P&F INDUSTRIES, INC. REPORTS RESULTS FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2022, AND ANNOUNCES SPECIAL DIVIDEND
P&F Industries, Inc. (NASDAQ: PFIN) reported Q2 2022 net revenue of $17.81 million, up 31.1% from $13.59 million in Q2 2021. However, Q2 2022 net income before income taxes fell to $55,000, a stark decline from $2.33 million in the same quarter last year. Notably, the company declared a special cash dividend of $0.05 per share, payable on August 29, 2022. Key growth drivers included increased sales in Aerospace and retail segments, particularly from The Home Depot rollout, but gross margin decreased by 4.1 percentage points due to rising costs.
- Q2 2022 net revenue increased by 31.1% year-over-year.
- Special cash dividend of $0.05 per share declared.
- Aerospace revenue rose by 25.7% compared to Q2 2021.
- PTG product line revenue up by over 160% from last year.
- Q2 2022 net income before taxes decreased to $55,000 from $2.33 million in Q2 2021.
- Net loss after taxes reached $21,000 for Q2 2022, compared to $2.42 million net income in Q2 2021.
- Consolidated gross margin declined by 4.1 percentage points.
- Rising material and transportation costs impacted margins.
MELVILLE, N.Y., Aug. 11, 2022 /PRNewswire/ -- P&F Industries, Inc. (NASDAQ: PFIN) today announced its results from operations for the three and six-month periods ended June 30, 2022. The Company is reporting net revenue of
The Company further announced today that its Board of Directors declared a special cash dividend of
Richard Horowitz, the Company's Chairman of the Board, Chief Executive Officer and President commented, "I am pleased to report that our revenue this quarter is more than
Mr. Horowitz added, "We are happy with the improvement in our operating income, and we are cautiously optimistic as we look to the future as we have a number of major initiatives in place that we believe will help improve margins and further absorb factory overhead during the second half of 2022 and beyond. However, it is difficult to foresee what the impact will be on our businesses from rising inflation, and a potential global recession. Further, COVID-19 remains an issue, as cases have once again risen in many parts of the country and abroad. We intend to do our utmost to continue to serve our customers, while ensuring the health and safety of our employees."
Mr. Horowitz concluded his remarks, "Furthermore, I am pleased to report that our Board of Directors has declared a
The Company will be reporting the following:
TRENDS AND UNCERTAINTIES
COVID-19 PANDEMIC
The COVID-19 virus and the resultant global economic down-turn had a negative impact on our fiscal 2021 results and continues to negatively impact certain sectors of the Company during 2022. Additionally, we believe that, while easing slightly, the on-going supply-chain crisis is related in large part to the pandemic. Further, we believe the COVID-19 global pandemic has been and continues to be the primary factor in the significant increases in the cost of international ocean freight and related matters. We believe that until the above issues improve, our business will likely continue to be adversely affected by the COVID-19 global pandemic.
BOEING/AEROSPACE
The Federal Aviation Administration ("FAA") and the European Union Aviation Safety Agency ("EASA") have lifted the grounding of the 737 MAX, however, China, which is a large market for Boeing, has not lifted the grounding on the 737 MAX aircraft. Boeing is currently holding completed 737 MAX aircraft destined for Chinese carriers. As a result of the aforementioned, and airline companies limiting deliveries of new aircraft, we believe production at Boeing of its 737 MAX aircraft is likely to remain below the production levels that existed prior to the grounding of certain Boeing aircraft and the COVID-19 pandemic.
Although the 787 Dreamliner is still in production, albeit at a reduced rate, we believe that Boeing has not been able to deliver a new aircraft to a customer for over one1 year. But a firm timeline for customer deliveries of new aircraft has not been announced.
