MFRI Announces Third Quarter Fiscal 2016/17 Financial Results
Net sales of $25.3 million; Loss from continuing operations of $1.1 million; Net loss from continuing operations of $3.6 million, or $0.47 per diluted share; Processing of new pipeline project for Canadian energy company underway
(firmenpresse) - NILES, IL -- (Marketwired) -- 12/13/16 -- MFRI, Inc. (NASDAQ: MFRI) announced today financial results for the third fiscal quarter ended October 31, 2016.
CEO David Mansfield commented, "MFRI''s third-quarter results were impacted by the ongoing soft energy market and reductions in capital allocations to infrastructure development in North America and the Middle East. As a consequence of the market contraction, there is overcapacity in the market and this has had a significant impact on both revenue and pricing. Revenue was down 46% as compared to last year''s period. During the quarter, the Company completed the wind down of its fabric filter business and continued to right size its cost and financing structures. General and administrative expenses decreased by more than $2 million from the 2015 third quarter.
"With these significant steps accomplished, I believe the Company is now set to sharpen its focus on advancing our Perma-Pipe business and brand. While conditions in the global energy markets remain challenging -- and will likely continue into 2017 -- there are a number of areas where robust opportunities for new projects are emerging. I also believe we are well positioned to leverage Perma-Pipe''s reputation as an outstanding global provider of factory-insulated pipe systems and coatings in both the Company''s traditional geographic markets and in new ones.
"During the quarter, Perma Pipe Canada began processing the anti-corrosion coated and insulated pipeline project recently won from a major Canadian energy company, which consists of two lines totaling 180 miles (300 km) destined for eastern Alberta. We are running multiple shifts and as of October 31, 2016 had processed almost one-quarter of the total production. We expect to continue production through March 2017.
"Our backlog as of October 31 was almost $53 million. The 27% increase from the end of 2Q FY 2016/17 reflects activity in Canada as well as improved bookings in the Middle East. Although it remains difficult to forecast timing in today''s uncertain environment, we are continuing to work expeditiously to secure new projects in both traditional and new areas of activity."
- Net sales decreased 46% to $25.3 million in the current quarter from $47.0 million in the prior-year quarter. Since the Company serves oil and gas customers, the low price of oil has had a dampening effect on infrastructure projects in the Gulf of Mexico, Canada and the Middle East. The continued shrinking of domestic federal and state infrastructure spending, combined with the general recession in the Gulf Cooperation Council region, have combined to weaken demand for district heating and cooling projects.
- Gross margin decreased to 15% of net sales in the current quarter from 30% of net sales in the prior-year quarter due to lower volumes available to cover fixed costs and to increasing competitive pressures on pricing that adversely impacted intake margins.
- Operating expenses decreased to $4.7 million from $6.8 million due to staffing reductions and lower management incentive compensation. This reduction reflects the efforts to resize the organization during the current market downturn.
- Pretax loss from continuing operations was $1.1 million as compared to income of $7.8 million in the prior-year quarter due to:
competitive pricing pressure and weak infrastructure spending in district heating and cooling markets
reduced volume in oil and gas operations resulting from low prices.
- Net loss was $3.8 million as compared to net income of $6.1 million in the prior-year quarter.
- For the reasons discussed above, net sales decreased 23% to $71.2 million year-to-date from $92.4 million in the prior-year-to-date.
- Gross margin decreased to 12% of net sales year-to-date from 21% of net sales in the prior-year-to-date. The resulting lower production levels and absorption of manufacturing costs resulted in reduced operating profit margins.
- General and administrative expenses decreased $2.6 million from $14.4 million in the prior-year period to $11.8 million due to staffing reductions and lower management incentive compensation expense. Selling expenses increased slightly to $4.2 million from $4.0 million due to the addition of the Canadian activity.
- Pretax loss from continuing operations was $9.4 million year to date versus income of $1.7 million during the prior-year period of income due to:
competitive pricing pressure and weak infrastructure spending in district heating and cooling markets
reduced volume in oil and gas operations resulting from low oil prices
a non-cash loss of $1.6 million from the consolidation of the joint venture
a one-time $0.8 million lawsuit settlement
$0.3 million in severance costs
increased professional services associated with the changes in the Company''s business structure to concentrate on a single line of business.
- The Company''s effective tax rate ("ETR") from continuing operations for the year to date was a negative 11.4% compared to 51.7% during the prior-year period. The October 31, 2016 computation of the projected annual tax rate has been significantly impacted by an increase in the projected loss for the year, especially an increase in the loss attributable to the U.A.E., which receives no tax benefit due to a zero tax rate in that country. Other changes in the ETR from the prior year-to-date to the current year-to-date are due to the Canadian acquisition and the allocation of tax expense between continuing operations, other comprehensive income and discontinued operations when applying intra-period allocation rules.
The Company began winding down the last of its filter businesses in May 2016 and substantially completed that process in October 2016, when it sold its filter production site in Winchester, Virginia. This business is reported as discontinued operations in the consolidated financial statements and the notes thereto.
- Net loss was $9.6 million compared to $0.9 million in the prior-year period.
MFRI, Inc. is a global leader in pre-insulated piping and leak detection systems for oil and gas gathering, district heating and cooling, and other applications. It uses its extensive engineering and fabrication expertise to develop piping solutions that solve complex challenges regarding the safe and efficient transportation of many types of liquids. In total, MFRI has operations at seven locations in five countries.
Statements and other information contained in this announcement that can be identified by the use of forward-looking terminology constitute "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, and are subject to the safe harbors created thereby, including, without limitation, statements regarding the expected future performance and operations of the Company. These statements should be considered as subject to the many risks and uncertainties that exist in the Company''s operations and business environment. Such risks and uncertainties include, but are not limited to, the project nature of the business, the increasing international nature of the business, economic conditions, market demand and pricing, competitive and cost factors, raw material availability and prices, global interest rates, currency exchange rates, labor relations and other risk factors.
MFRI''s Form 10-Q for the period ended October 31, 2016 will be accessible at and . For more information, visit the Company''s website or contact its investor relations representative, LHA.
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 13.12.2016 - 08:18 Uhr
Sprache: Deutsch
News-ID 1475411
Anzahl Zeichen: 3090
contact information:
Contact person:
Town:
NILES, IL
Phone:
Kategorie:
Forest and Paper Products
Typ of Press Release:
type of sending:
Date of sending:
Anmerkungen:
Diese Pressemitteilung wurde bisher 347 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"MFRI Announces Third Quarter Fiscal 2016/17 Financial Results
"
steht unter der journalistisch-redaktionellen Verantwortung von
MFRI (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
