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CFC International, Inc. Announces That It Has Signed a Letter of Intent to Be Acquired and Reports 2005 First Quarter Results

Published on 2005-05-04. Author : SpecialChem

CHICAGO HEIGHTS, Ill. -- Worldwide holographic and specialty coated film manufacturer, CFC International, Inc. (Nasdaq: CFCI - News) announced that it has entered into a letter of intent to merge the Company with an affiliate of Audax Group, a private equity firm, for an enterprise value of $109.4 million, which equates to an expected share price range for this transaction between $19.50 and $20.00 per share. The proposed transaction is subject to a number of conditions, including completion of due diligence and the negotiation and execution of a definitive agreement, and there can be no assurance that a transaction will be completed. The Company expects the transaction, if completed, to close during the third quarter of 2005.

The Company further reports that net income and diluted earnings per share for the first quarter of 2005 increased 30.0 percent to $1.5 million, or $0.33 cents per share on a fully diluted basis compared to $1.2 million or $0.26 cents per share on a fully diluted based for the first quarter of 2004. This increase in net income was primarily due to higher sales and improved productivity.

First quarter sales increased 10.4 percent to $23.0 million compared to $20.8 million in the first quarter of 2004. The increase in first quarter sales of 2005 was primarily due to strong printed products sales, which increased 12.1 percent, and robust pharmaceutical and security product sales, which increased 24.2 percent and 21.4 percent respectively, over the same period sales in 2004. In addition, sales were favorably affected by the continued strength of the Euro by approximately $332,000.

"This was another solid quarter for CFC, and we are excited with the number of opportunities that are in front of us in the next several quarters," said Greg Jehlik, CFC's President and Chief Executive Officer. "Our financial results for the quarter reflect the strengths of our worldwide employees being aligned with our business objectives, and our ability to serve a diversified marketplace with solutions." Jehlik further stated that, "We continue to invest in generating cost-effective and value-added solutions for our customers that will position CFC for long-term growth."

Based upon the Company's results and the current economic outlook, the Company anticipates meeting its previously stated net income of $1.10 - $1.15 per share on a fully diluted basis for calendar year 2005, utilizing a 35.4% tax rate.

Recent Developments

The company reports that the first embosser in the Chicago Heights, Illinois facility has been successfully installed and had its first production run the week of February 21, 2005.

The embosser for Europe arrived in Europe on April 15, 2005 and the Company expects this embosser to be on schedule and on line during the second quarter of 2005.

Headquartered in Chicago Heights, Illinois, CFC International is a market leader in the design, manufacture and marketing of holographics and specialty functional coatings that add value to a wide variety of industrial and consumer products. The Company operates facilities in Chicago Heights and Countryside, Illinois; London, England; and Goppingen, Germany.

Statements made in this press release, including those relating to expectations of future sales, net income and operating costs reductions, estimated availability of additional equipment, estimations of the market size for certain of the company's products or the company's share of those markets and expectations of increased sales attributable to various product lines, are forward looking and are made pursuant to the safe harbor provisions of the Securities Reform Act of 1995. Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in those statements. Among other things, continued unfavorable economic conditions may impact market growth trends or otherwise impact the demand for the company's products and services; competition from existing and new competitors and producers of alternative products will impact the company's ability to penetrate or expand its presence in new or growing markets; uncertainties relating to the company's ability to develop and distribute new proprietary products to respond to market needs in a timely manner may impact the company's ability to exploit new or growing markets; the company's ability to successfully identify and implement productivity improvements and cost reduction initiatives may impact profitability; and risks inherent in international operations, including possible economic, political or monetary instability, may impact the level and profitability of the company's foreign sales. In addition to the factors set forth in this release, the economic, competitive, governmental, technological and other factors identified in the company's filings with the Securities and Exchange Commission, could affect the forward looking statements contained in this press release. We have no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this press release or to reflect the occurrence of anticipated events.

Source: CFC International, Inc.

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