CFC International, Inc. Reports 2001 First Quarter Results

Apr 26, 2001, 01:00 ET from CFC International, Inc.

    CHICAGO HEIGHTS, Ill., April 26 /PRNewswire/ -- Worldwide holographic and
 specialty coated film manufacturer, CFC International, Inc. (Nasdaq:   CFCI)
 today reported results for the first quarter of 2001.  First quarter sales
 decreased 10.7 percent to $16.3 million compared to $18.3 million in the first
 quarter of 2000.  Approximately $450,000 of the decline in sales was primarily
 the result of the company's international sales being adversely affected by
 weak European currencies.  Specialty pigmented and simulated metal products
 sales in Europe were down approximately $1.5 million in the first quarter of
 2001, compared to the first quarter of 2000, primarily due to the company
 eliminating low margin customers in Europe.  Operating income in the first
 quarter was $699,000, down 59.1 percent from $1.7 million in 2000, due solely
 to the decline in gross profit, despite a decrease of $847,000 in operating
 expenses.
     Net income was $158,000 or $0.03 cents per share on a fully diluted basis
 in the first quarter of 2001, an 80.6 percent decrease compared to $811,000,
 or $0.18 cents per share, in the first quarter of 2000.  The decrease in net
 income during the first quarter was primarily the result of the lower sales
 volume.
     When comparing the first quarter of 2001, to the fourth quarter of 2000,
 gross profit increased to 30.8 percent of net sales, from 22.0 percent.  This
 increase is primarily the result of sales growth over the fourth quarter of
 2000, and the resultant efficiencies in utilization of labor and absorption of
 fixed costs during the first quarter of 2001, when compared to the previous
 quarter.  The company expects this trend to continue for the remainder of the
 year.
     "We are disappointed that our financial performance is off for the first
 quarter 2001, when compared to the first quarter of 2000, although sales are
 in line with our expectations due to the continued worldwide economic
 slowdown," said Roger Hruby, CFC's Chairman and CEO.  "Despite difficult
 market conditions, CFC's sales are approximately 10 percent higher than the
 fourth quarter of 2000, and our sales order volume continues to show signs of
 improvement over the end of last year."
     Mr. Hruby added, "The current economic environment certainly presents some
 tough challenges, but our objectives remain the same, and they are: 1) to
 continue to provide our customers with superior quality products and services
 on a global basis; 2) to continue to invest in new product development in
 order to expand our business into new markets; and 3) to continue to reduce
 operating expenses."
 
     Business Review
 
     Holographic Products
     Sales for holographic products decreased 11.2 percent to $2.8 million in
 the first quarter of 2001, from $3.2 million in the comparable period last
 year.  First quarter sales reflect a decrease primarily in holographic
 packaging sales to a major customer who continued to reduce inventory from
 last year during the first quarter of this year.  The company expects this
 product line to experience growth throughout the year, as CFC continues to
 penetrate the holographic packaging and authentication label market on a
 global basis.
 
     Printed Products
     CFC's printed products sales decreased 4.5 percent to $4.7 million in the
 first quarter of 2001, compared with $4.9 million in the comparable quarter
 last year.  Continued weakness in the manufactured housing industry
 contributed to this decline.  The company does not expect the manufactured
 housing industry to rebound until the second quarter of 2002.  However,
 printed products sales in the first quarter have increased by approximately
 $1 million over the fourth quarter of 2000, and the company expects sales in
 this category to continue at this level for the remainder of the year.
 
     Security Products
     CFC's security products line sales increased 3.5 percent in the first
 quarter of 2001 to $1.7 million from $1.6 million in the first quarter of
 2000.  This increase is primarily the result of the company supplying
 intaglio-printed documents to a foreign government.  The company has an
 ongoing contract from the foreign government, and expects sales to remain
 steady throughout the year.
 
     Pharmaceutical Products
     CFC's pharmaceutical products sales for the first quarter increased
 30.0 percent to $2.8 million, from $2.2 million in the first quarter of 2000.
 The increase in sales was primarily a result of a European business
 replenishing inventory levels that had been depleted during the fourth quarter
 of 2000, as compared to an inventory bulk-up at the end of 1999 due to the Y2K
 concerns; and the resultant lowering of inventory levels in the first quarter
 of 2000.  Pharmaceutical products sales should continue to grow in line with
 industry trends of three to five percent.
 
     Specialty Pigmented and Simulated Metal Products
     The Company's specialty pigmented and simulated metal products line
 reported first quarter sales of $4.3 million, compared to $6.4 million in the
 comparable quarter.  This 32.8 percent decrease is due to the Company's
 strategic plan to eliminate lower margin, high-service products, and the
 negative impact of European currencies against the U.S. dollar of
 approximately $340,000 in this product area.
     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; Ventura, California; London, England; Goeppingen,
 Germany; and Paris, France.
 
