MELVILLE, N.Y., May 11, 2023
/PRNewswire/ -- P&F Industries, Inc. (NASDAQ: PFIN) today
announced its results from operations for the three-month period
ended March 31, 2023. The Company is
reporting net revenue for the three-month period ended March 31, 2023, of $15,742,000, compared to $14,021,000 for the same three-month period in
2022. Additionally, the Company is reporting a net income
before income taxes of $494,000 for
the three-month period ended March 31,
2023, compared to a net loss before income taxes of
$714,000, for the three-month period
ended March 31, 2022. The Company is
reporting a net income after-taxes of $337,000 for the three-month period ended
March 31, 2023, compared to a net
loss after-taxes of $618,000 for the
same three-month period a year ago. Lastly, the Company
stated that its basic and diluted income per share for the
three-month period ended March 31,
2023, was $0.11, compared to a
basic and diluted loss per share of $0.19 for the same three-month period a year
ago.
Richard Horowitz, the Company's
Chairman of the Board, Chief Executive Officer and President
commented, "I am very pleased to report that, when comparing the
three-month periods ended March 31,
2023, and 2022, our revenue increased $1,721,000 and our income before taxes improved
by $1,208,000. Revenue at Hy-Tech
increased 55.6% or almost $2.1
million. Our PTG product line had the most significant
improvement, percentage-wise, with revenue increasing 105.6% this
quarter, compared to the same three-month period in 2022. Our OEM
product line had the largest dollar revenue growth with sales up by
more than $1.1 million compared to
the same three-month period in 2022. Although Florida
Pneumatic's revenue this quarter declined 3.5% from the same period
last year, due to weakness in its Automotive and Retail product
lines, its higher margin Aerospace revenue improved 35.7%, which
led to its increased gross margin and gross profit."
Mr. Horowitz continued, "Our first quarter 2023 consolidated
gross margin was 36.5%, compared to 32.2% for the same period a
year ago. This improvement was driven primarily by price
increases that began in mid to late 2022, lower ocean freight
costs, improved absorption of manufacturing overhead and product
mix. Additionally, the early-stage start-up issues related to
the integration of the Jackson Gear acquisition have significantly
decreased.
Despite the 12.3% increase in net revenue, we were able to
control our total operating expenses, which increased only
$2,000. It should be noted that
during the first quarter of 2022 we incurred approximately
$150,000 of acquisition-related
expenses pertaining to the Jackson Gear Company business
acquisition, which was included in our selling, general and
administrative expenses."
Mr. Horowitz concluded "We are doing our best to navigate
through these challenging times caused by rising inflation, an
unsettled U.S. economy, and ongoing global supply chain issues.
We believe that P&F should continue to see improved
results, as customer orders are strong, costs and expenses are less
volatile than in the recent past, and manufacturing overhead
absorption continues to improve. In addition, there are
multiple growth opportunities provided by both the Jackson Gear
business acquisition and our other product lines."
The Company will be reporting the following.
TRENDS AND UNCERTAINTIES
INTERNATIONAL SUPPLY CHAIN
Although much less than during the first quarter of 2022, we
continue to encounter delays in receiving inventory from our Asian
suppliers, which leads to intermittent shortages of
inventory. Our ocean freight costs, which had increased
significantly during the COVID-19 pandemic, have recently returned
to pre-pandemic levels. The above factors continued in the first
quarter of 2023 to impact our results. Lastly, we believe the
following international supply chain issues have also negatively
impacted our 2023 results:
- Increased price of fuel;
- Shortage of shipping containers;
- Congestion at the ports in Asia and the United
States.
At the present time, we believe that some or all of the
above-mentioned supply chain disruptions will likely continue for
some time in fiscal 2023. While we believe that most of the related
costs associated with the issues discussed above have been factored
into our selling price, there is no assurance that we will be able
to pass through any future additional direct costs or costs
incurred related to our international supply chain issues in the
future.
DOMESTIC TRANSPORTATION COSTS
During the first quarter of 2023 supply chain conditions
continued to improve yielding lower domestic transportation costs.
