Flanders Corporation (NASDAQ: FLDR)
-- Improved annual net loss by $15.6 million, to $4.1 million including
$9.9 million in impairment charges, compared to $19.7 million including
$14.2 million in impairment charges in 2007
-- Improved annual EBITDA to a loss of $10.7 million including $9.9
million in impairment charges, compared to a loss of $18.5 million
including $14.2 million in impairment charges in 2007
-- Expect to deliver annual 2009 revenue growth of 8% to 13% over 2008
Flanders Corporation reported financial results for the fourth
quarter and year ended December 31, 2008.
Flanders Corporation's president and CEO, Harry Smith, said:
"2008 was an outstanding year of improvement, as we executed
programs to increase efficiencies and reduce costs. We installed a
more experienced management team, exited non-core businesses,
consolidated facilities, optimized production, shortened
lead-times, improved on-time delivery to 99% and lowered headcount.
These changes strengthened the company both financially and
operationally, although we were not immune to the difficult
economic climate. 2008 revenue was $217.3 million, compared to
$244.9 million in 2007, reflecting disposition of direct sales
offices, decreases in retail orders, and reduced capital spending
by semiconductor and construction companies. However, our
turnaround actions yielded significant productivity improvements,
especially shedding sales offices and other businesses. As a
result, we lowered our net loss by $15.6 million, to $4.1 million
for 2008."
"We are excited about our recent successes. In October 2008, we
received a Blanket Order Agreement (BOA) Subcontract related to the
Shaw AREVA MOX facility located in Aiken, SC. In February 2009, we
won our inaugural order for glove boxes. Also, in 2009 retail
customers have reacted positively to our faster delivery time and
better customer service. Flanders continues to lead innovation in
the air filtration industry."
Fourth Quarter 2008 Financial Summary
Revenue for the fourth quarter 2008 was $49.8 million, compared
to $57.8 million in the fourth quarter 2007. During the quarter,
the company recorded a $4.3 million inventory write-down, a $3.2
million charge for fixed asset impairment and a $2.4 million charge
for impairment of goodwill. Including the $9.9 million in
impairment charges, the fourth quarter 2008 net loss was $14.3
million, or $0.55 per share. This compares to the fourth quarter of
2007 net loss of $4.3 million, or $0.17 per share. EBITDA loss for
the fourth quarter 2008 was $19.9 million, compared to $6.0 million
for the fourth quarter of 2007.
Management uses some 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, extraordinary items, depreciation and amortization (EBITDA)
provides a useful measure of operations.
Full Year 2008 Financial Summary
Revenue for the year ended 2008 was $217.3 million, compared to
$244.9 million in 2007. During 2008, the company recorded $4.3
million in inventory write downs as compared to charges of $3.1
million recorded in 2007. 2008 operating expenses decreased to
$47.3 million, which included $2.4 million in goodwill impairment
and a $3.2 million charge for loss on impaired fixed assets,
compared to $58.5 million in 2007, which included $8.1 million in
reserves for bad debt, a $2.5 million charge for loss on impaired
fixed assets, and $543,000 in impairment of goodwill. Including the
$9.9 million in impairment charges, net loss for 2008 was $4.1
million, or $0.16 per share. This compares to a 2007 net loss of
$19.7 million, or $0.75 per share in 2007, which included $14.2
million in write downs and impairment. EBITDA loss for the year
ended 2008 improved to $10.7 million, compared to $18.5 million in
2007.
Flanders' Chief Financial Officer, John Oakley said: "During
this very challenging environment, we lowered our monthly operating
expenses by 14% and we improved virtually every metric in our
balance sheet in 2008. Over the course of the year, we reduced net
debt by 2.5% and improved inventory turns. While the economy
remains uncertain, the streamlined company is positioned to take
advantage of the desire for greater energy efficiency and cleaner
air. We expect total revenue for 2009 to be between $235 million
and $246 million representing growth of 8% to 13% from 2008. We
also anticipate achieving our goals of improved productivity and
EBITDA growth."
