MELVILLE, N.Y., Aug. 12, 2010 (GLOBE NEWSWIRE) -- P&F Industries, Inc. (Nasdaq:PFIN) today announced its results of operations for the three and six-month periods ended June 30, 2010.
P&F Industries, Inc. reported revenue from continuing operations of $13,320,000 and $24,467,000, for the three and six-month periods ended June 30, 2010, respectively, compared to $14,073,000 and $26,294,000, for the same periods in 2009. For the three-month period ended June 30, 2010, the Company reported income after taxes from continuing operations of $269,000, compared to a loss after taxes from continuing operations of $71,000 during the three-month period ended June 30, 2009. For the six month period ended June 30, 2010, the Company reported a loss after taxes from continuing operations of $438,000, compared to an after tax loss from continuing operations of $410,000 in the same period a year ago. The Company noted that during the six-month period ended June 30, 2010 it incurred substantial legal and consulting fees primarily due to its efforts to resolve certain banking related issues, which aggregated approximately $555,000.
The Company reported basic and diluted earnings (loss) per common share of:
| For the three month period | For the six month period | |||
| ended June 30 | ended June 30 | |||
| 2010 | 2009 | 2010 | 2009 | |
| Basic and diluted earnings (loss) per share | ||||
| Continuing operations | $ 0.07 | $ (0.02) | $ (0.12) | $ (0.11) |
| Discontinued operations | (3.01) | (0.14) | (3.49) | (0.21) |
| Net (loss) | $ (2.94) | $ (0.16) | $ (3.61) | $ (0.32) |
Richard Horowitz, the Company's Chairman of the Board, Chief Executive Officer and President, stated, "The after tax profit from continuing operations we are reporting this quarter is due in large part to improved gross margins and the on-going cost reduction efforts put forth by P&F and its operating subsidiaries."
In addition, the Company incurred a loss after taxes from discontinued operations of $10,885,000 during the three-month period ended June 30, 2010, compared to a loss after taxes from discontinued operations of $494,000 in the second quarter of 2009. For the six-month period ended June 30, 2010 the loss after taxes from discontinued operations was $12,629,000 compared to a loss after taxes from discontinued operations of $761,000 for the same period in 2009.
Mr. Horowitz explained, "During the second quarter of 2010, PNC Bank foreclosed and liquidated the assets of Old Stairs Co., LLC, formerly known as WM Coffman LLC. As a result of such foreclosure and liquidation of these assets, combined with Old Stairs' results during the quarter, and the recognition of expenses generated from Old Stairs' default on its Marion, Virginia facility, Old Stairs recognized the loss from discontinued operations." Mr. Horowitz noted that, "We believe the proceeds from the liquidation of Old Stairs' assets will be sufficient to repay its secured creditors; however, Old Stairs Co. has not yet received the final accounting from PNC of its liquidation efforts."
The Company reported fiscal second quarter 2010 revenue at its Continental Tool Group of $8,695,000, compared to $9,336,000 in the same period a year ago. Specifically, revenue at Florida Pneumatic was $5,115,000 this quarter compared to $6,121,000 during the same three-month period in 2009. Florida Pneumatic's revenue for the six-month period ended June 30, 2010, was $9,661,000 compared to $10,830,000 for the same period in 2009. Revenue at Hy-Tech Machine for the three and six-month periods ended June 30, 2010 was $3,580,000 and $6,854,000, respectively, compared to $3,215,000 and $7,651,000 for the same periods in the prior year.
The Countrywide Hardware group, which, for reporting purposes as of January 1, 2010, consists only of Nationwide Industries, reported revenue for the three and six-month periods ended June 30, 2010 of $4,625,000 and $7,952,000, respectively, compared to $4,737,000 and $7,813,000 for the same periods in the prior year. The six-month increase was primarily driven by the fence and gate hardware product line.
During the three and six-month periods ended June 30, 2010, the Company reported consolidated gross margins of 35.2% and 35.5%, respectively, compared to 28.2% and 30.7% for the same periods in 2009. Gross margins at the Tools segment improved to 33.8% during the three-month period ended June 30, 2010, from 27.0% in the same three-month period in the prior year. During the six-month period ended June 30, 2010, gross margin for the Tools segment was 34.2%, compared to 31.0% in the same six-month period in 2009. The improvement was driven by an improved mix of products sold, improved pricing from its overseas suppliers, lower indirect labor and improved utilization of fixed overhead.
Nationwide's gross margin for the three-month period ended June 30, 2010 improved to 37.9% from 30.5% for the same period in 2009, and its gross margin for the six-month period ended June 30, 2010 was 38.3% compared to 30.4% during the six-month period ended June 30, 2009. These improvements are primarily the result of product mix, reductions in the cost of products and improved absorption of warehouse overhead.
For the three and six-month periods ended June 30, 2010, the Company's selling, general and administrative expenses were $4,084,000 and $8,401,000, compared to $3,823,000 and $8,026,000 for the same periods in 2009. The primary factor contributing to the increase in selling, general and administrative expenses was increased legal and consulting fees incurred during the first six months of 2010, primarily due to the Company's efforts to resolve certain banking related issues, which aggregated approximately $555,000. Further, the Company noted that its on-going expense and payroll reduction plan continues to provide cost savings throughout the organization.