The availability of port to warehouse transportation services
has improved significantly compared to 2022 and associated domestic
freight rates have continued to moderate although rising fuel costs
(diesel) have tempered rate reductions.
IMPACT OF INFLATION/GEOPOLITICAL ISSUES
We believe that the current and projected levels of inflation,
as well as a possible economic recession will likely continue to
have an effect on our manufacturing and operating costs. At the
present time, we are unable to reasonably estimate the impact
inflation and geo-political issues will have on our results of
operations for the foreseeable future.
We believe that our results of operations and financial
condition during 2023, were not materially impacted by the
Russia-Ukraine conflict, however we cannot predict
what impact this conflict may have on our results in the
future.
BOEING
Sales of aircraft by Boeing have been depressed since the two
737 MAX crashes in 2018 and 2019. Further, the Federal
Aviation Administration grounded all 737 MAX aircraft for several
quarters. These events, coupled with the COVID-19 pandemic reduced
Boeing's aircraft production levels to well below those prior to
the pandemic and the grounding. In 2019, Boeing produced 52 737 MAX
aircraft per month. It is currently still producing
significantly below that level. Per
Boeing, it plans to return to those levels in 2025 and
expects to add a fourth 737 MAX production line in 2024. We believe
that these stated plans along with the return of the Boeing 787
aircraft, which has also had production delays to full production,
will be beneficial to P&F's aerospace sales in the next several
years.
TECHNOLOGIES
We believe that over time, several newer technologies and
features will have a greater effect on the market for our
traditional pneumatic tool offerings. So far, the greatest impact
has been on the automotive aftermarket with the advent of advanced
cordless operated tools. Currently, we do not offer a cordless tool
to the automotive aftermarket. However, with respect to the
industrial market, we have developed for one of our largest OEM
customers a tool mechanism that is incorporated into a major line
of their cordless power tools. These tools have been in full
production with our supplied system for several years and our sales
of these products have continued to grow over that time. We
continue to analyze the practicality of developing or incorporating
newer technologies in our tool platforms for other markets as well.
This includes adding our internally developed mechanisms to
existing cordless power sources as well as producing complete
cordless tool systems. In addition, we have recently developed a
cordless installation tool for the aerospace market. We have begun
taking orders for this product and we expect to introduce other
versions later in 2023.
OTHER MATTERS
Other than the trends and uncertainties mentioned above, or
matters that may be discussed below, there are no major trends or
uncertainties that had, or we could reasonably expect to have a
material impact on our revenue and operations, nor was there any
unusual or infrequent event, transaction or any significant
economic change that materially affected our results of
operations.
RESULTS OF OPERATIONS
REVENUE
The tables below provide an analysis of our net revenue for the
three-month periods ended March 31,
2023, and 2022:
Consolidated
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|
|
|
|
|
Three months ended March
31,
|
|
|
|
|
|
|
|
Increase (decrease)
|
|
|
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2023
|
|
2022
|
|
$
|
|
%
|
|
Florida
Pneumatic
|
|
$
|
9,924,000
|
|
$
|
10,281,000
|
|
$
|
(357,000)
|
|
(3.5)
|
%
|
Hy-Tech
|
|
|
5,818,000
|
|
|
3,740,000
|
|
|
2,078,000
|
|
55.6
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|
Consolidated
|
|
$
|
15,742,000
|
|
$
|
14,021,000
|
|
$
|
1,721,000
|
|
12.3
|
%
|
Florida Pneumatic
Florida Pneumatic markets its air tool products to four primary
sectors within the pneumatic tool market; Automotive, Retail,
Aerospace and Industrial. It also generates revenue from its
Berkley products line, as well as a line of air filters and other
OEM parts ("Other").
