P&F Industries Reports Results For The Year Ended December 31, 2012

MELVILLE, N.Y., March 27, 2013 /PRNewswire/ -- P&F Industries, Inc. (Nasdaq: PFIN) today announced its results of operations for the year ended December 31, 2012.  The Company is reporting full year 2012 net revenue of $59,871,000, compared to $54,541,000 in 2011.  The Company is also reporting full year 2012 net income from continuing operations of $5,450,000, compared to $1,909,000, in 2011.  Included in the Company's 2012 net income from continuing operations is a net deferred tax benefit of $2,250,000, which resulted from a reduction in the valuation allowance on its deferred tax assets, partially offset by the utilization of deferred tax assets in 2012. 

The Company reported basic and diluted earnings (loss) per common share of:




For the years ended  December 31,


2012


2011

Basic earnings (loss) per share






Continuing operations


$

1.50


$

0.53

Discontinued operations



(0.01)



0.18

Net income


$

1.49


$

0.71








Diluted earnings (loss) per share







Continuing operations


$

1.45


$

0.52

Discontinued operations



(0.01)



0.17

Net income


$

1.44


$

0.69








Weighted average common shares outstanding:







Basic



3,641,000



3,615,000

Diluted



3,748,000



3,698,000

Richard Horowitz, the Company's Chairman of the Board, Chief Executive Officer and President commented, "I am extremely pleased to report that we were able to increase consolidated net revenue more than $5.3 million or 9.8%, during 2012, compared to the prior year.  Additionally, when comparing 2012 to 2011, P&F was able to improve its income before taxes from continuing operations more than $1.3 million, or 67%, despite a generally weak economic environment in the United States."  Mr. Horowitz added, "In December 2012, we amended our existing credit agreement with Capital One Leverage Finance. This amendment, among other things, extended the maturity date of the credit facility to December 17, 2017; increased the total commitment; increased maximum borrowings under the terms of the revolving credit line and lowered the margin rates added to our borrowings.  Additionally, I am pleased to announce that in late December 2012 we commenced our initial distribution of pneumatic air tools to The Home Depot through our Florida Pneumatic subsidiary."  Mr. Horowitz concluded his remarks stating, "All employees throughout our Company continue to remain focused on successfully expanding our respective market presence, as well as increasing profits without sacrificing quality or customer service."     

A summary of P&F's results of operations for the three and twelve months ended December 31, 2012 and 2011 follows.

REVENUE:

Consolidated



Three months ended December 31,







2012


2011


Variance


Variance







$


%

Tools














Florida Pneumatic


$

5,397,000


$

5,592,000


$

(195,000)


(3.5)


%

Hy-Tech



4,072,000



3,896,000



176,000


4.5



Tools Total



9,469,000



9,488,000



(19,000)


(0.2)

















Hardware














Hardware Total



3,222,000



2,386,000



836,000


35.0

















Consolidated


$

12,691,000


$

11,874,000


$

817,000


6.9


%

 



Year ended December 31,







2012


2011


Variance


Variance

Tools













   Florida Pneumatic


$

25,484,000


$

23,455,000


$

2,029,000


8.7

%

   Hy-Tech



16,657,000



16,394,000



263,000


1.6


   Tools Total



42,141,000



39,849,000



2,292,000


5.8















Hardware













   Hardware Total



17,730,000



14,692,000



3,038,000


20.7


Consolidated


$

59,871,000


$

54,541,000


$

5,330,000


9.8

%

Florida Pneumatic Manufacturing Corporation

An analysis of Florida Pneumatic's revenue for the three and twelve-month periods ended December 31, 2012 and 2011 is as follows:



Three months ended December 31,



2012



2011



Increase (decrease)



Revenue



Percent 

of
revenue



Revenue



Percent 

of
revenue



$


%



Retail customers


$

2,979,000



55.2

%


$

2,970,000



53.1

%


$

9,000


0.3


%

Industrial/catalog



1,754,000



32.5




1,682,000



30.1




72,000


4.3



Automotive



233,000



4.3




375,000



6.7




(142,000)


(37.9)



Other



431,000



8.0




565,000



10.1




(134,000)


