-- Net sales increased to $22.2 million for the second quarter of
2005, up 14.8% from $19.4 million for the second quarter in 2004.
Net sales for the first half of 2005 were up 12.5% to $45.2
million, up from $40.1 million for the same period last year.
CHICAGO HEIGHTS, Ill., Aug. 15 /PRNewswire-FirstCall/ -- Worldwide
holographic and specialty coated film manufacturer, CFC
International, Inc. (NASDAQ:CFCI), today reported results for the
second quarter of 2005. Net sales for the second quarter 2005
increased 14.8% to $22.2 million, compared to $19.4 million in the
second quarter of 2004. This increase in sales is due to growth on
a worldwide basis of the Company's printed pattern products and
pharmaceutical products, and strong domestic holographic sales,
resulting from the introduction of a new holographic security
product used on transaction cards. Net income decreased 12.2% to
$498,000, or $0.11 cents per share on a fully diluted basis for the
second quarter of 2005, compared to $567,000 or $0.13 cents per
share on a fully diluted basis, in the second quarter of 2004. The
Company incurred a foreign currency exchange loss of $488,000
($314,000 net of income taxes) due to the decline in the value of
the Euro to the dollar compared with the preceding quarter end, and
transaction expenses in connection with the possible sale of the
Company of $434,000 ($279,000 net of income taxes). The Company
reports that net income excluding the negative currency translation
and transaction fees incurred in connection with the possible sale
of the Company, would have increased 132.9% to $1.2 million or
$0.25 cents per share on a fully diluted basis for the second
quarter of 2005, compared to $567,000 or $0.13 cents per share on a
fully diluted basis for the second quarter of 2004. "In the second
quarter of 2005, CFC once again delivered solid sales growth," said
Greg Jehlik, CFC's Chief Executive Officer and President. "Our
second quarter results reflect increased sales in our long-standing
markets, that we are focused on our strategic initiatives and that
we are well- positioned to leverage future opportunities with new
products such as our recently launched HoloLam Plus(TM) for the
transaction card industry." Sales for the first half of 2005
totaled $45.2 million, an increase of 12.5% from $40.2 million for
the same period last year. Sales for the first half of 2005 were
positively affected by increased sales of the Company's printed
pattern products and pharmaceutical products on a worldwide basis,
and strong domestic holographic sales, resulting from the
introduction of a new holographic security product used on
transaction cards. Net income for the first half of 2005 increased
16.1% to $2.0 million, or $0.43 per share on a fully diluted basis,
compared to net income of $1.7 million or $0.39 per share on a
fully diluted basis for the first half of 2004. Net income in 2005
was adversely affected by the decline of the Euro from the end of
last year, resulting in foreign currency exchange loss of $765,000
($492,000 net of income taxes), and transaction expenses in
connection with the possible sale of the Company in the amount of
$434,000 ($279,000 net of income taxes). Net income for the first
half of 2005, without the negative currency translation and
transaction expenses would have increased 60.8% to $2.8 million, or
$0.60 per share on a fully diluted basis compared to net income of
$1.7 million, or $0.39 per share on a fully diluted basis, for the
six months ended June 30, 2004. "We are very pleased with the
positive results that we have delivered for the first half of
2005," said Roger Hruby, CFC's Chairman. "We achieved increases in
both total net income and net sales for the first half of 2005, as
compared to the same period a year ago, and we are well positioned
to continue to deliver profit growth and strong sales as we move
into the second half of 2005." The Company also announced today
that the letter of intent with Audax Group of the proposed
acquisition of CFC has been terminated. Roger F. Hruby, CFC's
Chairman, said, "As our negotiations with Audax progressed, it
became clear that we would be unable to complete an agreement at
this time that our Board could recommend to our shareholders, and
accordingly we and they agreed to terminate the letter of intent.
As we move forward, we will continue to pursue and evaluate all
strategic alternatives." Recent Developments The Company will be
exhibiting at the Pack Expo 2005 Show at the Las Vegas Convention
Center in Las Vegas, Nevada in Booth #9123 on September 26-28, 2005
where it will feature its holographic packaging and holographic
security and authentication solutions. Headquartered in Chicago
Heights, Illinois, CFC International is a market leader in the
design, manufacture and marketing of holographics and specialty
functional coatings that add value to a wide variety of industrial
and consumer products. The Company operates facilities in Chicago
Heights and Countryside, Illinois; London, England; and Goppingen,
Germany. A condensed consolidated balance sheet and statement of
operations is attached. Statements made in this press release,
including those relating to expectations of future sales, net
income and operating costs reductions, estimations of the market
size for certain of the company's products or the company's share
of those markets and expectations of increased sales attributable
to various product lines, are forward looking and are made pursuant
to the safe harbor provisions of the Securities Reform Act of 1995.
Such statements involve risks and uncertainties which may cause
results to differ materially from those set forth in those
statements. Among other things, continued unfavorable economic
conditions may impact market growth trends or otherwise impact the
demand for the company's products and services; competition from
existing and new competitors and producers of alternative products
will impact the company's ability to penetrate or expand its
presence in new or growing markets; uncertainties relating to the
company's ability to develop and distribute new proprietary
products to respond to market needs in a timely manner may impact
the company's ability to exploit new or growing markets; the
company's ability to successfully identify and implement
productivity improvements and cost reduction initiatives may impact
profitability; and risks inherent in international operations,
including possible economic, political or monetary instability, may
impact the level and profitability of the company's foreign sales.