|
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|
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|
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|
|
|
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|
|
|
|
|
|
Three months ended March
31,
|
|
|
|
2023
|
|
2022
|
|
Increase (decrease)
|
|
|
|
|
|
|
Percent of
|
|
|
|
Percent of
|
|
|
|
|
|
|
|
Revenue
|
|
revenue
|
|
Revenue
|
|
revenue
|
|
$
|
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%
|
|
Automotive
|
|
$
|
3,259,000
|
|
32.8
|
%
|
$
|
3,881,000
|
|
37.7
|
%
|
$
|
(622,000)
|
|
(16.0)
|
%
|
Retail
|
|
|
2,550,000
|
|
25.7
|
|
|
3,020,000
|
|
29.5
|
|
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(470,000)
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|
(15.6)
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|
Industrial
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1,578,000
|
|
15.9
|
|
|
1,444,000
|
|
14.0
|
|
|
134,000
|
|
9.3
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|
Aerospace
|
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|
2,411,000
|
|
24.3
|
|
|
1,777,000
|
|
17.3
|
|
|
634,000
|
|
35.7
|
|
Other
|
|
|
126,000
|
|
1.3
|
|
|
159,000
|
|
1.5
|
|
|
(33,000)
|
|
(20.8)
|
|
Total
|
|
$
|
9,924,000
|
|
100.0
|
%
|
$
|
10,281,000
|
|
100.0
|
%
|
$
|
(357,000)
|
|
(3.5)
|
%
|
Automotive revenue declined this quarter, compared to the same
period in 2022, due primarily to an across-the-board price increase
in all distribution channels in order to address rising input
costs. This change in pricing strategy led to a decline in number
of unit sales and thus overall revenue in this category. However,
Automotive gross margin improved as a result of this change. The
primary factors contributing to the 15.6% decline in our Retail
revenue were: a) a decision by The Home Depot ("THD") to reduce
in-store inventory levels; b) a reduction in display area at THD
stores; c) a net reduction in the number of items being offered by
THD this quarter, compared to the same three-month period in 2022,
and d) increased pressure from on-line distributors, as well as and
other "brick and mortar" retailers expanding their presence in this
product line. Partially offsetting the above-mentioned declines our
Aerospace revenue improved 35.7% when comparing the first quarter
of 2023 and 2022. This improvement was driven by, among other
factors, increased demand for new, limited life parts that JIFFY
has begun to market, and an overall increase in demand throughout
the sector for standard drilling, installation and torque control
tools. Lastly, our Industrial revenue increased primarily due to
improved general market conditions.
Hy-Tech
Hy-Tech designs, manufactures, and sells a wide range of
industrial products which are categorized as ATP for reporting
purposes. In addition to Engineered Solutions, products and
components manufactured for other companies under their brands are
included in the OEM category in the table below. PTG revenue is
comprised of products manufactured and sold by Hy-Tech's gear
business. NUMATX, Thaxton and other peripheral product lines, such
as general machining, are reported as Other.
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|
|
|
|
|
|
|
|
Three months ended March
31,
|
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|
|
2023
|
|
2022
|
|
Increase (decrease)
|
|
|
|
|
|
|
Percent of
|
|
|
|
|
Percent of
|
|
|
|
|
|
|
|
|
Revenue
|
|
revenue
|
|
Revenue
|
|
revenue
|
|
$
|
|
%
|
|
OEM
|
|
$
|
3,073,000
|
|
52.8
|
%
|
$
|
1,965,000
|
|
52.6
|
%
|
$
|
1,108,000
|
|
56.4
|
%
|
PTG
|
|
|
1,933,000
|
|
33.2
|
|
|
940,000
|
|
25.1
|
|
|
993,000
|
|
105.6
|
|
ATP
|
|
|
697,000
|
|
12.0
|
|
|
742,000
|
|
19.8
|
|
|
(45,000)
|
|
(6.1)
|
|
Other
|
|
|
115,000
|
|
2.0
|
|
|
93,000
|
|
2.5
|
|
|
22,000
|
|
23.7
|
|
Total
|
|
$
|
5,818,000
|
|
100.0
|
%
|
$
|
3,740,000
|
|
100.0
|
%
|
$
|
2,078,000
|
|
55.6
|
%
|
The $1.1 million increase in OEM
revenue this quarter, compared to the first quarter of 2022, was
driven by growth in certain markets that are served by a number of
Hy-Tech's OEM customers. The markets served by our customers
include multiple industrial applications, as well as the tool
rental market. PTG revenue for the first three months of 2023 more
than doubled its revenue reported for the same period a year ago.
