P&F Industries, Inc. (NASDAQ:PFIN) Q1 2023 Earnings Call Transcript May 12, 2023

Operator: Hello, and welcome to P&F Industries First Quarter of 2023 Earnings Call. My name is Melissa, and I will be your coordinator for today’s event. Please note, this conference is being recorded. [Operator Instructions] I will now hand you over to your host, Mr. Richard Goodman, P&F’s General Counsel, to begin today’s conference. Thank you. Mr. Goodman, please take it away.

Richard Goodman: Thank you, operator. Good morning, and welcome to P&F Industries first quarter 2023 conference call. With us today from management are Richard Horowitz, Chairman, President and Chief Executive Officer; and Joseph Molino, Chief Operating Officer and Chief Financial Officer. Before we get started, I’d like to remind you that any forward-looking statements discussed on today’s call by our management, including those related to the company’s future performance and outlook, based upon the company’s historical performance and current plans, estimates and expectations, which are subject to various risks and uncertainties and could cause the company’s actual results for future periods to differ materially from those expressed in any forward-looking statements made by or on behalf of the company.

These risk factors and uncertainties are described in today’s press release under forward-looking statements as well as in our most recent SEC filings, which you can find on the company’s website, including our 2022 annual report on Form 10-K, our quarterly reports on Form 10-Q and other documents. Forward-looking statements speak only as of the date on which they are made, and the company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. I would also like to remind all participants on this call that, as we’ve been doing for the past several conference calls, with respect to the question-and-answer portion of today’s conference call, the length of the questions from any particular stockholder or other caller together with management’s responses are limited to 20 minutes.

Additionally, please be aware that during the question-and-answer session, management will only answer questions directly related to the company’s first quarter 2023 results of operation and financial condition, as disclosed in the press release published earlier today. We must insist that you adhere to this procedure. Management will not be entertaining any questions that go beyond the scope of this call. And with that, I would now like to turn the call over to Richard Horowitz. Good morning, Richard.

Richard Horowitz: Good morning. Thank you, Rich, and good morning, everybody. Thank you all for joining us this morning to discuss P&F’s results for the three-month period ending March 31, 2023. I hope you’re all doing well as this country and the world continues to face the ongoing economic pressures and the ongoing crisis in Ukraine as well as tensions with China and Russia. We pray for a peaceful end to all these conflicts. I would also like to direct your attention to the company’s press release that was released earlier today, which includes the company’s March 31, 2023 balance sheet, statement of operations, statement of cash flows and the discussion related to the company’s results for the three-month period ended March 31 of this year and how these results compared to the same period in 2022.

Further, I wish to highlight a number of key factors that impacted our first quarter 2023 results. There was significant improvement in Hy-Tech’s revenue and gross margin. The gross margin at Florida Pneumatic improved as well. Our consolidated operating expenses were essentially flat compared to the first quarter of 2022 and rising interest rates, which we’re all quite familiar with was the primary cause for the increase in interest expense. Finally, in order to make better use of everybody’s time, yet be mindful of the purpose of this conference call, I would like to remind you all of the following, and as Richard just said as well, maybe a little redundant. First, as has become our standard practice, we will move directly to a question-and-answer session and not restate what is already in this morning’s press release.

Secondly, please be aware that we will only be answering questions directly related to the company’s first quarter results and the financial condition. We must insist you adhere to this procedure. And finally, please be mindful of a 20-minute time limit as previously noted, which we plan to enforce. To the extent shareholders or other callers with pertinent questions have multiple questions, please complete your portion of the Q&A within the 20-minute limit, and then we will move on to the next questionnaire. And with that, we will be happy to answer any pertinent questions that any stockholder or person on the call may have. Operator?

Operator: [Operator Instructions] We currently have no questions coming through. [Operator Instructions] Okay. And we do have a question coming through from Timothy Stabosz, a Private Investor. Timothy, you can go ahead.

Operator: Thank you very much. [Operator Instructions] Our next question comes from Andrew Shapiro of Lawndale Capital Management. Andrew, please go ahead.

Q&A Session

Operator: [Operator Instructions] And as we have no further questions in the queue, I’d like to hand it back over to Mr. Richard Horowitz. Sir, please go ahead.

Richard Horowitz: Thank you all for spending some time with us today and discussing our earnings. And we look forward – and of course, our dividend, we put an announcement last night that our second quarter dividend will be distributed in short order in the next couple of weeks. And we look forward to speaking with you in our Q2 conference call in a few months and stay well, everybody. Thank you so much, operator and everybody else.

Operator: Thank you. That concludes our conference today. Thank you for joining us. You may now disconnect. Host, please stand by.