In addition to the factors set forth in this release, the economic,
competitive, governmental, technological and other factors
identified in the company's filings with the Securities and
Exchange Commission, could affect the forward looking statements
contained in this press release. We have no obligation to revise or
update these forward- looking statements to reflect events or
circumstances that arise after the date of this press release or to
reflect the occurrence of anticipated events. You may access
additional information, including our filings with the Securities
and Exchange Commission and previous press releases by visiting CFC
International's Internet homepage at http://www.cfcintl.com/ . CFC
INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME (In
thousands, except earnings per share and operating income
percentage) Three Months Ended Six Months Ended June 30, June 30,
2005 2004 2005 2004 Net sales $22,228 $19,355 $45,216 $40,179 Cost
of goods (excluding depreciation and amortization shown below)
14,549 13,063 28,952 26,087 Operating expenses 4,550 4,419 9,176
8,853 Depreciation and amortization 1,169 1,016 2,344 2,355
Transaction expenses 434 - 434 - Operating income 1,526 857 4,310
2,884 Operating income% 7% 4% 9% 7% Interest expense 269 288 548
586 Interest income (4) - (9) (1) Interest rate swap valuation
(benefit) provision 34 (163) (32) (96) Rental (income), net (35)
(40) (68) (68) Foreign currency exchange loss (gain) 488 (52) 765
(27) Income before income taxes 774 824 3,106 2,490 Provision for
income taxes 276 257 1,108 768 Net income $498 $567 $1,998 $1,722
Diluted weighted average number of shares outstanding 4,634 4,514
4,629 4,503 Diluted earnings per share $0.11 $0.13 $0.43 $0.39
Adjusted earnings before interest, taxes, depreciation and
amortization (Note 1) $3,129 $1,873 $7,088 $5,239 SUMMARY OF
INTERNATIONAL SALES (In thousands, except international sales
percentage) Three Months Ended Six Months Ended June 30, June 30,
2005 2004 2005 2004 International sales($) $10,091 $9,364 $20,720
$19,333 International sales(%) 45% 48% 46% 48% NOTE 1: The Company
believes earnings before interest, taxes, depreciation and
amortization and other items (adjusted EBITDA) is an appropriate
measurement for its business because its enterprise value is more
closely aligned with this measurement and because of the continual
investment the Company makes in long-lived assets. Adjusted EBITDA
should not necessarily be considered as an alternative to net
income or cash flows from operating activities which are determined
in accordance with Generally Accepted Accounting Principles as an
indicator of operating performance or as a measure of liquidity.
The table that follows reconciles net income to adjusted EBITDA as
defined: Three Months Ended Six Months Ended June 30, June 30, (In
thousands) 2005 2004 2005 2004 Net income $498 $567 $1,998 $1,722
Add back (subtract): Transaction expenses 434 - 434 - Income taxes
276 257 1,108 768 Interest expense 269 288 548 586 Interest income
(4) - (9) (1) Interest rate swap valuation (benefit) provision 34
(163) (32) (96) Rental (income), net (35) (40) (68) (68) Foreign
currency exchange loss (gain) 488 (52) 765 (27) Depreciation and
amortization 1,169 1,016 2,344 2,355 Adjusted EBITDA $3,129 $1,873
$7,088 $5,239 CFC INTERNATIONAL, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS AT JUNE 30, 2005 AND DECEMBER 31, 2004 June 30,
December 31, 2005 2004 ASSETS Cash and cash equivalents $4,205,555
$4,554,699 Restricted cash 306,579 306,271 Accounts receivable,
less allowance for doubtful accounts 12,400,167 12,547,380
Inventories 17,204,649 17,709,138 Other current assets 1,306,868
1,389,790 Total current assets 35,423,818 36,507,278 Property,
plant and equipment, net 26,511,532 28,602,311 Deferred income
taxes 3,517,612 3,528,686 Intangible assets, net 2,274,730
2,393,466 Other assets 251,852 266,806 Goodwill 1,029,462 1,029,462
Fair value of interest rate swap 71,139 39,553 Total assets
$69,080,145 $72,367,562 LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $5,000,387 $5,625,085 Accounts
payable and accrued expenses 12,353,967 15,314,782 Total current
liabilities 17,354,354 20,939,867 Deferred income taxes 3,221,756
3,229,584 Long-term debt 14,093,068 15,698,791 Total liabilities
34,669,178 39,868,242 Stockholders' equity 34,410,967 32,499,320
Total liabilities and stockholders' equity $69,080,145 $72,367,562
DATASOURCE: CFC International, Inc. CONTACT: Dennis Lakomy, Chief
Financial Officer of CFC International, Inc., +1-708-757-2803 Web
site: http://www.cfcintl.com/ Company News On-Call:
http://www.prnewswire.com/comp/110663.html
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