This improvement was driven by the acquisition of the Jackson Gear
Company business that we acquired in January
2022. The increase in Hy-Tech's Other revenue was due to
stronger NUMATX and general machining revenue growth this quarter,
compared to the same three-month period in 2022. The modest decline
in ATP revenue is attributable to our decision to focus our
marketing efforts on OEM and PTG product offerings.
GROSS MARGIN/PROFIT
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|
|
Three months ended March
31,
|
|
Increase
|
|
|
|
2023
|
|
2022
|
|
Amount
|
|
|
%
|
|
Florida
Pneumatic
|
|
$
|
4,276,000
|
|
$
|
3,949,000
|
|
$
|
327,000
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|
|
8.3
|
%
|
As percent of
respective revenue
|
|
|
43.1
|
%
|
|
38.4
|
%
|
|
4.7
|
%
|
pts
|
|
|
Hy-Tech
|
|
$
|
1,466,000
|
|
$
|
562,000
|
|
$
|
904,000
|
|
|
160.9
|
|
As percent of
respective revenue
|
|
|
25.2
|
%
|
|
15.0
|
%
|
|
10.2
|
%
|
pts
|
|
|
Total
|
|
$
|
5,742,000
|
|
$
|
4,511,000
|
|
$
|
1,231,000
|
|
|
27.3
|
%
|
As percent of
respective revenue
|
|
|
36.5
|
%
|
|
32.2
|
%
|
|
4.3
|
%
|
pts
|
|
|
During the first quarter of 2023, Florida Pneumatic's gross
margin improved compared to the same period in the prior year
principally due to a shift away from the lower margin product
lines, Retail and Automotive, to the higher margin, industrial and
aerospace categories. Additionally, during 2022, we raised prices
in all product categories.
The improvement in Hy-Tech's gross margin is due primarily to
its overall product/customer mix. Additionally, cost and expense
reductions, coupled with revisions in pricing structure, enabled
Hy-Tech to improve its blended gross margin, thus contributing to
the overall gross margin improvement. We continue to focus on
improving manufacturing overhead absorption, particularly at our
PTG facility. While always ongoing, we expect the process of
integrating the Jackson Gear Company acquisition to be effectively
complete by approximately mid-2023.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses ("SG&A")
include salaries and related costs, commissions, travel,
administrative facilities costs, communications costs and
promotional expenses for our direct sales and marketing staff,
administrative and executive salaries and related benefits, legal,
accounting, and other professional fees as well as general
corporate overhead and certain engineering expenses.
During the first quarter of 2023, our SG&A was $5,175,000, compared to $5,173,000, incurred during the same three-month
period in 2022. Significant components to the net change include:
a) compensation expenses increased $223,000, due to several factors, among them the
additional staffing added throughout the Company, increased wages
primarily related to retention incentives and annual wage
adjustments and increases in company-wide
bonus/incentive/performance accruals; b) increased depreciation and
amortization of $51,000; c)
professional fees and expenses decreased $140,000, due primary to legal, accounting and
other fees incurred in connection with the JGC acquisition during
the first quarter of 2023 not recurring in the first quarter of
2023; and d) variable expenses declined $131,000. Variable expenses include among other
items, commissions, freight out, travel, advertising, shipping
supplies and warranty costs. Driving this decline was lower
advertising and shipping costs at Florida Pneumatic, caused
primarily by lower Retail revenue this quarter and a reduction in
discretionary Automotive advertising expenses, compared to the same
period a year ago.
OTHER INCOME
During the three-month period ended March
31, 2023, we recognized a gain of $21,000 from the sale of fully depreciated
equipment. Additionally, as a result of final resolution of
our Employee Retention Tax Credit ("ERTC") filing, we recorded an
additional $15,000 as Other Income.
This income is subject to federal and local tax.
