MFRI, Inc. (NASDAQ: MFRI) announced today sales and earnings for
the quarter ended April 30, 2010. The Company's net sales in the
first quarter were $49.9 million, 26.2% less than $67.6 million in
the corresponding quarter of the prior year; net loss was $484
thousand or ($0.07) per diluted share, compared to net income of
$6.0 million or $0.88 per diluted share, in the prior-year's
quarter.
FIRST QUARTER
SALES -- Sales were $49.9 million, 26.2% less than $67.6 million
for the prior-year's quarter and essentially the same as the
previous quarter. The prior-year quarter included sales related to
the India pipeline project, which was completed in the fall of
2009, and activity in the heating, ventilation and air conditioning
systems ("HVAC") business included in Corporate and Other.
GROSS PROFIT -- Gross profit for the quarter decreased to $10.8
million or 21.6% of sales from $18.7 million or 27.7% of sales in
the corresponding prior-year quarter, which included gross profit
related to the India pipeline project. Excluding the effects of the
India pipeline project and HVAC activity, gross profit was in line
with prior year and substantially higher than the $6.1 million of
the previous quarter.
EXPENSES -- Operating expenses decreased to $10.9 million or
21.9% of sales from $11.9 million or 17.5% of sales in the
prior-year period. The decrease in expenses was primarily due to
staffing reductions and decreased profit-based incentive
expense.
NET (LOSS) INCOME -- Net loss was $484 thousand or ($0.07) per
diluted share, compared to net income of $6.0 million or $0.88 per
diluted share in the prior-year's quarter. This decrease was
primarily due to the absence of sales and profits related to the
India pipeline project and HVAC activity that occurred in the
prior-year first quarter. The effective income tax rate of 11.1%
was less than the statutory U. S. federal income tax rate mainly
due to the impact of tax-free foreign income in the United Arab
Emirates ("U.A.E.").
BACKLOG -- The Company's backlog on April 30, 2010 was $86.1
million, up $12.8 million or 17.4% from January 31, 2010. The
principal factors driving this increase are bookings in domestic
piping systems activity, addition of an HVAC project, and the
highest level of bookings in industrial process cooling since
October 2008.
PIPING SYSTEMS -- The first quarter net sales and profit were
significantly below the record first quarter last year. In the
prior year, the Company was working actively on a 600 Kilometer
(370 mile) India pipeline project. Since the initial project was
completed in the fall of 2009, no work was performed in the fourth
quarter of 2009 or first quarter of 2010 at the India facility.
However, in January 2010, the Company received an order to insulate
and jacket at least an additional 150 kilometers (93 miles) of
pipeline for this project. The new work will begin in the second
quarter of 2010 and is expected to be completed by the end of the
year. With backlog up by 8% from the beginning of the fiscal year,
the Company is off to a good start considering the generally poor
economic climate particularly in the Dubai market.
FILTRATION PRODUCTS -- Industrial markets for filters continue
to be constrained, and this was reflected in an 18.0% decrease in
net sales from the prior-year's first quarter. Even so, the
filtration products business maintained a level gross profit and
improved gross margin by 2.4 percentage points compared to the
prior-year period. Foreign exchange loss and increased product
development, selling and advertising expenses produced a bigger
operating loss than last year's first quarter. However, when
compared to the previous quarter, the loss was substantially
reduced on lower sales due to improved margins. The Company will
continue to invest in new product development and geographic
expansion of sales activity to improve its competitive position in
this very challenging market.
INDUSTRIAL PROCESS COOLING -- Market conditions for industrial
process equipment continue to be difficult although the market is
showing some signs of improvement. Net sales were slightly higher
than the same quarter last year and essentially flat with last
quarter. Gross profit margin improved 4.0 percentage points from
the prior year and 2.4 percentage points from last quarter. This
improvement, coupled with good expense control, resulted in a small
loss for the quarter compared to much larger losses in the
prior-year's quarters. Quoting activity and orders have shown
increased strength over the past several months, both domestically
and internationally. Several large orders were secured and the base
business seems to be solidifying with backlog at the highest level
since October 2008.
HVAC CONTRACTING -- The market for new HVAC projects remained
constrained by economic conditions. Quoting activity for HVAC
projects has maintained reasonably high levels and in early 2010,
an $8 million contract was obtained for a Chicago project.
Fieldwork on this new project is expected to begin late in the
second quarter of 2010.
David Unger, CEO, said, "Maintaining our diversified product mix
and geographic view has helped mitigate the effects of a difficult
global economic climate. We believe market conditions will remain
challenging for some time. We plan to continue to make strategic
investments that are necessary to maintain growth in the long term.
