Attached files
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: July 31, 2012
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-07763
MET-PRO CORPORATION
(Exact name of registrant as specified in its charter)
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Pennsylvania
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23-1683282
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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160 Cassell Road, P.O. Box 144
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Harleysville, Pennsylvania
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19438
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (215) 723-6751
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ X ] No [ ]
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ X ] Non-accelerated filer [ ] Smaller reporting company [ ]
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]
As of September 6, 2012 the Registrant had 14,687,013 Common Shares, par value of $.10 per share, issued and outstanding.
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PART I – FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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as of July 31, 2012 and January 31, 2012
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2
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for the six-month and three-month periods ended July 31, 2012 and 2011
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3
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for the six-month and three-month periods ended July 31, 2012 and 2011
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4 | ||
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for the six-month periods ended July 31, 2012 and 2011
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5
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for the six-month periods ended July 31, 2012 and 2011
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6
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7
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16
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| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 17 | |
| Item 3. | Qualitative and Quantitative Disclosures about Market Risk | 25 | |
| Item 4. | Controls and Procedures | 25 | |
| PART II – OTHER INFORMATION | |||
| Item 1. | Legal Proceedings | 26 | |
| Item 1A. | Risk Factors | 27 | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 27 | |
| Item 3. | Defaults Upon Senior Securities | 27 | |
| Item 4. | 25 | ||
| Item 5. | Other Information | 27 | |
| Item 6. | 28 | ||
| SIGNATURES | 29 | ||
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PART I – FINANCIAL INFORMATION
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Item 1. Financial Statements
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July 31,
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January 31,
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ASSETS
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2012
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2012
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Current assets
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(unaudited)
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Cash and cash equivalents
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$31,173,910
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$34,581,394
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Short-term investments
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1,022,266
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764,061
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Accounts receivable, net of allowance for
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doubtful accounts of approximately
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$393,000 and $491,000, respectively
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17,782,160
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17,373,121
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Inventories
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17,927,911
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17,847,143
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Prepaid expenses, deposits and other current assets
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2,122,429
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1,683,486
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Deferred income taxes
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186,111
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186,329
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Total current assets
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70,214,787
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72,435,534
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Property, plant and equipment, net
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18,905,209
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19,322,436
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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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2,859,678
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2,952,332
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Total assets
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$112,778,587
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$115,509,215
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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Current liabilities
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Current portion of debt
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$569,963
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$657,216
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Accounts payable
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7,371,543
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7,684,739
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Accrued salaries, wages and benefits
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1,799,692
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1,827,603
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Other accrued expenses
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2,625,231
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2,357,929
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Dividend payable
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1,043,876
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1,042,297
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Customers’ advances
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1,441,639
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3,232,600
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Total current liabilities
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14,851,944
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16,802,384
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Long-term debt
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2,477,041
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2,687,971
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Accrued pension retirement benefits
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9,196,595
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10,618,047
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Other non-current liabilities
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57,489
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56,391
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Deferred income taxes
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1,314,255
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1,522,451
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Total liabilities
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27,897,324
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31,687,244
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Commitments and contingencies
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Shareholders’ equity
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Common shares, $.10 par value; 36,000,000 shares
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authorized, 15,928,679 shares issued, of which
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1,241,666 and 1,250,051 shares were reacquired and held in
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treasury
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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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4,582,952
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4,058,735
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Retained earnings
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97,020,326
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96,228,764
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Accumulated other comprehensive loss
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(8,044,714
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)
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(7,718,883
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)
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Treasury shares, at cost
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(10,270,169
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)
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(10,339,513
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)
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Total shareholders’ equity
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84,881,263
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83,821,971
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Total liabilities and shareholders’ equity
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$112,778,587
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$115,509,215
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See accompanying notes to consolidated financial statements.
(unaudited)
| Six Months Ended | Three Months Ended | |||||||
| July 31, | July 31, | |||||||
| 2012 | 2011 | 2012 |
2011
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Net sales
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$53,204,303
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$46,519,246
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$27,997,242
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$23,089,343
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Cost of goods sold
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35,555,673
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30,324,060
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19,299,138
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14,952,362
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Gross profit
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17,648,630
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16,195,186
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8,698,104
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8,136,981
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Operating expenses
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Selling
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6,088,953
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5,840,188
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3,029,372
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2,924,062
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General and administrative
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7,392,680
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6,049,529
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3,248,591
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2,990,426
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Total selling, general and administrative
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13,481,633
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11,889,717
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6,277,963
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5,914,488
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Income from operations
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4,166,997
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4,305,469
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2,420,141
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2,222,493
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Interest expense
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(84,398
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)
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(98,709
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)
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(41,863
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)
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(49,908
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)
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Other income
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95,672
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191,330
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49,747
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85,344
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Income before taxes
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4,178,271
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4,398,090
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2,428,025
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2,257,929
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Provision for taxes
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1,299,574
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1,495,349
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808,026
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767,695
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Net income
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$2,878,697
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$2,902,741
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$1,619,999
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$1,490,234
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Earnings per share, basic
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$.20
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$.20
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$.11
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$.10
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Earnings per share, diluted
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$.20
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$.20
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$.11
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$.10
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Cash dividend per share – declared
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$.142
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$.132
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$.071
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$.066
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Cash dividend per share – paid
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$.142
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$.132
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$.071
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$.066
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See accompanying notes to consolidated financial statements.
(unaudited)
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Six Months Ended
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Three Months Ended
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July 31,
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July 31,
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|||||||
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2012
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2011
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2012
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2011
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Net income
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$2,878,697
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$2,902,741
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$1,619,999
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$1,490,234
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Other comprehensive (loss) income, net of tax:
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Foreign currency translation adjustment
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(331,576
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)
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346,920
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(425,061
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)
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(121,100
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)
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Interest rate swap, net of tax of ($3,374),
$16,287, $6,072 and $16,135, respectively
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5,745
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(27,733
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)
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(10,338
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)
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( 27,474
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)
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Other comprehensive (loss) income, net of tax
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(325,831
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)
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319,187
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(435,399
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)
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(148,574
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)
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Total comprehensive income
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$2,552,866
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$3,221,928
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$1,184,600
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$1,341,660
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See accompanying notes to consolidated financial statements.
(unaudited)
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Accumulated
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Additional
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Other
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Common
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Paid-in
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Retained
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Comprehensive
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Treasury
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Shares
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Capital
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Earnings
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(Loss)
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Shares
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Total
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Balances, January 31, 2012
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$1,592,868
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$4,058,735
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$96,228,764
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($7,718,883
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)
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($10,339,513
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)
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$83,821,971
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Net income
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-
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-
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2,878,697
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-
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-
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2,878,697
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Other comprehensive (loss), net of tax
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-
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-
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-
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(325,831
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) |
-
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(325,831
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Dividends
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-
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-
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(2,087,135
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)
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-
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-
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(2,087,135
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)
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Stock-based compensation
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-
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593,561
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-
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-
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-
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593,561
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RSU transactions
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-
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(69,344
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) |
-
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-
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69,344
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-
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Balances, July 31, 2012
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$1,592,868
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$4,582,952
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$97,020,326
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($8,044,714
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)
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($10,270,169
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)
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$84,881,263
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||||
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Accumulated
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||||||||||||
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Additional
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Other
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|||||||||||
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Common
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Paid-in
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Retained
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Comprehensive
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Treasury
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||||||||
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Shares
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Capital
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Earnings
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(Loss) Income
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Shares
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Total
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Balances, January 31, 2011
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$1,592,868
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$3,448,249
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$93,113,247
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($3,201,767
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)
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($10,479,673
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)
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$84,472,924
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Net income
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-
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-
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2,902,741
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-
|
-
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2,902,741
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||||||
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Other comprehensive income, net of tax
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-
|
-
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-
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319,187
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-
|
319,187
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||||||
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Dividends
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-
|
-
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(1,935,059
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)
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-
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-
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(1,935,059
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)
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Stock-based compensation
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-
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359,652
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-
|
-
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-
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359,652
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||||||
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Stock option transactions
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-
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1,500
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-
|
-
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41,300
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42,800
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||||||
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Purchase of 3,717 treasury shares
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-
|
-
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-
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-
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(42,800
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)
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(42,800
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)
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Balances, July 31, 2011
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$1,592,868
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$3,809,401
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$94,080,929
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($2,882,580
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)
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($10,481,173
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)
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$86,119,445
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||||
See accompanying notes to consolidated financial statements.
