Earnings per diluted share up 16%
AMHERST, N.Y.--(BUSINESS WIRE)--May 3, 2017--
Allied
Motion Technologies Inc. (NASDAQ:AMOT) (“Company”), a global
designer and manufacturer of motion control products and solutions,
today reported financial results for the first quarter ended March 31,
2017.
“Cost discipline and the effectiveness of our refinancing last year
enabled net income growth on moderately softer revenue,” commented Dick
Warzala, Chairman and CEO of Allied Motion. “With regard to our markets,
on a trailing twelve-month basis, our Aerospace & Defense, Medical, and
Industrial/Electronics increased while our Vehicle markets were down due
to weakness and end-of-life in certain applications.”
Mr. Warzala concluded, “We are making solid strides with our
multi-product, fully integrated solutions that are leading to awards
such as the Vehicle market win just recently announced. For
customer-specific Vehicle applications, the sales cycles can be quite
long and the time from being selected for the solution to full rate
production can be upwards of 3 to 4 years, yet, we are building a
scalable foundation which can deliver strong returns on our investments.
Importantly, we also continue to build a pipeline of exciting
market-based, as well as customer-specific, application opportunities.”
First Quarter 2017 Results (Narrative compares with prior-year
period unless otherwise noted)
Revenue was $61.4 million, down $2.3 million, or 3.6%. Sales to U.S.
customers were 54% of total sales for the quarter compared with 55% for
the same period last year, with the balance of sales to customers
primarily in Europe, Canada and Asia. Excluding the unfavorable effects
of foreign currency exchange (FX), first quarter revenue was $62.5
million, down $1.2 million, or 2%, from the prior-year period.
Gross profit was $17.7 million, or 28.9% of revenue, compared with $18.5
million, 29.1% of revenue. The 20 basis point decline in gross margin
was due to lower volume, product mix and under absorption of costs in
certain production facilities.
Total operating costs and expenses decreased $0.4 million, or 3.0%, to
$13.3 million. G&A expenses declined 10.3%, or $0.7 million, to $5.7
million due to lower incentive and deferred compensation costs and
disciplined expense management. Engineering and development (“E&D”) was
up 3.5%, or $0.1 million, to $4.2 million and increased as a percent of
revenue to 6.8% from 6.4%. The modest increase in E&D investments were
focused on customized motion solutions for customers. As a percent of
sales, selling expenses were up 40 basis points to 4.2%, and reflected
the addition of new sales management and other personnel additions. The
$0.1 million in business development costs in the 2016 first quarter was
from the Heidrive acquisition.
As a result, first quarter operating income was $4.4 million compared
with $4.8 million, or as a percent of revenue, down 40 basis points to
7.1%.
Given the lower cost of debt with the new credit facility in 2016,
interest expense decreased $1.0 million, or nearly 66%, to $0.5 million.
The effective tax rate in the first quarter was 31.0%. The Company
anticipates its effective tax rate for 2017 to be approximately 29% to
32%. Net income for the quarter was up 12.8%, or $0.3 million, to $2.7
million. On a per share basis, net income increased $0.04, to $0.29 per
diluted share.
Earnings before interest, taxes, depreciation, amortization, stock
compensation expense, and business development costs (“Adjusted EBITDA”)
was $7.3 million compared with $7.6 million in the prior-year period. As
a percent of sales, Adjusted EBITDA decreased 10 basis points to 11.9%.
The Company believes that, when used in conjunction with measures
prepared in accordance with U.S. generally accepted accounting
principles, Adjusted EBITDA, which is a non-GAAP measure, helps in the
understanding of its operating performance. See the attached tables
for a description of non-GAAP financial measures and reconciliation
tables for Constant Currency and Adjusted EBITDA.
Balance Sheet and Cash Flow Review
Cash and cash equivalents at the end of the first quarter were $14.0
million compared with $15.5 million at the end of 2016. Cash provided by
operations was $2.3 million compared with $6.9 million of cash used in
operations during the first quarter of 2016.
