Flanders Corporation reported financial results for the first quarter ended March 31, 2009.
– By April Murelio –
Flanders is a leading air filtration products manufacturer. Flanders' products are utilized by many industries, including those associated with commercial and residential heating, ventilation and air conditioning systems, semiconductor manufacturing, ultra-pure materials, biotechnology, pharmaceuticals, synthetics, nuclear power and nuclear materials processing.
Flanders Corporation's Chairman, president and CEO Harry Smith said: "Our improved efficiencies have positioned the company to perform well during the difficult economic environment. While revenue was impacted by lulls in commercial and industrial segments of our business, our better procurement practices drove first quarter 2009 gross margins to 20.6%, up 290 basis points, compared to the first quarter of 2008. During 2008, we improved on-time delivery to 99%, restoring customers' confidence. As a result, our customers are relying more heavily on Flanders. Toward the quarter end, the rate of orders increased, particularly in our retail business. In fact, March orders were very healthy, and these trends continued into the second quarter. We are well positioned heading into our busy season, and we are confident in our projections for the year: revenue growth of 8% to 13% from 2008, profitability and positive EBITDA."
First Quarter 2009 Financial Summary
Revenue for the first quarter 2009 was $48.0 million, compared to $49.2 million in the first quarter 2008. Gross margin for the first quarter was 20.6%, compared to 17.7% in the first quarter 2008. The first quarter 2009 net income was $1.8 million, or $0.07 per share. This compares to the first quarter of 2008 net income of $2.4 million, or $0.09 per share, which included a $1.5 million gain for extraordinary items. EBITDA for the first quarter 2009 was $4.5 million, compared to $3.7 million, before the $1.5 million extraordinary gain in the first quarter of 2008.
Management uses some measures not in accordance with generally accepted accounting principles (GAAP) to evaluate the results of the company's operations and believes earnings before interest, taxes, extraordinary items, depreciation and amortization (EBITDA) provides a useful measure of operations.
Flanders' Chief Financial Officer John Oakley said: "We are encouraged that during this very challenging environment, optimized plants and production continued to yield cost benefits. We lowered operating expenses 19%, compared to the same period last year. As a result, operating margin increased to 5%, and we achieved profitability of $0.07 per diluted share. We also improved liquidity and delivered positive operating cash flow of $1.8 million. Even in an uncertain economy, our streamlined infrastructure combined with consumer and commercial demand for greater energy efficiency and cleaner air position us for growth. We continue to expect 2009 revenue to be between $235 million and $246 million delivering annual profitability and positive EBITDA."
Conference Call
Chairman, president and CEO Harry Smith and CFO John Oakley are scheduled to conduct a conference call and simultaneous webcast at 11:00 a.m. ET on May 4, 2009 to review these results in more detail. To access the call in the U.S., please dial (866) 425-6192, and for international callers dial (973) 409-9253 approximately 10 minutes prior to the start of the conference call. The conference ID will be 95329001. A telephone replay will be available until midnight Eastern Time on May 6th by dialing (800) 642-1687 or (706) 645-9291 and entering pass code 95329001.