INTEREST – NET
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|
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|
|
|
|
|
|
|
|
|
|
Three months ended March
31,
|
|
(Increase)
decrease
|
|
|
|
2023
|
|
2022
|
|
Amount
|
|
%
|
|
Interest expense
attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
124,000
|
|
$
|
48,000
|
|
$
|
(76,000)
|
|
(158.3)
|
%
|
Amortization expense of
debt issue costs
|
|
|
19,000
|
|
|
4,000
|
|
|
(15,000)
|
|
(375.0)
|
|
Interest income on ERTC
refunds
|
|
|
(34,000)
|
|
|
—
|
|
|
34,000
|
|
100.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
109,000
|
|
$
|
52,000
|
|
$
|
(57,000)
|
|
(109.6)
|
%
|
The most significant factor causing the increase in our
short-term borrowings interest expense was the growth in the SOFR
and prime rates. Most of our borrowings are SOFR plus Applicable
Margin. The Applicable Margin, as defined in our Credit
Agreement, during the three-month period ended March 31, 2023, was 2.10% applied to all SOFR
borrowings and 1.60% applied to Base Rate borrowings. The
Applicable Margin that was added to LIBOR and Base Rate borrowings
during the three-month period ended March
31, 2022, were 1.50% and 0.50%, respectively.
During the three-month period ended March
31, 2023, the SOFR rates ranged from 4.43% to 4.86%,
compared to LIBOR rates, which we were using during the first
quarter of 2022, that ranged from 0.10% to 0.47%. Further, the
prime rate, which is the interest rate used for Base Rate
borrowings before the Applicable Margin, during the first three
months of 2023 ranged from 7.5% to 8.0%, compared to prime rates
ranging from 3.25% to 3.50% during the same three-month period in
2022.
The amortization expense incurred during the three-month period
ended March 31, 2023, is related to
the debt issue costs associated with Amendment 11 to our banking
facility.
The average balance of short-term borrowings during the
three-month periods ended March 31,
2023, and 2022, were $7,287,000, and $10,157,000, respectively.
INCOME TAXES
At the end of each interim reporting period, we compute an
effective tax rate based upon our estimated full year results. This
estimate is used to determine the income tax provision or benefit
on a year-to-date basis and may change in subsequent interim
periods. Accordingly, the effective tax rate for the three-month
periods ended March 31, 2023, and
2022, were approximately a tax provision rate of 31.8% and tax
benefit rate 13.4%, respectively. The effective tax rates for all
periods presented were impacted primarily by state taxes, and
non-deductible expenses.
LIQUIDITY AND CAPITAL RESOURCES
We monitor such metrics as days' sales outstanding, inventory
requirements, inventory turns, estimated future purchasing
requirements and capital expenditures to project liquidity needs,
as well as evaluate return on assets. Our primary sources of funds
are operating cash flows, existing working capital and our Revolver
Loan ("Revolver") with our Bank.
We gauge our liquidity and financial stability by various
measurements, some of which are shown in the following table:
|
|
|
|
|
|
|
|
|
March 31,
2023
|
|
December 31, 2022
|
Working
capital
|
|
$
|
21,073,000
|
|
$
|
20,838,000
|
Current
ratio
|
|
|
2.57 to 1
|
|
|
2.44 to 1
|
Shareholders'
equity
|
|
$
|
42,184,000
|
|
$
|
41,956,000
|
Credit facility
We and Capital One Bank, NA entered into an amendment to the
Credit Facility that, among other things, extended the expiration
date to February 8, 2027.
At March 31, 2023, there was
approximately $7,800,000 available to
us under the Revolver arrangement.
Cash flows
For the three-month period ended March
31, 2023, cash provided by operating activities was
$790,000, compared to cash used by
operating activities for the three-month period ended March 31, 2022, of $3,972,000. At March 31,
2023, and 2022, our consolidated cash balance was
$561,000, and $642,000, respectively. We operate under
the terms and conditions of the Credit Agreement. As a
result, all domestic cash receipts are remitted to Capital One
lockboxes. Thus, nearly all cash on hand represents funds to cover
checks issued but not yet presented for payment.
Our total debt to total book capitalization (total debt divided
by total debt plus equity) at both March 31,
2023, and December 31, 2022,
was 15.3%.