(unaudited)
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Six Months Ended
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||||||
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July 31,
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||||||
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2012
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2011
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|||||
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Cash flows from operating activities
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||||||
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Net income
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$2,878,697
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$2,902,741
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||||
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Adjustments to reconcile net income to net
cash (used in) provided by operating activities:
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||||||
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Depreciation and amortization
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989,865
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955,777
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||||
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Stock-based compensation
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593,561
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359,652
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||||
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Deferred income taxes
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(209,897
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)
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(1,212
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)
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Loss/(gain) on sales of property and equipment, net
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1,080
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(27,496
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)
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Allowance for doubtful accounts
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(98,479
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)
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57,456
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Change in operating assets and liabilities:
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||||||
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Accounts receivable
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(425,173
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)
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(1,357,446
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)
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Inventories
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(219,103
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)
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(1,379,911
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)
|
||
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Prepaid expenses, deposits and other assets
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(695,430
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)
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(162,928
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)
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Accounts payable and accrued expenses
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(2,972
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)
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1,650,817
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Customers’ advances
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(1,788,386
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)
|
372,567
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|||
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Accrued pension retirement benefits
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(1,421,452
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)
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(2,751,787
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)
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Other non-current liabilities
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1,098
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1,098
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||||
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Net cash (used in) provided by operating activities
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(396,591
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)
|
619,328
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|||
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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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-
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33,990
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||||
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Acquisitions of property and equipment
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(678,364
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)
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(918,049
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)
|
||
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Purchase of investments
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(1,022,266
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)
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(1,010,534
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)
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Proceeds from maturities of investments
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1,012,123
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497,155
|
||||
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Net cash used in investing activities
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(688,507
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)
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(1,397,438
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)
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||
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Cash flows from financing activities
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||||||
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Proceeds from new borrowings
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223,454
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407,759
|
||||
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Reduction of debt
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(470,326
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)
|
(385,819
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)
|
||
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Exercise of stock options
|
-
|
42,800
|
||||
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Payment of dividends
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(2,085,556
|
)
|
(1,934,975
|
)
|
||
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Purchase of treasury shares
|
-
|
(42,800
|
)
|
|||
|
Net cash used in financing activities
|
(2,332,428
|
)
|
(1,913,035
|
)
|
||
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Effect of exchange rate changes on cash
|
10,042
|
11,572
|
||||
|
Net decrease in cash and cash equivalents
|
(3,407,484
|
)
|
(2,679,573
|
)
|
||
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Cash and cash equivalents at February 1
|
34,581,394
|
32,400,814
|
||||
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Cash and cash equivalents at July 31
|
$31,173,910
|
$29,721,241
|
||||
|
Supplemental disclosure of cash flow information:
|
||||||
|
Cash paid for interest
|
$85,534
|
$99,046
|
||||
|
Cash paid for income taxes
|
1,311,076
|
1,074,259
|
||||
|
See accompanying notes to consolidated financial statements.
|
||||||
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation:
The accompanying unaudited consolidated financial statements include the accounts of Met-Pro Corporation (“Met-Pro” or the “Company”) and its direct and indirect wholly-owned subsidiaries: Mefiag B.V., Met-Pro Product Recovery/Pollution Control Technologies Inc., Strobic Air Corporation, MPC Inc., Pristine Water Solutions Inc., Mefiag (Guangzhou) Filter Systems Ltd., Met-Pro (Hong Kong) Company Limited, Met-Pro Industrial Services Inc., Bio-Reaction Industries Inc., Met-Pro Holdings LLC and Met-Pro Chile Limitada. All significant intercompany accounts and transactions have been eliminated.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts disclosed in the financial statements and accompanying notes. Estimates, by their nature, are based on judgment and available information. Actual results could differ materially from those estimates.
Significant estimates inherent in the preparation of the accompanying unaudited consolidated financial statements include valuation of accounts receivable, goodwill, intangible assets, other long-lived assets, legal contingencies and assumptions used in the calculations of income taxes.
The accompanying interim unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. All adjustments (consisting of normal recurring adjustments) considered necessary to present fairly the financial position of the Company as of July 31, 2012 and the results of operations for the six-month and three-month periods ended July 31, 2012 and 2011, and changes in shareholders’ equity and cash flows for the six-month periods then ended, have been included. The results of operations for the six-month and three-month periods ended July 31, 2012 are not necessarily indicative of the results to be expected for the full year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K/A for the year ended January 31, 2012. In addition, the January 31, 2012 Balance Sheet data, presented herein, was derived from the audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP.
Recent Accounting Pronouncements:
In July 2012, the FASB issued ASU 2012-02, “Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.” This ASU simplifies how entities test indefinite-lived intangible assets for impairment which improves consistency in impairment testing requirements among long-lived asset categories. This amended standard permits an assessment of qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying value. For assets in which this assessment concludes it is more likely than not that the fair value is more than its carrying value, these amended standards eliminate the requirement to perform quantitative impairment testing as outlined in the previously issued standards. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012; early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.
NOTE 2 – FAIR VALUE DISCLOSURES
Cash and cash equivalents:
Cash and cash equivalents at July 31, 2012 and January 31, 2012 amounted to $31,173,910 and $34,581,394, respectively. The cash and cash equivalents balance at July 31, 2012 was comprised of the following: (i) cash amounting to $8,255,107 and (ii) cash equivalents consisting of money market funds amounting to $22,918,803. The Company places its cash deposits and temporary cash investments with financial institutions, that at times, may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. At July 31, 2012, the Company’s cash and cash equivalents were held at 20 financial institutions.
Short-term investments:
Short-term investments at July 31, 2012 and January 31, 2012 amounted to $1,022,266 and $764,061, respectively. The short-term investment balance at July 31, 2012 was comprised of four certificates of deposit with twelve month maturity dates. The short-term investment balance at January 31, 2012 was comprised of two certificates of deposit with nine month maturity dates and one certificate of deposit with a twelve month maturity date.
Long-term investments:
Long-term investments at July 31, 2012 and January 31, 2012 amounted to $246,473 and $494,537, respectively, which are reported in other assets on the consolidated balance sheets. The long-term investment balance at July 31, 2012 was comprised of one certificate of deposit with a 15 month maturity date. The long-term investment balance at January 31, 2012 was comprised of two certificates of deposit with fourteen and fifteen month maturity dates.
The Company evaluates the creditworthiness of the financial institutions and financial instruments in which it invests. The Company’s financial instruments are not held for trading purposes.
Debt:
The estimated fair value and carrying amount of debt were as follows:
|
July 31,
|
January 31, | |||||
|
2012
|
2012
|
|||||
|
Fair value
|
$3,443,543
|
$3,747,061
|
||||
|
Carrying amount
|
3,047,004
|
3,345,187
|
||||
Valuations for debt are determined based on borrowing rates currently available to the Company for loans with similar terms and maturities.
The Company uses an interest rate swap (see Note 7) to minimize its exposure to fluctuations in interest rates. The interest rate differential to be paid or received under these agreements is recognized over the term of the loan and is included in interest expense.
Fair value measurements:
ASC Topic 820, “Fair Value Measurements and Disclosures”, defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The standard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.
The following tables summarize the basis used to measure the Company’s financial assets (liabilities) at fair value on a recurring basis in the consolidated balance sheets.
|
Quoted Prices
|
|||||||
|
in Active
|
|||||||
|
Markets for
|
Significant
|
Significant
|
|||||
|
Identical
|
Observable
|
Unobservable
|
|||||
|
Balance at
|
Assets
|
Inputs
|
Inputs
|
||||
|
July 31, 2012
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||
|
Cash and cash equivalents
|
$31,173,910
|
$31,173,910
|
$-
|
$-
|
|||
|
Short-term investments
|
1,022,266
|
1,022,266
|
-
|
-
|
|||
|
Long-term investments
|
246,473
|
246,473
|
-
|
-
|
|||
|
Cash surrender value - life insurance policies
|
1,147,287
|
-
|
1,147,287
|
-
|
|||
|
Interest rate swap agreement
|
(357,167
|
)
|
-
|
(357,167
|
)
|
-
|
|
|
$33,232,769
|
$32,442,649
|
$790,120
|
$-
|
|
Quoted Prices
|
|||||||
|
in Active
|
|||||||
|
Markets for
|
Significant
|
Significant
|
|||||
|
Identical
|
Observable
|
Unobservable
|
|||||
|
Balance at
|
Assets
|
Inputs
|
Inputs
|
||||
|
January 31, 2012
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||
|
Cash and cash equivalents
|
$34,581,394
|
$34,581,394
|
$-
|
$-
|
|||
|
Short-term investments
|
764,061
|
764,061
|
-
|
-
|
|||
|
Long-term investments
|
494,537
|
494,537
|
-
|
-
|
|||
|
Cash surrender value - life insurance policies
|
1,089,989
|
-
|
1,089,989
|
-
|
|||
|
Interest rate swap agreement
|
(366,286
|
)
|
-
|
(366,286
|
)
|
-
|
|
|
$36,563,695
|
$35,839,992
|
$723,703
|
$-
|
There were no transfers of assets or liabilities between Level 1 and Level 2 in the six-month period ended July 31, 2012 or the fiscal year ended January 31, 2012.