Capital expenditures of $1.3 million included productivity and growth
initiatives. Debt was reduced by approximately $3 million, using cash
generated from operations and cash on hand, to $68.5 million at
quarter-end compared with $71.4 million at year-end 2016. Debt, net of
cash, was $54.5 million, or 41.6% of net debt to capitalization. Capital
expenditures in 2017 are expected to be somewhat similar to 2016, at
approximately $5 million to $6 million.
|
Orders and Backlog Summary ($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2017
|
|
|
Q4 2016
|
|
|
Q3 2016
|
|
|
Q2 2016
|
|
|
Q1 2016
|
|
Orders
|
|
|
$
|
60,459
|
|
|
$
|
56,543
|
|
|
$
|
59,088
|
|
|
$
|
68,347
|
|
|
$
|
66,391
|
|
Backlog
|
|
|
$
|
77,954
|
|
|
$
|
78,602
|
|
|
$
|
77,683
|
|
|
$
|
80,742
|
|
|
$
|
81,704
|
The sequential quarterly increase in orders was mostly the result of
strength in the Company’s Aerospace & Defense market. The decrease in
orders and backlog in the first quarter compared with the prior-year
period reflect softness in the Company’s Vehicle market, including
timing of customer requirements. Excluding the negative $1.0 million
impact of FX, orders were $61.5 million in the 2017 first quarter.
Conference Call and Webcast
The Company will host a conference call and webcast on Thursday, May 4,
2017 at 10:00 am ET. During the conference call, management will review
the financial and operating results and discuss Allied Motion’s
corporate strategy and outlook. A question and answer session will
follow.
To listen to the live call, participants can dial (778) 327-3988. In
addition, the call will be webcast live and may be found at: http://www.alliedmotion.com/investors
A telephonic replay will be available from 1:00 pm ET on the day of the
call through Thursday, May 11, 2017. To listen to the archived call,
dial (412)-317-6671 and enter replay pin number 10002771 or access the
webcast replay via the Company’s website. A transcript will also be
posted to the website once available.
About Allied Motion Technologies Inc.
Allied Motion (NASDAQ: AMOT), designs, manufactures and sells precision
and specialty motion control components and systems used in a broad
range of industries within our major served markets, which include
Vehicle, Medical, Aerospace & Defense, and Industrial/Electronics. The
Company is headquartered in Amherst, NY, has global operations and sells
into markets across the United States, Canada, South America, Europe and
Asia.
Allied Motion is focused on motion control applications and is known
worldwide for its expertise in electro-magnetic, mechanical and
electronic motion technology. Its products include brush and brushless
DC motors, brushless servo and torque motors, coreless DC motors,
integrated brushless motor-drives, gear motors, gearing, modular digital
servo drives, motion controllers, incremental and absolute optical
encoders, and other associated motion control-related products.
The Company’s growth strategy is focused on becoming the motion solution
leader in its selected target markets by leveraging its “technology/know
how” to develop integrated precision motion solutions that utilize
multiple Allied Motion technologies to “change the game” and create
higher value solutions for its customers. The Company routinely posts
news and other important information on its website at http://www.alliedmotion.com/.
Safe Harbor Statement
The statements in this news release and in the Company’s May 4, 2017
conference call that relate to future plans, events or performance are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements
include, without limitation, any statement that may predict, forecast,
indicate, or imply future results, performance, or achievements, and may
contain the word “believe,” “anticipate,” “expect,” “project,” “intend,”
“will continue,” “will likely result,” “should” or words or phrases of
similar meaning. Forward-looking statements involve known and unknown
risks and uncertainties that may cause actual results to differ
materially from the expected results described in the forward-looking
statements. The risks and uncertainties include those associated with:
the domestic and foreign general business and economic conditions in the
markets we serve, including political and currency risks and adverse
changes in local legal and regulatory environments; the introduction of
new technologies and the impact of competitive products; the ability to
protect the Company’s intellectual property; our ability to sustain,
manage or forecast its growth and product acceptance to accurately align
capacity with demand; the continued success of our customers and the
ability to realize the full amounts reflected in our order backlog as
revenue; the loss of significant customers or the enforceability of the
Company’s contracts in connection with a merger, acquisition,
disposition, bankruptcy, or otherwise; our ability to meet the technical
specifications of our customers; the performance of subcontractors or
suppliers and the continued availability of parts and components;
changes in government regulations; the availability of financing and our
access to capital markets, borrowings, or financial transactions to
hedge certain risks; the Company's ability to realize the annual
interest expense savings from its debt refinancing; the ability to
attract and retain qualified personnel who can design new applications
and products for the motion industry; the ability to implement our
corporate strategies designed for growth and improvement in profits
including to identify and consummate favorable acquisitions to support
external growth and the development of new technologies; the ability to
successfully integrate an acquired business into our business model
without substantial costs, delays, or problems; our ability to control
costs, including the establishment and operation of low cost region
manufacturing and component sourcing capabilities; and other risks and
uncertainties detailed from time to time in the Company’s SEC filings.
