Attached files
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| 8-K - FORM 8-K - MET PRO CORP | mpr8k20101217.htm |
3rd Quarter Report
for the Fiscal Year Ending January 31, 2011
Dear Fellow Shareholder:
The third quarter was another very solid quarter during which we were able to grow both net sales and net income when compared with the third quarter last year. We were also able to achieve good results in all our key metrics including new order bookings, gross margins, operating margins, and cash flow. This is the third straight quarter where net income and earnings per share were up significantly compared with the same periods last year.
Third quarter net sales of $21.4 million were up 8% compared with last year's third quarter, while net income of $1.4 million and earnings per share of $0.10 were up 38% and 43%, respectively, compared with the same quarter last year.
Many factors contributed to the significant earnings improvement for the current quarter including gradual improvement in global economic conditions, the Company’s “Lean” enterprise initiative, emerging market growth, and better product mix resulting from a higher proportion of fluid handling technologies sales. Our third quarter gross margin reached 36.4%, up from 33.7% in the third quarter of last year, while our operating margin rose to 10.2% of net sales compared with 7.8% last year.
New order bookings for the third quarter were $24.8 million, the best quarterly new order bookings total this fiscal year. During the quarter, we booked the single largest pump order in the Company’s history, $3.7 million, and ended the quarter with a backlog that was 12% higher than the same quarter a year ago. Quotation activity remains solid as we continue to execute our strategy to create new opportunities in key niche markets. As a result, our pipeline of new order opportunities continues to grow and strengthen.
During the third quarter, we continued to generate strong cash flows from operating activities, increasing our cash position at October 31, 2010 to $34.2 million. Our strong cash position allowed us to increase the dividend by 10% and to further invest in our business by acquiring substantially all of the assets, including the patents and technology, of Bio-Reaction Industries, LLC, a pioneer in environmentally friendly air pollution control systems for the elimination of volatile organic compounds, hazardous air pollutants and odors. Bio-Reaction’s technology is a nice complement to our existing pollution control technologies, enabling us to bring new, organic solutions to our existing customer base while also providing us the opportunity to introduce Met-Pro’s technologies to Bio-Reaction’s core markets and customer base.
On October 20, 2010, the Company declared a quarterly dividend of $0.066 per share, a 10 percent increase, payable on December 17, 2010 to shareholders of record at the close of business on December 3, 2010. This is the thirty-sixth consecutive year that Met-Pro Corporation has paid either a cash or stock dividend.
Though the recovery in our markets continues to be very measured in its pace, and in certain areas, such as large projects, choppy, we remain confident that over the long-term Met-Pro Corporation is well positioned to capitalize on the very powerful trends toward global environmental stewardship, energy efficiency, and process improvement. The results we have achieved can be attributed to our disciplined strategy to efficiently produce and deliver high-quality products that provide compelling value to our customers, which we believe will build value for you, our shareholders, over the long-term.
On behalf of all our loyal, dedicated and hardworking employees worldwide who have contributed to your Company’s success, thank you very much for your continued interest and support of Met-Pro Corporation.