INTERNATIONAL SUPPLY CHAIN
During the third and fourth quarters of 2021, and early 2022, we encountered severe delays in receiving inventory from our Asian suppliers, which led to intermittent shortages of inventory. It should be noted however that the international supply chain crisis has, as of late, begun to ease somewhat. Lastly, our ocean freight costs, which increased in some cases five-fold during the latter half of 2021 and for much of 2022, have begun to decline, but still well in excess of pre pandemic levels. This trend of higher costs and delayed deliveries has continued for most of 2022. We believe the major factors driving the above include:
- Increased price of fuel;
- Shortage of shipping containers;
- Congestion at the ports in Asia and the United States; and
- Shortage of truck drivers in the United States.
At the present time, we believe the above-mentioned supply chain disruptions will likely continue during the remainder of 2022. While we believe that most of these related costs associated with the items above have been, or will be, passed on to our customers throughout 2022, there is no assurance that any additional cost increases can be passed on in the future.
DOMESTIC TRANSPORTATION COSTS
Due to the shortage of truckers in the US, there has been both difficulty in moving goods from the ports to our facilities as well as arranging for pickups to deliver to our customers. In addition, we have seen an increase in the costs for these transportation services. It is unclear when or if this situation will abate. As such, these issues will affect the Company for the foreseeable future impacting our overall margins and possibly depressing sales.
IMPACT OF INFLATION / GEOPOLITCAL ISSUES
Increasing prices, most notably in freight/transportation, the cost of raw materials and labor had a material effect on our results of operations during the three and six-month periods ended June 30, 2022. We believe that the current and projected significant levels of inflation will continue to adversely impact our operating costs. As such, at the present time, we are unable to reasonably estimate the impact these issues will have on our results of operations for the remainder of 2022 and beyond.
During the six-month period ended June 30, 2022, we do not believe we were directly materially impacted by current geopolitical global events.
TECHNOLOGIES
We believe that over time, several newer technologies and features will have a greater impact on the market for our traditional pneumatic tool offerings. The impact of this evolution has been felt initially by the advent of advanced cordless operated hand tools in the automotive aftermarket. We continue to analyze the practicality of developing or incorporating more advanced technologies in our tool platforms.
Other than the aforementioned, or matters that may be discussed below, there are no major trends or uncertainties that had, or we could have reasonably expected to have a material impact on our revenue, nor was there any unusual or infrequent event, transaction or any significant economic change that materially affected our results of operations.
We believe that our relationships with our key customers and suppliers remain satisfactory.
REVENUE
The tables below provide an analysis of our net revenue for the three and six-month periods ended June 30, 2022 and 2021:
Consolidated
Three months ended June 30, | ||||||||||||
Increase | ||||||||||||
2022 | 2021 | $ | % | |||||||||
Florida Pneumatic | $ | 12,666,000 | $ | 10,712,000 | $ | 1,954,000 | 18.2 | % | ||||
Hy-Tech | 5,144,000 | 2,877,000 | 2,267,000 | 78.8 | ||||||||
Consolidated | $ | 17,810,000 | $ | 13,589,000 | $ | 4,221,000 | 31.1 | % | ||||
Six months ended June 30, | ||||||||||||
Increase | ||||||||||||
2022 | 2021 | $ | % | |||||||||
Florida Pneumatic | $ | 22,947,000 | $ | 21,614,000 | $ | 1,333,000 | 6.2 | % | ||||
Hy-Tech | 8,884,000 | 5,921,000 | 2,963,000 | 50.0 | ||||||||
Consolidated | $ | 31,831,000 | $ | 27,535,000 | $ | 4,296,000 | 15.6 | % | ||||
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").
