Exhibit 99.1
Flanders Corporation Reports First Quarter 2009 Financial Results
WASHINGTON, NC--(Marketwire - May 04, 2009) - Flanders Corporation (NASDAQ: FLDR)
-- Improved gross margins 290 basis points, compared to first quarter 2008
-- Lowered operating expenses 19% compared to first quarter 2008
-- Delivered operating margin of 5% and EPS of $0.07
Flanders Corporation (NASDAQ: FLDR) reported financial results for the first quarter ended March 31, 2009.
Flanders Corporation's Chairman, president and CEO Harry Smith said: "Our improved efficiencies have positioned the company to perform well during the difficult economic environment. While revenue was impacted by lulls in commercial and industrial segments of our business, our better procurement practices drove first quarter 2009 gross margins to 20.6%, up 290 basis points, compared to the first quarter of 2008. During 2008, we improved on-time delivery to 99%, restoring customers' confidence. As a result, our customers are relying more heavily on Flanders. Toward the quarter end, the rate of orders increased, particularly in our retail business. In fact, March orders were very healthy, and these trends continued into the second quarter. We are well positioned heading into our busy season, and we are confident in our projections for the year: revenue growth of 8% to 13% from 2008, profitability and positive EBITDA."
First Quarter 2009 Financial Summary
Revenue for the first quarter 2009 was $48.0 million, compared to $49.2 million in the first quarter 2008. Gross margin for the first quarter was 20.6%, compared to 17.7% in the first quarter 2008. The first quarter 2009 net income was $1.8 million, or $0.07 per share. This compares to the first quarter of 2008 net income of $2.4 million, or $0.09 per share, which included a $1.5 million gain for extraordinary items. EBITDA for the first quarter 2009 was $4.5 million, compared to $3.7 million, before the $1.5 million extraordinary gain in the first quarter of 2008.
Management uses some measures not in accordance with generally accepted accounting principles (GAAP) to evaluate the results of the company's operations and believes earnings before interest, taxes, extraordinary items, depreciation and amortization (EBITDA) provides a useful measure of operations.
Flanders' Chief Financial Officer John Oakley said: "We are encouraged that during this very challenging environment, optimized plants and production continued to yield cost benefits. We lowered operating expenses 19%, compared to the same period last year. As a result, operating margin increased to 5%, and we achieved profitability of $0.07 per diluted share. We also improved liquidity and delivered positive operating cash flow of $1.8 million. Even in an uncertain economy, our streamlined infrastructure combined with consumer and commercial demand for greater energy efficiency and cleaner air position us for growth. We continue to expect 2009 revenue to be between $235 million and $246 million delivering annual profitability and positive EBITDA."
Conference Call
Chairman, president and CEO Harry Smith and CFO John Oakley are scheduled to conduct a conference call and simultaneous webcast at 11:00 a.m. ET on May 4, 2009 to review these results in more detail. To access the call in the U.S., please dial (866) 425-6192, and for international callers dial (973) 409-9253 approximately 10 minutes prior to the start of the conference call. The conference ID will be 95329001. A telephone replay will be available until midnight Eastern Time on May 6th by dialing (800) 642-1687 or (706) 645-9291 and entering pass code 95329001.
Safe Harbor Statement
The statements made in this press release regarding Flanders (1) improved efficiencies positioning the company to perform well during the difficult economic environment, (2) better procurement practices, (3) improved on-time delivery, (4) restoring customer confidence and customers relying more heavily on the Company, (5) being well positioned heading into the busy season, (6) projections for the year of revenue growth being between 8% to 13% from 2008, profitability and positive EBITDA, (7) optimized plants and production yielding and continuing to yield cost benefits, (8) lowering and continuing to lower operating expenses, (9) operating margins increasing and continuing to increase, (10) streamlined infrastructure combined with consumer and commercial demand for position the Company for growth, and (11) 2009 revenue to be between $235 million and $246 million delivering annual profitability and positive EBITDA are based on the current expectations and beliefs of the management of Flanders and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For a more detailed discussion of risk factors that may affect Flanders' operations, please refer to the Company's Form 10-K for the year ended December 31, 2008. These forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update such forward-looking statements, except as required by law.
About Flanders
Flanders is a leading air filtration products manufacturer. Flanders' products are utilized by many industries, including those associated with commercial and residential heating, ventilation and air conditioning systems, semiconductor manufacturing, ultra-pure materials, biotechnology, pharmaceuticals, synthetics, nuclear power and nuclear materials processing.
For further information on Flanders and its products, visit its web site at http://www.flanderscorp.com/ or contact Kirsten Chapman or Tim Dien at (415) 433-3777.