The predominance of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. The Company’s cash surrender value of life insurance policies (which are reported in other assets on the consolidated balance sheets) and the interest rate swap agreement are valued using Level 2 measurements.
NOTE 3 – EARNINGS PER SHARE COMPUTATIONS
Basic earnings per share is based on the weighted average number of common shares outstanding. Diluted earnings per share is based on the weighted average number of common shares outstanding and potentially dilutive shares. The dilutive effect of employee and non-employee director stock options and awards of restricted stock units are included in the computation of diluted earnings per share. The dilutive effect of stock options is calculated using the treasury stock method and expected proceeds upon exercise of the stock options. The following table summarizes the shares used in computing basic and diluted net income per common share:
|
Six Months Ended
July 31,
|
Three Months Ended
July 31,
|
|||||||
|
2012
|
2011
|
2012
|
2011
|
|||||
|
Numerator:
|
||||||||
|
Net income
|
$2,878,697
|
$2,902,741
|
$1,619,999
|
$1,490,234
|
||||
|
Denominator:
|
||||||||
|
Weighted average common shares outstanding during
the period for basic computation
|
14,681,423
|
14,659,331
|
14,679,746
|
14,659,281
|
||||
|
Dilutive effect of stock-based compensation plans
|
54,730
|
165,349
|
59,802
|
173,958
|
||||
|
Weighted average common shares outstanding during
the period for diluted computation
|
14,736,153
|
14,824,680
|
14,739,548
|
14,833,239
|
||||
|
Earnings per share, basic
|
$.20
|
$.20
|
$.11
|
$.10
|
||||
|
Earnings per share, diluted
|
$.20
|
$.20
|
$.11
|
$.10
|
||||
For the six and three months ended July 31, 2012, employee and non-employee director stock options to purchase 1,098,849 common shares, were excluded from the calculations of diluted earnings per share, as the calculated proceeds from the options’ exercises were greater than the market price of the Company’s common shares at July 31, 2012. For the six and three months ended July 31, 2011, employee and non-employee director stock options to purchase 616,585 common shares were excluded from the calculations of diluted earnings per share, as the calculated proceeds from the options’ exercises were greater than the market price of the Company’s common shares at July 31, 2011.
NOTE 4 – STOCK-BASED COMPENSATION
The Company grants equity awards to its senior executives and non-employee Directors. Historically, this has consisted of stock option awards. In December 2010, the Company’s Board of Directors approved a change in practice to begin awarding non-employee Directors restricted stock units (“RSUs”).
Stock options:
On June 6, 2012, April 2, 2012, and February 27, 2012, the Company granted 3,300, 54,625, and 97,299 stock options, respectively, to its senior executives, with one-third exercisable one year from the grant date and the remaining two-thirds vesting two and three years from grant date, respectively. In the event of a “change of control”, certain unvested options may become immediately exercisable. Typically, the duration of options is for up to ten years from the date of grant, subject to early termination conditions. The fair value of options granted is amortized into compensation expense on a straight-line basis over the respective vesting period, net of estimated forfeitures. The fair value of the options is estimated as of the grant date using the Black-Scholes option valuation model. The per share fair value weighted-averages at the date of grant for stock options granted in the months of June 2012, April 2012 and February 2012, were $2.91, $3.18 and $2.96, respectively. As of July 31, 2012, there was $388,291 of total unrecognized compensation expense related to non-vested stock option awards.
10
MET-PRO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The application of this valuation model relies on the following assumptions that are judgmental and sensitive in the determination of the compensation expense:
|
Six Months Ended
|
|||
|
July 31,
|
|||
|
|
2012
|
2011
|
|
|
Expected term (years)
|
5.0
|
-
|
|
|
Risk-free interest rate
|
0.88%
|
-
|
|
|
Expected volatility
|
44%
|
-
|
|
|
Dividend yield
|
2.88% - 2.93%
|
-
|
|
Historical information was the principal basis for the selection of the expected term and dividend yield. The expected volatility is based on a weighted-average combination of historical and implied volatilities over a time period that approximates the expected term of the option. The risk-free interest rate was selected based upon the U.S. Treasury Bill rates in effect at the time of grant for the expected term of the option.
The following table summarizes stock option transactions for the six-month period ended July 31, 2012:
|
Weighted
|
||||||
|
Weighted
|
Average
|
|||||
|
Average
|
Remaining
|
Aggregate
|
||||
|
Shares
|
Exercise Price
|
Life (years)
|
Intrinsic Value
|
|||
|
Options:
|
||||||
|
Outstanding at February 1, 2012
|
1,223,292
|
$10.2437
|
5.52
|
|||
|
Granted
|
155,224
|
10.0439
|
||||
|
Forfeited
|
(3,301
|
)
|
12.1800
|
|||
|
Expired
|
(9,956
|
)
|
5.5476
|
|||
|
Exercised
|
-
|
-
|
||||
|
Outstanding at July 31, 2012
|
1,365,259
|
$10.2506
|
5.34
|
$227,781
|
||
|
Exercisable at July 31, 2012
|
1,074,125
|
$10.1874
|
4.40
|
$227,781
|
||
The intrinsic value of stock options is the amount by which the market price of the stock on a given date, such as at the end of the period or on the day of exercise, exceeded the market price of stock on the date of grant.
In connection with the Separation Agreement between the Company and its former Chief Financial Officer, the Company agreed to accelerate the vesting date and extend the exercise date of certain stock options. This was considered a stock option modification resulting in additional stock compensation expense of approximately $250,000, which was recorded in the three-month period ended April 30, 2012.
Restricted Stock Units:
On June 6, 2012 and December 16, 2011, the Company awarded an aggregate of 15,465 RSUs and 8,385 RSUs, respectively, to its five non-employee Directors. Each RSU entitles the grantee to receive, from the Company, one common share at the vesting date in accordance with the terms of the award agreement. All of the awards granted on December 16, 2011 were issued upon vesting at the Annual Meeting of Shareholders on June 6, 2012. The awards granted on the date of the 2012 Annual Meeting of Shareholders on June 6, 2012 are scheduled to vest at the 2013 Annual Meeting of Shareholders. The award agreements provide for accelerated vesting in certain instances such as a “change in control” or death, and for pro-rata vesting in the event of a non-cause departure from the Board of Directors prior to the one year anniversary of the award. The weighted average grant fair value per unit for awards granted on June 6, 2012 was $9.70 (which is the average of the high and low price of the Company’s
11
MET-PRO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
common shares on the NYSE that day). As of July 31, 2012 there was a total of $125,008 of unrecognized compensation expense related to the non-vested RSU awards.
The following table summarizes RSU transactions for the six months ended July 31, 2012:
| Units |
|
|
|
Non-vested at February 1, 2012
|
8,385
|
|
|
Granted
|
15,465
|
|
|
Vested
|
(8,385
|
)
|
|
Forfeited
|
-
|
|
|
Non-vested at July 31, 2012
|
15,465
|
NOTE 5 – INVENTORIES
Inventories consisted of the following:
|
July 31,
2012
|
January 31,
2012
|
||
|
Raw materials
|
$12,512,078
|
$12,673,210
|
|
|
Work in progress
|
2,429,963
|
2,808,747
|
|
|
Finished goods
|
2,985,870
|
2,365,186
|
|
|
$17,927,911
|
$17,847,143
|
NOTE 6 – INCOME TAXES
The Company utilizes the expected annual effective tax rate in determining its income tax provisions for interim periods. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.
As of the fiscal year ended January 31, 2012, the Company had an unrecognized tax benefit of $49,000 to account for state tax matters in the United States as a result of changes in tax positions with relevant tax authorities. As of April 30, 2012, the Company filed returns with the relevant state tax authorities upon which the $49,000 unrecognized tax benefit was determined, and has concluded that it did not have an unrecognized tax benefit as of April 30, 2012. The Company has determined that there have been no additional changes in its tax positions in the three-months ended July 31, 2012.
