- Net sales increased to $23.1 million for the third quarter of
2005, up 6.5% from $21.7 million for the third quarter in 2004.
CHICAGO HEIGHTS, Ill., Oct. 26 /PRNewswire-FirstCall/ -- Worldwide
holographic and specialty coated film manufacturer, CFC
International, Inc. (NASDAQ:CFCI) today reported results for the
third quarter of 2005. Sales in the third quarter of 2005 increased
6.5 percent to $23.1 million compared to $21.7 million in the third
quarter of 2004. The third quarter 2005 increase in sales was
primarily due to solid holographic security sales. Third quarter
2005 net income increased to $1.5 million, or $0.32 cents per share
on a fully diluted basis, compared to a net income of $1.4 million
or $0.32 cents per share on a fully diluted basis for the third
quarter of 2004. This increase in net income was primarily due to
higher sales. Earnings per share in the third quarter of 2005
stayed the same because on a fully diluted basis there were more
options in the money, and as a result included in the shares
outstanding as compared to the third quarter of 2004. "Once again,
we have delivered another solid quarter," said Greg Jehlik, CFC's
President and Chief Executive Officer. "Sales of our holographic,
security and pharmaceutical products continue to grow, as we gain
market share by offering our customers innovative solutions that
help them combat counterfeiting and provide them with unique
technologies. Our European operation's sales volumes have
increased, and we are producing profits over the previous year. We
continue to make strides in Asia, and have recently added personnel
to further strengthen our sales and marketing efforts in that area.
Additionally, the Company continues to make capital investments
that allow us to expand our capacity and capabilities. These
investments will allow us to deliver positive results for the
balance of the year and achieve sustainable growth over the
long-term." Jehlik further added, "Like most other businesses, we
are experiencing higher energy and raw material costs due to the
recent hurricanes in the U.S. However, we remain confident that we
are well positioned for continued growth, and we are encouraged by
the opportunities that we see in front of us." Operating income
excluding depreciation and amortization was $3.6 million in the
third quarter of 2005, an increase of 7.1 percent compared with
$3.4 million in the third quarter of 2004. This increase was
primarily due to higher sales and leveraging operating expenses in
the third quarter of 2005. Sales for the first nine months of 2005
totaled $68.3 million, an increase of 10.4 percent from $61.9
million for the same period last year. Sales for the first nine
months of 2005 reflected higher sales volumes in holographic
security and authenticity products and pharmaceutical products
sales worldwide. In addition, a strong Euro positively affected
sales by $640,000 for the first nine months of 2005. Net income for
the first nine months of 2005 increased to $3.5 million, or $0.75
cents per share on a fully diluted basis, from $3.2 million or
$0.71 cents per share on a fully diluted basis for the same period
last year. Net income for the first nine months of 2005, were
favorably affected by higher sales and by leveraging operating
expenses, and unfavorably affected by higher material prices,
scrap, transaction costs and foreign currency exchange losses due
to the strength of the U.S. dollar against the Euro. Operating
income excluding depreciation and amortization for the first nine
months of 2005 increased 19.2 percent to $10.3 million from $8.6
million in the first nine months of 2005 for the reasons described
above. "We are pleased with the positive financial results that CFC
has produced for the first nine months of 2005," said Roger Hruby,
CFC's Chairman. "These results reflect robust sales of our
holographic security products and solid growth in most of our core
businesses, both domestically and internationally." Recent
Developments The Company reports the addition of Mr. Tommy Chiu as
Business Development Manager, Asia. Mr. Chiu has more than 7 years
of international sales experience, and will lead the Company's
marketing efforts in Asia. The Company reports that it has
developed an interactive card design program, CardCAD(TM), that
allows users to visualize how its full face holographic laminate
HoloLam Plus(TM) patterns look on transaction cards. The program
was recently introduced at the International Card Manufacturers
Association conference held in Miami, FL on October 16-19, 2005.
The Company will be exhibiting at the upcoming Cartes 2005 show at
the Paris-Nord Villepinte in Paris, France, November 15-17, 2005 in
Booth #4 L 066, where it will feature its card products, such as
HoloLam Plus, magnetic stripe, signature panel, security holograms,
scratch-off foils and tipping foils for transaction cards.
