– Revenues Increase 10% to $244.3 Million –
– Posts Positive Cash Flow From Operating Activities for Fiscal 2010 –
WASHINGTON, N.C., April 13, 2011 (GLOBE NEWSWIRE) -- Flanders Corporation (OTCQX:FLDR) reported financial results for the year ended December 31, 2010.
Harry Smith, Flanders Corporation's Chairman and CEO, said: "2010 was an exciting but challenging year for the company. We realized strong top line revenue growth in a flat economy while we continued with our reorganization plan to reduce the number of rooflines and automate manufacturing. Subsequent to year end, we successfully refinanced our revolving line of credit and disposed of a number of facilities. With all of this now behind us, the streamlined company is looking forward to a prosperous 2011."
Financial Summary
Revenue for the year ended December 31, 2010 was $244.3 million, compared to $222.4 million for the year ended December 31, 2009, an increase of 10%. Gross margin was 16.5%, compared to 19.4% for the same period a year ago. Included in cost of goods sold is a $0.6 million charge resulted from the write-off of inventory and equipment in the fourth quarter. Depreciation included in cost of goods sold increased $1.8 million during 2010. When adjusting for these charges and increases in non cash expenses, adjusted gross margin for 2010 would be 17.5%.
Operating expenses, before plant consolidation and exit costs, loss on sale of and impairment of property, and stock compensation expense, in 2010 was $36.0 million compared to $31.3 million in 2009. This increase is partially attributable to $1.4 million in increased freight costs due to changes in shipping arrangements with customers earlier in 2010 and approximately $1.0 million in higher commissions due to higher revenues. Plant consolidation and exit costs of $13.4 million, losses on impairment of property and equipment of $3.3 million, and losses on sales of properties and equipment of $1.4 million were related to facilities closed by the company in 2010. The Company also recorded stock compensation expense of $5.2 million.
Net loss for the year ended December 31, 2010 was $16.1 million, or $(0.60) per diluted share, compared to net income of $7.0 million, or $0.27 per diluted share, for the year ended December 31, 2009. Adjusted EBITDA for the year ended December 31, 2010 was $13.2 million compared to $18.4 million for the same period a year ago.
John Oakley, President and CFO, noted, "Net sales for our retail product lines posted a solid increase for the year while sales in the commercial and industrial ASHRAE business was flat with the prior year. Our high purity product lines also had a strong sales year, with growth across most of the sales channels serviced by those product lines. We reaffirm our guidance for 2011 as a revenue increase of 8% to 11% as we believe we will continue to see strong performance in our high purity and retail product lines while we expect strengthening in our commercial and industrial ASHRAE product lines over 2011."
Non-GAAP Financial Measures
The Company provides some financial 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, certain noncash and non-operating expenses, extraordinary items, depreciation and amortization (Adjusted EBITDA) provides useful information in the measure of operations. These non-GAAP financial measures are intended to supplement the user's overall understanding of the Company's current financial performance and its prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by identifying certain expenses that, when excluded from the GAAP results, may provide additional understanding of the Company's core operating results or business performance. However, these non-GAAP financial measures are not intended to supersede or replace the Company's GAAP results. A reconciliation of the non-GAAP results to the GAAP results is provided in the "Reconciliation of Net Earnings to Adjusted EBITDA" schedule below.
Conference Call
Chairman of the Board and CEO, Harry Smith and President and CFO John Oakley are scheduled to conduct a conference call at 11:00 a.m. ET on April 13, 2011 to review these results in more detail. To access the call from within the U.S., please dial 866-425-6192, and international callers can access the call by dialing 973-409-9253 approximately 10 minutes prior to the start of the conference call. The conference ID will be 56971234. A telephone replay will be available until midnight Eastern Time on May 13, 2011 by dialing 800-642-1687 or 706-645-9291 and entering pass code 56971234.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements made in this press release other than statements of historical fact, are forward-looking statements. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include, among other things: statements and assumptions relating to future growth, as well as management's short-term and long-term performance goals; statements regarding anticipated order patterns from our customers or the anticipated economic conditions of the industries and markets that we serve; statements related to the performance of the U.S. and other economies generally; statements relating to the anticipated effects on results of operations or financial condition from recent and expected developments or events; statements relating to the Flanders' business and growth strategies; and any other statements or assumptions that are not historical facts. Flanders believes that its expectations are based on reasonable assumptions. However, these forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause Flanders' actual results, performance or achievements, or industry results, to differ materially from the Flanders' expectations of future results, performance or achievements expressed or implied by these forward-looking statements. In addition, the Flanders' past results of operations do not necessarily indicate its future results. You should not place undue reliance on any forward-looking statements. These statements speak only as of the date of this press release. Except as otherwise required by applicable laws, Flanders undertakes no obligation to publicly update or revise any forward-looking statements or the risk factors described in this press release, including projected sales and profit levels for any business segment in any given quarter, whether as a result of new information, future events, changed circumstances or any other reason after the date of this press release.
About Flanders
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.
For further information on Flanders and its products, visit its web site at or contact John Oakley at 252-946-8081.
The Flanders Corporation logo is available at
CONTACT: John Oakley President and Chief Financial Officer 252-946-8081