Actual results, events and performance may differ materially. Readers
are cautioned not to place undue reliance on these forward-looking
statements as a prediction of actual results. Any forward-looking
statement speaks only as of the date on which it is made. New risks and
uncertainties arise over time, and it is not possible for us to predict
the occurrence of those matters or the manner in which they may affect
us. The Company has no obligation or intent to release publicly any
revisions to any forward looking statements, whether as a result of new
information, future events, or otherwise.
FINANCIAL TABLES FOLLOW
|
ALLIED MOTION TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
For the three months ended
|
|
|
|
|
March 31,
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
61,354
|
|
|
$
|
63,675
|
|
|
Cost of goods sold
|
|
|
|
43,653
|
|
|
|
45,170
|
|
|
Gross margin
|
|
|
|
17,701
|
|
|
|
18,505
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
Selling
|
|
|
|
2,603
|
|
|
|
2,424
|
|
|
General and administrative
|
|
|
|
5,749
|
|
|
|
6,409
|
|
|
Engineering and development
|
|
|
|
4,191
|
|
|
|
4,050
|
|
|
Business development
|
|
|
|
-
|
|
|
|
83
|
|
|
Amortization of intangible assets
|
|
|
|
793
|
|
|
|
779
|
|
|
Total operating costs and expenses
|
|
|
|
13,336
|
|
|
|
13,745
|
|
|
Operating income
|
|
|
|
4,365
|
|
|
|
4,760
|
|
|
Other expense (income):
|
|
|
|
|
|
|
Interest expense
|
|
|
|
523
|
|
|
|
1,532
|
|
|
Other expense, net
|
|
|
|
(10
|
)
|
|
|
15
|
|
|
Total other expense, net
|
|
|
|
513
|
|
|
|
1,547
|
|
|
Income before income taxes
|
|
|
|
3,852
|
|
|
|
3,213
|
|
|
Provision for income taxes
|
|
|
|
(1,195
|
)
|
|
|
(858
|
)
|
|
Net income
|
|
|
$
|
2,657
|
|
|
$
|
2,355
|
|
|
|
|
|
|
|
|
|
Basic earnings per share:
|
|
|
|
|
|
|
Earnings per share
|
|
|
$
|
0.29
|
|
|
$
|
0.25
|
|
|
Basic weighted average common shares
|
|
|
|
9,068
|
|
|
|
9,273
|
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
Earnings per share
|
|
|
$
|
0.29
|
|
|
$
|
0.25
|
|
|
Diluted weighted average common shares
|
|
|
|
9,229
|
|
|
|
9,273
|
|
|
|
|
|
|
|
|
|
|
|
ALLIED MOTION TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
December 31, 2016
|
|
Assets
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
14,048
|
|
|
|
$
|
15,483
|
|
|
Trade receivables, net of allowance for doubtful accounts of $367
|
|
|
|
|
|
|
|
|
and $362 at March 31, 2017 and December 31, 2016, respectively
|
|
|
|
|
31,035
|
|
|
|
|
26,104
|
|
|
Inventories
|
|
|
|
|
30,862
|
|
|
|
|
31,098
|
|
|
Prepaid expenses and other assets
|
|
|
|
|
3,044
|
|
|
|
|
3,120
|
|
|
Total current assets
|
|
|
|
|
78,989
|
|
|
|
|
75,805
|
|
|
Property, plant and equipment, net
|
|
|
|
|
37,370
|
|
|
|
|
37,474
|
|
|
Deferred income taxes
|
|
|
|
|
845
|
|
|
|
|
923
|
|
|
Intangible assets, net
|
|
|
|
|
33,576
|
|
|
|
|
34,252
|
|
|
Goodwill
|
|
|
|
|
27,740
|
|
|
|
|
27,522
|
|
|
Other long term assets
|
|
|
|
|
3,906
|
|
|
|
|
3,943
|
|
|
Total assets
|
|
|
|
$
|
182,426
|
|
|
|
$
|
179,919
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Debt obligations
|
|
|
|
|
943
|
|
|
|
|
936
|
|
|
Accounts payable
|
|
|
|
|
14,605
|
|
|
|
|
13,204
|
|
|
Accrued liabilities
|
|
|
|
|
10,520
|
|
|
|
|
10,678
|
|
|
Total current liabilities
|
|
|
|
|
26,068
|
|
|
|
|
24,818
|
|
|
Long-term debt
|
|
|
|
|
67,592
|
|
|
|
|
70,483
|
|
|
Deferred income taxes
|
|
|
|
|
3,295
|
|
|
|
|
3,266
|
|
|
Pension and post-retirement obligations
|
|
|
|
|
4,220
|
|
|
|
|
4,381
|
|
|
Other long term liabilities
|
|
|
|
|
4,834
|
|
|
|
|
4,685
|
|
|
Total liabilities
|
|
|
|
|
106,009
|
|
|
|
|
107,633
|
|
|
Stockholders’ Equity:
|
|
|
|
|
|
|
|
|
Common stock, no par value, authorized 50,000 shares; 9,471
|
|
|
|
|
|
|
|
and 9,374 shares issued and outstanding at March 31, 2017
and
December 31, 2016, respectively
|
|
|
|
|
30,621
|
|
|
|
|
29,503
|
|
|
Preferred stock, par value $1.00 per share, authorized 5,000 shares;
|
|
|
|
|
|
|
|
|
no shares issued or outstanding
|
|
|
|
|
|
|
|
-
|
|
|
Retained earnings
|
|
|
|
|
57,211
|
|
|
|
|
54,786
|
|
|
Accumulated other comprehensive loss