During the three-month period ended March 31, 2023, we used
$905,000 for capital expenditures,
compared to $380,000 during the same
period in the prior year. Capital expenditures currently
planned for the remainder of 2023 are approximately $2,400,000, which we expect will be financed
through the Credit Facility.
The major portion of these planned capital expenditures will be
for new metal cutting equipment, tooling and information technology
hardware and software.
Our liquidity and capital are primarily sourced from our Credit
Facility.
Should the need arise whereby the current Credit Agreement is
insufficient, we could obtain additional funds based on the value
of our real property, and we believe the borrowing under the
current Agreement could be increased.
IMPACT OF INFLATION
During the three-month period ended March
31, 2023, with respect to our cost of inventory, we
encountered price increases in raw materials, imported parts and
tools, ocean freight and labor. Additionally, our operating
costs continue to encounter cost/price increases. It is
difficult to accurately determine what portion of the above
referenced increases are attributable to inflation. We have
been able to pass through most of the above-mentioned price
increases, however we cannot predict our ability to continue this
practice, nor to what degree. We intend to continue to
actively manage the impact of inflation on our results of
operations, however, we cannot reasonably estimate possible future
impacts at this time.
ABOUT P&F INDUSTRIES, INC.
P&F Industries, Inc., through its wholly owned subsidiaries,
is a leading manufacturer and importer of air-powered tools and
accessories sold principally to the aerospace, industrial,
automotive, and retail markets. P&F's products are sold
under its own trademarks, as well as under the private labels of
major manufacturers and retailers.
For information relating to the products and services we offer,
please visit our website at www.pfina.com. From there you can link
to our subsidiary websites.
OTHER INFORMATION
P&F Industries Inc. has scheduled a conference call on
May 11, 2023, at 11:00 A.M. Eastern Time, to discuss its first
quarter 2023 results and financial condition. Investors and
other interested parties who wish to listen to or participate can
dial 1-866-580-3963. It is suggested you call at least 10 minutes
prior to the call commencement. For those who cannot listen
to the live broadcast, a replay of the call will also be available
on the Company's website beginning on or about May 12, 2023.
Forward Looking Statement
The Private Securities Litigation Reform Act of 1995 (the
"Reform Act") provides a safe harbor for forward-looking statements
made by or on behalf of P&F Industries, Inc., and subsidiaries
("P&F", or the "Company"). P&F and its representatives may,
from time-to-time, make written or verbal forward-looking
statements, including statements contained in the Company's filings
with the Securities and Exchange Commission and in its reports to
shareholders. Generally, the inclusion of the words "believe,"
"expect," "intend," "estimate," "anticipate," "will," "may,"
"would," "could," "should," and their opposites and similar
expressions identify statements that constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934 and
that are intended to come within the safe harbor protection
provided by those sections. Any forward-looking statements
contained herein, including those related to the Company's future
performance, are based upon the Company's historical performance
and on current plans, estimates and expectations. All
forward-looking statements involve risks and uncertainties. These
risks and uncertainties could cause the Company's actual results
for all or part the 2022 fiscal year and beyond to differ
materially from those expressed in any forward-looking statement
made by or on behalf of the Company for a number of reasons
including, but not limited to:
- Risks related to the global outbreak of COVID-19 and other
public health crises;
- Risks associated with sourcing from overseas;
- Disruption in the global capital and credit markets;
- Importation delays;
- Customer concentration;
- Unforeseen inventory adjustments or changes in purchasing
patterns;
- Market acceptance of products;
- Competition;
- Price reductions;
- Exposure to fluctuations in energy prices;
- Exposure to fluctuations within the cost of raw materials;
- The strength of the retail economy in the United States and abroad;
- Adverse changes in currency exchange rates;
- Interest rates;
- Debt and debt service requirements;
- Borrowing and compliance with covenants under our credit
facility;
- Impairment of long-lived assets and goodwill;
- Retention of key personnel;
- Acquisition of businesses;
- Regulatory environment;
- Litigation and insurance;
- The threat of terrorism and related political instability and
economic uncertainty; and
- Business disruptions or other costs associated with information
technology, cyber-attacks, system implementations, data privacy or
catastrophic losses,
and those other risks and uncertainties described in its Annual
Report on Form 10-K for the year ended December 31, 2022 ("2022 Form 10-K"), its
Quarterly Reports on Form 10-Q, and its other reports and
statements filed by the Company with the Securities and Exchange
Commission. Forward-looking statements speak only as of the date on
which they are made. The Company undertakes no obligation to update
publicly or revise any forward-looking statement, whether as a
result of new information, future developments or otherwise. The
Company cautions you against relying on any of these
forward-looking statements.
