PMFG, Inc. – PMFG – Strong growth in the Process Products segment
Nasdaq:PMFG) reported financial results for the fourth quarter and fiscal year ended June 30, 2012.
Fourth Quarter Fiscal Year 2012 Compared to Fourth Quarter Fiscal Year 2011
Revenue in the fourth quarter of fiscal 2012 decreased $1.5 million, or 4.5%, to $33.0 million as strong growth in the Process Products segment was more than offset by lower revenue from the Environmental Systems segment. Increasing global demand for separation and filtration equipment utilized in natural gas infrastructure and power generation is driving the growth in the Process Products segment. The demand for the Company’s environmental systems products is highly dependent on the demand for new gas-fired power generation in the United States. Uncertainty around the implementation timing of certain environmental rules and regulations and decreased demand for new power generation are contributing to the lower revenue in the Environmental Systems segment.
Gross profit decreased in the quarter by $0.9 million, or 8.3%, to $9.9 million, while the gross margin declined as a percent of revenue from 31.4% to 30.0%. Gross profit was negatively impacted by $0.4 million of charges related to the closure and sale of our manufacturing facility in Abilene, Texas. Excluding the impact of the charges related to the Abilene facility, gross profit as a percentage of revenue was comparable to the prior year.
Operating expenses remained flat at $10.5 million in the quarter compared to the prior year, excluding a $3.6 million non-cash impairment charge on certain intangible assets recognized in the fourth quarter of fiscal 2011.
Peter J. Burlage, Chief Executive Officer, stated, “Our fourth quarter and fiscal 2012 top-line performance was defined by strong revenue growth in our global separation and filtration products for the natural gas industry that was largely offset by softness in our U.S. environmental business. In spite of these circumstances, we were pleased to report that total revenue grew in excess of 11% for fiscal year 2012. While we are disappointed with the reduction in our backlog for the quarter as a result of our decision to remove a customer contract on hold, business activity remained solid in most of our end markets as evidenced by our increase in net bookings for the fourth quarter and full fiscal year of more than 27% and 33%, respectively. Although our gross margin percentage was lower due to product mix and a one-time charge related to a facility closure, we will continue to manage our cost structure to enhance our overall competitive position and strengthen our ability to increase returns.
About PMFG
PMFG is a leading provider of custom engineered systems and products designed to help ensure that the delivery of energy is safe, efficient and clean. They primarily serve the markets for natural gas infrastructure, power generation and petrochemical processing. Headquartered in Dallas, Texas, PMFG market their systems and products worldwide.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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