CFC International, Inc. Announces That It Has Signed a Letter of
Intent to Be Acquired and Reports 2005 First Quarter Results - Net
income increased to $1.5 million for the first quarter of 2005, up
30.0% from $1.2 million as compared to the same period last year.
CHICAGO HEIGHTS, Ill., May 3 /PRNewswire-FirstCall/ -- Worldwide
holographic and specialty coated film manufacturer, CFC
International, Inc. (NASDAQ:CFCI) announced today that it has
entered into a letter of intent to merge the Company with an
affiliate of Audax Group, a private equity firm, for an enterprise
value of $109.4 million, which equates to an expected share price
range for this transaction between $19.50 and $20.00 per share. The
proposed transaction is subject to a number of conditions,
including completion of due diligence and the negotiation and
execution of a definitive agreement, and there can be no assurance
that a transaction will be completed. The Company expects the
transaction, if completed, to close during the third quarter of
2005. The Company further reports that net income and diluted
earnings per share for the first quarter of 2005 increased 30.0
percent to $1.5 million, or $0.33 cents per share on a fully
diluted basis compared to $1.2 million or $0.26 cents per share on
a fully diluted based for the first quarter of 2004. This increase
in net income was primarily due to higher sales and improved
productivity. First quarter sales increased 10.4 percent to $23.0
million compared to $20.8 million in the first quarter of 2004. The
increase in first quarter sales of 2005 was primarily due to strong
printed products sales, which increased 12.1 percent, and robust
pharmaceutical and security product sales, which increased 24.2
percent and 21.4 percent respectively, over the same period sales
in 2004. In addition, sales were favorably affected by the
continued strength of the Euro by approximately $332,000. "This was
another solid quarter for CFC, and we are excited with the number
of opportunities that are in front of us in the next several
quarters," said Greg Jehlik, CFC's President and Chief Executive
Officer. "Our financial results for the quarter reflect the
strengths of our worldwide employees being aligned with our
business objectives, and our ability to serve a diversified
marketplace with solutions." Jehlik further stated that, "We
continue to invest in generating cost-effective and value-added
solutions for our customers that will position CFC for long-term
growth." Based upon the Company's results and the current economic
outlook, the Company anticipates meeting its previously stated net
income of $1.10 - $1.15 per share on a fully diluted basis for
calendar year 2005, utilizing a 35.4% tax rate. Recent Developments
The company reports that the first embosser in the Chicago Heights,
Illinois facility has been successfully installed and had its first
production run the week of February 21, 2005. The embosser for
Europe arrived in Europe on April 15, 2005 and the Company expects
this embosser to be on schedule and on line during the second
quarter of 2005. Headquartered in Chicago Heights, Illinois, CFC
International is a market leader in the design, manufacture and
marketing of holographics and specialty functional coatings that
add value to a wide variety of industrial and consumer products.
The Company operates facilities in Chicago Heights and Countryside,
Illinois; London, England; and Goppingen, Germany. A condensed
consolidated balance sheet and statement of operations is attached.