Three months ended June 30, | |||||||||||||||||||
2022 | 2021 | Increase (decrease) | |||||||||||||||||
Percent of | Percent of | ||||||||||||||||||
Revenue | revenue | Revenue | revenue | $ | % | ||||||||||||||
Automotive | $ | 3,853,000 | 30.4 | % | $ | 3,782,000 | 35.3 | % | $ | 71,000 | 1.9 | % | |||||||
Retail | 4,826,000 | 38.1 | 3,763,000 | 35.1 | 1,063,000 | 28.2 | |||||||||||||
Industrial | 1,705,000 | 13.5 | 1,303,000 | 12.3 | 402,000 | 30.9 | |||||||||||||
Aerospace | 2,179,000 | 17.2 | 1,734,000 | 16.2 | 445,000 | 25.7 | |||||||||||||
Other | 103,000 | 0.8 | 130,000 | 1.1 | (27,000) | (20.8) | |||||||||||||
Total | $ | 12,666,000 | 100.0 | % | $ | 10,712,000 | 100.0 | % | $ | 1,954,000 | 18.2 | % | |||||||
Six months ended June 30, | ||||||||||||||||
2022 | 2021 | Increase (decrease) | ||||||||||||||
Percent of | Percent of | |||||||||||||||
Revenue | revenue | Revenue | revenue | $ | % | |||||||||||
Automotive | $ | 7,734,000 | 33.7 | % | $ | 7,884,000 | 36.5 | % | $ | (150,000) | (1.9) | % | ||||
Retail | 7,845,000 | 34.2 | 7,553,000 | 34.9 | 292,000 | 3.9 | ||||||||||
Industrial | 3,111,000 | 13.6 | 2,662,000 | 12.3 | 449,000 | 16.9 | ||||||||||
Aerospace | 3,994,000 | 17.4 | 3,262,000 | 15.1 | 732,000 | 22.4 | ||||||||||
Other | 263,000 | 1.1 | 253,000 | 1.2 | 10,000 | 4.0 | ||||||||||
Total | $ | 22,947,000 | 100.0 | % | $ | 21,614,000 | 100.0 | % | $ | 1,333,000 | 6.2 | % | ||||
When comparing the three-month periods ended June 30, 2022 and 2021, the most significant change in Florida Pneumatic's revenue occurred within its Retail sector. The
The
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.
Three months ended June 30, | ||||||||||||||||
2022 | 2021 | Increase (decrease) | ||||||||||||||
Percent of | Percent of | |||||||||||||||
Revenue | revenue | Revenue | revenue | $ | % | |||||||||||
OEM | $ | 2,542,000 | 49.4 | % | $ | 1,408,000 | 48.9 | % | $ | 1,134,000 | 80.5 | % | ||||
ATP | 945,000 | 18.4 | 779,000 | 27.1 | 166,000 | 21.3 | ||||||||||
PTG | 1,583,000 | 30.8 | 604,000 | 21.0 | 979,000 | 162.1 | ||||||||||
Other | 74,000 | 1.4 | 86,000 | 3.0 | (12,000) | (14.0) | ||||||||||
Total | $ | 5,144,000 | 100.0 | % | $ | 2,877,000 | 100.0 | % | $ | 2,267,000 | 78.8 | % | ||||
Six months ended June 30, | ||||||||||||||||
2022 | 2021 | Increase | ||||||||||||||
Percent of | Percent of | |||||||||||||||
Revenue | revenue | Revenue | revenue | $ | % | |||||||||||
OEM | $ | 4,507,000 | 50.7 | % | $ | 3,019,000 | 51.0 | % | $ | 1,488,000 | 49.3 | % | ||||
ATP | 1,687,000 | 19.0 | 1,492,000 | 25.2 | 195,000 | 13.1 | ||||||||||
PTG | 2,522,000 | 28.4 | 1,250,000 | 21.1 | 1,272,000 | 101.8 | ||||||||||
Other | 168,000 | 1.9 | 160,000 | 2.7 | 8,000 | 5.0 | ||||||||||
Total | $ | 8,884,000 | 100.0 | % | $ | 5,921,000 | 100.0 | % | $ | 2,963,000 | 50.0 | % | ||||
Key factors driving the
Hy-Tech's six-month, year-over-year growth was mostly accomplished during the three-month period ended June 30, 2022. As such, factors contributing to this growth include increased orders from a major OEM customer, the JGC business acquisition, the easing of COVID-19 restrictions, and slight improvement in the general economic conditions.