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;
London, England; and Goppingen, Germany. A condensed consolidated
balance sheet and statement of operations is attached. Statements
made in this press release, including those relating to
expectations of future sales, net income and operating costs
reductions, estimations of the market size for certain of the
company's products or the company's share of those markets and
expectations of increased sales attributable to various product
lines, are forward looking and are made pursuant to the safe harbor
provisions of the Securities Reform Act of 1995. Such statements
involve risks and uncertainties which may cause results to differ
materially from those set forth in those statements. Among other
things, continued unfavorable economic conditions may impact market
growth trends or otherwise impact the demand for the company's
products and services; competition from existing and new
competitors and producers of alternative products will impact the
company's ability to penetrate or expand its presence in new or
growing markets; uncertainties relating to the company's ability to
develop and distribute new proprietary products to respond to
market needs in a timely manner may impact the company's ability to
exploit new or growing markets; the company's ability to
successfully identify and implement productivity improvements and
cost reduction initiatives may impact profitability; and risks
inherent in international operations, including possible economic,
political or monetary instability, may impact the level and
profitability of the company's foreign sales. In addition to the
factors set forth in this release, the economic, competitive,
governmental, technological and other factors identified in the
company's filings with the Securities and Exchange Commission,
could affect the forward looking statements contained in this press
release. We have no obligation to revise or update these forward-
looking statements to reflect events or circumstances that arise
after the date of this press release or to reflect the occurrence
of anticipated events. You may access additional information,
including our filings with the Securities and Exchange Commission
and previous press releases by visiting CFC International's
Internet homepage at http://www.cfcintl.com/ . CFC INTERNATIONAL,
INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except
Earnings Per Share and Operating Three Months Ended Nine Months
Ended Income Percentage) September 30, September 30, 2005 2004 2005
2004 Net Sales $23,124 $21,718 $68,341 $61,897 Cost of Goods
(Excluding Depreciation and Amortization Shown Below) 15,155 13,842
44,107 39,929 Operating Expenses 4,291 4,512 13,467 13,365
Depreciation and Amortization 1,162 1,238 3,506 3,593 Transaction
fees 74 - 508 - Operating Income 2,442 2,126 6,753 5,010 Operating
Income % 10.6% 9.8% 9.9% 8.1% Interest Expense 276 308 823 894
Interest Income (28) - (37) (1) Interest Rate Swap Valuation
(Benefit) Provision (35) 49 (66) (47) Rental Income (46) (50) (114)
(118) Foreign Currency Exchange Loss (Gain) 9 (263) 775 (290)
Income Before Income Taxes 2,266 2,082 5,372 4,572 Provision for
Income Taxes 800 651 1,907 1,419 Net Income (Note 1) $1,466 $1,431
$3,465 $3,153 Diluted Weighted Average Number of Shares Outstanding
4,620 4,488 4,626 4,498 Diluted Earnings Per Share $0.32 $0.32
$0.75 $0.71 Adjusted Earnings Before Interest, Taxes, Depreciation
and Amortization (Note 1) $3,678 $3,364 $10,767 $8,603 SUMMARY OF
INTERNATIONAL SALES (In Thousands, Except International Sales Three
Months Ended Nine Months Ended Percentage) September 30, September
30, 2005 2004 2005 2004 International Sales ($) $10,064 $9,961
$30,784 $29,294 International Sales (%) 43.5% 45.9% 45.0% 47.3%
NOTE 1: The Company believes earnings before interest, taxes,
depreciation and amortization (adjusted EBITDA) is an appropriate
measurement for its business because its enterprise value is more
closely aligned with this measurement and because of the continual
investment the company makes in long-lived assets. Adjusted EBITDA
should not necessarily be considered as an alternative to net
income or cash flows from operating activities which are determined
in accordance with Generally Accepted Accounting Principles as an
indicator of operating performance or as a measure of liquidity.
The table that follows reconciles net income to adjusted EBITDA as
defined: Three Months Ended Nine Months Ended September 30,
September 30, (In thousands) 2005 2004 2005 2004 Net income $1,466
$1,431 $3,465 $3,153 Add back (subtract): Transaction expenses 74 -
508 - Income taxes 800 651 1,907 1,419 Interest expense 276 308 823
894 Interest income (28) - (37) (1) Interest rate swap valuation
(benefit) provision (35) 49 (66) (47) Rental income (46) (50) (114)
(118) Foreign currency exchange loss (gain) 9 (263) 775 (290)
Depreciation and amortization 1,162 1,238 3,506 3,593 Adjusted
EBITDA $3,678 $3,364 $10,767 $8,603 CFC INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS AT SEPTEMBER 30, 2005 AND
DECEMBER 31, 2004 September 30, December 31, 2005 2004 ASSETS Cash
and cash equivalents $6,264,526 $4,554,699 Restricted cash 311,587
306,271 Accounts receivable, less allowance for doubtful accounts
14,861,225 12,547,380 Inventories 16,900,556 17,709,138 Other
current assets 1,449,734 1,389,790 Total current assets 39,787,628
36,507,278 Property, plant and equipment, net 26,852,183 28,602,311
Deferred income taxes 3,517,612 3,528,686 Intangible assets, net
2,215,463 2,393,466 Other assets 251,852 266,806 Goodwill 1,029,462
1,029,462 Fair value of interest rate swap 105,888 39,553 Total
assets $73,760,088 $72,367,562 LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $6,086,581 $5,625,085 Accounts
payable and accrued expenses 14,520,829 15,314,782 Total current
liabilities 20,607,410 20,939,867 Deferred income taxes 3,221,756
3,229,584 Long-term debt 14,124,763 15,698,791 Total liabilities
37,953,929 39,868,242 Stockholders' equity 35,806,159 32,499,320
Total liabilities and stockholders' equity $73,760,088 $72,367,562
DATASOURCE: CFC International, Inc. CONTACT: Dennis Lakomy, Chief
Financial Officer of CFC International, Inc., +1-708-757-2803 Web
site: http://www.cfcintl.com/ Company News On-Call:
http://www.prnewswire.com/comp/110663.html
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