Polypore Q1 Profit Declines, Enters Into Long-term Supply Deal With Panasonic

(RTTNews) - Shares of Polypore International Inc. (PPO) gained more than 5 percent in extended trades Thursday after the filtration technology company announced a five-year lithium-ion separator supply agreement with a unit of Japanese consumer electronics giant Panasonic Corp. (PCRFY.PK, PCRFF.PK). The company also said that its board of directors has authorized it to repurchase up to 4.5 million shares of its common stock.

However, the company reported a 7 percent decline in profit for the first quarter from last year, when results included an income from discontinued operations. Adjusted earnings for the quarter missed analysts' estimates. However, net sales increased from last year.

The Charlotte, North Carolina-based company's net income for the first quarter was $8.4 million or $0.18 per share, down from $9.0 million or $0.19 per share in the same period last year. The prior-year quarter's results include income from discontinued operations of $3.4 million or $0.07 per share.

Excluding items, adjusted net income for the latest quarter was $13.6 million or $0.30 per share, compared to $10.0 million or $0.21 per share in the year-ago period. On average, nine analysts polled by Thomson Reuters expected the company to earn $0.32 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 10 percent to $161.0 million from $145.9 million in the same period last year. Excluding the effect of foreign currency translation, sales for the quarter increased $14.3 million, or 10 percent. Analysts had a consensus revenue estimate of $161.72 million.

In the company's energy storage business, sales of lead-acid battery separators in the quarter rose 4 percent from last year to $79.1 million. Meanwhile, lithium battery separator sales rose 23 percent from the year-ago quarter to $30.1 million due to higher volumes in electric drive vehicles or EDVs, partly offset by a decline in consumer electronics.

Polypore noted that new vehicle model introductions showed promise for additional growth in Electronics and EDV segment later in 2014 and into 2015.

However, sales at the company's separations media segment increased 14 percent in the quarter to $51.8 million. Excluding the effect of foreign currency translation, sales increased 11 percent.

Sales of healthcare products increased 9 percent to $32.1 million, while sales of filtration and specialty products rose 24 percent to $19.7 million.

Polypore said its Celgard subsidiary has entered into a five-year lithium-ion separator supply agreement with a unit of Panasonic.

Under the deal, Panasonic Automotive and Industrial Systems Division will purchase Celgard brand separators to be used in its large-format electric drive vehicle lithium-ion batteries. This long-term agreement includes guaranteed purchase and supply volume requirements and a five-year term. Financial terms of the deal were not disclosed.

Further, Polypore's board of directors authorized the company to repurchase up to 4.5 million shares of its common stock, or about 10 percent of shares currently outstanding. The company may make the stock repurchases from time-to-time on the open market or in privately negotiated transactions.

The stock repurchase program does not require the company to repurchase any specific number of shares, and the company may terminate the repurchase program at any time.

PPO closed Thursday's regular trading session at $34.72, up $0.24 or 0.70 percent on a volume of 555,276 shares. However, in after-hours, the stock gained $1.78 or 5.13 percent to $36.50.