ARC Reports Second Quarter Fiscal Year 2015 Financial Results

For the quarter ended December 28, 2014, compared to the quarter ended December 29, 2013:

DELAND, Fla., Feb. 5, 2015 — (PRNewswire) — ARC Group Worldwide, Inc. ("ARC") (NASDAQ: ARCW), a leading global provider of advanced manufacturing and 3D printing solutions, today reported its second quarter fiscal year 2015 (December 28, 2014) financial results.

Second Quarter Operating Results

Second quarter fiscal year 2015 revenue was $27.1 million, an increase of 35.9% compared to the prior year period.  The year-over-year increase was largely the result of acquisitions completed during the fourth quarter of fiscal year 2014.  Sequentially, weakness in the firearms industry offset metal injection molding ("MIM") revenue gains in other sectors, as well as record quarterly revenue at Tekna Seal and robust sales growth at 3D Material Technologies and Kecy.  Quarterly revenue results at the Company's Hungarian operations were also impacted by the decline of the Euro versus the US dollar.  In January 2015, the Company entered into currency contracts to partially mitigate potential further Euro depreciation.

Gross Profit for the period was $6.4 million, an increase of 0.9% compared to the prior year period.  Adjusted EBITDA was $3.8 million, an increase of 0.3% compared to the prior year period.  Sequentially, Adjusted EBITDA margins were 14.1%, versus 14.2% and 9.6% in the prior two quarters since the Kecy acquisition.  Overall, while the Company continues to execute on its integration and cost reduction strategies, margins during the quarter were impacted by several factors, including: (i.) a reduction in inventory levels at AFT to improve working capital efficiency; (ii.) changes in the Company's direct workforce versus contract labor staffing levels; (iii.) continued investment into 3DMT's proprietary Additive Manufacturing technology and services; and (iv.) continued investment in the Company's sales and marketing efforts.

Last quarter, the Company began the implementation of an extensive margin enhancement program throughout each of its operating units.  ARC expects to realize improved operational efficiencies and margins from these strategic initiatives, particularly as revenue returns to normalized levels.  Separately, recent indications from firearm customers, defense industry conferences, and other sector metrics, including FBI background checks, have suggested the firearm market has begun to stabilize and is poised for a potential rebound. 

Jason Young, Chairman and CEO, commented, "ARC remains in a transitional phase following our acquisitive prior fiscal year, and while we have faced modest short term weakness due to the slowdown in the firearms market, we remain optimistic about the long term prospects of our approach to advanced manufacturing through the strategic combination of additive and subtractive processes.  We believe our platform is differentiated, and offers our customers unique and comprehensive solutions to their manufacturing needs.  We also believe that as we fully integrate our offerings, we will be able to improve our margins and expand our revenue over time.  In the short run, some of our efforts require investment and productivity improvements, but long-term we believe we are developing proprietary technology that will give our customers innovative and compelling advantages."

GAAP to Non-GAAP Reconciliation

EBITDA, Adjusted EBITDA, EBITDA margin, and Adjusted EBITDA margin are non-GAAP financial measures.  EBITDA margin and Adjusted EBITDA margin are calculated by dividing EBITDA and Adjusted EBITDA, respectively, by sales.  We have provided this non-GAAP financial information to aid in better understanding the Company's performance absent these charges.  Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States.  The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.

The reconciliation to GAAP is as follows (dollars in thousands):


For the three months ended:

December 28,
2014


September 28,
2014


June 30,
2014


December 29,
2013

Net (Loss) Income (GAAP)

$         (2)


$           232


$          209


$    1,575


Plus: Interest Expense, Net

1,213


921


618


294


Plus: Income Taxes

237


153


(7)


690


Plus: Depreciation and Amortization

2,355


2,311


1,681


892

EBITDA (Non-GAAP)

$    3,803


$        3,617


2,501


$    3,451

EBITDA Margin (Non-GAAP)

14.0%


12.6%


10.6%


17.3%


Plus: Merger Expense

$         11


$           176


$         342


$          —


Plus: Other Non-Recurring Expenses


286




Plus: Reorganization expenses




351


Less: Gain on Early Extinguishment of Debt



(578)


Adjusted EBITDA (Non-GAAP)

$    3,814


$        4,079


$       2,265


$    3,802

Adjusted EBITDA Margin (Non-GAAP)

14.1%


14.2%


9.6%


19.1%


















1 | 2  Next Page »



Review Article Be the first to review this article
Featured Video
Latest Blog Posts
The Open Geospatial Consortium BlogThe OGC Blog
by The Open Geospatial Consortium Blog
Call For Participation: OGC Geotech Interoperability Experiment
Jobs
GIS Specialist for City of Ithaca at ithaca, New York
Mid-Level Landscape Architect/Designer for Studio-MLA at Los Angeles, California
ASIC Architects and Hardware Engineers at D. E. Shaw Research for D. E. Shaw Research at New York, New York
Director, Industrial Machinery Solutions- SISW PLM for Siemens AG at Livonia, Michigan
Upcoming Events
URISA's GIS & NG9-1-1 Task Force at United States - Feb 1, 2022 - Dec 31, 1969
URISA LEAP Conference at United States - Feb 1 - 3, 2022
Geo Week 2022 at Denver CO - Feb 6 - 8, 2022
Small Satelite Symposium at Silicon Valley Mountain View CA - Feb 8, 2022 - Dec 31, 1969



© 2022 Internet Business Systems, Inc.
670 Aberdeen Way, Milpitas, CA 95035
+1 (408) 882-6554 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering EDACafe - Electronic Design Automation TechJobsCafe - Technical Jobs and Resumes  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy PolicyAdvertise