P & F
INDUSTRIES, INC. AND SUBSIDIARIES
|
|
|
|
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
(In Thousands
$)
|
March 31,
2023
|
December 31,
2022
|
|
(Unaudited)
|
(Audited)
|
Assets
|
|
|
Cash
|
|
$
|
561
|
|
|
$
|
667
|
|
Accounts receivable -
net
|
|
|
9,139
|
|
|
|
7,370
|
|
Inventories
|
|
|
23,654
|
|
|
|
24,491
|
|
Prepaid expenses and
other current assets
|
|
|
1,112
|
|
|
|
2,753
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
34,466
|
|
|
|
35,281
|
|
|
|
|
|
|
|
|
|
|
Net property and
equipment
|
|
|
9,758
|
|
|
|
9,363
|
|
Goodwill
|
|
|
4,825
|
|
|
|
4,822
|
|
Other intangible assets
- net
|
|
|
5,158
|
|
|
|
5,326
|
|
Deferred income taxes -
net
|
|
|
472
|
|
|
|
629
|
|
Right-of-use assets –
operating leases
|
|
|
5,309
|
|
|
|
5,521
|
|
Other assets –
net
|
|
|
78
|
|
|
|
62
|
|
Total
assets
|
|
$
|
60,066
|
|
|
$
|
61,004
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
7,602
|
|
|
$
|
7,570
|
|
Accounts
payable
|
|
|
2,219
|
|
|
|
3,094
|
|
Accrued compensation
and benefits
|
|
|
1,009
|
|
|
|
1,757
|
|
Accrued other
liabilities
|
|
|
1,647
|
|
|
|
1,002
|
|
Current leased
liabilities – operating leases
|
|
|
916
|
|
|
|
1,020
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
13,393
|
|
|
|
14,443
|
|
|
|
|
|
|
|
|
|
|
Noncurrent leased
liabilities – operating leases
|
|
|
4,426
|
|
|
|
4,535
|
|
Other
liabilities
|
|
|
63
|
|
|
|
70
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
17,882
|
|
|
|
19,048
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
|
42,184
|
|
|
|
41,956
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
$
|
60,066
|
|
|
$
|
61,004
|
|
|
|
|
|
|
|
|
|
|
P & F
INDUSTRIES, INC., AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
|
Three months Ended
March 31,
|
(In Thousands
$)
|
2023
|
2022
|
|
|
|
Net revenue
|
$
|
15,742
|
$
|
14,021
|
Cost of
sales
|
10,000
|
9,510
|
Gross profit
|
5,742
|
4,511
|
Selling, general and
administrative expenses
|
5,175
|
5,173
|
Operating income
(loss)
|
567
|
(662)
|
Other income
|
36
|
---
|
Interest
expense
|
(109)
|
(52)
|
Income (loss) before
income taxes
|
494
|
(714)
|
Income tax (expense)
benefit
|
(157)
|
96
|
Net income
(loss)
|
$
|
337
|
$
|
(618)
|
|
|
|
P&F INDUSTRIES, INC., AND
SUBSIDIARIES
|
|
Three months Ended
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
March 31,
|
|
(In Thousands $)
|
|
2023
|
|
|
2022
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
337
|
|
|
$
|
(618)
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income (loss) to net cash (used in) provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash and other
charges:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
511
|
|
|
|
443
|
|
Amortization of other
intangible assets
|
|
|
173
|
|
|
|
157
|
|
Operating lease
expense
|
|
|
237
|
|
|
|
232
|
|
Amortization of debt
issue costs
|
|
|
19
|
|
|
|
4
|
|
Amortization of
consideration payable to a customer
|
|
|
---
|
|
|
|
67
|
|
Provision for (recovery
of) provision for losses on accounts receivable
|
|
|
23
|
|
|
|
(12)
|
|
Stock-based
compensation
|
|
|
8
|
|
|
|
1
|
|
Restricted stock-based
compensation
|
|
|
9
|
|
|
|
8
|
|
Deferred income
taxes
|
|
|