A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows:
|
2012
|
||
|
Balance at February 1, 2012
|
$49,000
|
|
|
Increases in tax positions for prior years
|
-
|
|
|
Decreases in tax positions for prior years
|
(49,000
|
) |
|
Increases in tax positions for current year
|
-
|
|
|
Balance at July 31, 2012
|
$-
|
The Company and its subsidiaries are subject to income taxes in the U.S. federal jurisdiction, and various states and foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company and its subsidiaries are no longer subject to U.S. federal or non-U.S. income tax examinations by tax authorities for the years before 2008.
12
MET-PRO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 7 – DEBT
The Company and its subsidiaries have domestic and foreign uncommitted, unsecured lines of credit totaling $4,369,210 which can be used for working capital, of which $2,915,641 has been committed to standby letters of credit as of July 31, 2012. The standby letters of credit have expiration dates during the fiscal years ending January 31, 2013 and 2014 in the amounts of $2,314,685 and $600,596, respectively. Of the total lines of credit available, the foreign unsecured line of credit totals $369,120 (300,000 Euro). As of July 31, 2012 and January 31, 2012 the Company had zero outstanding borrowings from its domestic line of credit other than the amounts committed to standby letters of credit. The Company’s Mefiag B.V. subsidiary’s line of credit, which is with a bank in The Netherlands, had outstanding borrowings of $213,081 or 173,180 Euro as of July 31, 2012 and $265,581, or 202,997 Euro, as of January 31, 2012.
The Company’s long-term debt is subject to certain covenants, including maintenance of prescribed amounts of leverage and fixed charge coverage ratios. The Company was in compliance with all applicable covenants as of July 31, 2012.
The Company has an interest rate swap agreement to hedge against the potential impact on earnings from increases in market interest rates. Effective April 3, 2006, the Company entered into a fifteen-year interest rate swap agreement for a notional amount equal to the balance on the bond payable maturing April 2021. The Company swapped the ninety-day LIBOR for a fixed rate of 4.87%. As of July 31, 2012, the effective interest rate was 6.90% as a result of the swap agreement plus the interest rate floor provision of 250 basis points. The interest rate swap agreement is accounted for as a cash flow hedge that qualifies for treatment under the short-cut method of measuring effectiveness. There was no hedge ineffectiveness as of July 31, 2012. The fair value of the interest rate swap agreement resulted in a decrease in equity of $225,015 (net of tax) as of July 31, 2012 and a decrease in equity of $230,760 (net of tax) as of January 31, 2012. These results are recorded in the accumulated other comprehensive loss section of shareholders’ equity.
NOTE 8 – EMPLOYEE BENEFIT PLANS
The Company has several defined benefit pension plans covering eligible employees in the United States. Effective December 31, 2006, the Company amended its defined benefit pension plans to freeze the accrual of future benefits for all its salaried and non-union hourly employees. Effective December 31, 2008, the Company amended its defined benefit pension plan to freeze the accrual of future benefits for union hourly employees. The net periodic pension cost is based on estimated values provided by the Company’s independent actuary.
The following table provides the components of net periodic pension (income) cost:
|
Six Months Ended
|
Three Months Ended
|
||||||||
|
July 31,
|
July 31,
|
||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||
|
Service cost
|
$112,070
|
$102,842
|
$56,035
|
$51,442
|
|||||
|
Interest cost
|
544,436
|
560,764
|
272,218
|
280,364
|
|||||
|
Expected return on plan assets
|
(609,644
|
)
|
(700,981
|
)
|
(304,822
|
)
|
(350,481
|
)
|
|
|
Recognized net actuarial loss
|
219,982
|
104,943
|
109,991
|
52,443
|
|||||
|
Net periodic benefit cost
|
$266,844
|
$67,568
|
$133,422
|
$33,768
|
|||||
The Company elected to contribute $1,627,122 to its pension and defined contribution plans during the six-month period ended July 31, 2012. The Company expects to make an additional contribution of $47,122 during the six-month period ending January 31, 2013. The Company contributed $2,951,289 to its pension and defined benefit plans during the six-month period ended July 31, 2011.
13
MET-PRO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 9 – BUSINESS SEGMENT DATA
The Company has five operating segments which are aggregated into three reportable segments: Product Recovery/Pollution Control Technologies, Fluid Handling Technologies and Mefiag Filtration Technologies, and one other segment (Filtration/Purification Technologies). The Filtration/Purification Technologies segment is comprised of two operating segments that meet the criteria for aggregation.
The Company expects, based upon the current financial performance of its business units, that the current segment reporting will be presented in periods in the foreseeable future using the three reportable segments and the one other segment.
The accounting policies of the reporting segments are the same as those described in the summary of significant accounting policies. The Company evaluates the performance of these segments based on many factors including sales, sales trends, margins and operating performance.
No significant intercompany revenue is realized in these reporting segments. Interest income and expense are not included in the measure of segment profit reviewed by management. Income taxes are also not included in the measure of segment operating profit reviewed by management.
The Company follows the practice of allocating general corporate expenses, including depreciation and amortization expense, among the reporting segments based upon a percentage of sales.
The financial segmentation information is presented in the following table:
|
Six Months Ended
|
Three Months Ended
|
||||||||
|
July 31,
|
July 31,
|
||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||
|
Net sales
|
|
||||||||
|
Product Recovery/Pollution Control Technologies
|
$23,694,236
|
$17,957,870
|
$13,193,396
|
$9,625,898
|
|||||
|
Fluid Handling Technologies
|
17,715,506
|
16,960,255
|
8,315,307
|
7,407,151
|
|||||
|
Mefiag Filtration Technologies
|
6,375,331
|
6,344,301
|
3,523,165
|
3,204,384
|
|||||
|
Filtration/Purification Technologies
|
5,419,230
|
5,256,820
|
2,965,374
|
2,851,910
|
|||||
|
$53,204,303
|
$46,519,246
|
$27,997,242
|
$23,089,343
|
||||||
|
Income (loss) from operations
|
|||||||||
|
Product Recovery/Pollution Control Technologies
|
($912,229
|
)
|
($529,328
|
) |
($469,167
|
)
|
($49,043
|
) | |
|
Fluid Handling Technologies
|
4,747,658
|
4,142,399
|
2,363,288
|
1,901,703
|
|||||
|
Mefiag Filtration Technologies
|
295,813
|
390,550
|
367,901
|
169,078
|
|||||
|
Filtration/Purification Technologies
|
35,755
|
301,848
|
158,119
|
200,755
|
|||||
|
$4,166,997
|
$4,305,469
|
$2,420,141
|
$2,222,493
|
||||||
|
July 31,
|
|
January 31,
|
|||||||
|
2012
|
2012
|
||||||||
|
Identifiable assets
|
|
|
|||||||
|
Product Recovery/Pollution Control Technologies
|
$37,284,193
|
$36,444,763
|
|||||||
|
Fluid Handling Technologies
|
18,815,811
|
19,290,035
|
|||||||
|
Mefiag Filtration Technologies
|
14,916,983
|
14,017,572
|
|||||||
|
Filtration/Purification Technologies
|
8,419,428
|
8,368,652
|
|||||||
|
79,436,415
|
78,121,022
|
||||||||
|
Corporate
|
33,342,172
|
37,388,193
|
|||||||
|
$112,778,587
|
$115,509,215
|
||||||||
14
MET-PRO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 10 – CONTINGENCIES AND COMMITTMENTS
Beginning in 2002, the Company began to be named in asbestos-related lawsuits filed against a large number of industrial companies including, in particular, those in the pump and fluid handling industries. In management’s opinion, the complaints typically have been vague, general and speculative, alleging that the Company, along with the numerous other defendants, sold unidentified asbestos-containing products and engaged in other related actions which caused injuries (including death) and loss to the plaintiffs. Counsel has advised that more recent cases typically allege more serious claims of mesothelioma. The Company believes that it has meritorious defenses to the cases which have been filed and that none of its products were a cause of any injury or loss to any of the plaintiffs. The Company’s insurers have hired attorneys who, together with the Company, are vigorously defending these cases. The Company has been dismissed from or settled a large number of these cases. The sum total of all payments through July 31, 2012 to settle cases involving asbestos-related claims was $695,000, all of which has been paid by the Company’s insurers including legal expenses, except for corporate counsel expenses, with an average cost per settled claim, excluding legal fees, of approximately $25,000.
Based upon the most recent information available to the Company regarding such claims, there were a total of 143 cases pending against the Company as of July 31, 2012 (with Connecticut, New York, Pennsylvania and West Virginia having the largest number of cases), as compared with approximately 130 cases that were pending as of March 22, 2012. Subsequent to January 31, 2012, 25 new cases were filed against the Company, and the Company was dismissed from 15 cases and settled two cases. Most of the pending cases have not advanced beyond the early stages of discovery, although a number of cases are on schedules leading to, or are scheduled for trial. The Company believes that its insurance coverage is adequate for the cases currently pending against the Company and for the foreseeable future, assuming a continuation of the current volume, nature of cases and settlement amounts; however, the Company has no control over the number and nature of cases that are filed against it, nor as to the financial health of its insurers or their position as to coverage. The Company also presently believes that none of the pending cases will have a material adverse impact upon the Company’s results of operations, liquidity or financial condition.