GROSS MARGIN/PROFIT
Three months ended June 30, | Increase (decrease) | ||||||||||||
2022 | 2021 | Amount | % | ||||||||||
Florida Pneumatic | $ | 4,771,000 | $ | 4,165,000 | $ | 606,000 | 14.6 | % | |||||
As percent of respective revenue | 37.7 | % | 38.9 | % | (1.2) | % | pts | ||||||
Hy-Tech | $ | 865,000 | $ | 683,000 | $ | 182,000 | 26.6 | ||||||
As percent of respective revenue | 16.8 | % | 23.7 | % | (6.9) | % | pts | ||||||
Total | $ | 5,636,000 | $ | 4,848,000 | $ | 788,000 | 16.3 | % | |||||
As percent of respective revenue | 31.6 | % | 35.7 | % | (4.1) | % | pts | ||||||
Although Florida Pneumatic's gross profit increased
Six months ended June 30, | Increase (decrease) | ||||||||||||
2022 | 2021 | Amount | % | ||||||||||
Florida Pneumatic | $ | 8,721,000 | $ | 8,365,000 | $ | 356,000 | 4.3 | % | |||||
As percent of respective revenue | 38.0 | % | 38.7 | % | (0.7) | % | pts | ||||||
Hy-Tech | $ | 1,426,000 | $ | 1,119,000 | $ | 307,000 | 27.4 | ||||||
As percent of respective revenue | 16.1 | % | 18.9 | % | (2.8) | % | pts | ||||||
Total | $ | 10,147,000 | $ | 9,484,000 | $ | 663,000 | 7.0 | % | |||||
As percent of respective revenue | 31.9 | % | 34.4 | % | (2.5) | % | pts | ||||||
Florida Pneumatic's gross profit improved by
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 second quarter of 2022, our SG&A was
- During the second quarter of 2021, we incurred approximately
$288,000 in costs related to the May 2021 ransomware attack at our Florida Pneumatic subsidiary, where no such costs were incurred during the second quarter of 2022. - Our compensation expense increased
$151,000 . Compensation expense is comprised of base salaries and wages, accrued performance-based bonus incentives and associated payroll taxes and employee benefits. Several factors contributed to this increase, among them the staffing added in connection with the JGC acquisition, increased wages primarily related to retention incentives and annual wage adjustments and a net increase in companywide bonus/incentive/performance accruals. - We incurred increases this quarter, compared to the same quarter in 2021 in professional fees, stock-based compensation, and amortization of
$47,000 ,$37,000 , and$23,000 , respectively.
Our six-month 2022 total SG&A was
- Compensation expenses increased
$316,000 . Compensation expense is comprised of base salaries and wages, accrued performance-based bonus incentives and associated payroll taxes and employee benefits. Several factors contributed to this increase, among them the staffing added in connection with the JGC acquisition, increased wages primarily related to retention incentives and annual wage adjustments and increases in companywide bonus/incentive/performance accruals. - Professional fees and expenses increased
$280,000 , due primary to legal, accounting, and other fees incurred in connection with the JGC acquisition. Other expenses that contributed to the increase in professional fees were cyber security related costs and recruitment fees. - Our variable expenses decreased
$253,000 . Driving this decline were significantly lower advertising at Florida Pneumatic, caused by a change in a distribution channel strategy. - Our computer-related expenses declined
$248,000 , when comparing the six-month periods ended June 30, 2022 and 2021. During the second quarter of 2021 we incurred approximately$288,000 in costs related to the May 2021 ransomware attack at our Florida Pneumatic subsidiary, where no such costs were incurred during the second quarter of 2022. - Lastly, our general corporate expenses declined
$61,000 this quarter, compared to the same period in 2021.
