MELVILLE, N.Y., March 28,
2023 /PRNewswire/ -- P&F Industries, Inc.
(NASDAQ: PFIN) today announced its results from operations for the
year ended December 31, 2022. The
Company is reporting net revenue of $59,041,000 for the year ended December 31, 2022, compared to $53,554,000, for the same period in 2021.
For the year ended December 31, 2022,
the Company is reporting a net loss before income taxes of
$1,852,000, compared to net income
before income taxes of $2,288,000 for
the year ended December 31,
2021. The Company noted that during 2021 it recorded as Other
Income a gain from the forgiveness of its Paycheck Protection
Program loan of $2,929,000 by the
Small Business Administration in accordance with the Coronavirus
Aid, Relief, and Economic Security Act, known as the CARES Act, and
an additional $2,028,000 of Other
Income related to the Employee Retention Credits, also provided by
the CARES Act. It further pointed out that its full year 2022
loss from operation was $1,482,000,
an improvement of $1,115,000,
compared to the operating loss of $2,597,000 in 2021.
The Company is reporting a net loss after-tax of $1,476,000, for the year ended December 31, 2022, compared to net income after
tax of $2,290,000 for the year ended
December 31, 2021. For fiscal
year 2022, the Company's basic and diluted loss per share was
$0.46, compared to basic and diluted
earnings per share of $0.72 for
fiscal 2021.
Richard Horowitz, the Company's
Chairman of the Board, Chief Executive Officer, and President
commented, "2022 was a year of transition for P&F. After
nearly two years operating under COVID-19 restrictions and
conditions, as 2022 progressed, we began to see business begin to
show signs of improvement. The transition also was driven by
the acquisition of the Jackson Gear Company business in
January 2022, which was the primary
reason for the revenue growth of just shy of $5.4 million. The largest factor
contributing to the $1.1 million
reduction in operating loss was the significantly improved Gross
Profits at Florida Pneumatic and the tools product lines of Hy-Tech
due to both cost reductions and price increases to customers.
Regarding PTG, the acquisition of the Jackson Gear specialty
gear business allowed us to penetrate markets we previously were
unable to reach and enhanced our position in other markets where we
had a modest presence. The integration of this business took
longer than expected, but as we enter 2023, PTG is poised for
growth as its new order levels continue to increase, has a more
modernized facility, and a more established customer
base.
As we set our sights on the future, I want to point out that
during 2022, our consolidated spending on capital equipment was
$2,374,000, with most going into
Hy-Tech. Further, we plan on additional capital expenditures of
approximately $2.6 million in
2023. I believe that with, new business lines, and
modernization of the facilities, P&F, and Hy-Tech in
particular, should fare much better in 2023 and beyond, compared to
2022. As a result, we are cautiously optimistic about improving our
results. However, it is difficult to foresee what the impact will
be on our businesses from inflation and rising interest rates, the
on-going supply chain difficulties and associated delays, and the
fear of a possible global recession. Further, while much less of an
issue today, COVID-19 does remain a factor, particularly with
respect to our Asian suppliers."
Mr. Horowitz added "Furthermore, as was previously announced,
our Board of Directors decided to reinstate the Company's quarterly
$0.05 per common share dividend. The
Board believes this decision is appropriate at this time based upon
the Company's current financial condition, results of operations,
capital requirements and other factors. Lastly, I am pleased
to announce that the Company's credit facility, which was set to
expire in February 2024, was extended
by an additional three years through February 2027. This
amendment does not change any of the material terms, including the
rates and fees charged, however we did agree to eliminate the
capital expenditure line of $1.6
million, which we believe will not hinder our current growth
plans."
RESULTS OF OPERATIONS
2022 compared to 2021
REVENUE
The tables set forth below provide an analysis of our revenue
for the years ended December 31,
2022, and 2021.