At any given time, the Company is typically also party to a small number of other legal proceedings arising in the ordinary course of business. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based upon the present information, including the Company’s assessment of the facts of each particular claim as well as accruals, the Company believes that no pending proceeding will have a material adverse impact upon the Company’s results of operations, liquidity, or financial condition.
NOTE 11 – ACCOUNTANTS’ 10-Q REVIEW
Marcum LLP, the Company’s independent registered public accountants, performed a limited review of the financial information included herein. Their report on such review accompanies this filing.
To the Audit Committee of the Board of Directors
and Shareholders of Met-Pro Corporation
We have reviewed the accompanying consolidated balance sheet of Met-Pro Corporation and its wholly-owned subsidiaries as of July 31, 2012, and the related consolidated statements of income and comprehensive income for the six-month and three-month periods ended July 31, 2012 and 2011, and the consolidated statements of shareholders’ equity and cash flows for the six-month periods ended July 31, 2012 and 2011. These financial statements are the responsibility of the Company’s management.
We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim consolidated financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the consolidated balance sheet of Met-Pro Corporation and its wholly-owned subsidiaries as of January 31, 2012, and the related consolidated statements of income, shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated March 22, 2012, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of January 31, 2012 is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.
/s/ Marcum LLP
Marcum LLP
Bala Cynwyd, Pennsylvania
September 6, 2012
16
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations:
Cautionary Statement Concerning Forward-Looking Statements:
Our prospects are subject to certain uncertainties and risk. In addition to the other information set forth in this report, you should carefully consider the factors which could materially affect our business, financial condition, financial results or future performance, as discussed in Part I, “Item 1A. Risk Factors” and Part II, “Item 7. Forward-Looking Statements; Factors That May Affect Future Results” in our Annual Report on Form 10-K/A for the fiscal year ended January 31, 2012. This Quarterly Report on Form 10-Q also contains certain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements may be identified by words describing our belief or expectation, such as where we say that we “believe”, “expect” or “anticipate”, or where we characterize something in a manner in which there is an express or implicit reference to the future, such as “non-recurring” or “unusual,” or where we express that our view is based upon the “current status” of a given matter, or upon facts as we know them as of the date of the statement. The content and/or context of other statements that we make may indicate that the statement is “forward-looking”. We claim the “safe harbor” provided by The Private Securities Reform Act of 1995 for all forward-looking statements.
Results may differ materially from our current results and actual results could differ materially from those suggested in the forward-looking statements as a result of certain risk factors, other one-time events, other important factors disclosed previously and from time to time in the Company’s other filings with the Securities and Exchange Commission.
Introduction:
The following discussion and analysis should be read in conjunction with Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q, in addition to Item 8 “Financial Statements and Supplementary Data” in the Company’s Annual Report on Form 10-K/A for the fiscal year ended January 31, 2012.
Results of Operations:
The following table sets forth, for the six and three-month periods indicated, certain financial information derived from the Company’s consolidated statements of income expressed as a percentage of net sales.
|
Six Months Ended
|
Three Months Ended | |||||||||
|
July 31,
|
July 31, | |||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||
|
Net sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
||||||
|
Cost of goods sold
|
66.8%
|
65.2%
|
68.9%
|
64.8%
|
||||||
|
Gross profit
|
33.2%
|
34.8%
|
31.1%
|
35.2%
|
||||||
|
Selling expenses
|
11.5%
|
12.6%
|
10.8%
|
12.7%
|
||||||
|
General and administrative expenses
|
13.9%
|
13.0%
|
11.6%
|
12.9%
|
||||||
| Total selling, general and administrative expenses | 25.4% | 25.6% | 22.4% | 25.6% | ||||||
|
Income from operations
|
7.8%
|
9.2%
|
8.7%
|
9.6%
|
||||||
|
Interest expense
|
(0.2%
|
)
|
(0.2%
|
)
|
(0.2%
|
)
|
(0.2%
|
)
|
||
|
Other income
|
0.2%
|
0.4%
|
0.2%
|
0.4%
|
||||||
|
Income before taxes
|
7.8%
|
9.4%
|
8.7%
|
9.8%
|
||||||
|
Provision for taxes
|
2.4%
|
3.2%
|
2.9%
|
3.3%
|
||||||
|
Net income
|
5.4%
|
6.2%
|
5.8%
|
6.5%
|
||||||
17
MET-PRO CORPORATION AND SUBSIDIARIES
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations continued:
Six Months Ended July 31, 2012 vs. Six Months Ended July 31, 2011:
Net sales for the six-month period ended July 31, 2012 were $53,204,303 compared with $46,519,246 for the six-month period ended July 31, 2011, an increase of $6,685,057 or 14.4%.
Sales in the Product Recovery/Pollution Control Technologies reporting segment were $23,694,236, or $5,736,366 higher than the $17,957,870 of sales for the six-month period ended July 31, 2011, an increase of 31.9%. The sales increase in the Product Recovery/Pollution Control Technologies reporting segment was driven by higher sales in both the Met-Pro Environmental Air Solutions and Strobic Air business units, with the Met-Pro Environmental Air Solutions business unit contributing a higher percentage of the overall sales increase of the reporting segment, in part due to sales of the Bio-Reaction product line which was acquired in October 2010.
Sales in the Fluid Handling Technologies reporting segment totaled $17,715,506, or $755,251 higher than the $16,960,255 of sales for the six-month period ended July 31, 2011, an increase of 4.5%. Sales in the Fluid Handling Technologies reporting segment were higher as compared with the same period last year due to higher sales in the Met-Pro Global Pump Solutions business unit.
Sales in the Mefiag Filtration Technologies reporting segment were $6,375,331, or $31,030 higher than the $6,344,301 of sales for the six-month period ended July 31, 2011, or essentially flat, which is consistent with the trends in the industrial markets serviced by this reporting segment, which are primarily the automotive and housing industries.
Sales in the Filtration/Purification Technologies segment were $5,419,230, or $162,410 higher than the $5,256,820 of sales for the six-month period ended July 31, 2011, an increase of 3.1%. This increase was due primarily to increased sales in both the Keystone Filter and Pristine Water Solutions business units.
The Company’s backlog of orders totaled $33,871,352 and $26,346,245 as of July 31, 2012 and 2011, respectively. The rate of the Company’s bookings of new orders varies from period to period. Orders have varying delivery schedules, and as of any particular date, the Company’s backlog may not be predictive of actual revenues for any succeeding specific period, in part due to potential customer requested delays in delivery, the extent and duration of which may vary widely from period to period. The Company has also observed a trend over the last several years wherein larger projects are more frequently booked and shipped in the same quarter in which we received the customer’s purchase order, due to improved project execution and shorter lead times, resulting in such projects not appearing in publicly disclosed annual or quarterly backlog figures. Additionally, the Company’s customers typically have the right to cancel a given order, although the Company has historically experienced a very low rate of cancellation. The Company expects that a majority of the backlog that existed as of July 31, 2012 will be shipped during the current fiscal year.
The gross profit margin for the six-month periods ended July 31, 2012 and July 31, 2011 was 33.2% and 34.8%, respectively. This was primarily attributable to the Product Recovery/Pollution Control Technologies reporting segment, as well as the Filtration/Purification Technologies segment, both of which had lower gross profit margins than the same period of last year, which offset the gross profit margin improvement the Fluid Handling Technologies reporting segment experienced over the same period last year.
Income from operations for the six-month period ended July 31, 2012 was $4,166,997 compared with $4,305,469 for the six-month period ended July 31, 2011, a decrease of $138,472 or 3.2%. The loss from operations in the Product Recovery/Pollution Control Technologies reporting segment totaled $912,229, or $382,901 more than the loss of $529,328 for the six-month period ended July 31, 2011. The increase in the loss from operations in this segment was primarily related to the following: (i) three large contracts in the Met-Pro Environmental Air Solutions business unit which, although contributing $2.7 million in revenue, were at essentially an aggregate breakeven gross profit, due to lower than normal contract pricing and cost overruns and (ii) a higher proportion of general corporate expenses which are allocated to the segments based on revenues. These adverse factors more than offset the higher gross margin in the Strobic Air business unit, as well as the benefit during the period of not having severance expense of approximately $300,000 which was incurred in the six-month period ended July 31, 2011.