(23.7)



Total


$

5,397,000



100.0

%


$

5,592,000



100.0

%


$

(195,000)


(3.5)


%

 



Year Ended December 31,



2012



2011



Increase (decrease)



Revenue



Percent 

of
revenue



Revenue



Percent 

of
revenue



$



%


Retail customers


$

14,499,000




56.9

%


$

13,078,000




55.8

%


$

1,421,000




10.9

%

Industrial/catalog



7,813,000




30.7




6,855,000




29.2




958,000




14.0


Automotive



1,071,000




4.2




1,297,000




5.5




(226,000)




(17.4)


Other



2,101,000




8.2




2,225,000




9.5




(124,000)




(5.6)


Total


$

25,484,000




100.0

%


$

23,455,000




100.0

%


$

2,029,000




8.7

%

During the fourth quarter of 2012, Florida Pneumatic commenced its initial product delivery, or roll-out to its new retail customer, The Home Depot ("THD").  Revenue from its other retail customer, Sears Holdings Corporation ("Sears"), declined when compared to the same three month period in 2011. The decline in Sears' revenue is partially due to the timing of seasonal orders delivered in the third quarter of 2012, compared to the fourth quarter of 2011. Florida Pneumatic continued its growth in the higher gross margin industrial/catalog sector. Fourth quarter of 2012 Automotive product revenue, as well as Other revenue, which includes revenue from its Berkley, air filters and OEM lines, declined when compared to the same period in 2011, due primarily to its decision to place greater emphasis on expanding its Retail and Industrial/catalog lines.

With respect to the full-year 2012, Florida Pneumatic continued to expand its presence in the higher gross margin, industrial/catalog sector.  The Company intends to continue to expand its marketing effort in this sector of the pneumatic air tool market.  As Florida Pneumatic commenced shipments to THD during the latter half of 2012, revenue from its Retail customers, in the aggregate, improved 10.9 % when comparing 2012 to 2011. This increase was due primarily to the THD revenue, offset by a reduction in Sears' revenue of certain specialty, promotional and basic items. As noted previously, the decrease in Florida Pneumatic's Other and Automotive revenue were due in large part to its decision to focus their efforts on expansion of the Retail and Industrial/catalog product lines.

Hy-Tech Machines Inc.

Hy-Tech creates quality replacement parts for pneumatic tools, markets its own value-added line of air tools and distributes a complementary line of sockets ("ATP").  Hy-Tech manufactures and markets a line of products that primarily focus on power generation, mining, construction and general industrial manufacturing markets ("Hy-Tech Machine").

An analysis of Hy-Tech's revenue for the three and twelve-month periods ended December 31, 2012 and 2011 is as follows:



Three months ended December 31,



2012



2011



Increase (decrease)



Revenue


Percent 

of
revenue



Revenue



Percent 

of
revenue



$


%



ATP


$

2,592,000


63.7

%


$

2,477,000



63.6

%


$

115,000


4.6


%

Hy-Tech Machine



397,000


9.7




448,000



11.5




(51,000)


(11.4)



Major customer



1,014,000


24.9




892,000



22.9




122,000


13.7



Other



69,000


1.7




79,000



2.0




(10,000)


(12.7)



Total


$

4,072,000


100.0

%


$

3,896,000



100.0

%


$

176,000


4.5


%























 



Year Ended December 31,



2012



2011



Increase (decrease)




Revenue


Percent

of
revenue



Revenue


Percent

of
revenue



$


%


ATP


$

10,840,000



65.1

%


$

11,081,000



67.6

%


$

(241,000)



(2.2)%


Hy-Tech Machine



1,664,000



10.0




1,922,000



11.7




(258,000)



(13.4)


Major customer



3,787,000



22.7




3,065,000



18.7




722,000



23.6


Other



366,000



2.2




326,000



2.0




40,000



12.3


Total


$

16,657,000



100.0

%


$

16,394,000



100.0

%


$

263,000



1.6

%

Hy-Tech's revenue from its Major customer, as well as revenue from its ATP product line improved when comparing its fourth quarter of 2012 revenue to the same period in the prior year.  We believe both of these increases are due primarily to improving general global economic conditions in this sector during 2012, compared to the prior year.  Reductions in revenue from its Hy-Tech Machine and Other product lines partially offset the increase.