Consolidated
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Year Ended December 31,
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2022
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2021
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Increase
(decrease)
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Percent of
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Percent of
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Revenue
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revenue
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Revenue
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revenue
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$
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%
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Florida
Pneumatic
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$
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41,398,000
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70.1
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%
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$
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41,488,000
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77.5
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%
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$
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(90,000)
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(0.2)
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%
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Hy-Tech
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17,643,000
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29.9
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12,066,000
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22.5
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5,577,000
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46.2
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Total
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$
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59,041,000
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100.0
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%
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$
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53,554,000
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100.0
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%
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$
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5,487,000
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10.2
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%
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Florida Pneumatic
Florida Pneumatic markets its air tool products to four primary
sectors within the pneumatic tool market; Automotive, Retail,
Aerospace, and Industrial. It also generates revenue from its
Berkley products line, as well as a line of air filters and other
OEM parts ("Other").
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Year Ended December 31,
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2022
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2021
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Increase
(decrease)
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Percent of
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Percent of
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Revenue
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revenue
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Revenue
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revenue
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$
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%
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Automotive
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$
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13,699,000
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33.1
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%
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$
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14,543,000
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35.1
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%
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$
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(844,000)
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(5.8)
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%
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Retail
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12,523,000
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30.3
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13,995,000
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33.7
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(1,472,000)
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(10.5)
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Aerospace
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8,658,000
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20.9
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7,184,000
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17.3
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1,474,000
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20.5
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Industrial
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5,958,000
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14.4
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5,289,000
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12.7
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669,000
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12.6
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Other
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560,000
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1.3
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477,000
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1.2
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83,000
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17.4
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Total
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$
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41,398,000
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100.0
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%
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$
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41,488,000
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100.0
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%
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$
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(90,000)
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(0.2)
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%
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Florida Pneumatic's full year 2022 revenue is slightly less
($90,000) than the prior year.
Its 2022 Retail revenue declined 10.5%, when comparing the fiscal
2022 to the prior year. This decline was driven by several
factors, including: a) sluggishness in consumer demand at The Home
Depot ("THD"), most notably occurring during the fourth quarter of
2022, which we believe was due to rising interest rates and the
general economy softness; b) lower sales of certain tools that
enjoyed higher than usual volume during 2021, such as spray guns,
which are used to combat the COVID-19 virus, and c) an effort by
THD to lower its own inventory levels. 2022 Automotive
revenue also declined when compared to 2021. The primary
factors for the 5.8% reduction, were weak consumer demand occurring
in the United States and, to a
lesser extent, in Europe. Further, we believe this weakness
in demand for our AIRCAT line of automotive products similar to the
decline in Retail revenue, was driven by global rising interest
rates and slowing economies. Both the above product lines are
affected by the consumer market. Partially offsetting the
above declines was a 20.5% increase in Florida Pneumatics' higher
gross margin, Jiffy product line. The key factor driving this
increase throughout the year was stronger demand in 2022 from both
the commercial and military sectors. Most of the Aerospace
revenue is attributable to Jiffy Air Tool. Lastly, Florida
Pneumatic's Industrial revenue continued its growth during 2022
that commenced in the latter half of 2021. Its 2022 revenue
increased 12.6% over 2021, which increased 51.9% over 2020.
The primary factors driving this growth are an improved supply
chain and increased demand in the foundry, metal fabrication,
manufacturing, and assembly sectors.
Hy-Tech
Hy-Tech designs, manufactures, and sells a wide range of
industrial products which are categorized as ATP for reporting
purposes. In addition to Engineered Solutions, products and
components manufactured for other companies under their brands are
included in the OEM category in the table below. PTG revenue is
comprised of products manufactured and sold by Hy-Tech's gear
business. NUMATX, Thaxton and other peripheral product lines, such
as general machining, are reported as Other.
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Year Ended December 31,
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2022
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2021
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Increase
(decrease)
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Percent
of
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Percent
of
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Revenue
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revenue
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Revenue
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revenue
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$
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%
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OEM
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$
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8,688,000
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49.2
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%
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$
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5,842,000
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48.4
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%
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$
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2,846,000
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48.7
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%
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PTG
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5,602,000
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31.8
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2,846,000
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23.6
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2,756,000
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96.8
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ATP
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2,850,000
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16.2
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3,024,000
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25.1
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(174,000)
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(5.8)
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Other
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503,000
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2.8
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354,000
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2.9
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149,000
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42.1
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Total
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$
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17,643,000
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100.0
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%
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$
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12,066,000
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100.0
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%
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$
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5,577,000
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46.2
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%
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A key factor driving the 46.2% increase in Hy-Tech's fiscal 2022
revenue, compared to the prior year was the acquisition of JGC that
occurred in January 2022, which
significantly contributed to the PTG revenue improvement of 96.8%,
or more than $2,750,000.
