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CURRENT STATUS:
BACKLOG - The Company's backlog on January 31, 2013 was $148 million, up 78% from the prior year. Additionally, since January 31, 2013, piping systems has received approximately $27 million of additional orders, which were highlighted in a February 5, 2013 press release.
% Year Backlog ($ in thousands): 1/31/13 1/31/12 Change ---------- ---------- --------- Piping Systems $ 89,508 $ 53,769 66% Filtration Products 25,834 14,473 78% Industrial Process Cooling 4,665 6,431 (27%) Other 28,176 8,539 230% ---------- ---------- --------- Total $ 148,183 $ 83,212 78% ========== ========== =========
PIPING SYSTEMS - Piping systems has been investing in its new plant in Saudi Arabia for the last two years. In April 2012, the Company opened the new factory in Dammam, Saudi Arabia. Since November 2012, the Company has announced receipt of several orders totaling approximately $50 million primarily for two landmark projects in Saudi Arabia: the Grand Mosque in Mecca and the King Abdul-Aziz International Airport in Jeddah.
Sales volume at the Company's domestic facilities declined, reflecting the adverse effect from the continuing decrease in federal and state spending for government funded construction activity in the U.S.
FILTRATION PRODUCTS - Reduced market demand for fabric filters led to a decrease in filtration product sales. Filtration products gained some sizeable orders for the coming 24 months, resulting in a backlog increase of 78% over the prior year period. Of the $26 million in backlog, approximately $12 million of those orders are scheduled for delivery in 2014.
INDUSTRIAL PROCESS COOLING - This segment showed improvements in net sales of 16% over prior year and more than doubled its income from operations. On April 26, 2013, the Company announced the signing of a definitive agreement to sell the domestic assets of its subsidiary Thermal Care, Inc. to IPEG, Inc. The transaction closed on April 30, 2013. Upon closing, the Company transferred the applicable assets, liabilities and employees of the business to the buyer. In future periods, industrial process cooling will be reported as a discontinued operation.
Brad Mautner, President and CEO, said, "The information in our 2012 annual report filing, this press release and our recent announcement of the sale of the U.S. assets of our Thermal Care business describe an important time for our Company. We have taken the strategic decision to focus our resources on our two large reportable segments: filtration products and piping systems. From an operating standpoint, we are largely a project driven company. Therefore, the dramatic 78% growth in backlog, not including the additional orders won during the first quarter this year will take time to turn into sales and profits. Fiscal 2012 was difficult operationally, as extremely weak market demand for fabric filters continued and we built backlog in piping, but did not yet realize the benefits. We expect to realize these benefits in 2013 and are working actively to size the fabric filter business to the lower demand expected in the near term. There are also programs now under way to lower manufacturing costs, improve working capital turns and control capital expenses. However, based on the recent results, accounting rules require us to record the large non-cash impairments that resulted in 75% of the reported loss per share for the year. I fully expect that we will perform in our core businesses at a level that will ultimately make use of tax benefits that have now been fully reserved.