Income from operations in the Fluid Handling Technologies reporting segment totaled $4,747,658, or $605,259 higher than the income of $4,142,399 for the six-month period ended July 31, 2011, an increase of 14.6%. The increase in
18
MET-PRO CORPORATION AND SUBSIDIARIES
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations continued:
income from operations in this reporting segment was principally related to the increase in sales, as well as higher gross margins in the Met-Pro Global Pump Solutions business unit.
Income from operations in the Mefiag Filtration Technologies reporting segment totaled $295,813, or $94,737 lower than the income of $390,550 for the six-month period ended July 31, 2011, a decrease of 24.3%. The decrease in income from operations in the Mefiag Filtration Technologies reporting segment resulted from slightly lower gross margins.
Income from operations in the Filtration/Purification Technologies segment was $35,755 or $266,093 lower than the income of $301,848 for the six-month period ended July 31, 2011, a decrease of 88.2%. The decrease in income from operations in the Filtration/Purification Technologies segment was related primarily to lower gross profit margins in the Pristine Water Solutions business unit, attributable to increases in material costs and competitive pricing pressures in the municipal market.
Net income for the six-month period ended July 31, 2012 was $2,878,697 compared with $2,902,741 for the six-month period ended July 31, 2011, a decrease of $24,044, or 0.8%.
Selling expense was $6,088,953 for the six-month period ended July 31, 2012, an increase of $248,765 compared with $5,840,188 for the same period last year. This increase was primarily due to increased advertising activities. Selling expense as a percentage of net sales was 11.5% for the six-month period ended July 31, 2012 compared with 12.6% for the same period last year.
General and administrative expense was $7,392,680 for the six-month period ended July 31, 2012 compared with $6,049,529 for the same period last year, an increase of $1,343,151. This increase was due primarily to: (i) costs of approximately $695,000 related to separation expenses, which included salary continuation, stock option modification and transition expenses, associated with the Company’s change in its Chief Financial Officer, which was recorded in the first fiscal quarter ended April 30, 2012, as well as (ii) increased healthcare and pension expenses. These expenses more than offset the $300,000 of severance expense that the Company incurred during the six months ended July 31, 2011 as a result of the Company offering an enhanced voluntary employee retirement program for employees within the Product Recovery/Pollution Control Technologies reporting segment. General and administrative expense as a percentage of net sales was 13.9% for the six-month period ended July 31, 2012, compared with 13.0% for the same period last year.
Interest expense was $84,398 for the six-month period ended July 31, 2012, compared with $98,709 for the same period in the prior year, a decrease of $14,311. This slight decrease was due principally to reduction of indebtedness.
Other income was $95,672 for the six-month period ended July 31, 2012 compared with $191,330 for the same period in the prior year, a decrease of $95,658. This decrease is primarily attributable to a reduction in foreign currency gains in the current year.
The effective tax rate for the six-month period ended July 31, 2012 was 31.1%, compared to 34.0% in the comparable period of the prior year. The reduction in the effective rate on a year-over-year basis was primarily the result of a one-time benefit recorded in the three-months ended April 30, 2012, that is attributable to deductible stock compensation expense resulting from a change in the status of outstanding stock options. The Company’s analysis of its current tax position led to using a 34.0% rate for fiscal year 2013, before recognition of the aforementioned benefit. The Company will continue to analyze its tax position in future quarters, and could increase or decrease the effective tax rate, depending upon the analysis at that time.
19
MET-PRO CORPORATION AND SUBSIDIARIES
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations continued:
Three Months Ended July 31, 2012 vs. Three Months Ended July 31, 2011:
Net sales for the three-month period ended July 31, 2012 were $27,997,242 compared with $23,089,343 for the three-month period ended July 31, 2011, an increase of $4,907,899 or 21.3%.
Sales in the Product Recovery/Pollution Control Technologies reporting segment were $13,193,396, or $3,567,498 higher than the $9,625,898 of sales for the three-month period ended July 31, 2011, an increase of 37.1%. The sales increase in the Product Recovery/Pollution Control Technologies reporting segment was driven by higher sales in the both the Met-Pro Environmental Air Solutions and Strobic Air business units, with the Met-Pro Environmental Air Solutions business unit contributing a higher percentage of the overall sales increase of the reporting segment, in part due to sales of the Bio-Reaction product line which was acquired in October 2010.
Sales in the Fluid Handling Technologies reporting segment totaled $8,315,307, or $908,156 higher than the $7,407,151 of sales for the three-month period ended July 31, 2011, an increase of 12.3%. Sales in the Fluid Handling Technologies reporting segment were higher as compared with the same period last year due to higher sales in the Met-Pro Global Pump Solutions business unit.
Sales in the Mefiag Filtration Technologies reporting segment were $3,523,165, or $318,781 higher than the $3,204,384 of sales for the three-month period ended July 31, 2011, an increase of 9.9%. Sales in the Mefiag Filtration Technologies reporting segment were higher as compared with the same period last year, due to increased sales in our North American operations, offset somewhat by a sales decline in our European operations.
Sales in the Filtration/Purification Technologies segment were $2,965,374, or $113,464 higher than the $2,851,910 of sales for the three-month period ended July 31, 2011, an increase of 4.0%. This increase was due primarily to increased sales for Keystone Filter products, whereas Pristine Water Solutions products were essentially flat with the comparable period last year.
The gross profit margin for the three-month period ended July 31, 2012 was 31.1% compared with 35.2% for the three-month period ended July 31, 2011. This was primarily attributable to the gross profit margin in the Product Recovery/Pollution Control Technologies reporting segment which was significantly lower compared with the same period last year, partially offset by higher gross profit margins in the Fluid Handling Technologies and Mefiag Filtration Technologies reporting segments, as compared with the same period last year.
Income from operations for the three-month period ended July 31, 2012 was $2,420,141 compared with $2,222,493 for the three-month period ended July 31, 2011, an increase of $197,648, or 8.9%. The increase in income from operations was primarily the result of higher gross profit dollars on the increased level of net sales, partially offset by the increase in total selling, general and administrative expense, as compared with the same period in last year.
The loss from operations in the Product Recovery/Pollution Control Technologies reporting segment totaled $469,167, or $420,124 greater than the loss of $49,043 for the three-month period ended July 31, 2011. The increase in the loss from operations in this segment was primarily related to the following: (i) three large contracts in the Met-Pro Environmental Air Solutions business unit which, although contributing $2.0 million in revenue, were at an aggregate negative gross profit margin, due to lower than normal contract pricing and cost overruns and (ii) a higher proportion of general corporate expenses which are allocated to the segments based on revenues. These adverse factors more than offset the higher gross margin in the Strobic Air business unit, as well as the benefit of not having severance expense of approximately $300,000 which was incurred in the three-month period ended July 31, 2011.
Income from operations in the Fluid Handling Technologies reporting segment totaled $2,363,288, or $461,585 higher than the $1,901,703 for the three-month period ended July 31, 2011, an increase of 24.3%. The increase in income from operations was due to the higher sales and gross profit margins in the Met-Pro Global Pump Solutions business unit.
Income from operations in the Mefiag Filtration Technologies reporting segment totaled $367,901 compared with income from operations of $169,078 for the three-month period ended July 31, 2011, an increase of $198,823, or 117.6%. The increase in income from operations in the Mefiag Filtration Technologies reporting segment resulted primarily from higher sales and gross profit margins.
20
MET-PRO CORPORATION AND SUBSIDIARIES
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations continued:
Income from operations in the Filtration/Purification Technologies segment was $158,119 compared with income from operations of $200,755 for the three-month period ended July 31, 2011, a decrease of $42,636. The decrease in income from operations was related primarily to lower gross profit margins in the Pristine Water Solutions business unit, due primarily to increases in material costs and competitive pricing pressures in the municipal market.
Net income for the three-month period ended July 31, 2012 was $1,619,999 compared with $1,490,234 for the three-month period ended July 31, 2011, an increase of $129,765, or 8.7%.
Selling expense was $3,029,372 for the three-month period ended July 31, 2012, an increase of $105,310 compared with selling expense of $2,924,062 for last year’s second quarter. This increase was primarily due to higher representative and distributor commission expense as well as increased advertising activities. Selling expense as a percentage of net sales was 10.8% for the three-month period ended July 31, 2012, compared with 12.7% for the same period last year.
General and administrative expense was $3,248,591 for the three-month period ended July 31, 2012 compared with $2,990,426 for the same period last year, an increase of $258,165. The increase in general and administrative expense was due primarily to increased healthcare and pension expenses. General and administrative expense as a percentage of net sales was 11.6% for the three-month period ended July 31, 2012, compared with 12.9% for the same period last year.