Additionally, Hy-Tech's OEM revenue increased 48.7% over the prior
year. This improvement is due primarily to increased shipments to a
major OEM customer, and to a lesser extent, improved general market
conditions in 2022, compared to 2021 during which Hy-Tech was
impacted by the slowdown caused by the COVID global pandemic. The
gross profit generated from the shipments to this OEM customer is
less than historical OEM gross profit. The key factor for the
increase in Hy-Tech's Other revenue was a large one-time order for
its Thaxton products. The decline (5.8%) in ATP revenue was driven
by two factors; first, Hy-Tech's ATP products continue to be
price-challenged by off-shore suppliers, and second, the Company's
decision in 2021 to focus more of its design and marketing efforts
on its OEM suite of products.
GROSS MARGIN
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Year Ended December
31,
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Increase
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2022
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2021
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Amount
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%
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Florida
Pneumatic
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$
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16,484,000
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$
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15,274,000
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$
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1,210,000
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7.9
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%
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As percent of
respective revenue
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39.8
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%
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36.8
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%
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3.0
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% pts
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Hy-Tech
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$
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2,455,000
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$
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2,073,000
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$
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382,000
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18.4
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%
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As percent of
respective revenue
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13.9
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%
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17.2
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%
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(3.3)
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% pts
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Total Tools
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$
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18,939,000
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$
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17,347,000
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$
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1,592,000
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9.2
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%
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As percent of
respective revenue
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32.1
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%
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32.4
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%
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(0.3)
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% pts
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Florida Pneumatic's Aerospace revenue generates stronger margins
than its other product lines. Aerospace revenue increased as
a percentage of Florida Pneumatic's revenue, which in turn was a
major factor in the improved gross margin. The vast majority
of Florida Pneumatic's Aerospace revenue is generated through the
sale of the JIFFY product line. Additionally, other factors
that contributed to Florida Pneumatic's 300 basis point improvement
were, its ability during fiscal 2022 to pass through some of the
increases it incurred in ocean and domestic freight costs, as well
as favorable foreign exchange rates, mostly related to the
Taiwanese dollar. It should be noted that Florida Pneumatic's ocean
freight costs, particularly during the second half of 2021 through
mid-2022 increased approximately five-fold, when compared to
pre-pandemic rates. Our ocean freight costs have declined
somewhat during the second half of 2022, but still remain above
pre-pandemic levels. These improvements to gross margin were
partially offset by increased warranty costs related to The Home
Depot. Warranty costs lag in relation to shipments. As such,
we believe these costs will decline over time.
Hy-Tech manufactures most of its products. Its gross margin is
significantly affected by customer/product mix. Specifically,
its largest OEM customers generates lower than average gross
margin. We are continuing to increase prices and reduce
manufacturing costs without jeopardizing the relationship with this
major customer. Additionally, factors such as absorption of
manufacturing overhead, raw material pricing, third-party costs,
and the supply chain issues have affected its overall gross margin.
Specifically, during 2022, Hy-Tech has encountered higher raw
material, freight, and outside third-party vendor costs, all
adversely affecting its gross margin in 2022. Further, during
the latter portion of 2022 as Hy-Tech realigned its marketing and
sales strategy, it determined that certain customers and products
would no longer be serviced. As a result, Hy-Tech incurred an
excess charge relating to obsolete, slow-moving inventory
("OSMI"). Further, Hy-Tech's total gross margin was impacted
by weak overhead absorption at its Punxsutawney, PA. facility, due primarily to
integration issues of the Jackson Gear Company acquisition that
occurred during the first quarter of 2022. We believe these
issues will be corrected by the end of the second quarter of
2023.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses ("SG&A")
include salaries and related costs, commissions, travel,
administrative facilities, communications costs and promotional
expenses for our direct sales and marketing staff, administrative
and executive salaries, and related benefits, legal, accounting,
and other professional fees as well as general corporate overhead
and certain engineering expenses.