OTHER INFORMATION
P&F Industries has scheduled a conference call for today, August 12, 2010, at 11:00 A.M., Eastern Time to discuss its second quarter of 2010 results and other developments relating to the Company. Investors and other interested parties can listen to the call by dialing (877) 407-9210, or via a live web cast accessible at www.pfina.com. To listen to the web cast, please register and download audio software at the site at least 15 minutes prior to the call. For those who cannot listen to the live broadcast, a replay of the call will also be available on the Company's web-site beginning on or about August 13, 2010.
P&F Industries, Inc., through its two wholly owned operating subsidiaries, Continental Tool Group, Inc. and Countrywide Hardware, Inc., manufactures and/or imports air-powered tools sold principally to the industrial, retail and automotive markets, and various residential hardware such as kitchen and bath hardware, fencing hardware and door and window hardware primarily to the housing industry. P&F's products are sold under their own trademarks, as well as under the private labels of major manufacturers and retailers.
This is a Safe-Harbor Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including those related to the Company's future performance, and those contained in the comments of management, are based upon the Company's historical performance and on current plans, estimates and expectations, which are subject to various risks and uncertainties, including, but not limited to, the strength of the retail, industrial, housing and other markets in which the Company operates, the impact of competition, product demand, supply chain pricing, the Company's debt and debt service requirements, potential exposure to the Company in connection with PNC Bank's foreclosure on the assets of Old Stairs, Co, LLC, formerly WM Coffman and those other risks and uncertainties described in the reports and statements filed by the Company with the Securities and Exchange Commission, including, among others, those described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009. These risks could cause the Company's actual results for the 2010 fiscal year and beyond to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company. Forward-looking statements speak only as of the date on which they are made, and 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.
| P & F INDUSTRIES, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED CONDENSED BALANCE SHEETS | ||
| In Thousand $ | June 30, 2010 | December 31, 2009 |
| (Unaudited) | (Audited) | |
| Assets | ||
| Cash | $ 820 | $ 546 |
| Accounts receivable - net | 7,596 | 7,545 |
| Inventories - net | 17,931 | 19,746 |
| Notes and other receivables | 92 | 110 |
| Deferred income taxes - net | 670 | 670 |
| Income tax refund receivable | 49 | 3,270 |
| Prepaid expenses and other current assets | 209 | 169 |
| Assets of discontinued operations | 188 | 10,797 |
| Total current assets | 27,555 | 42,853 |
| Property and equipment | 25,229 | 25,156 |
| Less accumulated depreciation and amortization | 12,792 | 11,990 |
| Net property and equipment | 12,437 | 13,166 |
| Goodwill | 5,150 | 5,150 |
| Other intangible assets - net | 2,476 | 2,651 |
| Deferred income taxes – net | 1,437 | 1,437 |
| Assets of discontinued operations | 16 | 3,924 |
| Other assets – net | 233 | 237 |
| Total assets | $ 49,304 | $ 69,418 |
| Liabilities and Shareholders' Equity | ||
| Short-term borrowings | $ 11,300 | $ 16,300 |
| Accounts payable | 2,530 | 1,396 |
| Other accrued liabilities | 3,103 | 2,003 |
| Liabilities of discontinued operations | 12,870 | 9,719 |
| Current maturities of long-term debt | 4,883 | 5,015 |
| Total current liabilities | 34,686 | 34,433 |
| Long-term debt, less current maturities | 1,688 | 4,148 |
| Liabilities of discontinued operations | 313 | 5,222 |
| Total liabilities | 36,687 | 43,803 |
| Total shareholders' equity | 12,617 | 25,615 |
| Total liabilities and shareholders' equity | $ 49,304 | $ 69,418 |
| P & F INDUSTRIES, INC. AND SUBSIDIARIES | ||||
| CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS | ||||
| Three months ended June 30, | Six months ended June 30, | |||
| In Thousand $ | 2010 | 2009 | 2010 | 2009 |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Net revenue | $ 13,320 | $ 14,073 | $ 24,467 | $ 26,294 |
| Cost of sales | 8,630 | 10,105 | 15,778 | 18,226 |
| Gross profit | 4,690 | 3,968 | 8,689 | 8,068 |
| Selling, general and admin expenses | 4,084 | 3,823 | 8,401 | 8,026 |
| Operating (loss) income | 606 | 145 | 288 | 42 |
| Interest expense | 337 | 322 | 726 | 627 |
| Income (Loss) from continuing operations before income taxes | 269 | (177) | (438) | (585) |
| Income tax (benefit) expense | 0 | (106) | 0 | (175) |
| Net income (loss) from continuing operations | 269 | (71) | (438) | (410) |
|
Loss from discontinued operations (net of tax benefit of $ none for the three and six- month periods ended June 30, 2010 and $268 and $326 for three and six-month periods ended June 30, 2009) |
(10,885) | (494) | (12,629) | (761) |
| Net loss | $ (10,616) | $ (565) | $ (13,067) | $ (1,171) |