Interest expense was $41,863 for the three-month period ended July 31, 2012, compared with $49,908 for the same period in the prior year, a decrease of $8,045. This decrease was due to reduction of indebtedness.
Other income was $49,747 for the three-month period ended July 31, 2012 compared with $85,344 for the same period in the prior year, a decrease of $35,597. The decrease in other income related to lower gains on currency exchange as well as lower interest income earned on cash balances.
The effective tax rates for the three-month periods ended July 31, 2012 and 2011 were 33.3% and 34.0%, respectively. The effective tax rate of 33.3% for the three-month period ended July 30, 2012 was a result of an estimated 34.0% tax rate for fiscal 2013, whereas an effective tax rate of 35.0% had been estimated for the three-month period ended April 30, 2012. The Company will continue to analyze its tax position for future periods, and could increase or decrease the effective tax rate in subsequent periods of fiscal 2013.
Liquidity and Capital Resources:
The Company’s principal sources of liquidity are cash flows from operations, borrowings under existing lines of credit and access to credit markets. The Company’s principal uses of cash are operating expenses, capital expenditures, working capital requirements, dividends and debt service. Management expects that the Company’s current cash and cash equivalent balances, cash generated from operations and unused borrowing capacity will be sufficient to support the Company’s planned operating and capital requirements for the foreseeable future and at least the next twelve months.
The Company’s cash and cash equivalents were $31,173,910 on July 31, 2012 compared with $34,581,394 on January 31, 2012, a decrease of $3,407,484. The decrease in the Company’s cash and cash equivalents is primarily the net result of quarterly cash dividend payments amounting to $2,085,556, investment in property and equipment of $678,364 and payments on debt totaling $470,326 and cash used in operating activities amounting to $396,591. The Company’s cash flows from operating activities are also influenced, in part, by the timing of shipments and negotiated standard payment terms, including retention associated with major projects, as well as other factors including changes in inventories and accounts receivable balances.
Cash flows used in operating activities during the six-month period ended July 31, 2012 amounted to $396,591 compared with cash provided by operating activities of $619,328 in the six-month period ended July 31, 2011, a decrease of $1,015,919. The decrease in cash flows from operating activities, as compared with the same period last year, was due principally to the following: (i) a decrease in customers advances of $1,788,386 compared with an increase of $372,567 for the same period last year, or a period-to-period unfavorable change of $2,160,953, (ii) a decrease in accounts payable and accrued expenses of $2,972 compared with an increase of $1,650,817 for the same period last year, or a period-to-period unfavorable change of $1,653,789 and (iii) an increase in prepaid expenses, deposits and other
21
MET-PRO CORPORATION AND SUBSIDIARIES
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations continued:
assets of $695,430 compared with an increase of $162,928 for the same period last year, or a period-to-period unfavorable change of $532,502. The previously listed adverse factors were partially offset by (i) a decrease in accrued pension retirement benefits of $1,421,452 compared with a decrease of $2,751,787 for the same period last year, or a period-to-period favorable change of $1,330,335, (ii) an increase in inventories of $219,103 compared with an increase of $1,379,911 for the same period last year, or a period-to-period favorable change of $1,160,808 and (iii) a decrease in accounts receivable of $425,173 compared with a decrease of $1,357,446 for the same period last year, or a period-to-period favorable change of $932,273.
Cash flows used in investing activities during the six-month period ended July 31, 2012 amounted to $688,507 compared with cash flows used in investing activities of $1,397,438 for the six-month period ended July 31, 2011, a decrease of $708,931. The decrease in cash outflow from investing activities was due primarily to greater proceeds from maturities of investments and lower acquisitions of property and equipment as compared with the same period in last year.
Financing activities during the six-month period ended July 31, 2012 utilized $2,332,428 of available resources, compared with $1,913,035 utilized during the six-month period ended July 31, 2011, an increase of $419,393. The increase in cash used in financing activities is due primarily to the reduced proceeds from new borrowings in the current year period, as compared with the same period last year.
The Company and its subsidiaries also have access to $4,369,210 of uncommitted, unsecured domestic and foreign lines of credit, subject to terms thereof, of which $2,915,641 has been committed for standby letters of credit as of July 31, 2012. The existing domestic credit agreements include two financial covenants: a liability/tangible net worth ratio and a fixed charge coverage ratio. At July 31, 2012, the Company was in compliance with both financial covenants.
The Board of Directors declared quarterly dividends of $0.071 per share payable on March 16, 2012, June 15, 2012 and September 14, 2012 to shareholders of record at the close of business on March 2, 2012, June 1, 2012 and August 31, 2012, respectively.
22
MET-PRO CORPORATION AND SUBSIDIARIES
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations continued:
Critical Accounting Policies and Estimates:
Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon the Company’s consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. The significant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:
Revenue Recognition:
The Company recognizes a majority of its revenues from product sales or services provided when the following revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable and collectability is reasonably assured. Revenue from contracts related to the Company’s subsidiary Bio-Reaction Industries Inc., representing the minority of revenues, are recognized on the percentage of completion method, measured by the percentage of contract costs incurred to date, compared with the estimated total contract costs for each contract. This method is used because management considers contract costs to be the best available measure of progress on these contracts related to Bio-Reaction Industries Inc.
Depreciation and Amortization:
Property, plant and equipment, finite lived intangible assets and certain other long-lived assets are depreciated or amortized over their useful lives. Useful lives are based on management’s estimates of the period that the assets will generate revenue. Property, plant and equipment, as well as intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Goodwill:
The Company assesses the qualitative and quantitative factors which could affect the fair value of goodwill carried in its reporting units on an annual basis or more frequently when an indicator of impairment exists. Quantitative impairment testing involves significant judgment in estimating projections of fair value generated through future performance of each of the reporting units, which comprise our operating segments. In calculating the fair value of the reporting units using the present value of estimated future cash flows method, we rely on a number of assumptions including sales and related gross margin projections, operating margins, anticipated working capital requirements and market rate of returns used in discounting projected cash flows. These assumptions are based upon market and industry forecasts, our business plans and historical data. Inherent uncertainties exist in determining and applying such factors. The discount rate used in the projection of fair value represents a weighted average cost of capital available to the Company.
During the fiscal year ended January 31, 2012, we performed a quantitative impairment analysis on each of the Company’s reporting units that carry goodwill on their balance sheets. In each case, the fair value exceeded the carrying amount, including goodwill, by a significant amount, except for Flex-Kleen and Pristine Water Solutions which represents 69.6% of the total Company-wide goodwill.
For Flex-Kleen, the carrying value as of January 31, 2012 and 2011 amounted to $9.3 million and $9.1 million, respectively. The fair value of Flex-Kleen as of January 31, 2012 and 2011 totaled $13.2 million and $12.3 million, respectively. As a result, the fair value exceeded the carrying amount, including goodwill, by $3.9 million and $3.2 million at January 31, 2012 and 2011, respectively. Therefore, as of January 31, 2012, Flex-Kleen’s goodwill was not impaired.
Flex-Kleen, which initially performed well after being acquired in 1998, thereafter had several years of declining performance which we attributed primarily to a general weakness in its served markets, followed by improved performance in the fiscal years ended January 31, 2007, 2008 and 2009. In the fiscal years ended January 31, 2007, 2008 and 2009, actual results exceeded the projected results used in our impairment model. During the fiscal year ended January 31, 2010, Flex-Kleen’s net sales and operating profit were below the projections in our impairment model, which we believe was a reflection of the downturn in global business and economic conditions during this period of time
23
MET-PRO CORPORATION AND SUBSIDIARIES
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations continued:
and was not due to any new development specific to Flex-Kleen. In the fiscal year ended January 31, 2011, Flex-Kleen’s net sales were below the projections but operating profit was slightly above the projections in our impairment model. In the fiscal year ended January 31, 2012, Flex-Kleen’s net sales and operating profit exceeded the projections in our impairment model. Our impairment model requires that Flex-Kleen’s sales and operating profit improve during each of the next several fiscal years in order for us to avoid a potential impairment charge.
Because of market conditions and/or potential changes in strategy and product portfolio, it is possible that forecasts used to support asset carrying values may change in the future, which could result in non-cash charges that would adversely affect our results of operations and financial condition. Based on current projections, a one percent decrease in revenue growth, a one percent decrease in gross margin or a one percent increase in the weighted average cost of capital would reduce the fair value for Flex-Kleen by $1.9 million, $1.1 million, and $0.9 million, respectively. Additionally, the Company cannot predict the occurrence of unknown events that might adversely affect the reportable value of Flex-Kleen’s goodwill.