Our SG&A expenses during 2022 were $20,373,000, compared to $19,856,000, in 2021. Significant factors that
contributed to the net change include:
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i)
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Compensation expenses
increased $676,000. Compensation expense is comprised of base
salaries and wages, accrued performance-based bonus incentives and
associated payroll taxes and employee benefits. Several
factors contributed to this increase, among them the staffing added
in connection with the JGC acquisition, increased wages primarily
related to retention incentives and annual wage adjustments and
increases in company-wide bonus/incentive/performance
accruals.
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ii)
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Professional fees and
expenses increased $305,000, due primarily to legal, accounting,
and other fees incurred in connection with the JGC acquisition.
Other expenses that contributed to the increase in professional
fees included ongoing cyber security/prevention costs, recruitment
fees and legal fees associated with regulatory
initiatives.
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iii)
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Bad debt expense
increased $96,000, when comparing 2022 to 2021. During the fourth
quarter of 2022 we made several attempts to resolve and collect
past due invoices from one customer, to no avail. It is extremely
unlikely that we will be able to collect from this
customer.
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iv)
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Our depreciation and
amortization increased $94,000 as the result of additional
equipment purchased throughout the year and equipment and
intangible assets acquired in connection with the Jackson Gear
Company acquisition.
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v)
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Temporary labor and
stock-based compensation expense increased $35,000 and $36,000,
respectively.
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vi)
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Our variable expenses
decreased $499,000. Driving this decline were significantly lower
advertising costs at Florida Pneumatic, caused by a change in a
distribution channel strategy.
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vii)
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Our computer-related
expenses declined $280,000. During the second quarter of 2021, we
incurred approximately $288,000 in costs related to the May 2021
ransomware attack at our Florida Pneumatic subsidiary, where no
such costs were incurred during 2022.
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IMPAIRMENT OF ASSETS
During 2022 and 2021, we reduced by $48,000 and $88,000, respectively, the carrying value of
certain not-in-use fixed assets to their fair value.
OTHER INCOME
In accordance with current accounting guidance, we recorded a
gain of $19,000 during the fourth
quarter of 2022 related to the early termination of a real property
lease.
In December 2021 we completed the
process of determining and verifying our eligibility and amount of
payroll tax credits known as the Employee Retention Credit
("ERC"). This resulted in filing certain amended payroll tax
forms, which, in the aggregate, totaled $2,028,000 of payroll tax credits. During
2022, we received approximately $112,000 of the ERC. In January 2023, we received approximately
$1,677,000 of the ERC.
The ERC is subject to federal and local tax. Pursuant to the
Coronavirus Aid, Relief, and Economic Security Act
("CARES Act"), on April 20,
2020, we received a Paycheck Protection Program ("PPP")
loan, in the amount of $2,929,000.
Under the terms of the CARES Act, as amended, we were eligible to
apply for forgiveness for all or a portion of the PPP loan.
In February 2021, we filed an
application for forgiveness with the lender, who approved this
submission and submitted the application for forgiveness to the
Small Business Administration. On June 9,
2021, we were advised that the SBA had approved our PPP loan
forgiveness application. Accordingly, the lender applied the
funds it received from the SBA and paid off PPP loan principal and
interest in full. In accordance with accounting guidance this
forgiveness of debt and related accrued interest was be accounted
for as Other Income and Interest Expense – Net, in 2021, and was
not considered as taxable income.
