ARC GROUP WORLDWIDE INC Exhibit 99.1
Highlights for the quarter ended December 27, 2015, compared sequentially to the quarter ended September 27, 2015:
Sales of $25.0 million, an increase of 2.2%; and
Adjusted EBITDA of $2.9 million, an increase of 8.4%.
Second fiscal quarter 2016 revenue was $25.0 million, a 2.2% increase sequentially, compared to the first fiscal quarter of 2016. The increase was due to early stages of momentum in several key market segments served by the Company, along with record metal 3D printing revenue. Adjusted EBITDA for the second fiscal quarter was $2.9 million, an 8.4% increase sequentially, compared to the first fiscal quarter of 2016. Adjusted EBITDA Margin increased to 11.5%, from 10.8% in the prior sequential quarter, reflecting greater operational efficiencies.
ARC has launched a new initiative in Mexico, which is expected to begin operations in the next several months. ARC Mexico should help the Company be more competitive in winning new North American business and improving margins.
Jason Young, Chairman and CEO, commented, "While we are encouraged by the positive sequential performance, we are still in the early stages of building momentum in sales. We remain focused on improving speed to market for our customers and helping them consolidate their supply chain with our holistic solution. Under our new sales leadership and focus, we believe we are making good progress educating our customers about our differentiated solution and expect to get continued traction over time. We are also encouraged by the growing demand for our metal 3D printing services, which we expect to be a major growth driver in the future."
EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Earnings and Adjusted Earnings Per Share are non-GAAP financial measures. EBITDA Margin and Adjusted EBITDA Margin are calculated by dividing EBITDA and Adjusted EBITDA, respectively, by sales. The Company has provided non-GAAP financial information to provide additional, meaningful comparisons of current results to prior periods' results by excluding items that the Company does not believe reflect its fundamental business performance and are not representative or indicative of its results of operations. 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):
December 27, | September 27, | June 30, | December 28, | ||||||
For the three months ended: | 2015 | 2015 | 2015 | 2014 | |||||
Net Loss | $ | (594) | $ | (441) | $ | (666) | $ | (2) | |
Interest Expense, Net | 1,126 | 1,141 | 1,248 | 1,213 | |||||
Income Taxes | (132) | (426) | 1,158 | 237 | |||||
Depreciation and Amortization | 2,388 | 2,362 | 2,402 | 2,355 | |||||
EBITDA | $ | 2,788 | $ | 2,636 | 4,142 | $ | 3,803 | ||
EBITDA Margin | 11.1 | % | 10.8 | % | 14.4 | % | 14.0 | % | |
Merger Expenses | - | - | - | 11 | |||||
Reorganization Expenses | 90 | 9 | - | - | |||||
Adjusted EBITDA | $ | 2,878 | $ | 2,645 | $ | 4,142 | 3,814 | ||
Adjusted EBITDA Margin | 11.5 | % | 10.8 | % | 14.4 | % | $ | 14.1 | % |
Net Loss | $ | (594) | $ | (441) | $ | (666) | $ | (2) | |
Merger Expenses | - | - | - | 11 | |||||
Reorganization Expenses | 90 | 9 | - | - | |||||
Adjusted Earnings | $ | (504) | $ | (432) | $ | (666) | $ | 9 | |
Adjusted Earnings Per Share | $ | (0.03) | $ | (0.02) | $ | (0.04) | $ | - | |
Weighted Average Common Shares Outstanding | 18,123,883 | 18,123,883 | 17,752,915 | 14,673,205 | |||||
EBITDA excludes interest expense, net and income taxes because these items are associated with our capitalization and tax structures. EBITDA also excludes depreciation and amortization expense because these non-cash expenses reflect the impact of prior capital expenditure decisions which may not be indicative of future capital expenditure requirements.
The Company defines Adjusted EBITDA as EBITDA plus merger expenses, other non-recurring expenses and reorganization expenses. Merger expenses are costs incurred to effectuate our acquisitions, such as advisory, legal and accounting fees. Other non-recurring expenses consist primarily of accounting and legal fees associated with our acquisitions and financing activities. Reorganization expenses are primarily labor and labor related costs associated with the termination of employees.
Adjusted Earnings removes the impact of merger expenses and reorganization expenses.
ARC Group Worldwide, Inc., is a leading global advanced manufacturing and 3D printing service provider. The Company offers its customers a compelling portfolio of advanced manufacturing technologies and cutting-edge capabilities to improve the efficiency of traditional manufacturing processes and accelerate their time to market. In addition to being a world leader inmetal injection molding, ARC has significant expertise in plastic andmetal 3D printing,precision stamping, traditional and clean roomplastic injection molding, advanced rapidtooling,thixomolding, lean manufacturing,antennas,hermetic seals, robotics, andflanges and forges.
Forward Looking StatementsThis press release may contain "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995, which are based on ARC's current expectations, estimates and projections about future events. These include, but are not limited to, statements, if any, regarding business plans, pro-forma statements and financial projections, ARC's ability to expand its services and realize growth. These statements are not historical facts or guarantees of future performance, events or results. Such statements involve potential risks and uncertainties, and the general effects of financial, economic, and regulatory conditions affecting our industries. Accordingly, actual results may differ materially. ARC does not have any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For further information on risks and uncertainties that could affect ARC's business, financial condition and results of operations, readers are encouraged to review Item 1A. - Risk Factors and all other disclosures appearing in ARC's Form 10-K for the fiscal year ended June 30, 2015 and Form 10-Q for the period ended September 27, 2015 as well as current reports on Form 8-K filed from time-to-time with the Securities and Exchange Commission.
Sales $ 25,028 $ 27,106 $ 49,517 $ 55,804
Cost of sales20,407 20,719 40,412 42,434
Gross profit 4,621 6,387 9,105 13,370
Selling, general and administrative 4,312 4,919 8,525 10,418 Merger expense- 11 - 187
Income from operations 309 1,457 580 2,765
Other income (expense), net 91 (9) 94 (11) Interest expense, net(1,126) (1,213) (2,267) (2,134)
(Loss) income before income taxes (726) 235 (1,593) 620
Income tax benefit (expense)132 (237) 558 (390) Net (loss) income (594) (2) (1,035) 230
Less: Net income attributable to non-controlling interest(35) (58) (64) (114) Net (loss) income attributable to ARC Group
$ (629) | $ (60) | $ (1,099) | $ 116 |
$ (0.03) | $ - | $ (0.06) | $ 0.01 |
Worldwide, Inc.
Net (loss) income per common share: Basic and diluted
Weighted average common shares outstanding:
Basic and diluted 18,123,883 14,673,205 18,123,883 14,673,205
ARC Group Worldwide Inc. issued this content on 09 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 09 February 2016 23:04:08 UTC
Original Document: http://www.arcgroupworldwide.com/resources/docs/PR/ARC%20Group%20Earnings%20Release%20Q2%202016.pdf