- Tables Follow -
FLANDERS CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED CONDENSED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
March 31, | December 31, | |||||||
ASSETS | 2009 | 2008 | ||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 451 | $ | 404 | ||||
Receivables: | ||||||||
Trade, less allowance: | ||||||||
3/31/2009 $3,200; 12/31/2008 $3,683 | 39,954 | 37,682 | ||||||
Other | 401 | 280 | ||||||
Inventories | 33,260 | 31,549 | ||||||
Deferred taxes | 4,047 | 4,285 | ||||||
Income Taxes | 9,209 | 10,048 | ||||||
Other current assets | 5,100 | 4,714 | ||||||
Total current assets | 92,422 | 88,962 | ||||||
Property and equipment, less accumulated depreciation: 3/31/2009$55,799; 12/31/2008 $55,520 | 59,528 | 57,156 | ||||||
Intangible assets, less accumulated amortization: | ||||||||
3/31/2009 $1,464; 12/31/2008 $1,449 | 293 | 295 | ||||||
Other Assets | 14,669 | 14,604 | ||||||
$ | 166,912 | $ | 161,017 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Current maturities of long-term debt and capital lease obligations | $ | 1,243 | $ | 1,307 | ||||
Accounts payable | 23,091 | 22,795 | ||||||
Accrued expenses | 15,356 | 13,517 | ||||||
Other Current Liabilities | 6,179 | 6,179 | ||||||
Total current liabilities | 45,869 | 43,798 | ||||||
Long-term capital lease obligations, less current maturities | 452 | 554 | ||||||
Long-term debt, less current maturities | 31,740 | 29,611 | ||||||
Long-term liabilities, other | 4,183 | 4,286 | ||||||
Deferred taxes | - | - | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
Preferred stock, $.001par value, 10,000 shares authorized; none issued | - | - | ||||||
Common stock, $.001 par value; 50,000 shares authorized; issued and outstanding: 25,524 and25,524 shares at March 31, 2009 and December 31, 2008, respectively | 26 | 26 | ||||||
Additional paid-in capital | 87,298 | 87,253 | ||||||
Accumulated other comprehensive loss | (1,176 | ) | (1,231 | ) | ||||
Retained deficit | (1,480 | ) | (3,280 | ) | ||||
84,668 | 82,768 | |||||||
$ | 166,912 | $ | 161,017 |
FLANDERS CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | ||||||||
(In thousands, except per share data) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2009 | 2008 | |||||||
Net sales | $ | 48,020 | $ | 49,194 | ||||
Cost of goods sold | 38,115 | 40,470 | ||||||
Gross profit | 9,905 | 8,724 | ||||||
Operating expenses | 7,535 | 9,276 | ||||||
Operating income (loss) | 2,370 | (552 | ) | |||||
Nonoperating income (expense): | ||||||||
Other income, net | 754 | 2,603 | ||||||
Interest expense | (267 | ) | (633 | ) | ||||
487 | 1,970 | |||||||
Earnings before income taxes and extraordinary item | 2,857 | 1,418 | ||||||
Provision for income taxes | 1,057 | 567 | ||||||
Income before extraordinary item | 1,800 | 851 | ||||||
Extraordinary gain on Fire (net of taxes) | - | 1,533 | ||||||
Net earnings | $ | 1,800 | $ | 2,384 | ||||
Income before extraordinary item Basic earnings per share | $ | 0.07 | $ | 0.03 | ||||
Extraordinary item | $ | - | $ | 0.06 | ||||
Net earnings per share | $ | 0.07 | $ | 0.09 | ||||
Income before extraordinary item Diluted earnings per share | $ | 0.07 | $ | 0.03 | ||||
Extraordinary item | $ | - | $ | 0.06 | ||||
Net earnings per share | $ | 0.07 | $ | 0.09 | ||||
Weighted average common shares outstanding | ||||||||
Basic | 25,524 | 25,723 | ||||||
Diluted | 25,780 | 26,124 |
FLANDERS CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2009 | 2008 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net cash provided by operating activities | $ | 1,805 | $ | 3,650 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Disposal, net of cash acquired | - | (11 | ) | |||||
Purchase of property and equipment | (3,850 | ) | (2,045 | ) | ||||
Proceeds from sale of property and equipment | 49 | 3 | ||||||
Decrease in other assets | 169 | 199 | ||||||
Net cash used in investing activities | (3,632 | ) | (1,854 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Principal payments on long-term borrowings | (190 | ) | (145 | ) | ||||
Net proceeds from (payments on) revolving credit agreement | 2,154 | (1,002 | ) | |||||
Payment of Debt Issuance Costs | (90 | ) | - | |||||
Purchase and Retirement of Common Stock | - | (281 | ) | |||||
Proceeds from Sales of Common Stock | - | 56 | ||||||
Net cash provided by (used in) financing activities | 1,874 | (1,372 | ) | |||||
Net increase in cash and cash equivalents | 47 | 424 | ||||||
CASH AND CASH EQUIVALENTS | ||||||||
Beginning of period | 404 | 498 | ||||||
End of period | $ | 451 | $ | 922 | ||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
Cash paid during the period for: | ||||||||
Income taxes | $ | 62 | $ | 51 | ||||
Interest | $ | 201 | $ | 564 | ||||
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND | ||||||||
FINANCING ACTIVITIES | ||||||||
Sale of equipment for note receivable | $ | 166 | $ | 83 | ||||
Cashless exercise of common stock (Net) | $ | - | $ | (270 | ) | |||
Offset of accrued expenses against trade accounts receivable | $ | 3,427 | $ | 7,211 | ||||
DISPOSAL OF COMPANIES | ||||||||
Working Capital surplus disposed, net of cash and cash equivalents disposed | - | 466 | ||||||
Fair value of other assets disposed, | ||||||||
principally property and equipment | - | 119 | ||||||
Goodwill disposed | - | 589 | ||||||
Minority interest | - | 141 | ||||||
$ | - | $ | 1,315 |
FLANDERS CORPORATION AND SUBSIDIARIES | ||||||||
RECONCILIATION OF NET EARNINGS TO EBITDA | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Three months ended | ||||||||
March 31, | ||||||||
2009 | 2008 | |||||||
Net Earnings | $ | 1,800 | $ | 2,384 | ||||
Extraordinary items | 0 | (1,533 | ) | |||||
Interest | 267 | 633 | ||||||
Taxes | 1,057 | 567 | ||||||
Depreciation and amortization | 1,367 | 1,609 | ||||||
EBITDA Earnings | $ | 4,491 | $ | 3,660 |
Company Contact:
John Oakley
CFO
Flanders Corporation
(252) 946-8081
Investor Relations Contacts:
Lippert / Heilshorn & Associates
Kirsten Chapman / Tim Dien
tdien@lhai.com
(415) 433-3777