MFRI Inc. is a multi-line company engaged in pre-insulated specialty piping systems for oil and gas gathering, district heating and cooling and other applications; custom-designed industrial filtration products to remove particulates from dry gas streams; and various other industrial processes. The company today announced sales and earnings for the third quarter and nine months ended October 31, 2010.
Third-quarter net sales increased 11.9 percent to $58.8 million compared to $52.6 million in the third quarter of 2009.
The company reported net income of $3.6 million or $0.52 per diluted share, compared to net income of $0.7 million or $0.10 per diluted share, for the comparable quarter of last year.
Gross profit for the third quarter increased to $13.6 million, or 23.0 percent of sales, up from $12.5 million, or 23.8 percent of sales, in the corresponding prior year’s quarter.
MFRI’s operating expenses decreased to $10.5 million, or 17.9 percent of sales, from $10.7 million, or 20.3 percent of sales, in the prior year’s period. The decrease in expenses was primarily due to staffing reductions and expense control measures.
Sales for the nine months ended October 31, 2010, were $170.6 million, a 5.9 percent decrease compared to the $181.3 million for the prior-year’s first nine months.
Year-to-date gross profit decreased to $38.1 million, or 22.3 percent of sales, from $45.8 million or 25.3% in the prior year. The company attributes the decline in gross profit decline primarily due to reduced volume in the U.A.E. and the completion of the large project in India, as well as to slowdown in local construction activity.
Net income for the nine months ended October 31, 2010, was $6.0 million or $0.87 diluted earnings per share, compared to $10.5 million or $1.53 diluted earnings per share in the prior-year period.
Brad Mautner, president and COO, noted the company’s expectations for the upcoming quarter and its positive forecast for 2011.
“We are happy to report that the third quarter continued to deliver year-over-year operating profit improvement in both the industrial process cooling and filtration segments. The piping systems segment also showed modest operating profit growth even though margins were lower than the prior year’s quarter due to pricing pressures in the U.A.E., U.S. and ongoing development expenses for expansion into Saudi Arabia. The expected timing for work in the backlog coupled with the usual winter slow period for piping systems is anticipated to produce another difficult fourth quarter, but we expect results better than last year. Given a slowly improving U.S. business climate and a backlog with some large projects due for execution next year, 2011 shows promise for improvement compared to 2010,” Mautner stated in the press release.
As of October 31, 2010, the company’s backlog was $75.1 million, up 2.4 percent from January 31, 2010. The majority of the backlog is not expected to result in sales until the second or third quarter next year.
For more information visit www.mfri.com
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