168
|
|
|
|
(102)
|
|
Gain on disposal of
fixed assets
|
|
|
(21)
|
|
|
|
---
|
|
Dividends declared but
not yet paid
|
|
|
(160)
|
|
|
|
---
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(1,783)
|
|
|
|
(844)
|
|
Inventories
|
|
|
861
|
|
|
|
(3,243)
|
|
Prepaid expenses and
other current assets
|
|
|
1,640
|
|
|
|
(144)
|
|
Accounts
payable
|
|
|
(876)
|
|
|
|
716
|
|
Accrued compensation
and benefits
|
|
|
(749)
|
|
|
|
270
|
|
Accrued other
liabilities and other current liabilities
|
|
|
639
|
|
|
|
(672)
|
|
Operating lease
liabilities
|
|
|
(239)
|
|
|
|
(226)
|
|
Other
liabilities
|
|
|
(7)
|
|
|
|
(9)
|
|
Total
adjustments
|
|
|
453
|
|
|
|
(3,354)
|
|
Net cash provided by
(used in) by operating activities
|
|
|
790
|
|
|
|
(3,972)
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
$
|
(905)
|
|
|
$
|
(380)
|
|
Proceeds from the sale of fixed
assets
|
|
|
21
|
|
|
|
---
|
|
Purchase of net assets of the
Jackson Gear Company business
|
|
|
---
|
|
|
|
(2,300)
|
|
Net
cash used in investing activities
|
|
|
(884)
|
|
|
|
(2,680)
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
Bank financing costs
|
|
|
(35)
|
|
|
|
---
|
|
Net proceeds from short-term
borrowings
|
|
|
33
|
|
|
|
6,757
|
|
Net
cash (used in) provided by financing activities
|
|
|
(2)
|
|
|
|
6,757
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash
|
|
|
(10)
|
|
|
|
(2)
|
|
Net (decrease) increase
in cash
|
|
|
(106)
|
|
|
|
103
|
|
Cash at beginning of
period
|
|
|
667
|
|
|
|
539
|
|
Cash at end of
period
|
|
$
|
561
|
|
|
$
|
642
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
Cash paid
for:
|
Interest
|
|
|
$
|
119
|
|
|
$
|
36
|
|
|
Noncash
information:
|
Right of Use ("ROU")
assets recognized for new operating lease liabilities
|
|
|
$
|
---
|
|
|
$
|
987
|
|
|
P & F INDUSTRIES, INC., AND
SUBSIDIARIES
|
NON-GAAP FINANCIAL MEASURE AND
RECONCILIATION
|
|
COMPUTATION OF (EBITDIA) - EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION,
IMPAIRMENT, AND
AMORIZATION
|
(UNAUDITED)
|
|
|
|
(In Thousands $)
|
|
For the Three Months Ended March
31,
|
|
|
|
|
|
2023
|
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
337
|
|
|
$
|
(618)
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
684
|
|
|
|
600
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
109
|
|
|
|
|
52
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
|
157
|
|
|
|
(96)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (1)
|
|
$
|
1,287
|
|
|
$
|
(62)
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Company discloses a
tabular comparison of EBITDIA, which is a non-GAAP measure because
it is instrumental in comparing the results from period to period.
The Company's management believes that the comparison of
EBITDIA provides greater insight into the Company's results of
operations for the periods presented. EBITDIA should not be
considered in isolation or as a substitute for operating income as
reported on the face of our statement of operations
|
View original
content:https://www.prnewswire.com/news-releases/pf-industries-inc-reports-improved-results-for-the-three-month-period-ended-march-31-2023-301821706.html
SOURCE P&F Industries, Inc.