Revenue Performance - Florida Pneumatic's revenue decreased by 14.4% to $10,845,000 for the three months ended June 30, 2023, compared to $12,666,000 in the same period of 2022[103]. - Hy-Tech's revenue increased by 3.4% to $5,318,000 for the three months ended June 30, 2023, compared to $5,144,000 in the same period of 2022[103]. - Consolidated revenue for the three months ended June 30, 2023, was $16,163,000, a decrease of 9.2% from $17,810,000 in the same period of 2022[103]. - For the six months ended June 30, 2023, Florida Pneumatic's revenue was $20,769,000, down 9.5% from $22,947,000 in the same period of 2022[103]. - Hy-Tech's revenue for the six months ended June 30, 2023, increased by 25.4% to $11,137,000 from $8,884,000 in the same period of 2022[103]. - Consolidated revenue for the six months ended June 30, 2023, was $31,906,000, a slight increase of 0.2% from $31,831,000 in the same period of 2022[103]. - Automotive revenue for Q2 2023 was $3,503,000, a decrease of 9.1% compared to $3,853,000 in Q2 2022[105]. - Retail revenue declined significantly by 39.5% to $2,920,000 in Q2 2023 from $4,826,000 in Q2 2022[105]. - Aerospace revenue increased by 36.0% to $2,963,000 in Q2 2023, up from $2,179,000 in Q2 2022[105]. - Total revenue for the six months ended June 30, 2023, was $20,769,000, a decrease of 9.5% from $22,947,000 in the same period of 2022[106]. - Hy-Tech's total revenue for the six months ended June 30, 2023, increased by 25.4% to $11,137,000 compared to $8,884,000 in the same period of 2022[110]. Gross Margin and Expenses - The company experienced significant improvement in gross margin at both Hy-Tech and Florida Pneumatic[84]. - Gross margin for Florida Pneumatic improved to 41.6% in Q2 2023 from 37.7% in Q2 2022, reflecting a shift to higher margin product lines[111]. - Hy-Tech's gross margin increased by 8.1 percentage points to 24.9% in Q2 2023 compared to 16.8% in Q2 2022[112]. - SG&A expenses for Q2 2023 were $5,368,000, a slight decrease from $5,479,000 in Q2 2022[117]. Financial Position and Cash Flow - The net expense for the three-month period ended June 30, 2023, was $4,000, primarily due to a loss on equipment disposal[119]. - Interest expense for short-term borrowings increased by 25.8% to $112,000 in Q2 2023 from $89,000 in Q2 2022[121]. - Total interest expense for the first half of 2023 was $216,000, a 56.5% increase compared to $138,000 in the same period of 2022[121]. - The average balance of short-term borrowings decreased to $7,060,000 in Q2 2023 from $11,544,000 in Q2 2022[124]. - The effective tax rate for Q2 2023 was approximately 33.4%, compared to a tax expense of 138.2% in Q2 2022[126]. - Working capital increased to $21,245,000 as of June 30, 2023, from $20,838,000 at the end of 2022[127]. - The current ratio improved to 2.86:1 as of June 30, 2023, compared to 2.44:1 at the end of 2022[127]. - Cash provided by operating activities for the first half of 2023 was $4,234,000, compared to cash used of $1,154,000 in the same period of 2022[130]. - Total debt to total book capitalization decreased to 11.2% as of June 30, 2023, from 15.3% at the end of 2022[131]. Future Outlook and Challenges - The company is developing a cordless installation tool for the aerospace market, with orders expected to increase later in 2023[100]. - The company continues to face challenges with inventory delays from Asian suppliers, although freight costs are approaching pre-pandemic levels[93]. - The company is monitoring the impact of inflation and geopolitical issues on manufacturing and operating costs, with no current estimates available[96]. - Planned capital expenditures for the remainder of 2023 are approximately $1,300,000, primarily for new metal cutting equipment and IT hardware/software[132]. - The company has approximately $9,324,000 available under the Revolver arrangement as of June 30, 2023[129]. Aerospace Revenue - Aerospace revenue for the six-month period ended June 30, 2023, increased by 34.6% compared to the same period in 2022, driven by demand for new consumable parts[106].
P&F Industries(PFIN) - 2023 Q2 - Quarterly Report