OTHER EXPENSE (INCOME)
Other expense in 2022 consists primarily of adjustments to the fair value of certain assets.
On April 20, 2020, we received a Paycheck Protection Program ("PPP") loan, in the amount of
INTEREST EXPENSE (INCOME)
Three months ended June 31, | Increase (decrease) | |||||||||||
2022 | 2021 | Amount | % | |||||||||
Interest expense attributable to: | ||||||||||||
Short-term borrowings | $ | 89,000 | $ | 8,000 | $ | 81,000 | 1012.5 | % | ||||
PPP loan | — | (27,000) | 27,000 | 100.0 | ||||||||
Amortization expense of debt issue costs | 4,000 | 4,000 | — | NA | ||||||||
Other | (7,000) | — | (7,000) | NA | ||||||||
Total | $ | 86,000 | $ | (15,000) | $ | 101,000 | 673.3 | % | ||||
Six months ended June 30, | Increase (decrease) | |||||||||||
2022 | 2021 | Amount | % | |||||||||
Interest expense attributable to: | ||||||||||||
Short-term borrowings | $ | 137,000 | $ | 18,000 | $ | 119,000 | 661.1 | % | ||||
PPP loan | — | (19,000) | 19,000 | 100.0 | ||||||||
Amortization expense of debt issue costs | 8,000 | 8,000 | — | NA | ||||||||
Other | (7,000) | — | (7,000) | NA | ||||||||
Total | $ | 138,000 | $ | 7,000 | $ | 131,000 | 1,871.4 | % | ||||
Our average short-term borrowings during the three and six-month periods ended June 30, 2022, increased significantly, when compared to the same periods in 2021. This increase was due primarily to our decision to increase safety stock levels of inventory, due primarily to delays and other supply chain issues, increased inventory related to the shipment of the stocking rollout that occurred during the second quarter of 2022, and the purchase and related costs associated with the acquisition in the first quarter of 2022 of the JGC business. Additionally, the Applicable Margins, as defined in the Credit Agreement with Capital One bank, NA, also increased.
As discussed earlier, during the second quarter of 2021, we applied for and received forgiveness of the PPP loan. Accordingly, we recorded the reversal of associated interest expense.
Debt issue costs are associated with an amendment to the Credit Agreement. There were no amortizable debt issue costs incurred with Amendment No. 9, or Amendment No. 10 to the Credit Agreement.
Other interest relates to interest received in connection with federal income tax refunds received.
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 and six-month periods ended June 30, 2022, were a tax expense of
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:
June 30, 2022 | December 31, 2021 | |||||
Working capital | $ | 22,407,000 | $ | 24,598,000 | ||
Current ratio | 2.40 to 1 | 3.04 to 1 | ||||
Shareholders' equity | $ | 43,066,000 | $ | 43,840,000 | ||
Credit facility
We and the Bank entered into an amendment that, among other things, increased the Revolver borrowing commitment by
At June 30, 2022, there was
Should the need arise whereby the current Credit Agreement is insufficient; we believe that the current Agreement could be expanded, and/or we could obtain additional funds based on the value of our real property.
Cash flows
For the six-month period ended June 30, 2022, cash used by operating activities was
Our total debt to total book capitalization (total debt divided by total debt plus equity) on June 30, 2022, was
During the six-month period ended June 30, 2022, we completed the JGC acquisition, with a purchase price of
During the six-month period ended June 30, 2022, we used
The major portion of these planned capital expenditures will be for new metal cutting equipment, tooling and information technology hardware and software, and the expansion of our Punxsutawney, PA facility as a result of the acquisition of JGC business.
Our liquidity and capital is primarily sourced from our credit facility.
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.
OTHER INFORMATION
P&F Industries Inc. has scheduled a conference call later today at 11:00 A.M. Eastern Time, to discuss its second quarter 2022 results and financial condition. Investors and other interested parties who wish to listen to or participate can dial 1-888-221-3881. 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 August 12, 2022.