     A statement of income and a statement of sales by market are attached.
 
     The forward-looking statements made in this press release, which reflects
 management's best judgment based upon factors currently known, involve risks
 and uncertainties detailed from time to time in the Company's filings with the
 Securities and Exchange Commission.  Actual results may vary materially.
     You may access additional information, including financial filings and
 previous press releases by visiting CFC International's Internet homepage at
 http://www.cfcintl.com .
 
 
     CFC INTERNATIONAL, INC.
     2001 CONSOLIDATED STATEMENT OF INCOME
                                                   1st          1st
                                                 Quarter      Quarter
     (In Thousands, Except Earnings Per Share)    2001         2000
 
     Net Sales                                  $16,310       $18,258
     Gross Profit                                 5,026         6,883
       Gross Profit (%)                           30.8%         37.7%
     Operating Expenses                           4,327         5,174
     Operating Income                               699         1,710
       Operating Income(%)                         4.3%          9.4%
     Interest                                       402           294
     Other                                           42           169
 
     Income from Continuing Operations Before       255         1,246
       Income Taxes
 
     Provision for Income Taxes                      97           435
     Net Income                                    $158          $811
 
     Diluted Weighted Average Number of
      Shares Outstanding                          4,566         4,759
 
     Diluted Earnings Per Share                   $0.03         $0.18
 
     Earnings Before Interest, Taxes,
      Depreciation and                           $1,771        $2,525
       Amortization
 
 
     CFC INTERNATIONAL, INC.
     STATEMENT OF SALES BY PRODUCT LINE
                                                   1st         1st
                                                 Quarter     Quarter
     (In Thousands)                               2001         2000
 
     Holographics Products                       $2,820        $3,175
 
     Printed Products                             4,668         4,888
 
     Security Products                            1,693         1,636
 
     Pharmaceutical Products                      2,845         2,188
 
     Specialty Pigmented and Simulated
       Metal Products                             4,284         6,371
 
     TOTAL                                      $16,310       $18,258
 
 
     CFC INTERNATIONAL, INC.
     INTERNATIONAL SALES
                                                  1st           1st
                                                Quarter       Quarter
     (In Thousands)                              2001          2000
 
     International Sales ($)                     $8,900        $9,046
 
     International Sales (%)                      54.6%         49.5%
 
 
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SOURCE CFC International, Inc.
    CHICAGO HEIGHTS, Ill., April 26 /PRNewswire/ -- Worldwide holographic and
 specialty coated film manufacturer, CFC International, Inc. (Nasdaq:   CFCI)
 today reported results for the first quarter of 2001.  First quarter sales
 decreased 10.7 percent to $16.3 million compared to $18.3 million in the first
 quarter of 2000.  Approximately $450,000 of the decline in sales was primarily
 the result of the company's international sales being adversely affected by
 weak European currencies.  Specialty pigmented and simulated metal products
 sales in Europe were down approximately $1.5 million in the first quarter of
 2001, compared to the first quarter of 2000, primarily due to the company
 eliminating low margin customers in Europe.  Operating income in the first
 quarter was $699,000, down 59.1 percent from $1.7 million in 2000, due solely
 to the decline in gross profit, despite a decrease of $847,000 in operating
 expenses.
     Net income was $158,000 or $0.03 cents per share on a fully diluted basis
 in the first quarter of 2001, an 80.6 percent decrease compared to $811,000,
 or $0.18 cents per share, in the first quarter of 2000.  The decrease in net
 income during the first quarter was primarily the result of the lower sales
 volume.
     When comparing the first quarter of 2001, to the fourth quarter of 2000,
 gross profit increased to 30.8 percent of net sales, from 22.0 percent.  This
 increase is primarily the result of sales growth over the fourth quarter of
 2000, and the resultant efficiencies in utilization of labor and absorption of
 fixed costs during the first quarter of 2001, when compared to the previous
 quarter.  The company expects this trend to continue for the remainder of the
 year.
     "We are disappointed that our financial performance is off for the first
 quarter 2001, when compared to the first quarter of 2000, although sales are
 in line with our expectations due to the continued worldwide economic
 slowdown," said Roger Hruby, CFC's Chairman and CEO.  "Despite difficult
 market conditions, CFC's sales are approximately 10 percent higher than the
 fourth quarter of 2000, and our sales order volume continues to show signs of
 improvement over the end of last year."
     Mr. Hruby added, "The current economic environment certainly presents some
 tough challenges, but our objectives remain the same, and they are: 1) to
 continue to provide our customers with superior quality products and services
 on a global basis; 2) to continue to invest in new product development in
 order to expand our business into new markets; and 3) to continue to reduce
 operating expenses."
 