|
|
|
|
|
(11,415
|
)
|
|
|
|
(12,003
|
)
|
|
Total stockholders’ equity
|
|
|
|
|
76,417
|
|
|
|
|
72,286
|
|
|
Total Liabilities and Stockholders’ Equity
|
|
|
|
$
|
182,426
|
|
|
|
$
|
179,919
|
|
|
|
|
|
|
|
|
|
ALLIED MOTION TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
Cash Flows From Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
2,657
|
|
|
|
$
|
2,355
|
|
|
Adjustments to reconcile net income to net cash provided by (used in)
|
|
|
|
|
|
|
|
|
|
operating activities (net of working capital acquired in 2016):
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
2,450
|
|
|
|
|
2,270
|
|
|
Deferred income taxes
|
|
|
|
|
|
(48
|
)
|
|
|
|
96
|
|
|
Stock compensation expense
|
|
|
|
|
|
466
|
|
|
|
|
513
|
|
|
Debt issue cost amortization recorded in interest expense
|
|
|
|
|
|
37
|
|
|
|
|
-
|
|
|
Other
|
|
|
|
|
|
248
|
|
|
|
|
(217
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
|
|
|
(4,768
|
)
|
|
|
|
(6,423
|
)
|
|
Inventories
|
|
|
|
|
|
221
|
|
|
|
|
(16
|
)
|
|
Prepaid expenses and other assets
|
|
|
|
|
|
150
|
|
|
|
|
(484
|
)
|
|
Accounts payable
|
|
|
|
|
|
1,302
|
|
|
|
|
(748
|
)
|
|
Accrued liabilities
|
|
|
|
|
|
(383
|
)
|
|
|
|
(4,261
|
)
|
|
Net cash provided by (used in) operating activities
|
|
|
|
|
|
2,332
|
|
|
|
|
(6,915
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Investing Activities:
|
|
|
|
|
|
|
|
|
|
Consideration paid for acquisition, net of cash acquired ($2,329)
|
|
|
|
|
|
-
|
|
|
|
|
(17,000
|
)
|
|
Purchase of property and equipment
|
|
|
|
|
|
(1,288
|
)
|
|
|
|
(984
|
)
|
|
Net cash used in investing activities
|
|
|
|
|
|
(1,288
|
)
|
|
|
|
(17,984
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Financing Activities:
|
|
|
|
|
|
|
|
|
|
Borrowings on lines-of-credit, net
|
|
|
|
|
|
-
|
|
|
|
|
10,859
|
|
|
Principal payments of long-term debt
|
|
|
|
|
|
(3,000
|
)
|
|
|
|
(1,875
|
)
|
|
Dividends paid to stockholders
|
|
|
|
|
|
(228
|
)
|
|
|
|
(224
|
)
|
|
Stock transactions under employee benefit stock plans
|
|
|
|
|
|
628
|
|
|
|
|
811
|
|
|
Net cash (used in) provided by financing activities
|
|
|
|
|
|
(2,600
|
)
|
|
|
|
9,571
|
|
|
Effect of foreign exchange rate changes on cash
|
|
|
|
|
|
121
|
|
|
|
|
366
|
|
|
Net decrease in cash and cash equivalents
|
|
|
|
|
|
(1,435
|
)
|
|
|
|
(14,962
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
|
15,483
|
|
|
|
|
21,278
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
|
$
|
14,048
|
|
|
|
$
|
6,316
|
|
|
|
|
|
|
|
|
|
|
|
|
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ALLIED MOTION TECHNOLOGIES INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands)
In addition to reporting net income, a U.S. generally accepted
accounting principle (“GAAP”) measure, the Company presents Adjusted
EBITDA (earnings before interest, income taxes, depreciation and
amortization, stock compensation expense, and business development
costs), which is a non-GAAP measure. The Company believes Adjusted
EBITDA is often a useful measure of a Company’s operating performance
and is a significant basis used by the Company’s management to evaluate
and compare the core operating performance of its business from period
to period by removing the impact of the capital structure (interest),
tangible and intangible asset base (depreciation and amortization),
taxes, stock-based compensation expense, business development costs
related to acquisitions, and other items that are not indicative of the
Company’s core operating performance. Adjusted EBITDA does not represent
and should not be considered as an alternative to net income, operating
income, net cash provided by operating activities or any other measure
for determining operating performance or liquidity that is calculated in
accordance with generally accepted accounting principles.
The Company’s calculation of Adjusted EBITDA for the three months ended
March 31, 2017 and 2016 is as follows:
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Three months ended
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March 31,