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 2021 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;
- The strength of the retail economy in the United States and abroad;
- Risks associated with Brexit;
- 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, 2021, 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 $) | June 30, 2022 | December 31, 2021 | ||||||
(Unaudited) | (Audited) | |||||||
Assets | ||||||||
Cash | $ | 431 | $ | 539 | ||||
Accounts receivable - net | 10,418 | 7,550 | ||||||
Inventories | 24,610 | 24,021 | ||||||
Prepaid expenses and other current assets | 2,946 | 4,566 | ||||||
Total current assets | 38,405 | 36,676 | ||||||
Net property and equipment | 8,941 | 8,080 | ||||||
Goodwill | 4,822 | 4,447 | ||||||
Other intangible assets - net | 5,673 | 5,592 | ||||||
Deferred income taxes - net | 374 | 349 | ||||||
Right-of-use assets – operating leases | 3,718 | 2,969 | ||||||
Other assets – net | 69 | 77 | ||||||
Total assets | $ | 62,002 | $ | 58,190 | ||||
Liabilities and Shareholders' Equity | ||||||||
Short-term borrowings | $ | 10,069 | $ | 5,765 | ||||
Accounts payable | 2,337 | 2,920 | ||||||
Accrued compensation and benefits | 1,187 | 1,475 | ||||||
Accrued other liabilities | 1,484 | 1,078 | ||||||
Current leased liabilities – operating leases | 921 | 840 | ||||||
Total current liabilities | 15,998 | 12,078 | ||||||
Noncurrent leased liabilities – operating leases | 2,855 | 2,176 | ||||||
Other liabilities | 83 | 96 | ||||||
Total liabilities | 18,936 | 14,350 | ||||||
Total shareholders' equity | 43,066 | 43,840 | ||||||
Total liabilities and shareholders' equity | $ | 62,002 | $ | 58,190 | ||||
P & F INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||
Three months ended June 30, | Six months ended June 30, | |||||||
(In Thousand $) | 2022 | 2021 | 2022 | 2021 | ||||
Net revenue | $ | 17,810 | $ | 13,589 | $ | 31,831 | $ | 27,535 |
Cost of sales | 12,174 | 8,741 | 21,684 | 18,051 | ||||
Gross profit | 5,636 | 4,848 | 10,147 | 9,484 | ||||
Selling | 5,479 | 5,458 | 10,652 | 10,449 | ||||
Operating loss | 157 | (610) | (505) | (965) | ||||
Other (expense) income | (16) | 2,929 | (16) | 2,929 | ||||
Interest (expense) income | (86) | 15 | (138) | (7) | ||||
Income (loss) before income taxes | 55 | 2,334 | (659) | 1,957 | ||||
Income tax (expense) benefit | (76) | 89 | 20 | 159 | ||||
Net income (loss) | $ | (21) | $ | 2,423 | $ | (639) | $ | 2,116 |
P&F INDUSTRIES, INC. AND SUBSIDIARIES | Six months | ||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | ended June 30, | ||||||||||||||||
(In Thousands $) | 2022 | 2021 | |||||||||||||||
Cash Flows from Operating Activities: | |||||||||||||||||
Net (loss) income | $ | (639) | $ | 2,116 | |||||||||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||||||
Non-cash and other charges: | |||||||||||||||||
Depreciation and amortization | 881 | 902 | |||||||||||||||
Amortization of other intangible assets | 341 | 316 | |||||||||||||||
Rent expense from leased obligations | 471 | 449 | |||||||||||||||
Amortization of debt issue costs | 8 | 8 | |||||||||||||||
Amortization of consideration payable to a customer | 135 | 135 | |||||||||||||||
Provision for losses on (recovery of) accounts receivable | 42 | 59 | |||||||||||||||
Stock-based compensation | 1 | 3 | |||||||||||||||
Stock-based compensation – exercise of options | 38 | — | |||||||||||||||
Restricted stock-based compensation | 19 | 27 | |||||||||||||||
Forgiveness of PPP loan | — | (2,929) | |||||||||||||||
Deferred income taxes | (20) | (159) | |||||||||||||||