INTEREST EXPENSE – NET
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Year Ended December
31,
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(increase)
decrease
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2022
|
|
2021
|
|
Amount
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%
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Interest expense
attributable to:
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Short-term
borrowings
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$
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353,000
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$
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47,000
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$
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(306,000)
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(651.1)
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%
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PPP loan
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—
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(18,000)
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(18,000)
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(100.0)
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Amortization expense of
debt issue costs
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|
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16,000
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|
16,000
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|
|
—
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|
—
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|
Other
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(6,000)
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|
|
—
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6,000
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NA
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Total
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$
|
363,000
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|
$
|
45,000
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$
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(318,000)
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(706.7)
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%
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The most significant factor causing the increase in our
short-term borrowings interest expense was the growth in the prime
rate during 2022. The Applicable Margin, as defined in our
Credit Agreement during fiscal 2022 ranged from 1.5% to 2.10%
applied to LIBOR /SOFR borrowings and from 0.50% to 1.60% applied
to Base rate borrowings. The interest charged on Base rate
borrowings, (effectively borrowings at Prime rate) before adding
Applicable Margin increased from 3.25% in January 2022 to 7.50% at December 31, 2022. Further, the interest
rate before the Applicable Margin for LIBOR / SOFR term borrowings
increased from an average of 1.61% in January 2022 to an average of 6.20% for borrowing
in December 2022. Our average monthly
borrowings under the Credit Facility during fiscal 2022 ranged from
$7,852,000 to $12,654,000. The average monthly short-term
borrowing during fiscal 2022 was $9,845,000, compared to $2,686,000 during the prior year. The increase
was driven by the Jackson Gear Company business acquisition in
January 2022. Additional working
capital needs are due to the anticipated growth, and a roll-out of
a tools program to our retail customer. Our Revolver borrowings
increased significantly in the first half of 2022 and began to
decline during the second half of 2022. At December 31, 2022 our borrowing under the Credit
Facility was net $7,570,000.
(See Liquidity and Capital Resources for further discussion).
The amortization expense is related to the debt issue costs
associated with amendments to our banking facility.
Lastly, Other relates to interest income in connection with Tax
refunds received in fiscal 2022.
INCOME TAX EXPENSE
The benefit from income taxes was $376,000 in 2022, compared to $2,000 in 2021. Significant factors impacting the
2022 net effective tax benefit rate were non-deductible permanent
differences, and state and local taxes. The net effective tax
benefit for 2022 was (20.3%).
LIQUIDITY AND CAPITAL RESOURCES
We monitor such metrics as days sales outstanding, inventory
requirements, accounts payable and capital expenditures to project
liquidity needs, as well as evaluate return on assets. Our primary
source of funds is our Revolver Loan ("Revolver") with our
bank.
We gauge our liquidity and financial stability by various
measurements, some of which are shown in the following table:
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|
|
December 31,
|
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|
2022
|
|
2021
|
|
|
|
|
|
|
|
Working
capital
|
|
$
|
20,838,000
|
|
$
|
24,598,000
|
Current
ratio
|
|
|
2.44 to
1
|
|
|
3.04 to 1
|
Shareholders'
equity
|
|
$
|
41,956,000
|
|
$
|
43,840,000
|
|
Credit Facility
Currently our Credit Facility, will be discussed in detail in
the Company's Form 10-K. This Credit Facility was amended in
March 2023. Key components of the current amendment include
extending the expiration date to February 8,
2027, and the removal of the $1,600,000 CapEx facility.
Additionally, should the need arise whereby the current Credit
Facility is insufficient; we could obtain additional funds based on
the value of our real property.
Cash Flows
For the year ended December 31,
2022, cash provided by operating activities was $3,288,000, compared to cash used in operating
activities for the year ended December 31,
2021, of $4,149,000. At
December 31, 2022, our consolidated
cash balance was $667,000, compared
to $539,000 at December 31, 2021. Cash at our UAT subsidiary on
December 31, 2022, and 2021 was
$49,500 and $190,000, respectively. We operate under the
terms and conditions of the Credit Agreement. As a result, all
domestic cash receipts are remitted to Capital One lockboxes.
Our total debt to total book capitalization (total debt divided
by total debt plus equity) on December 31,
2022, was 15.3%, compared to 11.6% on December 31, 2021.
Capital spending during the year ended December 31, 2022, was $2,374,000, compared to $642,000 in 2021. Capital expenditures currently
planned for 2023 are approximately $2,600,000 which we expect will be financed
through the Credit Facility. The major portion of these planned
capital expenditures will be for new metal cutting equipment,
tooling and information technology hardware and software.
Our liquidity and capital is primarily sourced from our credit
facility, and cash provided by operations. At December 31, 2022, we had $7,678,000 available to us from the revolver
portion of the credit facility.
For the year ended December 31,
2022, we had $7,235,000 of
open purchase order commitments, compared to $16,331,000 at December
31, 2021.
ABOUT P&F INDUSTRIES, INC.