| /s/ Raymond J. De Hont | |
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Raymond J. De Hont
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Chairman, President and
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Chief Executive Officer
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December 8, 2010
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Met-Pro Corporation
Consolidated Statements of Income
(unaudited)
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Three Months Ended
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Nine Months Ended
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||||||||
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October 31,
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October 31,
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||||||||
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2010
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2009
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2010
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2009
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||||||
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Net sales
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$21,384,674
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$19,807,781
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$65,098,637
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$60,334,372
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|||||
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Cost of goods sold
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13,589,638
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13,131,244
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41,478,910
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39,538,914
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|||||
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Gross profit
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7,795,036
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6,676,537
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23,619,727
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20,795,458
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|||||
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Operating expenses
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|||||||||
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Selling
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2,849,221
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2,366,455
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8,549,038
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7,415,388
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|||||
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General and administrative
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2,763,913
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2,771,681
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8,478,717
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8,599,958
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|||||
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5,613,134
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5,138,136
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17,027,755
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16,015,346
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||||||
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Income from operations
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2,181,902
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1,538,401
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6,591,972
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4,780,112
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|||||
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Interest expense
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(50,201
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) |
(58,994
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) |
(159,887
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) |
(166,449
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) | |
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Other income, net
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18,601
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61,689
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208,834
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138,441
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Income before taxes
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2,150,302
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1,541,096
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6,640,919
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4,752,104
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|||||
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Provision for taxes
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731,103
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516,266
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2,257,912
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1,591,957
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|||||
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Net income
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$1,419,199
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$1,024,830
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$4,383,007
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$3,160,147
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|||||
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Basic earnings per share
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$.10
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$.07
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$.30
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$.22
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|||||
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Diluted earnings per share
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$.10
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$.07
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$.30
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$.22
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Average common shares outstanding:
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|||||||||
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Basic shares
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14,620,439
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14,600,109
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14,621,802
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14,600,109
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|||||
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Diluted shares
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14,711,056
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14,676,525
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14,717,084
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14,676,297
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Met-Pro Corporation
Consolidated Balance Sheets
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October 31,
2010
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January 31,
2010
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|||||
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Assets
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(unaudited)
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|||||
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Current assets
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||||||
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Cash and cash equivalents
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$34,195,031
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$31,387,108
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Accounts receivable, net of allowance for
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||||||
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doubtful accounts of approximately
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||||||
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$173,000 and $204,000, respectively
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13,760,732
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14,011,950
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||||
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Inventories
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15,951,368
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16,136,521
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Prepaid expenses, deposits and other current assets
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1,664,162
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1,709,664
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Total current assets
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65,571,293
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63,245,243
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Property, plant and equipment, net
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19,853,258
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19,860,751
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Goodwill
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20,798,913
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20,798,913
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Other assets
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1,761,399
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703,452
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Total assets
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$107,984,863
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$104,608,359
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Liabilities and shareholders’ equity
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||||||
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Current liabilities
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||||||
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Current portion of long-term debt
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$534,811
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$534,251
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||||
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Accounts payable
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5,544,724
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4,297,936
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||||
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Accrued salaries, wages and expenses
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4,194,457
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3,425,691
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Dividend payable
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966,098
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876,279
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Customers’ advances
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561,250
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882,637
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Deferred income taxes
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181,253
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181,253
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Total current liabilities
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11,982,593
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10,198,047
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Long-term debt
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3,255,522
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3,536,755
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Other non-current liabilities
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8,147,488
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8,179,410
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Deferred income taxes
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1,668,671
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1,716,563
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Total liabilities
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25,054,274
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23,630,775
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Shareholders’ equity
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||||||
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Common shares, $.10 par value; 36,000,000 shares
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||||||
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authorized, 15,928,679 shares issued, of which
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1,290,838 and 1,311,664 shares were reacquired
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and held in treasury at the respective dates
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1,592,868
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1,592,868
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Additional paid-in capital
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3,340,332
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2,988,950
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Retained earnings
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92,324,568
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90,662,820
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Accumulated other comprehensive loss
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(3,760,013
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)
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(3,679,641
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)
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Treasury shares, at cost
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(10,567,166
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)
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(10,587,413
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)
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Total shareholders’ equity
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82,930,589
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80,977,584
