Flanders Q2 Earnings: Financial News

ST. PETERSBURG, FL--(MARKET WIRE)--Jul 30, 2008 -- Flanders Corporation (FLDR - News) today announced its results for the second quarter ended June 30, 2008. Net Earnings were $6.9 million or $.27 per share, compared to Net Earnings of $802 thousand, or $0.03 per share, for the second quarter ended June 30, 2007. Revenues for the quarter were $57.3 million, down 10% from $64.3 million for the second quarter ended June 30, 2007.

Harry Smith, Chief Operating Officer, commented, "Once again we have continued optimism for our 2008 operating results. We are continuing to focus on our core competencies and during the second quarter we sold another direct sales office, as well as finalized the sale of the media operation which we believe will help make our operation more profitable."

Smith concluded, "We have worked thoroughly to bring the organization back to core competence. Our operations continue to improve as evidenced by our service levels to our big box retailers in the 98% range during the second quarter. As a result, we have increased interest by the big box retailers for our products based on a renewed focus of quality and service into these accounts.

"Our main focus at this point is to correct our price points in our markets. We have implemented significant price increases in both our commercial and industrial division and with our retail customers. These price increases will be underway during the third quarter of 2008 and we have high optimism with the level of success of our price increases attained. We also continue to work on our infrastructure and our new IT platform installation will be in progress soon. This will aid operations in getting relevant data quickly to make us quicker and smarter. We also are continuing to focus on automation and leveraging our purchase volume on raw material purchases to get us a distinct advantage over our smaller competitors in the air filtration industry."

Conference Call

A conference call with investors, analysts and other interested parties is scheduled for 4:30 p.m. EDT on Wednesday, July 30, 2008, to discuss 2008 second quarter operating results. People wishing to participate in the conference call should dial 866-425-6192.

Safe Harbor Statement

The statements made in this press release regarding Flanders (1) belief of and intention to achieve long-term profitable growth, (2) continued optimism for its 2008 operating results, (3) return to profitability, (4) focus on our core competencies, product mix, and factory utilization, (5) focusing on operations and profitability in order to maximize shareholder value. (5) being very close to finalizing the sale of the media operation which is a testament to the Company's focus of shedding verticality and making operations efficient and profitable, (6) thoroughly bringing the organization back to core competence, (7) working diligently with its vendor base for raw materials and logistics to build a structure that gives the Company a significant advantage over competitors due to large volume purchases in both areas, (8) focusing on automation to continue to drive down head-count and get plants more efficient, (9) achieving sales of $245 million in sales for 2008, (10) monitoring and working toward a potential MOX contract, (12) remaining focused on bringing the organization back to a health and (13) that the decisions the new management team has made and changes implemented will lead to long term profitability and increased shareholder value going forward and other statements that are not historical in nature constitute forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on the current expectations and beliefs of the management of Flanders and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such risks and uncertainties include, without limitation, the Company's ability to increase sales; the Company's ability to maintain its customer base; the Company's ability to have profitable long-term relationships with its customers; that the market for the Company's products will continue to grow; seasonality, competition and other factors; the effect of competitive and economic factors and the Company's reaction to them; possible disruption in commercial activities caused by terrorist activity and armed conflicts; changes in logistics and security arrangements; reduced purchases relative to security expectations or economic factors; possible disruption in commercial activity as a result of natural disasters; the Company's ability to generate positive cash flows from operating activities; the ability of the Company to repurchase its common shares and what effect those transactions may have on cash and liquidity; the Company's ability to expand current markets and develop new markets. For a more detailed discussion of risk factors that may affect Flanders operations, please refer to the Company's Form 10-K for the year ended December 31, 2007. These forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update such forward-looking statements, except as required by law.

About Flanders

Flanders is a leading air filtration products manufacturer. Flanders' products are utilized by many industries, including those associated with commercial and residential heating, ventilation and air conditioning systems, semiconductor manufacturing, ultra-pure materials, biotechnology, pharmaceuticals, synthetics, nuclear power and nuclear materials processing.

This press release contains forward-looking statements that are inherently subject to risk. These forward-looking statements are not intended to be promises or predictions of the future and may be affected by a number of factors that may change the currently anticipated outcome. These factors include market acceptance of Flanders' products, competition in the marketplace for Flanders' products, the success of retailers and distributors through which Flanders sells its products, Flanders' ability to contain costs and maintain production and efficiency with a reduced workforce, a determination by potential Flanders customers that the higher cost of its high-end filtration systems can be justified for general application, Flanders' ability to successfully retrofit existing buildings with effective sophisticated filtering and air handling systems, the ability to increase its high end containment products for commercial and governmental settings, and the development of increased demand for its high-end products. Many of these factors are not within Flanders' control. These factors, and others, are discussed in Flanders' periodic reports filed with the Securities and Exchange Commission and should be reviewed by the reader of this press release.

For further information on Flanders and its products, visit its web site at http://www.flanderscorp.com/ or contact Harry Smith at (252) 946-8081.

 
Selected Operations Data (all but per share data in
 Millions)                                             Q2 2008    Q2 2007
                                                      ---------  ----------
Net sales                                             $    57.3  $     64.3
Gross profit                                                8.5        11.6
Operating expenses                                          9.3        11.1
Operating income (loss)                                    (0.8)        0.5
Non-operating income (expense)                              1.0         0.0
Earnings (Loss) before income taxes and extraordinary
 item                                                       0.1         0.5
Extraordinary item                                          6.8         0.5
Net earnings                                          $     6.9  $      0.8
Net earnings per share:
  Basic                                               $    0.27  $     0.03
  Diluted                                             $    0.26  $     0.03
Common shares outstanding:
  Basic                                                    25.7        26.7
  Diluted                                                  26.2        27.6


Selected Balance Sheet Data (in Millions)             6/30/2008  12/31/2007
                                                      ---------  ----------
Working capital                                       $    55.0  $     50.3
Total assets                                              178.8       183.6
Long-term obligations, including current maturities        31.6        32.3
Total shareholders' equity                                 96.6        87.4