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2017
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2016
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Net income
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$
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2,657
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$
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2,355
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Interest expense
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523
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1,532
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Provision for income tax
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1,195
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858
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Depreciation and amortization
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2,450
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2,270
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EBITDA
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6,825
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7,015
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Stock compensation expense
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466
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513
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Business development costs
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-
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83
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Adjusted EBITDA
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$
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7,291
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$
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7,611
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Constant Currency Presentation
The Company believes constant currency information provides valuable
supplemental information that facilitates period-to-period comparisons
of the company's business performance. The constant currency
presentation, which is a non-GAAP measure, excludes the impact of
fluctuations in foreign currency exchange rates. Constant currency
results are calculated by translating current period results in local
currency using the prior year's currency conversion rate. The following
table reconciles reported amounts to constant currency amounts for the
three months ended March 31, 2017.
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Three months ended
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March 31, 2017
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$ in thousands
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% increase (decrease)
compared with prior
year
amounts
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Revenue
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2017 revenue, as reported
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$
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61,354
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-3.6
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%
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Currency impact
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1,123
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1.8
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%
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2017 revenue, at 2016 exchange rates
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$
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62,477
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-1.8
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%
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View source version on businesswire.com: http://www.businesswire.com/news/home/20170503006651/en/
Source: Allied Motion Technologies Inc.
Allied Motion Technologies Inc.
Sue Chiarmonte, 716-242-8634 x602
sue.chiarmonte@alliedmotion.com
or
Investors:
Kei
Advisors LLC
Deborah K. Pawlowski, 716-843-3908
dpawlowski@keiadvisors.com
