PMFG Inc, USA

PMFG Inc, USA

COMPANY WATCH PMFG Inc, USA Schweitzer-Mauduit International Inc, USA Key Figures (US$ million) Three months ended 28.6.2014 29.6.2013 Revenues ...

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COMPANY WATCH

PMFG Inc, USA

Schweitzer-Mauduit International Inc, USA

Key Figures (US$ million) Three months ended 28.6.2014

29.6.2013

Revenues

39.7

34.5

Cost of Goods Sold

29.7

21.4

Gross Profit

10.0

13.1

Operating Income/(Loss)

(30.4)

(1.5)

Net Earnings/(Loss)

(30.1)

(2.8)

Twelve months ended 28.6.2014

29.6.2013

130.7

133.9

Cost of Goods Sold

94.8

87.1

Gross Profit

35.9

46.8

Operating Income

(37.2)

0.8

Net Earnings/(Loss)

(38.3)

(1.5)

Revenues

COMMENT PMFG Inc, parent company of Peerless Mfg Co, delivered a 15.1% increase in fourth quarter revenues to US$39.7 million. On a sequential basis, revenues in the fourth quarter were 23.0% higher than the immediately preceding quarter. The revenue gains mainly reflect increased demand for air pollution control equipment, as well as the impact of the acquisition of CCA Combustion Solutions. While revenue from China improved, the larger Asia-Pacific region, including China, was relatively flat on a year ago. The US$30.0 million net loss in the quarter compared with a net loss of US$2.8 million in the prior year. The Process Products segment, which includes separation and filtration equipment used in power generation, natural gas infrastructure and petrochemical processing, saw revenues slip US$2.1 million, or 7.4%, in the fourth quarter to US$26.0 million. Segment operating income decreased to a loss of US$0.3 million from income of US$5.3 million a year

September 2014

earlier, due to lower revenue, cost overruns on specific projects, and, to a lesser degree, inefficiencies in the company’s US manufacturing operations. PMFG management are taking corrective actions to address the inefficiencies, but these steps are not expected to deliver meaningful improvement until the second half of fiscal year 2015. Fiscal 2014 revenues of US$130.7 million were essentially flat, while the net loss of US$38.4 million in fiscal 2014 was significantly up on the US$2.1 million net loss a year earlier. Process Products segment revenues in fiscal 2014 decreased US$13.7 million, or 12.2%, to US$99.0 million compared with US$112.7 million last year. The lower revenue from the Process Products segment is largely attributed to the overlap of a significant project in the Middle East substantially completed in fiscal 2014 and delays in anticipated project awards from the Asia-Pacific region, particularly from China. ■ www.peerlessmfg.com

Key Figures (US$ million) Second quarter ended 30.6 2014

2013

Net Sales Of Which: Filtration

203.6

196.5

32.1

n/a

Cost of Products Sold

144.4

131.6

59.2

64.9

4.2

3.7

Operating Profit/(Loss) Of Which: Filtration

30.5

42.1

3.9

n/a

Net Income

25.0

26.6

Six months ended 31.12 2013

2012

Net Sales Of Which: Filtration

408.3

391.0

63.8

n/a

Cost of Products Sold

291.5

263.4

Gross Profit

116.8

127.6

8.3

7.5

Operating Profit/(Loss) Of Which: Filtration

63.6

83.8

4.3

n/a

Net Income

48.2

56.7

Gross Profit R&D Expenses

R&D Expenses

COMMENT Diversified paper products manufacturer Schweitzer-Mauduit International (SWM) has posted second quarter fiscal 2014 net sales of US$203.6 million, up 3.6% on the prior year. The revenue figure included US$32.1 million from the company’s new Filtration segment created through its recent acquisition of DelStar Inc. Excluding these revenues, SWM’s total net sales decreased 12.7% on the 2013 figure reflecting significant drops in its Paper (down 9.2%) and Reconstituted Tobacco (down 21.0%) segments. “DelStar continued to perform well, delivering strong growth and our teams

continue to engage in a highly collaborative effort to identify both organic and acquisitionrelated growth opportunities,” Frederic Villoutreix, SWM’s chair and CEO said. “We are committed to building our Filtration platform, and are already using SWM’s global infrastructure to execute an international expansion for DelStar.” In the longer-term, Villoutreix believes that there are significant synergistic opportunities for SWM to couple its existing expertise in lightweight paper production with DelStar’s access to the growing filtration industry. ■ www.swmintl.com

Filtration Industry Analyst

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