Thursday, February 24, 2011

Polypore International (PPO) Impresses the Street

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Our old friend Polypore International (PPO) continues to be a performer, although is becoming less of a secret, on the back of its lithium battery business.  It is still a quiet enough stock that none of the major news agencies like Reuters or AP writes an earnings review. Year over year growth trends ex battery business were ho hum, but with a 8 cent beat versus expectation, off to the races she goes.  The stock was looking very troubling the past few days, but quite a reversal today.  Kind of strange such a little followed stock reacts so violently at its earning reports - last quarter it fell 20%, this quarter up 15%!



Expectations were $160M and 34 cents; Polypore came in at $169.5M and 42 cents.

Per Press release:
  • Sales were $169.5 million compared with $152.0 million in the prior-year period. Excluding the effect of foreign currency translation, sales increased 14%.
  • Adjusted Net Income and Adjusted EPS were $19.3 million and $0.42 per diluted share compared with $16.2 million and $0.36 per diluted share in the prior-year period. 
After a boffo year of growth, the lithium battery business is now 20% of revenue:
  • Lithium battery separator sales were $33.9 million, an increase of $9.0 million, or 36%. The increase, while limited by capacity, reflects strong demand in consumer electronics and growing demand in Electric Drive Vehicles ("EDVs"). For the year, sales were $131.0 million, an increase of $44.9 million, or 52%.
The rest of the company is pretty boring (although filtration business did solid 20% growth), so I won't go into it - you are buying this name mostly for this niche battery business. 

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Polypore International, Inc., a technology filtration company, develops, manufactures, and markets microporous membranes used in separation and filtration processes. It operates in two segments, Energy Storage and Separations Media.

[Dec 7, 2010: Polypore Surges Higher on Upgrade]
[Nov 4, 2010: Earnings Report Swamps Polypore]


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