Revenue Performance - Consolidated revenue for the three months ended March 31, 2023, was $15,742,000, an increase of 12.3% compared to $14,021,000 in the same period of 2022[96] - Florida Pneumatic's revenue decreased by 3.5% to $9,924,000 from $10,281,000 year-over-year[96] - Hy-Tech's revenue increased significantly by 55.6%, reaching $5,818,000 compared to $3,740,000 in the prior year[96] - Total revenue for the first quarter of 2023 was $9,924,000, a decrease of 3.5% compared to $10,281,000 in the same period of 2022[98] - Automotive revenue declined by 16.0% to $3,259,000, primarily due to price increases leading to a reduction in unit sales[98] - Aerospace revenue increased by 35.7% to $2,411,000, driven by higher demand for new parts and tools[98] - Hy-Tech's total revenue rose by 55.6% to $5,818,000, with OEM revenue increasing by 56.4% to $3,073,000[101] Gross Margin and Expenses - The company experienced a significant improvement in Hy-Tech's revenue and gross margins, alongside a stronger gross margin at Florida Pneumatic[80] - Gross margin for the company improved to 36.5% in Q1 2023, up from 32.2% in Q1 2022, attributed to a shift towards higher-margin product lines[102] - Selling, general and administrative expenses remained stable at $5,175,000, with a slight increase in compensation expenses[105] Cash Flow and Capital Expenditures - Cash provided by operating activities was $790,000 in Q1 2023, compared to cash used of $3,972,000 in Q1 2022[113] - Capital expenditures for Q1 2023 were $905,000, with planned expenditures for the remainder of 2023 estimated at $2,400,000[114] Tax and Liquidity - The effective tax rate for Q1 2023 was approximately 31.8%, compared to a tax benefit rate of 13.4% in Q1 2022[109] - The company had a current ratio of 2.57 to 1 as of March 31, 2023, indicating strong liquidity[110] Operational Developments - The company is developing a cordless installation tool for the aerospace market, with orders expected to be fulfilled later in 2023[93] - The acquisition of Jackson Gear Company has been consolidated into Hy-Tech, enhancing market exposure in the larger gears market[80] - The company plans to analyze the practicality of incorporating newer technologies into its tool platforms for various markets[93] Supply Chain and Economic Factors - Supply chain disruptions from Asian suppliers continue to impact inventory availability, although ocean freight costs have returned to pre-pandemic levels[88] - Domestic transportation costs have decreased due to improved supply chain conditions, despite rising fuel costs tempering rate reductions[89] - The company is monitoring inflation and geopolitical issues, which may affect manufacturing and operating costs in the foreseeable future[90] Internal Controls and Legal Proceedings - As of March 31, 2023, the Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective[122] - There were no changes in internal control over financial reporting during the fiscal quarter ended March 31, 2023, that materially affected the internal control[123] - There have been no material changes to the legal proceedings' disclosure since the 2022 Form 10-K[125]
P&F Industries(PFIN) - 2023 Q1 - Quarterly Report