P&F Industries, Inc., through its wholly owned subsidiaries,
is a manufacturer and importer of air-powered tools and accessories
sold principally to the aerospace, industrial, automotive, and
retail markets. P&F's products are sold under its own
trademarks, as well as under the private labels of major
manufacturers and retailers.
For information relating to the products and services we offer,
please visit our website at www.pfina.com. From there you can link
to our subsidiary websites.
OTHER INFORMATION
P&F Industries Inc. has scheduled a conference call on
March 28, 2023, at 11:00 A.M. Eastern Time, to discuss its full year
2022 results and financial condition. Investors and other
interested parties who wish to listen to or participate can dial
1-866-580-3963. It is suggested you call at least 10 minutes prior
to the call commencement. For those who cannot listen to the live
broadcast, a replay of the call will also be available on the
Company's website beginning on or about March 29, 2023.
Forward Looking Statement
The Private Securities Litigation Reform Act of 1995 (the
"Reform Act") provides a safe harbor for forward-looking statements
made by or on behalf of P&F Industries, Inc., and subsidiaries
("P&F", or the "Company"). P&F and its representatives may,
from time-to-time, make written or verbal forward-looking
statements, including statements contained in the Company's filings
with the Securities and Exchange Commission and in its reports to
shareholders. Generally, the inclusion of the words "believe,"
"expect," "intend," "estimate," "anticipate," "will," "may,"
"would," "could," "should," and their opposites and similar
expressions identify statements that constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934 and
that are intended to come within the safe harbor protection
provided by those sections. Any forward-looking statements
contained herein, including those related to the Company's future
performance, are based upon the Company's historical performance
and on current plans, estimates and expectations. All
forward-looking statements involve risks and uncertainties. These
risks and uncertainties could cause the Company's actual results
for all or part of 2023 fiscal year and beyond to differ materially
from those expressed in any forward-looking statement made by or on
behalf of the Company for a number of reasons including, but not
limited to:
- Risks related to the global outbreak of COVID-19 and other
public health crises;
- Risks associated with sourcing from overseas;
- Disruption in the global capital and credit markets;
- Importation delays;
- Customer concentration;
- Unforeseen inventory adjustments or changes in purchasing
patterns;
- Market acceptance of products;
- Competition;
- Price reductions;
- Exposure to fluctuations in energy prices;
- Exposure to fluctuations within the cost of raw materials;
- The strength of the retail economy in the United States and abroad;
- Adverse changes in currency exchange rates;
- Interest rates;
- Debt and debt service requirements;
- Borrowing and compliance with covenants under our credit
facility;
- Impairment of long-lived assets and goodwill;
- Retention of key personnel;
- Acquisition of businesses;
- Regulatory environment;
- Litigation and insurance;
- The threat of terrorism and related political instability and
economic uncertainty; and Business disruptions or other costs
associated with information technology, cyber-attacks, system
implementations, data privacy or catastrophic losses; and
- Those other risks and uncertainties described in its Annual
Reports on Form 10-K, its Quarterly Reports on Form 10-Q, and its
other reports and statements filed (and to be filed) by the Company
with the Securities and Exchange Commission. Forward-looking
statements speak only as of the date on which they are made. The
Company undertakes no obligation to update publicly or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise. The Company cautions you against
relying on any of these forward-looking statements.
