Met-Pro Corp.’s (MPR) second-quarter earnings plunged 56.2% year over year to $1.2 million on sluggish demand in its large project and industrial markets. Earnings per share came in at 8 cents, compared to 18 cents in the year-ago quarter and missing the Zacks Consensus Estimate by 38.5%, or 5 cents.
The Harleysville, PA-based company posted a 25.8% year-over-year decline in revenues to $20.9 million as sales slumped across all segments amid weak global economic conditions. The company booked orders worth $19.4 million in the quarter, compared to $25.7 million in the same period last year.
In terms of segments, Product Recovery and Pollution Control, which contributed nearly 50% to overall revenue, fell 27.3% year over year to $10.3 million. Fluid Handling Technologies dipped 27.2% to $5.7 million, while Mefiag Filtration Technologies slipped 34.7% to $1.99 million. The Filtration and Purification Technologies unit declined 6.5% to $2.8 million primarily due to a slowdown in the Keystone Filter business. During the quarter, Met-Pro generated $16.2 million from domestic operations, about 77.5% of total sales and $4.7 million from international operations.
Gross margin decreased by a modest 20 basis points year over year to 34.0%, as weak revenue performance was partially offset by various efficiency initiatives, including facility consolidations, global sourcing, lean manufacturing and lower commodity costs. However, operating expenses, as a percentage of revenue, rose 560 bps year over year to 25.6%, mainly due to higher expenses related to pension, healthcare and stock options. Accordingly, operating income slumped nearly 56% year over year to $1.8 million, while operating margin contracted 580 bps to 8.5%.
Met-Pro ended the quarter with cash and equivalents of $29.2 million, compared to $22.7 million in the year-ago quarter. The improved cash position was primarily caused by a 38.7% reduction in accounts receivable to $13.9 million coupled with a 14.2% decrease in inventories to $18.2 million. During the first half, the company deployed $1.3 million towards capital expenditure and $1.75 million for payment of dividends.
Looking ahead, the company expects bookings to improve in the second-half of the year, driven by the federal stimulus programs leading to better sales and bottom-line performance. Meanwhile, the Zacks Consensus Estimate on Met-Pro’s earnings for the fiscal year ending January 2010 is currently pegged at 51 cents per share, which has slipped a penny over the past 2 months. Next year’s Zacks Consensus Estimate has also moved down by 2 cents over the same period to 66 cents per share.
Met-Pro is a global manufacturer of product recovery and pollution control equipment for purification of air and liquids, fluid handling equipment for corrosive, abrasive and high temperature liquids, and filtration and purification products. The company has operations in the U.S., Canada, Europe and China.
Read the full analyst report on “MPR”
Zacks Investment Research
