UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
(Exact name of registrant as specified in its charter)
| ||
(State or other jurisdiction of |
| (I.R.S. Employer Identification Number) |
incorporation or organization) |
|
|
|
|
|
| ||
(Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
|
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ | Accelerated filer ☐ | Smaller reporting company | |
|
|
|
|
|
|
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for the complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 7, 2022, there were
P&F INDUSTRIES, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022
TABLE OF CONTENTS
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
P&F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 2022 | December 31, 2021 | |||||
| (unaudited) |
| (See Note 1) | |||
ASSETS | ||||||
CURRENT ASSETS | ||||||
Cash | $ | | $ | | ||
Accounts receivable — net |
| |
| | ||
Inventories |
| |
| | ||
Prepaid expenses and other current assets |
| |
| | ||
TOTAL CURRENT ASSETS |
| |
| | ||
| ||||||
PROPERTY AND EQUIPMENT |
| |||||
Land |
| |
| | ||
Buildings and improvements |
| |
| | ||
Machinery and equipment |
| |
| | ||
| |
| | |||
Less accumulated depreciation and amortization |
| |
| | ||
NET PROPERTY AND EQUIPMENT |
| |
| | ||
| ||||||
GOODWILL |
| |
| | ||
| ||||||
OTHER INTANGIBLE ASSETS — net |
| |
| | ||
| ||||||
DEFERRED INCOME TAXES — net |
| |
| | ||
| ||||||
RIGHT-OF-USE ASSETS – OPERATING LEASES | | | ||||
| ||||||
OTHER ASSETS — net |
| |
| | ||
| ||||||
TOTAL ASSETS | $ | | $ | |
See accompanying notes to consolidated financial statements (unaudited).
3
P&F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 2022 | December 31, 2021 | |||||
| (unaudited) |
| (See Note 1) | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
CURRENT LIABILITIES | ||||||
Short-term borrowings | $ | | $ | | ||
Accounts payable |
| |
| | ||
Accrued compensation and benefits |
| |
| | ||
Accrued other liabilities |
| |
| | ||
Current lease liabilities – operating leases | | | ||||
TOTAL CURRENT LIABILITIES |
| |
| | ||
Noncurrent lease liabilities – operating leases | | | ||||
Other liabilities |
| |
| | ||
| ||||||
TOTAL LIABILITIES |
| |
| | ||
| ||||||
SHAREHOLDERS’ EQUITY |
|
|
|
| ||
Preferred stock - $ |
|
| ||||
Common stock |
|
|
|
| ||
Class A - $ |
| |
| | ||
Class B - $ |
|
| | |||
Additional paid-in capital |
| |
| | ||
Retained earnings |
| |
| | ||
Treasury stock, at cost – |
| ( |
| ( | ||
Accumulated other comprehensive loss |
| ( |
| ( | ||
TOTAL SHAREHOLDERS’ EQUITY |
| |
| | ||
| ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | | $ | |
See accompanying notes to consolidated financial statements (unaudited).
4
P&F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(unaudited)
Three months | Nine months | |||||||||||
ended September 30, | ended September 30, | |||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 | |||||
Net revenue | $ | |
| $ | |
| $ | |
| $ | | |
Cost of sales |
| |
|
| |
| |
|
| | ||
Gross profit |
| |
|
| |
|
| |
|
| | |
Selling, general and administrative expenses |
| |
|
| |
|
| |
|
| | |
Operating loss |
| ( |
|
| ( |
| ( |
|
| ( | ||
Other (expense) income |
| ( |
|
| |
|
| ( |
|
| | |
(Loss) gain on sale of property and equipment | | ( | | ( | ||||||||
Interest expense | ( | ( | ( | ( | ||||||||
(Loss) income before income taxes | ( | ( | ( | | ||||||||
Income tax benefit |
| |
|
| |
|
| |
|
| | |
Net (loss) income | $ | ( |
| $ | ( | $ | ( |
| $ | | ||
Basic (loss) earnings per share | $ | ( |
| $ | ( |
| $ | ( |
| $ | | |
Diluted (loss) earnings per share | $ | ( |
| $ | ( |
| $ | ( |
| $ | | |
|
|
|
|
|
| |||||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
| |||||
|
|
|
|
|
| |||||||
Basic |
| |
|
| |
|
| |
|
| | |
Diluted |
| |
|
| |
| |
|
| | ||
|
|
|
|
|
| |||||||
Net (loss) income | $ | ( |
| $ | ( |
| $ | ( |
| $ | | |
Other comprehensive loss - foreign currency translation adjustment |
| ( |
|
| ( |
| ( |
|
| ( | ||
Total comprehensive (loss) income | $ | ( |
| $ | ( | $ | ( |
| $ | |
See accompanying notes to consolidated financial statements (unaudited).
