P & F Industries, Inc. (NASDAQ:PFIN)

PFIN ($6.92) announced that it has acquired substantially all of the assets of Jiffy Air Tool, Inc. Its press release read:

“The purchase price consisted of approximately $7 million in cash and the assumption of certain payables and contractual obligations and is subject to a post-closing working capital adjustment. In addition, the seller may be entitled to up to $1 million in additional contingent consideration based upon certain revenue thresholds and other criteria set forth in the Asset Purchase Agreement with respect to two defined measurement periods occurring within approximately the first two years following the closing date. Bonanza Holdings Corp. purchased the operating assets of Jiffy Air Tool and Bonanza Properties Inc. purchased the real property of Jiffy Air Tool. Each of Bonanza Holdings Corp. and Bonanza Properties Corp. are wholly owned subsidiaries of Florida Pneumatic. We anticipate that this acquisition will be immediately accretive to earnings.”

Q2 2015 Results

• Q2 2015 sales of $22.5 million vs $18.2 million in the prior year period.
• Q2 2015 non-GAAP EPS of $0.30 vs $0.15 in the prior year.

Richard Horowitz, the Company's Chairman of the Board, Chief Executive Officer and President commented, "Our revenue, net income and earnings per share this quarter continue to highlight the positive effect our three 2014 acquisitions have had on our results. The AIRCAT and NITROCAT pneumatic tool lines continue to strengthen and expand our presence in the automotive sector. As a result, the Automotive sector revenue at Florida Pneumatic increased more than $2.7 million this quarter, compared to the second quarter of 2014, nearly a nine-fold increase. Further, we have recently begun to market this new line of automotive tools through our Universal Air Tool subsidiary in the United Kingdom, and we remain optimistic that these innovative pneumatic air tools will gain acceptance in Europe. Our team at Hy-Tech continues the process of integrating the complex manufacturing of the ATSCO suite of pneumatic tools into its Cranberry, PA facility. We currently expect that the majority of these tools will be incorporated into the manufacturing cycle sometime late in 2015. Additionally, I wish to point out that Nationwide's revenue and profits were higher this quarter compared to the second quarter of 2014.

First Quarter 2015 Results

• Q1 2015 sales of $19.8 vs $15.9 million in the prior year
• Q1 2015 EPS of $0.21 vs $0.12 in the prior year

Richard Horowitz, the Company's Chairman of the Board, Chief Executive Officer and President commented, "We are beginning to see the positive results of the three businesses acquired in the third quarter of 2014, as evidenced by improvement in both revenue and earnings per share this quarter compared to the first quarter of 2014. We believe that the AIRCAT and NITROCAT pneumatic tools lines acquired as part of the Exhaust Technologies acquisition should continue to strengthen and expand our presence in the automotive sector. Further, this line of products is being introduced to the United Kingdom through our Universal Air Tool subsidiary and we are optimistic that these innovative pneumatic air tools will gain acceptance to the automotive sector there, as well. The integration of the ATSCO business into Hy-Tech is proceeding, albeit slower than we had anticipated. We expect that this process should be substantially completed sometime later in 2015.

Fourth Quarter 2014 Results

• Q4 2014 sales of $17.9 million vs $15.3 million in the prior year
• Q4 2014 EPS of $0.07 vs $0.24 in the prior year

Horowitz, the Company's Chairman of the Board, Chief Executive Officer and President commented, "Primarily the result of our decision in late 2013 to sell the kitchen and bath product line, which had revenue of $2,331,000 in 2013, Nationwide's 2014 revenue declined $1,571,000, when compared to the prior year. However, the loss of the kitchen and bath revenue was partially offset with the continued growth in Nationwide's primary product line of fence and gate hardware. With higher overall gross margin and lower operating expenses, Nationwide was able to generate improved operating income compared to 2013. In the third quarter of 2014, we completed three acquisitions, each of which was accretive in 2014. These acquisitions provided us with expanded and new product channels and greater international presence. The purchase of Exhaust Technologies, Inc., and Universal Air Tools Company Limited, was the primary factor in Florida Pneumatic's $5.4 million increase in its higher gross margin Automotive tools revenue. These acquisitions offset the decline in Florida Pneumatic's lower gross margin Retail revenue from The Home Depot, which was primarily due to the fact that our 2013 retail revenue included initial stocking orders, and the continued slowdown at Sears. The acquisition of Air Tool Service Company contributed to the growth in Hy-Tech's fourth quarter of 2014 revenue and gross margin. Lastly, I wish to point out that, as the result of the three acquisitions during 2014, included in our 2014 selling and general administrative expenses, are $764,000 of acquisition-related expenses, as well as additional amortization and depreciation of approximately $545,000. As a result, P&F's full year 2014 income before income taxes is $3,777,000, compared to $4,604,000, for 2013. I believe it is important to note that, despite an erratic economy, which we believe was a contributing factor for the decline in consolidated revenue and pre-tax profit, our full year 2014 EBITDA was $6,586,000, compared to $6,920,000 in 2013. I remain optimistic as we look toward 2015."