Hy-Tech's full-year 2012 revenue improved 1.6%, when compared to 2011. The increase in revenue from its Major customer, we believe, is due primarily to improved global economic conditions in this sector, which favorably impacted on this customer.  ATP revenue declined, due primarily to a one-time significant order for sockets in 2011, which did not repeat in 2012. The decline in Hy-Tech Machine revenue is due in large part to management's decision to assign additional labor and overhead to the manufacturing for, and servicing of, its Major customer.   

Nationwide Industries Inc.

An analysis of Nationwide's revenue for the three and twelve-month periods ended December 31, 2012 and 2011 is as follows:



Three months ended December 31,



2012



2011



Increase (decrease)



Revenue


Percent 

of
revenue



Revenue


Percent 

of
revenue



$


%



Fence and gate hardware


$

2,061,000


64.0

%


$

1,356,000


56.8

%


$

705,000


52.0


%

Kitchen and bath



528,000


16.4




553,000


23.2




(25,000)


(4.5)



OEM



364,000


11.3




276,000


11.6




88,000


31.9



Patio



269,000


8.3




201,000


8.4




68,000


33.8



Total


$

3,222,000


100.0

%


$

2,386,000


100.0

%


$

836,000


35.0


%

 



Year ended December 31,



2012



2011



Increase (decrease)



Revenue


Percent 

of
revenue



Revenue


Percent 

of
revenue



$



%



Fence and gate hardware


$

12,265,000


69.2

%


$

9,630,000


65.5

%


$

2,635,000



27.4


%

Kitchen and bath



2,709,000


15.3




2,606,000


17.8




103,000



4.0



OEM



1,599,000


9.0




1,571,000


10.7




28,000



1.8



Patio



1,157,000


6.5




885,000


6.0




272,000



30.7



Total


$

17,730,000


100.0

%


$

14,692,000


100.0

%


$

3,038,000



20.7


%

Fence and gate hardware continues to be the strength behind Nationwide's revenue growth, with fourth quarter of 2012 exceeding the same period in 2011 by 52.0%. This improvement is due primarily to the expanded customer base and new product releases. The increase in patio revenue is due primarily to increased activity in the sale of foreclosed houses occurring in Florida. When comparing the fourth quarter of 2012 to the same period in 2011, revenue increased at its OEM product line primarily due to certain orders being delayed by its customers from the fourth quarter 2011 to the first quarter of 2012.  During the fourth quarter of 2012, Kitchen and bath encountered a softening of the market. 

When comparing the full-year 2012 to 2011, Nationwide was able to increase revenue throughout its suite of product lines. However, nearly 87% of Nationwide's revenue growth was generated from its fence and gate hardware product line, which was due primarily to the introduction of new products, as well as to expanded marketing efforts and increased customer base.  Nationwide's kitchen and bath product line revenue improved slightly.  Despite significant pricing pressure, along with a dwindling market and other factors, OEM product line revenue for the full year 2012 recorded a minimal increase. As a result, it is likely we will continue to place less emphasis on this product line.  Patio revenue during the full-year 2012, increased when compared to the same period in 2011, due primarily to an increase in the sale of foreclosed housing units, which tend to require repair/ replacement of patio enclosures.  As fence and gate hardware continue to be the primary contributor to Nationwide's revenue growth, we intend to continue our current strategy, which is to develop new, innovative fence and gate hardware products and accessories, as well as to continue to expand our national market campaign.

GROSS MARGIN



Three months ended December 31,



Increase (decrease)




2012



2011



Amount



%


Tools


$

3,663,000



$

3,482,000



$

181,000




5.2

%

As % of respective revenue



38.7

%



36.7

%



2.0

% pts. 





Hardware


$

1,154,000



$

791,000



$

363,000




45.9

%

As % of respective revenue



35.8

%



33.2

%



2.6

% pts. 





Consolidated


$

4,817,000



$

4,273,000



$

544,000




12.7

%

As % of respective revenue



38.0

%



36.0

%



2.0

% pts.