P&F Industries, Inc. (NASDAQ:PFIN) today announced its results from continuing operations for the three and nine-month periods ended September 30, 2016. P&F Industries, Inc. is reporting third quarter 2016 revenue from continuing operations of $14,633,000, compared to $15,924,000, for the third quarter of 2015. For the nine-month period ended September 30, 2016, the Company’s revenue from continuing operations was $44,769,000, compared to $46,541,000, during the same period a year ago. The Company is reporting a loss from continuing operations before taxes of $393,000 and $8,462,000, for the three and nine-month periods ended September 30, 2016. Its year to date loss is resulting primarily from the non-cash impairment charge to goodwill and other intangible assets of $8,311,000, recorded during the second quarter of 2016. Income from continuing operations before income taxes were $776,000 and $2,274,000, respectively, for the same three and nine month periods in 2015. The Company is reporting a net loss from continuing operations for the three and nine-month periods ended September 30, 2016 of $286,000, and $5,590,000, respectively, compared to net income from continuing operations during the same periods in 2015 of $505,000 and $1,510,000.
Richard Horowitz, the Company’s Chairman of the Board, Chief Executive Officer and President commented, “While the overall results for the company are disappointing and show a loss, primarily due to certain factors impacting Hy-Tech’s results, I wish to give further insight into the numbers, and point out several details that provide a more encouraging outlook and why we are optimistic about our future. First, in the third quarter we increased our allowance for slow moving inventory at Hy-Tech by $427,000. This adjustment will be reassessed in future periods, to the extent the related products are consumed in the manufacturing process, or sold separately. Second, in September, we began shipping new products that utilize our extensive air tool motor manufacturing knowledge to new OEM markets and customers. We have additional multiple customer sponsored projects currently underway in areas we have not traditionally marketed to, that we believe could replace a portion of the revenue lost due to the energy industry downturn. These projects are targeted to evolve over the next several quarters, and we remain confident that they should strengthen and diversify our revenue base going forward. Third, we believe the downturn we have seen in the energy industry, based on the indices we monitor, appears to be stabilizing. As such, as the new sources of revenue we are developing begin to gain momentum, Hy-Tech’s total revenue should begin to improve.”
Mr. Horowitz continued, “Florida Pneumatic continued its strong performance, due primarily to the growth of its AIRCAT product line. We intend to continue to release additional AIRCAT products later this year and next. Further, our strategic plan is to move into other sectors of the automotive market, leveraging off of our strategic relationships with the industry’s major distributors. Florida Pneumatic’s retail business is steady, and while its industrial/catalog sector has been impacted by the energy activity fall-off, this is not significant enough to dramatically slow its overall trajectory, as this sector represents a relatively small percentage of their revenue.”
Mr. Horowitz added, “On November, 1st, we closed on the sale of the Tampa building that was the headquarters of our former Nationwide subsidiary. After fees and expenses, we received approximately $3.5 million, which was used to eliminate substantially all of our bank debt. As the result of the execution of our business strategy, and our projected continuing positive cash flows, P&F is not expected to be a significant borrower until such time as when we have a need due to possible expansion through acquisition or otherwise, or for other strategic needs. Notwithstanding the non-cash charges we incurred during the three and nine month period, we believe that our financial position, cash flow and continuing implementation of our business strategy, should enable us to continue to pay our regular quarterly dividend for the reasonably foreseeable future.”
He concluded his remarks by stating, “We believe this is a time of positive transition for P&F. While selling Nationwide has reduced the size of our company, as part of our strategic plan, we are focused on expanding our position in the power tool and accessories market, and intend to grow the company from its current level, both organically and opportunistically through attractive and synergistic acquisitions.”