Statements made in this press release, including those relating to
expectations of future sales, net income and operating costs
reductions, estimated availability of additional equipment,
estimations of the market size for certain of the company's
products or the company's share of those markets and expectations
of increased sales attributable to various product lines, are
forward looking and are made pursuant to the safe harbor provisions
of the Securities Reform Act of 1995. Such statements involve risks
and uncertainties which may cause results to differ materially from
those set forth in those statements. Among other things, continued
unfavorable economic conditions may impact market growth trends or
otherwise impact the demand for the company's products and
services; competition from existing and new competitors and
producers of alternative products will impact the company's ability
to penetrate or expand its presence in new or growing markets;
uncertainties relating to the company's ability to develop and
distribute new proprietary products to respond to market needs in a
timely manner may impact the company's ability to exploit new or
growing markets; the company's ability to successfully identify and
implement productivity improvements and cost reduction initiatives
may impact profitability; and risks inherent in international
operations, including possible economic, political or monetary
instability, may impact the level and profitability of the
company's foreign sales. In addition to the factors set forth in
this release, the economic, competitive, governmental,
technological and other factors identified in the company's filings
with the Securities and Exchange Commission, could affect the
forward looking statements contained in this press release. We have
no obligation to revise or update these forward-looking statements
to reflect events or circumstances that arise after the date of
this press release or to reflect the occurrence of anticipated
events. You may access additional information, including our
filings with the Securities and Exchange Commission and previous
press releases by visiting CFC International's Internet homepage at
http://www.cfcintl.com/ . CFC INTERNATIONAL, INC. Consolidated
Statements of Income 1st 1st (In Thousands, Except Earnings Per
Share and Quarter Quarter Operating Income Percentage) 2005 2004
Net sales $22,989 $20,824 Cost of goods sold (excluding
depreciation and amortization shown below) 14,403 13,024 Operating
expenses 4,627 4,434 Depreciation and amortization 1,174 1,339
Operating income 2,785 2,027 Operating income % 12.1% 9.7% Interest
expense 279 299 Interest income (5) (1) (Gain) loss on interest
rate swap (65) 67 Other income (rental income) (33) (28) Foreign
currency exchange loss 277 25 Income before income taxes 2,332
1,665 Provision for income taxes 832 511 Net income $1,500 $1,154
Diluted Weighted Average Number of Shares Outstanding 4,613 4,493
Diluted Earnings Per Share $0.33 $0.26 Adjusted Earnings Before
Interest, Taxes, Depreciation and Amortization (Note 1) $3,959
$3,366 1st 1st (In Thousands) Quarter Quarter 2005 2004
International Net Sales $10,629 $9,969 International Net Sales
46.2% 47.9% NOTE 1: The Company believes earnings before interest
expense, income taxes, depreciation and amortization (adjusted
EBITDA) is an useful measurement for its business because
management understands that such information is considered by
certain investors as an additional basis on which to evaluate the
Company's ability to pay interest, repay debt and make capital
expenditures. Adjusted EBITDA should not necessarily be considered
as an alternative to net income or cash flows from operating
activities which are determined in accordance with Generally
Accepted Accounting Principles as an indicator of operating
performance or as a measure of liquidity. The table following
reconciles net income to adjusted EBITDA as defined: 1st 1st (In
Thousands) Quarter Quarter 2005 2004 Net income $1,500 $1,154 Add
back (subtract): Income taxes 832 511 Interest expense 279 299
Interest income (5) (1) Depreciation and amortization 1,174 1,339
(Gain) loss on interest rate swap (65) 67 Other income (rental
income) (33) (28) Foreign currency exchange loss 277 25 Adjusted
EBITDA $3,959 $3,366 CFC INTERNATIONAL, INC. CONSOLIDATED BALANCE
SHEETS AT MARCH 31, 2005 AND DECEMBER 31, 2004 March 31, December
31, 2005 2004 ASSETS Cash and cash equivalents $3,084,131
$4,554,699 Restricted cash 306,380 306,271 Accounts receivable,
less allowance for doubtful accounts 13,211,049 12,547,380
Inventories 17,815,114 17,709,138 Other current assets 1,540,710
1,389,790 Total current assets 35,957,384 36,507,278 Property,
plant and equipment, net 27,730,315 28,602,311 Deferred income
taxes 3,517,612 3,528,686 Intangible assets, net 2,322,578
2,393,466 Other assets 269,817 266,806 Goodwill 1,029,462 1,029,462
Fair value of interest rate swap 104,874 39,553 Total assets
$70,932,042 $72,367,562 LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $5,398,488 $5,625,085 Accounts
payable and accrued expenses 12,863,263 15,314,782 Total current
liabilities 18,261,751 20,939,867 Deferred income taxes 3,221,756
3,229,584 Fair value of interest rate swap - - Long-term debt
15,012,665 15,698,791 Total liabilities 36,496,172 39,868,242
Stockholders' equity 34,435,870 32,499,320 Total liabilities and
stockholders' equity $70,932,042 $72,367,562 DATASOURCE: CFC
International, Inc. CONTACT: Dennis Lakomy, Chief Financial Officer
of CFC International, Inc., +1-708-757-2803 Web site:
http://www.cfcintl.com/ Company News On-Call:
http://www.prnewswire.com/comp/110663.html
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