Conference Call
President and CEO, Harry Smith and CFO John Oakley are scheduled
to conduct a conference call at 11:00 a.m. ET on Mar. 16, 2009 to
review these results in more detail. To access the call in the
U.S., please dial (866) 425-6192, and for international callers
dial (973) 409-9253 approximately 10 minutes prior to the start of
the conference call. The conference ID will be 86800116. A
telephone replay will be available until midnight Eastern Time on
March 20th by dialing (800) 642-1687 or (706) 645-9291 and entering
pass code 86800116.
Safe Harbor Statement
The statements made in this press release regarding Flanders (1)
having an outstanding year of improvement, increasing efficiencies
and reducing costs, (2) installing a more experienced management
team and exiting non-core businesses, (3) using those and other
improvements to strengthen the company both financially and
operationally, (4) turnaround actions yielding significant
productivity improvements, (4) being excited about recent
successes, (5) retail customers reacting positively to faster
delivery time, and better customer service, and having those
actions continue, (6) continuing to lead innovation in the air
filtration industry, (7) being positioned to take advantage of the
desire for greater energy efficiency and cleaner air, (8) total
revenue for 2009 to be between $235 million and $246 million,
representing growth of 8% to 13% from 2008, and (9) achieving its
goals of improved productivity and EBITDA growth are based on the
current expectations and beliefs of the management of Flanders and
are subject to a number of risks and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. For a more detailed discussion of risk
factors that may affect Flanders' operations, please refer to the
Company's Form 10-K for the year ended December 31, 2008. These
forward-looking statements speak only as of the date on which such
statements are made, and the Company undertakes no obligation to
update such forward-looking statements, except as required by
law.
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 http://www.flanderscorp.com/ or contact Kirsten Chapman
or Tim Dien at (415) 433-3777.
FLANDERS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Operations (unaudited)
(In thousands, except per share data)
Three months ended Year ended
December 31, December 31,
------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales $ 49,795 $ 57,830 $ 217,328 $ 244,941
Gross profit (1,478) 4,583 26,560 31,789
Operating expenses 19,280 12,196 47,287 58,511
----------- ----------- ----------- -----------
Operating loss (20,758) (7,613) (20,727) (26,722)
Non operating expense (1,506) (759) 1,504 (1,969)
----------- ----------- ----------- -----------
Losses before income
taxes (22,264) (8,372) (19,223) (28,691)
Benefit for income
taxes (7,276) (663) (6,060) (8,791)
Extraordinary items 695 3,446 9,030 213
----------- ----------- ----------- -----------
Net loss $ (14,293) $ (4,263) $ (4,133) $ (19,687)
=========== =========== =========== ===========
Selected Balance Sheet Data At At
(in Millions) (unaudited) December 31 December 31
----------------- -----------------
2008 2007
----------------- -----------------
Working capital $ 45.2 $ 50.3
Total assets 161.0 183.6
Long-term Debt and Capital Lease
obligations, including current
maturities 31.5 32.3
Total shareholders? equity 82.8 87.4
Reconciliation of Net Three months ended Year ended
Loss to EBIDTA December 31, December 31,
------------------------ ------------------------
(in thousands)
(unaudited) 2008 2007 2008 2007
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net Loss $ (14,293) $ (4,263) $ (4,133) $ (19,687)
Extraordinary items (695) (3,446) (9,030) (213)
Interest 471 731 2,094 2,743
Taxes (7,276) (663) (6,060) (8,791)
Depreciation and
Amortization 1,913 1,595 6,396 7,415
----------- ----------- ----------- -----------
EBITDA Loss $ (19,880) $ (6,046) $ (10,733) $ (18,533)
=========== =========== =========== ===========
Company Contact: John Oakley CFO Flanders Corporation (252)
946-8081 Investor Relations Contacts: Lippert / Heilshorn &
Associates Kirsten Chapman/ Tim Dien Email Contact (415)
433-3777
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