An example of that is our recently announced initiative to
establish a pipe insulation facility in Saudi Arabia designed to
capture a greater share of the growing market in that country and
nearby Gulf Cooperation Council countries."
Brad Mautner, President and COO, said, "Although the quarter
produced a net loss, each of the businesses worked diligently to
maximize their results from the opportunities that were available.
This is certainly evident when comparing sequential quarters. Net
sales were essentially flat from last quarter; however, the Company
increased gross profit substantially and reduced the net loss from
$0.85 to $0.07 per diluted share. Balancing new initiatives with
the day-to-day challenges of reduced market demands will continue
to test our Company; however we are prepared to face this reality
and leverage our strengths to improve results even more."
MFRI, Inc. is a multi-line company engaged in the following
businesses: pre-insulated specialty piping systems for oil and gas
gathering, district heating and cooling and other applications;
custom-designed industrial filtration products to remove
particulates from dry gas streams; industrial process cooling
equipment to remove heat from molding, printing and other
industrial processes; and installation of heating, ventilation and
air conditioning for large buildings.
Form 10-Q for the period ended April 30, 2010 will be accessible
at http://www.sec.gov/. For more information visit the Company's
website www.mfri.com or contact the Company directly.
Statements and other information contained in this announcement
which can be identified by the use of forward-looking terminology
such as "anticipate," "may," "will," "expect," "continue,"
"remain," "intend," "aim," "should," "prospects," "could," "
position," "future," "potential," "believes," "plans," "likely,"
"seems," and "probable," or the negative thereof or other
variations thereon or comparable terminology, constitute
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934 as amended and are subject to the
safe harbors created thereby. These statements should be considered
as subject to the many risks and uncertainties that exist in the
Company's operations and business environment. Such risks and
uncertainties include, but are not limited to, economic conditions,
market demand and pricing, competitive and cost factors, raw
material availability and prices, global interest rates, currency
exchange rates, labor relations and other risk factors.
MFRI, INC. AND SUBSIDIARIES
Condensed Statements of Operations and Related Data (Unaudited)
Three Months Ended
(In 000's except per share data) April 30, January 31, April 30,
Operating Statement Information 2010 2010 2009
--------- ----------- ---------
Net sales
Piping Systems $ 25,216 $ 20,778 $ 32,627
Filtration Products 19,114 21,598 23,305
Industrial Process Cooling 5,191 5,268 5,053
Corporate and Other (1) 329 1,466 6,594
--------- ----------- ---------
Total 49,850 49,110 67,579
--------- ----------- ---------
Gross profit:
Piping Systems 7,002 4,011 14,148
Filtration Products 2,637 726 2,646
Industrial Process Cooling 1,289 1,178 1,051
Corporate and Other (176) 185 882
--------- ----------- ---------
Total 10,752 6,100 18,727
--------- ----------- ---------
Income (loss) from operations
Piping Systems 3,436 185 9,952
Filtration Products (519) (2,306) (285)
Industrial Process Cooling (184) (681) (495)
Corporate and Other (2,895) (1,466) (2,300)
--------- ----------- ---------
Total (162) (4,268) 6,872
(Loss) income from joint venture (97) 87 0
Interest expense, net 285 323 688
--------- ----------- ---------
(Loss) income before income taxes (544) (4,504) 6,184
Income tax (benefit) expense (60) 1,277 178
--------- ----------- ---------
Net (loss) income $ (484) $ (5,781) $ 6,006
========= =========== =========
Weighted average common shares
outstanding
Basic 6,837 6,835 6,816
Diluted 6,837 6,835 6,852
(Loss) earnings per share:
Basic $ (0.07) $ (0.85) $ 0.88
Diluted $ (0.07) $ (0.85) $ 0.88
April 30, January 31,
2010 2010
Backlog: ---------- -----------
Piping Systems $ 52,564 $ 48,770
Filtration Products 21,271 21,397
Industrial Process Cooling 4,021 2,377
Corporate and Other 8,223 788
---------- -----------
Total $ 86,079 $ 73,332
========== ===========
(1) Corporate and Other includes activity for the installation of heating,
ventilation and air conditioning systems.
See the Company's Form 10-Q for the period for notes to
financial statements.
Perma Pipe (NASDAQ:PPIH)
Historical Stock Chart
From Sep 2024 to Oct 2024
Perma Pipe (NASDAQ:PPIH)
Historical Stock Chart
From Oct 2023 to Oct 2024