P & F
INDUSTRIES, INC. AND UBSIDIARIES
|
|
|
|
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
(In Thousands
$)
|
December 31,
2022
|
December 31,
2021
|
|
(Unaudited)
|
(Audited)
|
Assets
|
|
|
Cash
|
|
$
|
667
|
|
|
$
|
539
|
|
Accounts receivable -
net
|
|
|
7,370
|
|
|
|
7,550
|
|
Inventories
|
|
|
24,491
|
|
|
|
24,021
|
|
Prepaid expenses and
other current assets
|
|
|
2,753
|
|
|
|
4,566
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
35,281
|
|
|
|
36,676
|
|
|
|
|
|
|
|
|
|
|
Net property and
equipment
|
|
|
9,363
|
|
|
|
8,080
|
|
Goodwill
|
|
|
4,822
|
|
|
|
4,447
|
|
Other intangible assets
- net
|
|
|
5,326
|
|
|
|
5,592
|
|
Deferred income taxes -
net
|
|
|
629
|
|
|
|
349
|
|
Right-of-use assets –
operating leases
|
|
|
5,521
|
|
|
|
2,969
|
|
Other assets –
net
|
|
|
62
|
|
|
|
77
|
|
Total
assets
|
|
$
|
61,004
|
|
|
$
|
58,190
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
7,570
|
|
|
$
|
5,765
|
|
Accounts
payable
|
|
|
3,094
|
|
|
|
2,920
|
|
Accrued compensation
and benefits
|
|
|
1,757
|
|
|
|
1,475
|
|
Accrued other
liabilities
|
|
|
1,002
|
|
|
|
1,078
|
|
Current lease
liabilities – operating leases
|
|
|
1,020
|
|
|
|
840
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
14,443
|
|
|
|
12,078
|
|
|
|
|
|
|
|
|
|
|
Noncurrent lease
liabilities – operating leases
|
|
|
4,535
|
|
|
|
2,176
|
|
Other
liabilities
|
|
|
70
|
|
|
|
96
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
19,048
|
|
|
|
14,350
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
|
41,956
|
|
|
|
43,840
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
$
|
61,004
|
|
|
$
|
58,190
|
|
|
|
|
|
|
|
|
|
|
P & F INDUSTRIES, INC. AND
SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
Year Ended December 31,
|
(In Thousands $)
|
2022
|
2021
|
|
|
|
Net revenue
|
$
|
59,041
|
$
|
53,554
|
Cost of
sales
|
40,102
|
36,207
|
Gross profit
|
18,939
|
17,347
|
Selling, general and
administrative expenses
|
20,373
|
19,856
|
Impairment of assets
held for sale
|
48
|
88
|
Operating
loss
|
(1,482)
|
(2,597)
|
Loss on sale of
property and equipment
|
(26)
|
(27)
|
Other income
|
19
|
4,957
|
Interest
expense
|
(363)
|
(45)
|
(Loss) income before
income taxes
|
(1,852)
|
2,288
|
Income tax
benefit
|
376
|
2
|
Net (loss)
income
|
$
|
(1,476)
|
$
|
2,290
|
P&F
INDUSTRIES, INC. AND SUBSIDIARIES
|
|
Year
Ended
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited)
|
|
December
31,
|
|
(In Thousands
$)
|
|
2022
|
|
|
2021
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(1,476)
|
|
|
$
|
2,290
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income (loss) to net cash (used in) provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash and other
charges:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
1,837
|
|
|
|
1,788
|
|
Amortization of other intangible assets
|
|
|
687
|
|
|
|
631
|
|
Operating lease expense
|
|
|
949
|
|
|
|
895
|
|
Amortization of debt issue costs
|
|
|
16
|
|
|
|
16
|
|
Amortization of consideration payable to a
customer
|
|
|
157
|
|
|
|
270
|
|
Provision for losses on accounts receivable
|
|
|
47
|
|
|
|
10
|
|
Stock-based compensation
|
|
|
39
|
|
|
|
5
|
|
Restricted stock-based compensation
|
|
|
52
|
|
|
|
43
|
|
(Loss) gain on sale of fixed assets
|
|
|
26
|
|
|
|
(27)
|
|
Deferred income taxes
|
|
|
(276)
|
|
|
|
(120)
|
|
Fair value adjustment of assets held for sale
|
|
|
48
|
|
|
|
88
|
|
Gain on early
termination of lease
|
|
|
(19)
|
|
|
|
---
|
|
Forgiveness of government grant obligations
|
|
|
---
|
|
|
|
(2,929)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
739
|
|
|
|
(96)
|
|
Inventories
|
|
|