For Pristine Water Solutions, the carrying value as of January 31, 2012 and 2011 amounted to $4.6 million at both dates. The fair value of Pristine Water Solutions as of January 31, 2012 and 2011 totaled $5.9 million and $9.8 million, respectively. As a result, the fair value exceeded the carrying amount, including goodwill, by $1.3 million and $5.2 million at January 31, 2012 and 2011, respectively. Therefore, as of January 31, 2012, Pristine Water Solutions’ goodwill was not impaired.
During the fiscal year 2012, there was a decline in net sales and operating profit of our Pristine Water Solutions business unit that we attribute to a number of factors including raw material price increases, increased price competition, product mix, continued weaknesses in Pristine Water Solutions’ principal market, the municipal market, and inclement weather in certain geographic areas which affected product demand. Our impairment model requires that Pristine Water Solutions’ sales and operating profit improve during each of the next several fiscal years in order for us to avoid a potential impairment charge.
Because of market conditions and/or potential changes in strategy and product portfolio, it is possible that forecasts used to support asset carrying values may change in the future, which could result in non-cash charges that would adversely affect our results of operations and financial condition. Based on current projections, a one percent decrease in revenue growth, a one percent decrease in gross margin or a one percent increase in the weighted average cost of capital would reduce the fair value for Pristine Water Solutions by $0.7 million, $0.5 million, and $0.4 million, respectively. Additionally, the Company cannot predict the occurrence of unknown events that might adversely affect the reportable value of goodwill related to Pristine Water Solutions.
Pension Obligations:
The determination of our obligation and expense for pension benefits is dependent on our selection of certain assumptions used by actuaries in calculating such amounts. Those assumptions are described in Note 13 of the January 31, 2012 consolidated financial statements included in Form 10-K/A and include, among others, the discount rate and the expected long-term rate of return on plan assets. In accordance with generally accepted accounting principles, actual results that differ from our assumptions are accumulated and amortized over future periods and therefore, generally affect our recognized expense and recorded obligation in such future periods. While we believe that our assumptions are appropriate, significant differences in our actual experience or significant changes in our assumptions may materially affect our pension obligations and our future expense.
We are exposed to certain market risks, primarily changes in interest rates. There have been no significant changes in our exposure to market risks since January 31, 2012. Refer to “Item 7A. Quantitative and Qualitative Disclosure About Market Risks” of the Company’s Annual Report on Form 10-K/A for the fiscal year ended January 31, 2012 for additional information.
(a) Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) that are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, under the supervision of the Company’s Disclosure Committee, evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, were effective as of July 31, 2012.
(b) Changes in Internal Control Over Financial Reporting
During the six months ended July 31, 2012, there were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
(c) Limitations on the Effectiveness of Controls
Control systems, no matter how well conceived and operated, are designed to provide a reasonable, but not an absolute, level of assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. The Company conducts periodic evaluations of its internal controls to enhance, where necessary, its procedures and controls.
Item 1. Legal Proceedings
Certain of the statements made in this Item 1 (and elsewhere in this Report) are “forward-looking” statements which are subject to the considerations set forth in “Forward-Looking Statements; Factors That May Affect Future Results” located in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this Report, and we refer you to these considerations.
Beginning in 2002, the Company began to be named in asbestos-related lawsuits filed against a large number of industrial companies including, in particular, those in the pump and fluid handling industries. In management’s opinion, the complaints typically have been vague, general and speculative, alleging that the Company, along with the numerous other defendants, sold unidentified asbestos-containing products and engaged in other related actions which caused injuries (including death) and loss to the plaintiffs. Counsel has advised that more recent cases typically allege more serious claims of mesothelioma. The Company believes that it has meritorious defenses to the cases which have been filed and that none of its products were a cause of any injury or loss to any of the plaintiffs. The Company’s insurers have hired attorneys who, together with the Company, are vigorously defending these cases. The Company has been dismissed from or settled a large number of these cases. The sum total of all payments through July 31, 2012 to settle cases involving asbestos-related claims was $695,000, all of which has been paid by the Company’s insurers including legal expenses, except for corporate counsel expenses, with an average cost per settled claim, excluding legal fees, of approximately $25,000.
Based upon the most recent information available to the Company regarding such claims, there were a total of 143 cases pending against the Company as of July 31, 2012 (with Connecticut, New York, Pennsylvania and West Virginia having the largest number of cases), as compared with approximately 130 cases that were pending as of March 22, 2012. Subsequent to January 31, 2012, 25 new cases were filed against the Company, and the Company was dismissed from 15 cases and settled two cases. Most of the pending cases have not advanced beyond the early stages of discovery, although a number of cases are on schedules leading to, or are scheduled for trial. The Company believes that its insurance coverage is adequate for the cases currently pending against the Company and for the foreseeable future, assuming a continuation of the current volume, nature of cases and settlement amounts; however, the Company has no control over the number and nature of cases that are filed against it, nor as to the financial health of its insurers or their position as to coverage. The Company also presently believes that none of the pending cases will have a material adverse impact upon the Company’s results of operations, liquidity or financial condition.
At any given time, the Company is typically also party to a small number of other legal proceedings arising in the ordinary course of business. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based upon the present information, including the Company’s assessment of the facts of each particular claim as well as accruals, the Company believes that no pending proceeding will have a material adverse impact upon the Company’s results of operations, liquidity, or financial condition.
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K/A for the year ended January 31, 2012 as filed with the Securities and Exchange Commission, which could materially affect our business, financial condition, financial results or future performance.
| (a) | During the six months ended July 31, 2012, we did not sell any of our equity securities that were not registered under the Securities Act of 1933. |
| (b) | Not applicable. |
| (c) | The following table summarizes Met-Pro’s purchases of its common shares for the three months ended July 31, 2012: |
Issuer Purchases of
Equity Securities
|
Period
|
Total
Number of Shares
Purchased
|
Average
Price Paid
Per Share
|
Total
Number of
Shares
Purchased
As Part of
Publicly
Announced
Plans or
Programs
|
Maximum
Number of
Shares
That May
Yet be
Purchased
Under the
Plan or
Programs
|
(1)
|
||||
|
May 1-31, 2012
|
-
|
$ -
|
-
|
170,496
|
|||||
|
June 1-30, 2012
|
-
|
-
|
-
|
170,496
|
|||||
|
July 1-31, 2012
|
-
|
-
|
-
|
170,496
|
|||||
|
Total
|
-
|
$ -
|
-
|
170,496
|
|
(1)
|
On November 3, 2008, our Board of Directors authorized a common share repurchase program that was publicly announced on November 5, 2008, for up to 300,000 shares. The program has no fixed expiration date.
|
None.
Not applicable.
None.
|
(a)
|
Exhibits Required by Item 601 of Regulation S-K
|
|||
|
Exhibit No.
|
Description
|
|||
|
(31.1)
|
||||
|
Pursuant to Section 302 of the
|
||||
|
Sarbanes-Oxley Act of 2002.*
|
||||
|
(31.2)
|
||||
|
Pursuant to Section 302 of the
|
||||
|
Sarbanes-Oxley Act of 2002.*
|
||||
|
(32.1)
|
||||
|
Pursuant to 18 U.S.C. Section 1350, as adopted
|
||||
|
Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.*
|
||||
|
(32.2)
|
||||
|
Pursuant to 18 U.S.C. Section 1350, as adopted
|
||||
|
Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.*
|
||||
|
(101.INS)
|
XBRL Instance*
|
|||
|
(101.SCH)
|
XBRL Taxonomy Extension Schema*
|
|||
|
(101.CAL)
|
XBRL Taxonomy Extension Calculation*
|
|||
|
(101.LAB)
|
XBRL Taxonomy Extension Labels*
|
|||
|
(101.PRE)
|
XBRL Taxonomy Extension Presentation*
|
|||
|
(101.DEF)
|
XBRL Taxonomy Extension Definition*
|
|||
|
* Filed herewith.
|
||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
Met-Pro Corporation
|
||
|
(Registrant)
|
||
|
September 6, 2012
|
/s/ Raymond J. De Hont
|
|
|
Raymond J. De Hont
|
||
|
Chairman, Chief Executive Officer
|
||
|
and President
|
||
|
(Duly Authorized Officer and Principal Executive Officer)
|
||
|
September 6, 2012
|
/s/ Neal E. Murphy
|
|
|
Neal E. Murphy
|
||
|
Vice President-Finance,
|
||
|
Chief Financial Officer, Secretary and Treasurer
|
||
|
(Duly Authorized Officer and Principal Financial Officer)
|
||
29