Monday, PMFG, Inc. (PMFG) posted a drop in its second-quarter net income, hurt by one-time expenses for backlog amortization and fair value inventory adjustment, reflecting difficult credit environment.
The company posted a second-quarter net earnings of $494 thousands or $0.04 per share, lower than $3.5 million or $0.27 per share in the comparable quarter last year.
The results for the recent quarter included $1.1 million of backlog amortization expense and an additional $37 thousands of fair value inventory adjustment expense.
Headquartered in Dallas, Texas, the company said, on a non-GAAP basis, which excludes expenses related to the fair value adjustments of Nitram's backlog and inventory, its quarterly net earnings would have been $1.4 million, or $0.11 per share.
On average two analysts polled by Thomson Reuters expected the company to report earnings of $0.07 per share, on revenues of $43.56 million. Analysts' estimates typically exclude special items.
Quarterly revenues totaled $39.1 million, up from $37.1 million reported a year ago.
Operating expenses for the quarter was $10.40 million, higher than $7.17 million recorded last year, while operating income declined drastically to $1.87 million from $5.24 million.
Commenting on the quarterly results, Peter Burlage, Chief Executive Officer, said, "The decline in revenues and earnings in our second quarter reflect the impact of the global recession and the severe credit restrictions encountered by the industries we serve. Some of our customers are responding to the current economic conditions by curtailing or suspending projects as they evaluate the changing outlook on demand for energy.''
Remaining optimistic, the company further said that its continued investment in product technology and operational efficiency would help to overcome the changing competitive landscape experienced currently.
On a year-to-date basis, the company reported a net loss of $172 thousands or $0.01 per share. This compares to net earnings of $6.9 million or $0.53 per share for the same period last year. On a non-GAAP basis, the company reported net earnings of $3.7 million or $0.28 per share.
Revenues for six months totaled $82.8 million, $15.7 million higher than prior-year's revenues of $67.1 million.
Analysts expected earnings of $0.51 per share, on revenues of $172.84 million for the year.
Shares of the company ended Friday's regular trading session at $8.01.
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