5
P&F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (unaudited)
Three months ended September 30, 2022
Accumulated | ||||||||||||||||||||||
Class A common | Additional | other | ||||||||||||||||||||
stock, $1 par | paid-in | Retained | Treasury stock | comprehensive | ||||||||||||||||||
| Total |
| Shares |
| Amount |
| capital |
| earnings |
| Shares |
| Amount |
| loss | |||||||
Balance, July 1, 2022 | $ | |
| | $ | | $ | | $ | |
| ( | $ | ( | $ | ( | ||||||
|
|
|
|
|
|
|
| |||||||||||||||
Net loss |
| ( |
| |
| |
|
| ( |
| |
| |
| | |||||||
Restricted common stock compensation |
| |
| |
| |
| |
| |
| |
| |
| | ||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
Stock-based compensation |
| — |
| |
| |
| |
| |
| |
| |
| | ||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
Dividends |
| ( |
|
|
|
| ( |
|
|
| ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
Foreign currency translation adjustment |
| ( |
| |
| |
| |
| |
| |
| |
| ( | ||||||
|
|
|
|
|
|
|
|
| ||||||||||||||
Balance, September 30, 2022 | $ | |
| | $ | | $ | | $ | |
| ( | $ | ( | $ | ( |
Three months ended September 30, 2021
| Accumulated | |||||||||||||||||||||
| Class A common |
| Additional |
| other | |||||||||||||||||
| stock, $1 par |
| paid-in |
| Retained |
| Treasury stock |
| comprehensive | |||||||||||||
| Total |
| Shares |
| Amount |
| capital |
| earnings |
| Shares |
| Amount |
| loss | |||||||
Balance, July 1, 2021 | $ | |
| | $ | | $ | | $ | |
| ( | $ | ( | $ | ( | ||||||
|
|
|
|
|
|
| ||||||||||||||||
Net loss |
| ( |
| |
| |
| |
| ( |
| |
| |
| | ||||||
| ||||||||||||||||||||||
Restricted common stock compensation |
| |
| |
| |
| |
| |
| |
| |
| | ||||||
|
|
|
|
|
|
|
| |||||||||||||||
Stock-based compensation |
| |
| |
| |
| |
| |
| |
| |
| | ||||||
|
|
|
|
|
|
|
| |||||||||||||||
Foreign currency translation adjustment |
| ( |
| |
| |
| |
| |
| |
| |
| ( | ||||||
|
|
|
|
| ||||||||||||||||||
Balance, September 30, 2021 | $ | |
| | $ | | $ | | $ | |
| ( | $ | ( | $ | ( |
See accompanying notes to consolidated financial statements (unaudited).
6
P&F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (unaudited)
Nine months ended September 30, 2022
Accumulated | ||||||||||||||||||||||
Class A common | Additional | other | ||||||||||||||||||||
stock, $1 par | paid-in | Retained | Treasury stock | comprehensive | ||||||||||||||||||
| Total |
| Shares |
| Amount |
| capital |
| earnings |
| Shares |
| Amount |
| loss | |||||||
Balance, January 1, 2022 | $ | |
| | $ | | $ | | $ | |
| ( | $ | ( | $ | ( | ||||||
|
|
|
|
|
|
|
|
| ||||||||||||||
Net loss |
| ( |
| |
| |
| |
| ( |
| |
| |
| | ||||||
Exercise of Stock Options | | | | | | | | | ||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||
Restricted common stock compensation |
| |
| |
| |
| |
| |
| |
| |
| | ||||||
|
| |||||||||||||||||||||
Stock-based compensation |
| |
| |
| |
| |
| |
| |
| |
| | ||||||
|
| |||||||||||||||||||||
Dividends |
| ( |
| |
| |
| |
| ( |
| |
| |
| | ||||||
|
|
|
|
|
|
| ||||||||||||||||
Foreign currency translation adjustment |
| ( |
| |
| |
| |
| |
| |
| |
| ( | ||||||
|
|
|
|
|
|
|
|
| ||||||||||||||
Balance, September 30, 2022 | $ | |
| | $ | | $ | | $ | |
| ( | $ | ( | $ | ( |
Nine months ended September 30, 2021
Accumulated | ||||||||||||||||||||||
Class A common | Additional | other | ||||||||||||||||||||
stock, $1 par | paid-in | Retained | Treasury stock | comprehensive | ||||||||||||||||||
| Total |
| Shares |
| Amount |
| capital |
| earnings |
| Shares |
| Amount |
| loss | |||||||
Balance, January 1, 2021 | $ | |
| | $ | | $ | | $ | |
| ( | $ | ( | $ | ( | ||||||
|
|
|
|
|
|
|
|
| ||||||||||||||
Net income |
| |
| |
| |
| |
| |
| |
| |
| | ||||||
| ||||||||||||||||||||||
Restricted common stock compensation |
| |
| |
| |
| |
| |
| |
| |
| | ||||||
|
|
|
|
|
|
|
|
| ||||||||||||||
Stock-based compensation |
| |
| |
| |
| |
| |
| |
| |
| | ||||||
|
|
|
|
|
|
|
| |||||||||||||||
Foreign currency translation adjustment |
| ( |
| |
| |
| |
| |
| |
| |
| ( | ||||||
|
|
|
|
|
|
| ||||||||||||||||
Balance, September 30, 2021 | $ | |
| | $ | | $ | | $ | |
| ( | $ | ( | $ | ( |
See accompanying notes to consolidated financial statements (unaudited).