Fourth Quarter 2013 Results

• P&F Industries, Inc. is reporting full year 2013 revenue of $76,066,000, compared to $59,871,000 for the full year 2012.
• The company reported EPS of $0.24 compared to $0.08 for the same quarter 2012.

Richard Horowitz, the Company's Chairman of the Board, Chief Executive Officer and President commented, "Our consolidated 2013 revenue increased 27.0% when compared to 2012's revenue. Specifically, our Tools segment revenue for 2013 grew by 31.9% over the prior year, primarily due to the addition of The Home Depot. Additionally, our Hardware segment is also reporting an increase in year over year revenue of 15.6%."

The Company's 2013 net income after taxes was $3,225,000, compared to $5,411,000, for the same period in 2012. Mr. Horowitz noted, "Although we are reporting an increase in our income before income taxes of approximately $1.3 million, our net income after taxes declined. I wish to remind our stockholders that in the third quarter of 2012, we reduced the valuation allowance on certain deferred tax assets, resulting in a net deferred tax benefit in 2012 of $2,115,000. Therefore, we are reporting full-year 2013 basic and diluted earnings per share of $0.87 and $0.83, respectively, compared to $1.49 and $1.44, respectively, for full-year 2012." Mr. Horowitz added, "As the result of a lapse of the statute of limitations on an uncertain tax position, during the fourth quarter of 2013 we realized a tax benefit of $329,000. As a result, our net income after taxes for the 2013 fiscal fourth quarter was $919,000, compared to $342,000 in the same period in 2012."

Mr. Horowitz concluded by saying, "Lastly, as the result of our exiting the kitchen and bath product line at Nationwide in November 2013, we have effectively accelerated approximately $7.8 million of deferred tax deductions. We believe this action will reduce our cash tax payments by approximately $2,680,000, as the tax liabilities become due."

Third Quarter 2013 Results

• The company is reporting revenue of $20,483,000 for the three month period ended September 30, 2013, compared to $17,622,000 for the same period in 2012.
• The company reported diluted earnings per share of$0.20, compared to $0.95 and for the same periods in the prior year.

For the three and nine-month periods ended September 30, 2013 the Company's after-tax income was $810,000 and $2,306,000, respectively, compared to $3,567,000 and $5,069,000, respectively, for the same periods in 2012.  Mr. Horowitz noted, "During the third quarter of 2012, we reversed the valuation allowance on our federal deferred tax assets, which gave rise to income tax benefits of $2,302,000 and $2,252,000, respectively, for the three and nine-month periods ended September 30, 2012.  The increase in our effective tax rate reflects the usage of our deferred tax assets and should not result in any material cash outlay." 

Mr. Horowitz concluded, "We are reporting basic earnings per share for the three and nine-month periods ended September 30, 2013 of $0.22 and $0.63, respectively, compared to $0.98 and $1.40, respectively, for the same periods in 2012. Our diluted earnings per share for the three and nine-month periods ended September 30, 2013 were $0.20 and $0.59, respectively, compared to $0.95 and $1.36, respectively for the same periods in the prior year. Again, I wish to remind you that the reduction in the estimated valuation allowance on our deferred tax assets in September 2012, generated tax benefits for the three and nine-month period ended September 30, 2012, which caused our after-tax income to be inflated. Lastly, as the result of our exiting the kitchen and bath product line at Nationwide, which will be discussed later, we have effectively accelerated approximately $7.9 million of deferred tax deductions. We believe this action will reduce our cash tax payments by approximately $2,680,000, as the tax liabilities become due."

Second Quarter 2011 Results

P&F Industries, Inc. is reporting revenue from continuing operations of $14,164,000 and $27,617,000, respectively for the three and six-month periods ended June 30, 2011, compared to $13,320,000 and $24,467,000, respectively, for the same periods in 2010.

Net earnings per common share for the second quarter 2011 were $0.22 vs $0.17 in 2010.

Richard Horowitz, the Company's Chairman of the Board, Chief Executive Officer and President commented, "During the second quarter of 2011, we continued the positive momentum generated in the first quarter, despite a very sluggish economic environment. As the result of the efforts put forth at all three subsidiaries, I am pleased to report that for the fourth consecutive quarter, both revenue and pre-tax profits have improved compared to the prior year."