(Loss) gain on sale of fixed assets | (5) | 7 | |||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Accounts receivable | (2,276) | (750) | |||||||||||||||
Inventories | (353) | (895) | |||||||||||||||
Prepaid expenses and other current assets | 1,302 | 414 | |||||||||||||||
Accounts payable | (778) | 1,482 | |||||||||||||||
Accrued compensation and benefits | 681 | 718 | |||||||||||||||
Accrued other liabilities and other current liabilities | (524) | (64) | |||||||||||||||
Payments on lease liabilities | (461) | (443) | |||||||||||||||
Other liabilities | (17) | (28) | |||||||||||||||
Total adjustments | (515) | (748) | |||||||||||||||
Net cash (used in) provided by operating activities | (1,154) | 1,368 | |||||||||||||||
Cash Flows from Investing Activities: | |||||||||||||||||
Capital expenditures | $ | (923) | $ | (247) | |||||||||||||
Purchase of net assets of Jackson Gear Company business | (2,300) | — | |||||||||||||||
Net cash used in investing activities | (3,223) | (247) | |||||||||||||||
Cash Flows from Financing Activities: | |||||||||||||||||
Proceeds from exercise of stock options | 2 | ||||||||||||||||
Net payments relating to short-term borrowings | 4,304 | (1,004) | |||||||||||||||
Net cash (provided by) used in financing activities | 4,306 | (1,004) | |||||||||||||||
Effect of exchange rate changes on cash | (37) | (4) | |||||||||||||||
Net increase (decrease) in cash | (108) | 113 | |||||||||||||||
Cash at beginning of period | 539 | 904 | |||||||||||||||
Cash at end of period | $ | 431 | $ | 1,017 | |||||||||||||
P&F INDUSTRIES, INC. AND SUBSIDIARIES | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (continued) | |||||||||
(In Thousands $) | |||||||||
Supplemental disclosures of cash flow information: | |||||||||
Cash paid for: | |||||||||
Interest | $ | 114 | $ | 19 | |||||
Taxes | $ | 124 | 12 | ||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | -- | $ | 6 | |||||
Noncash information: | |||||||||
Right of Use ("ROU") assets recognized for new operating lease liabilities | $ | 987 | $ | 53 | |||||
P & F INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||||||||||
NON-GAAP FINANCIAL MEASURE AND RECONCILIATION | ||||||||||||||||
COMPUTATION OF (EBITDA) - EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
(In Thousands $) | For the three-month periods ended | For the six-month periods ended June 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net income (loss) (2) | $ | (21) | $ | 2,423 | $ | (639) | $ | 2,116 | ||||||||
Add: | ||||||||||||||||
Depreciation and amortization | 622 | 608 | 1,222 | 1,218 | ||||||||||||
Interest expense (income) | 86 | (15) | 138 | 7 | ||||||||||||
Income tax expense (benefit) | 76 | (89) | (20) | (159) | ||||||||||||
784 | 504 | 1,340 | 1,066 | |||||||||||||
EBITDA (1) | $ | 763 | $ | 2,927 | $ | 701 | $ | 3,182 | ||||||||
(1) | The Company discloses a tabular comparison of EBITDA, 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 EBITDA provides greater insight into the Company's results of operations for the periods presented. EBITDA should not be considered in isolation or as a substitute for operating income as reported on the face of our statement of operations. | |
(2) | Included in the three- and six-month Net income for 2021 is the forgiveness of the |
View original content:https://www.prnewswire.com/news-releases/pf-industries-inc-reports-results-for-the-three-and-six-month-periods-ended-june-30-2022-and-announces-special-dividend-301604037.html
SOURCE P&F Industries, Inc.
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