Cfc (NASDAQ:CFCI)
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CFC International, Inc. Announces That It Has Signed a Letter of
Intent to Be Acquired and Reports 2005 First Quarter Results
- Net income increased to $1.5 million for the first quarter of 2005, up 30.0%
from $1.2 million as compared to the same period last year.
CHICAGO HEIGHTS, Ill., May 3 /PRNewswire-FirstCall/ -- Worldwide holographic
and specialty coated film manufacturer, CFC International, Inc. (NASDAQ:CFCI)
announced today that it has entered into a letter of intent to merge the
Company with an affiliate of Audax Group, a private equity firm, for an
enterprise value of $109.4 million, which equates to an expected share price
range for this transaction between $19.50 and $20.00 per share. The proposed
transaction is subject to a number of conditions, including completion of due
diligence and the negotiation and execution of a definitive agreement, and
there can be no assurance that a transaction will be completed. The Company
expects the transaction, if completed, to close during the third quarter of
2005.
The Company further reports that net income and diluted earnings per share for
the first quarter of 2005 increased 30.0 percent to $1.5 million, or $0.33
cents per share on a fully diluted basis compared to $1.2 million or $0.26
cents per share on a fully diluted based for the first quarter of 2004. This
increase in net income was primarily due to higher sales and improved
productivity.
First quarter sales increased 10.4 percent to $23.0 million compared to $20.8
million in the first quarter of 2004. The increase in first quarter sales of
2005 was primarily due to strong printed products sales, which increased 12.1
percent, and robust pharmaceutical and security product sales, which increased
24.2 percent and 21.4 percent respectively, over the same period sales in 2004.
In addition, sales were favorably affected by the continued strength of the
Euro by approximately $332,000.
"This was another solid quarter for CFC, and we are excited with the number of
opportunities that are in front of us in the next several quarters," said Greg
Jehlik, CFC's President and Chief Executive Officer. "Our financial results
for the quarter reflect the strengths of our worldwide employees being aligned
with our business objectives, and our ability to serve a diversified
marketplace with solutions." Jehlik further stated that, "We continue to
invest in generating cost-effective and value-added solutions for our customers
that will position CFC for long-term growth."
Based upon the Company's results and the current economic outlook, the Company
anticipates meeting its previously stated net income of $1.10 - $1.15 per share
on a fully diluted basis for calendar year 2005, utilizing a 35.4% tax rate.
Recent Developments
The company reports that the first embosser in the Chicago Heights, Illinois
facility has been successfully installed and had its first production run the
week of February 21, 2005.
The embosser for Europe arrived in Europe on April 15, 2005 and the Company
expects this embosser to be on schedule and on line during the second quarter
of 2005.
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, estimated
availability of additional equipment, 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
1st 1st
(In Thousands, Except Earnings Per Share and Quarter Quarter
Operating Income Percentage) 2005 2004
Net sales $22,989 $20,824
Cost of goods sold (excluding depreciation and
amortization shown below) 14,403 13,024
Operating expenses 4,627 4,434
Depreciation and amortization 1,174 1,339
Operating income 2,785 2,027
Operating income % 12.1% 9.7%
Interest expense 279 299
Interest income (5) (1)
(Gain) loss on interest rate swap (65) 67
Other income (rental income) (33) (28)
Foreign currency exchange loss 277 25
Income before income taxes 2,332 1,665
Provision for income taxes 832 511
Net income $1,500 $1,154
Diluted Weighted Average Number of Shares Outstanding 4,613 4,493
Diluted Earnings Per Share $0.33 $0.26
Adjusted Earnings Before Interest, Taxes, Depreciation
and Amortization (Note 1) $3,959 $3,366
1st 1st
(In Thousands) Quarter Quarter
2005 2004
International Net Sales $10,629 $9,969
International Net Sales 46.2% 47.9%
NOTE 1: The Company believes earnings before interest expense, income
taxes, depreciation and amortization (adjusted EBITDA) is an
useful measurement for its business because management
understands that such information is considered by certain
investors as an additional basis on which to evaluate the
Company's ability to pay interest, repay debt and make capital
expenditures. 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
following reconciles net income to adjusted EBITDA as defined:
1st 1st
(In Thousands) Quarter Quarter
2005 2004
Net income $1,500 $1,154
Add back (subtract):
Income taxes 832 511
Interest expense 279 299
Interest income (5) (1)
Depreciation and amortization 1,174 1,339
(Gain) loss on interest rate swap (65) 67
Other income (rental income) (33) (28)
Foreign currency exchange loss 277 25
Adjusted EBITDA $3,959 $3,366
CFC INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS AT
MARCH 31, 2005 AND DECEMBER 31, 2004
March 31, December 31,
2005 2004
ASSETS
Cash and cash equivalents $3,084,131 $4,554,699
Restricted cash 306,380 306,271
Accounts receivable, less allowance for
doubtful accounts 13,211,049 12,547,380
Inventories 17,815,114 17,709,138
Other current assets 1,540,710 1,389,790
Total current assets 35,957,384 36,507,278
Property, plant and equipment, net 27,730,315 28,602,311
Deferred income taxes 3,517,612 3,528,686
Intangible assets, net 2,322,578 2,393,466
Other assets 269,817 266,806
Goodwill 1,029,462 1,029,462
Fair value of interest rate swap 104,874 39,553
Total assets $70,932,042 $72,367,562
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $5,398,488 $5,625,085
Accounts payable and accrued expenses 12,863,263 15,314,782
Total current liabilities 18,261,751 20,939,867
Deferred income taxes 3,221,756 3,229,584
Fair value of interest rate swap - -
Long-term debt 15,012,665 15,698,791
Total liabilities 36,496,172 39,868,242
Stockholders' equity 34,435,870 32,499,320
Total liabilities and stockholders' equity $70,932,042 $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