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Total liabilities and shareholders’ equity
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$107,984,863
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$104,608,359
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Met-Pro Corporation
Consolidated Statements of Cash Flows
(unaudited)
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Nine Months Ended October 31,
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||||||
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2010
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2009
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Cash flows from operating activities
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||||||
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Net income
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$4,383,007
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$3,160,147
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Adjustments to reconcile net income to net
cash provided by operating activities:
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||||||
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Depreciation and amortization
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1,344,262
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1,458,401
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Deferred income taxes
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(1,809
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)
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(1,792
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)
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(Gain) on sale of property and equipment, net
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(13,236
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)
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(13,695
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)
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Stock-based compensation
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484,416
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494,625
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Allowance for doubtful accounts
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(31,473
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)
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101,492
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Changes in operating assets and liabilities:
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||||||
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Accounts receivable
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364,097
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6,910,662
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Inventories
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214,319
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3,832,976
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Prepaid expenses, deposits and other assets
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(269,599
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)
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251,165
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Accounts payable and accrued expenses
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1,839,376
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(1,385,430
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)
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Customers’ advances
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(324,249
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)
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298,448
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Other non-current liabilities
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(31,922
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)
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(354,7933
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)
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Net cash provided by operating activities
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7,957,189
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14,752,206
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Cash flows from investing activities
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||||||
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Proceeds from sale of property and equipment
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36,037
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20,382
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Acquisitions of property and equipment
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(1,128,403
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)
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(1,826,975
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)
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Payment for acquisition of business
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(955,268
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)
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–
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|||
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Net cash used in investing activities
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(2,047,634
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)
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(1,806,593
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)
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Cash flows from financing activities
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||||||
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Proceeds from new borrowing
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189,074
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485,336
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||||
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Reduction of debt
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(584,864
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)
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(373,336
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)
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||
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Exercises of stock options
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547,232
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–
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||||
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Payments of dividends
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(2,631,441
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)
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(2,628,020
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)
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||
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Purchases of treasury shares
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(660,019
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)
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–
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|||
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Net cash used in financing activities
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(3,140,018
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)
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(2,516,020
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)
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||
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Effect of exchange rate changes on cash
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38,386
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106,550
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||||
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Net increase in cash and cash equivalents
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2,807,923
|
10,536,143
|
||||
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Cash and cash equivalents at February 1
|
31,387,108
|
21,749,653
|
||||
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Cash and cash equivalents at October 31
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$34,195,031
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$32,285,796
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|||
Met-Pro Corporation
Consolidated Business Segment Data
(unaudited)
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Three Months Ended
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Nine Months Ended | |||||||||
| October 31, | October 31, | |||||||||
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2010
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2009
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2010
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2009
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Net sales
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||||||||||
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Product Recovery/Pollution Control Technologies
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$9,204,381
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$9,012,363
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$29,924,788
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$26,900,405
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||||||
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Fluid Handling Technologies
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7,031,096
|
5,781,338
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20,070,626
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18,491,303
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||||||
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Mefiag Filtration Technologies
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2,478,656
|
2,502,795
|
7,421,375
|
6,981,727
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||||||
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Filtration/Purification Technologies
|
2,670,541
|
2,511,285
|
7,681,848
|
7,960,937
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||||||
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$21,384,674
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$19,807,781
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$65,098,637
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$60,334,372
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|||||||
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Income (loss) from operations
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||||||||||
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Product Recovery/Pollution Control Technologies
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$324,695
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$561,966
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$1,483,092
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$1,610,321
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||||||
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Fluid Handling Technologies
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1,563,262
|
833,094
|
4,166,526
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3,110,175
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||||||
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Mefiag Filtration Technologies
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89,283
|
47,062
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459,248
|
(111,372
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)
|
|||||
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Filtration/Purification Technologies
|
204,662
|
96,279
|
483,106
|
170,988
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||||||
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$2,181,902
|
$1,538,401
|
$6,591,972
|
$4,780,112
|
|||||||
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October 31,
2010
|
January 31,
2010
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|||||||||
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Identifiable Assets
|
||||||||||
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Product Recovery/Pollution Control Technologies
|
$33,684,030
|
$34,466,168
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||||||||
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Fluid Handling Technologies
|
17,689,173
|
18,068,428
|
||||||||
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Mefiag Filtration Technologies
|
13,118,549
|
12,257,281
|
||||||||
|
Filtration/Purification Technologies
|
8,352,155
|
8,257,837
|
||||||||
|
72,843,907
|
73,049,714
|
|||||||||
|
Corporate
|
35,140,956
|
31,558,645
|
||||||||
|
$107,984,863
|
$104,608,359
|
|||||||||
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this shareholder letter, and other materials filed or to be filed with the Securities and Exchange Commission (as well as information included in oral or other written statements made or to be made by the Company) contain statements that are forward-looking. Such statements may relate to plans for future expansion, business development activities, capital spending, financing, the effects of regulation and competition, or anticipated sales or earnings results. Such information involves risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. These risks and uncertainties include, but are not limited to, those relating to, the cancellation or delay of purchase orders and shipments, product development activities, goodwill impairment, computer systems implementation, dependence on existing management, the continuation of effective cost and quality control measures, retention of customers, global economic and market conditions, and changes in federal or state laws.
Met-Pro common shares are traded on the New York Stock Exchange, symbol MPR.
Financial information should be considered in conjunction with the Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report and the Securities and Exchange Commission’s Form 10-K for the fiscal year ended January 31, 2010. To obtain an Annual Report, Form 10-K or additional information on the Company, please call 215-723-6751 and ask for the Investor Relations Department, or visit the Company’s website at www.met-pro.com.