SOURCE: Flanders Corporation

May 02, 2007 17:40 ET

Flanders Q1 Earnings

ST. PETERSBURG, FL -- (MARKET WIRE) -- May 2, 2007 -- Flanders Corporation (NASDAQ: FLDR) today announced its results for the first quarter ended March 31, 2007. Earnings were $0 or $.00 per share, from $2.0 million, or $0.08 per share for the first quarter ended March 31, 2006. Revenues for the quarter were $60.2 million up 18.4% from $50.9 million for the first quarter ended March 31, 2006.

Steve Clark, President and C.E.O., commented, "Our top line grew by 18% during the quarter based on our success in marketing our two new products, Energy Air and our new nested product. We were able to successfully introduce our new Energy Air product line using our Power Saver Media™. We will be expanding these new media to include our MERV 10 (PLUS) and MERV 12 (ELITE) product lines. We continue to gain market share and believe that our product development will drive market expansion. As we expand our markets and automate our plants, we should generate additional cash to advertise our new Power Saver Media™. This unique media not only increases filtration efficiency but reduces energy costs. Increased volume, automation, and innovative products should lead to increased gross margin."

Our gross margin declined during the past two quarters due to a number of factors. The US economy experienced cost increases due to inflation including increases in in-bound shipping costs due to increased fuel costs, raw material costs, especially in the cost of metal. The plant fire in Texas and the plant flood in Auburn, Pennsylvania have continued to increase the overall cost of our production. Additionally, the product mix has shifted towards lower margin items, a trend that we anticipate will be reversing in the near term. Gross Margins have also decreased due to the start-up of three new plants in Clarkton, North Carolina, Dallas, Texas and Matamoros, Mexico as well as new production lines for the EnergyAire and nested products. The company slowed its production down during the quarter to allow our inventory levels to shrink; however, this created inefficiencies and decreased the companies overall gross margin. During March our plants have ramped back up and are operating more efficiently and are expected to run all out for the remainder of the year.

Robert Amerson, Chairman of the Board, commented, "We are reviewing our operating plans to improve our overall performance by realignment of plants and manufacturing lines. We have made significant capital improvements over the last five quarters and we are focusing on realizing the benefits of these investments."

Clark added, "We are continuing to see interest in our nuclear and biological filtration systems for use in government and commercial settings. This market is currently evolving and we are well positioned to capitalize on new opportunities as they arise."

Conference Call

A conference call with investors, analysts and other interested parties is scheduled for 11:00 a.m. EDT on Thursday, May 3, 2007, to discuss 2007 first quarter operating results. People wishing to participate in the conference call should dial 800-922-0755.

Selected Operations Data (all but per share data
 in Millions)                                       Q1 2007      Q1 2006
                                                  -----------  ------------
Net sales                                         $      60.2  $       50.9
Gross profit                                              9.0          11.5
Operating expenses                                       11.0           9.0
Operating income (loss)                                  (2.0)          2.5
Earnings (Losses) before income taxes and
 extraordinary item                                      (1.6)          3.0
Extraordinary item                                         .9             -
Net earnings (losses)                             $        .0  $        2.0
Net earnings per share:
  Basic                                           $      0.00  $       0.08
  Diluted                                         $      0.00  $       0.07

Common shares outstanding:
  Basic                                                  26.4          26.3
  Diluted                                                27.5          28.0


Selected Balance Sheet Data (in Millions)          3/31/2007   12/31/2006
                                                  ------------ ------------
Working capital                                   $       64.3 $       68.0
Total assets                                             201.9        207.1
Long-term obligations, including current
 maturities                                               37.7         42.9
Total shareholders’ equity                               108.8        107.4
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.

This press release contains forward-looking statements that are inherently subject to risk. These forward-looking statements are not intended to be promises or predictions of the future and may be affected by a number of factors that may change the currently anticipated outcome. These factors include market acceptance of Flanders' products, competition in the marketplace for Flanders' products, the success of retailers and distributors through which Flanders sells its products, Flanders' ability to contain costs and maintain production and efficiency with a reduced workforce, a determination by potential Flanders customers that the higher cost of its high-end filtration systems can be justified for general application, Flanders' ability to successfully retrofit existing buildings with effective sophisticated filtering and air handling systems, the ability to increase its high end containment products for commercial and governmental settings, the success of Flanders CSD (Flanders Complete Services Division), the ability to continue implementation of vertical integration of our raw material supplies and the development of increased demand for its high-end products. Many of these factors are not within Flanders' control. These factors, and others, are discussed in Flanders' periodic reports filed with the Securities and Exchange Commission and should be reviewed by the reader of this press release.

For further information on Flanders and its products, visit its web site at http://www.flanderscorp.com/ or contact Steven Clark at (727) 822-4411.

Contact Information

  • Contact:
    Steven Clark
    Chief Executive Officer
    Flanders Corporation
    (727) 822-4411