     Business Review
 
     Holographic Products
     Sales for holographic products decreased 11.2 percent to $2.8 million in
 the first quarter of 2001, from $3.2 million in the comparable period last
 year.  First quarter sales reflect a decrease primarily in holographic
 packaging sales to a major customer who continued to reduce inventory from
 last year during the first quarter of this year.  The company expects this
 product line to experience growth throughout the year, as CFC continues to
 penetrate the holographic packaging and authentication label market on a
 global basis.
 
     Printed Products
     CFC's printed products sales decreased 4.5 percent to $4.7 million in the
 first quarter of 2001, compared with $4.9 million in the comparable quarter
 last year.  Continued weakness in the manufactured housing industry
 contributed to this decline.  The company does not expect the manufactured
 housing industry to rebound until the second quarter of 2002.  However,
 printed products sales in the first quarter have increased by approximately
 $1 million over the fourth quarter of 2000, and the company expects sales in
 this category to continue at this level for the remainder of the year.
 
     Security Products
     CFC's security products line sales increased 3.5 percent in the first
 quarter of 2001 to $1.7 million from $1.6 million in the first quarter of
 2000.  This increase is primarily the result of the company supplying
 intaglio-printed documents to a foreign government.  The company has an
 ongoing contract from the foreign government, and expects sales to remain
 steady throughout the year.
 
     Pharmaceutical Products
     CFC's pharmaceutical products sales for the first quarter increased
 30.0 percent to $2.8 million, from $2.2 million in the first quarter of 2000.
 The increase in sales was primarily a result of a European business
 replenishing inventory levels that had been depleted during the fourth quarter
 of 2000, as compared to an inventory bulk-up at the end of 1999 due to the Y2K
 concerns; and the resultant lowering of inventory levels in the first quarter
 of 2000.  Pharmaceutical products sales should continue to grow in line with
 industry trends of three to five percent.
 
     Specialty Pigmented and Simulated Metal Products
     The Company's specialty pigmented and simulated metal products line
 reported first quarter sales of $4.3 million, compared to $6.4 million in the
 comparable quarter.  This 32.8 percent decrease is due to the Company's
 strategic plan to eliminate lower margin, high-service products, and the
 negative impact of European currencies against the U.S. dollar of
 approximately $340,000 in this product area.
     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; Ventura, California; London, England; Goeppingen,
 Germany; and Paris, France.
 
     A statement of income and a statement of sales by market are attached.
 
     The forward-looking statements made in this press release, which reflects
 management's best judgment based upon factors currently known, involve risks
 and uncertainties detailed from time to time in the Company's filings with the
 Securities and Exchange Commission.  Actual results may vary materially.
     You may access additional information, including financial filings and
 previous press releases by visiting CFC International's Internet homepage at
 http://www.cfcintl.com .
 
 
     CFC INTERNATIONAL, INC.
     2001 CONSOLIDATED STATEMENT OF INCOME
                                                   1st          1st
                                                 Quarter      Quarter
     (In Thousands, Except Earnings Per Share)    2001         2000
 
     Net Sales                                  $16,310       $18,258
     Gross Profit                                 5,026         6,883
       Gross Profit (%)                           30.8%         37.7%
     Operating Expenses                           4,327         5,174
     Operating Income                               699         1,710
       Operating Income(%)                         4.3%          9.4%
     Interest                                       402           294
     Other                                           42           169
 
     Income from Continuing Operations Before       255         1,246
       Income Taxes
 
     Provision for Income Taxes                      97           435
     Net Income                                    $158          $811
 
     Diluted Weighted Average Number of
      Shares Outstanding                          4,566         4,759
 
     Diluted Earnings Per Share                   $0.03         $0.18
 
     Earnings Before Interest, Taxes,
      Depreciation and                           $1,771        $2,525
       Amortization
 
 
     CFC INTERNATIONAL, INC.
     STATEMENT OF SALES BY PRODUCT LINE
                                                   1st         1st
                                                 Quarter     Quarter
     (In Thousands)                               2001         2000
 
     Holographics Products                       $2,820        $3,175
 
     Printed Products                             4,668         4,888
 
     Security Products                            1,693         1,636
 
     Pharmaceutical Products                      2,845         2,188
 
     Specialty Pigmented and Simulated
       Metal Products                             4,284         6,371
 
     TOTAL                                      $16,310       $18,258
 
 
     CFC INTERNATIONAL, INC.
     INTERNATIONAL SALES
                                                  1st           1st
                                                Quarter       Quarter
     (In Thousands)                              2001          2000
 
     International Sales ($)                     $8,900        $9,046
 
     International Sales (%)                      54.6%         49.5%
 
 
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 SOURCE  CFC International, Inc.