7
P&F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Nine months | ||||||
ended September 30, | ||||||
| 2022 |
| 2021 | |||
Cash Flows from Operating Activities: | ||||||
Net (loss) income | $ | ( |
| $ | | |
|
|
| ||||
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |
|
|
| |||
|
|
| ||||
Non-cash and other charges: |
|
|
| |||
Depreciation |
| |
|
| | |
Amortization of other intangible assets |
| 514,000 |
|
| | |
Amortization of operating lease assets | |
|
| | ||
Amortization of debt issue costs |
| |
|
| | |
Amortization of consideration payable to a customer |
| |
|
| | |
Recovery of provision for losses on accounts receivable |
| ( |
|
| | |
Stock-based compensation |
| |
|
| | |
Stock-based compensation-options exercise | | | ||||
Restricted stock-based compensation |
| |
|
| | |
Deferred income taxes |
| ( |
|
| ( | |
(Gain) loss on disposal of fixed assets | ( | | ||||
Gain on early termination of lease | ( | |||||
Forgiveness of Paycheck Protection Program loan | | ( | ||||
Fair value adjustment of assets held for sale | | | ||||
Changes in operating assets and liabilities, net of effects of acquisition |
|
|
| |||
Accounts receivable |
| ( |
|
| ( | |
Inventories |
| ( |
|
| ( | |
Prepaid expenses and other current assets |
| |
|
| | |
Accounts payable |
| ( |
|
| | |
Accrued compensation and benefits |
| |
|
| | |
Accrued other liabilities and other current liabilities | |
|
| ( | ||
Operating lease liabilities |
| ( |
|
| ( | |
Other liabilities |
| ( |
|
| ( | |
Total adjustments |
| |
|
| ( | |
Net cash provided by (used in) operating activities | | ( |
See accompanying notes to consolidated financial statements (unaudited).
8
P&F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Nine months | ||||||
ended September 30, | ||||||
| 2022 |
| 2021 | |||
Cash Flows from Investing Activities: |
|
|
|
| ||
Capital expenditures | $ | ( | $ | ( | ||
Proceeds from sale of fixed asset | | | ||||
Purchase of net assets of the Jackson Gear Company business |
| ( |
|
| | |
Net cash used in investing activities |
| ( |
|
| ( | |
|
| |||||
Cash Flows from Financing Activities: |
|
|
| |||
Dividend payments |
| ( |
|
| | |
Net proceeds from short-term borrowings |
| |
|
| | |
Proceeds from exercise of stock options | | | ||||
Net cash provided by financing activities |
| |
|
| | |
|
|
| ||||
Effect of exchange rate changes on cash |
| ( |
|
| ( | |
Net decrease in cash |
| ( |
|
| ( | |
Cash at beginning of period |
| |
|
| | |
Cash at end of period | $ | |
| $ | | |
|
| |||||
Supplemental disclosures of cash flow information: |
|
|
| |||
|
| |||||
Cash paid for: |
|
|
| |||
Interest | $ | |
| $ | | |
Taxes | $ | | $ | | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | |
| $ | | |
|
| |||||
Non-cash information: |
|
|
| |||
Right of Use (“ROU”) assets recognized for new operating lease liabilities | $ | |
| $ | | |
ROU adjustment due to early termination | $ | |
| $ | |
See accompanying notes to consolidated financial statements (unaudited).
9