(223)
|
|
|
|
(5,671)
|
|
Prepaid expenses and other current assets
|
|
|
1,446
|
|
|
|
(1,825)
|
|
Accounts payable
|
|
|
(21)
|
|
|
|
726
|
|
Accrued compensation and benefits
|
|
|
304
|
|
|
|
954
|
|
Accrued other liabilities and other current
liabilities
|
|
|
(68)
|
|
|
|
(264)
|
|
Operating lease liabilities
|
|
|
(945)
|
|
|
|
(888)
|
|
Other liabilities
|
|
|
(31)
|
|
|
|
(45)
|
|
Total
adjustments
|
|
|
4,764
|
|
|
|
(6,439)
|
|
Net cash
provided by (used in) operating activities
|
|
|
3,288
|
|
|
|
(4,149)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(2,374)
|
|
|
|
(642)
|
|
Proceeds from
disposal of property and equipment
|
|
|
46
|
|
|
|
58
|
|
Purchase of the
net assets of the Jackson Gear Company business
|
|
|
(2,300)
|
|
|
|
—
|
|
Net cash used in investing activities
|
|
|
(4,628)
|
|
|
|
(584)
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
Dividend
payments
|
|
|
(319)
|
|
|
|
—
|
|
Proceeds from exercise
of stock options
|
|
|
2
|
|
|
|
—
|
|
Net proceeds relating
to short-term borrowings
|
|
|
1,805
|
|
|
|
4,391
|
|
Net cash provided by financing activities
|
|
|
1,488
|
|
|
|
4,391
|
|
Effect of exchange rate
changes on cash
|
|
|
(20)
|
|
|
|
(23)
|
|
Net increase (decrease)
in cash
|
|
|
128
|
|
|
|
(365)
|
|
Cash at beginning of
period
|
|
|
539
|
|
|
|
904
|
|
Cash at end of
period
|
|
$
|
667
|
|
|
$
|
539
|
|
P&F INDUSTRIES, INC. AND
SUBSIDIARIES
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited) (CONTINUED)
|
|
|
|
|
|
|
|
(In Thousands $)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid
for:
|
|
|
|
|
|
|
|
Interest
|
|
$
|
322
|
|
|
$
|
39
|
Taxes
|
|
$
|
128
|
|
|
|
22
|
Cash paid for amounts included in the measurement of
operating lease liabilities
|
|
$
|
34
|
|
|
$
|
10
|
|
|
|
|
|
|
|
|
Noncash
information:
|
|
|
|
|
|
|
|
Right of Use ("ROU")
assets recognized for new operating lease liabilities
|
|
$
|
3,488
|
|
|
$
|
427
|
P & F
INDUSTRIES, INC. AND SUBSIDIARIES
|
NON-GAAP FINANCIAL
MEASURE AND RECONCILIATION
|
|
COMPUTATION OF
(EBITDA) – (LOSS) EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION, AND AMORIZATION
|
(UNAUDITED)
|
|
|
|
(In Thousands
$)
|
|
For the Year Ended
December 31,
|
|
|
|
2022
|
|
|
|
2021
|
|
Net (loss) income
(2)
|
|
$
|
(1,476)
|
|
|
$
|
2,290
|
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation &
amortization (3)
|
|
|
2,772
|
|
|
|
2,737
|
|
Interest
expense
|
|
|
363
|
|
|
|
45
|
|
Impairment,
etc.
|
|
|
48
|
|
|
|
88
|
|
Income tax
benefit
|
|
|
(376)
|
|
|
|
(2)
|
|
|
|
|
2,807
|
|
|
|
2,868
|
|
|
|
|
|
|
|
|
|
|
EBITDA (1)
|
|
$
|
1,331
|
|
|
$
|
5,158
|
|
|
|
|
|
|
|
|
|
|
Notes
|
(1)
|
The Company discloses a
tabular comparison of EBITDA, which is a non-GAAP measure because
it is instrumental in comparing the results from period to
period. The Company's management believes that the comparison
of EBITDA provides greater insight into the Company's results of
operations for the periods presented. EBITDA should not be
considered in isolation or as a substitute for operating income as
reported on the face of our statement of operations.
|
|
|
|
|
(2)
|
Included in the
2021 net income is the forgiveness of the $2,929,000 PPP loan and
$2,028,000 of ERTC.
|
|
|
|
|
(3)
|
Includes depreciation,
and amortization of: (a) intangible assets; (b) amortization of
consideration payable to a customer, and (c) non-cash stock-based
compensation expense.
|
|
|
|
###
View original
content:https://www.prnewswire.com/news-releases/pf-industries-inc-reports-results-for-the-year-ended-december-31-2022-announces-extension-to-banking-facility-301782765.html
SOURCE P&F Industries, Inc.