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MFRI, Inc. (MFRI: Summary, Messages, Articles), a manufacturer of piping systems for oil and gas delivery, industrial heating and cooling devices, and industrial filtration products, reported strong second quarter financial results this morning. Revenues rose to $77.6 million, a quarterly record and an increase of 32% from $58.9 million reported a year ago. Net income set another quarterly record of $2.4 million, or 35 cents per share, an increase of 67% compared to $1.4 million, or 22 cents per share year-over-year. Backlog of unfinished orders was $189 million at quarter’s end. No analysts currently cover the stock.

“Our expansion strategy led to strong sales, earnings and backlog growth,” said David Unger, CEO of MFRI. “In 2007, 30% of the Company’s sales were to customers outside of the United States, up from 18% in 2006, and sales have approximately doubled since 2003. Many changes have been made and are continuing in an effort to return to more historic margins. Even though we expect continuing pressure from soft U.S. and European economies, operating margin improvement is a high priority. We anticipate continued sales growth due to our increased order backlog, which is $57 million higher than a year ago.”

Shares of MFRI closed at $10.15 yesterday and have traded in a 52-week range of $9.19 - $24.29. With 6.9 million shares outstanding, MFRI has a market cap of $70 million and a P/S of 0.26. The upcoming third quarter is historically and seasonally the strongest. Stockholders’ equity is approximately $63 million.

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