MRO Magazine

Allied Motion Reports Earnings Increase of 16% For the Quarter Ended June 30, 2015

By Business Wire News   


Allied Motion Technologies Inc. (NASDAQ:AMOT) today announced net income increased 16% to $3,125,000 or $0.34 per diluted share for the quarter ended June 30, 2015 compared to $2,693,000 or $0.29 per diluted share for the quarter ended June 30, 2014. Revenues for the quarter declined 3% to $60,479,000 compared to $62,069,000 last year. The strength of the U.S. dollar against foreign currencies continued to have an impact on the reported results of the second quarter as well as for the year.

“The continued strength of the U.S. dollar poses a challenge in comparing our reported results on a true comparative basis to reflect the real change year over year. Without the strengthening of the US dollar, revenues for the second quarter of 2015 would have increased 5% and fully diluted earnings per share would have increased 30% compared to the same quarter in 2014, as measured in constant currency. Year to date, revenues would have increased 6% and fully diluted earnings per share would have increased 39% as compared to the same period in 2014, commented Dick Warzala, Chairman and CEO of Allied Motion. “For the quarter, we experienced growth in our Aerospace and Defense, Medical and Electronics markets. Our Vehicle markets were flat, while our Industrial and Distribution markets were down. As we move forward into the future, we will focus on improving internal operations efficiencies through the utilization of our Allied Systematic Tools and we will strive to enhance our growth opportunities through strategic acquisitions. We also believe the long term success of our Company will be further enhanced by executing our strategy and leveraging our full capabilities to design innovative “Motion Solutions That Change the Game” and meet the current and emerging needs of our customers in our served market segments.”

For the quarter, the overall decrease in revenue was due to a 5% volume increase, offset by an 8% unfavorable currency impact. The strengthening of the U.S. dollar against foreign currencies also continued to impact reported bookings when compared to the prior year. Bookings for the quarter ended June 30, 2015 were $64.5 million compared to $63.5 million for the second quarter of 2014 or an increase of 2%. The increase in bookings was 10% volume related, offset by an 8% currency impact. Backlog as of June 30, 2015 was $75.6 million compared to $80.8 million as of June 30, 2014, a decrease of 6% over the prior year. Of the 6% decrease in backlog, 2% was volume related and 4% was currency related. Bank debt net of cash at June 30, 2015 increased by $0.2 million to $61.9 million as compared to December 31, 2014, and showed a slight decrease when compared to March 31, 2015.

For the six months ended June 30, 2015, the Company achieved net income of $6,101,000 or $.66 per diluted share compared to net income of $4,841,000 or $.53 per diluted share for the same six month period last year. Revenues decreased 2% to $120,059,000 compared to $122,504,000 last year. This overall decrease in revenue was due to a 6% volume increase, offset by an 8% unfavorable currency impact. Bookings for the first six months this year were $122.7 million compared to $127.9 million for the same six months last year or a decrease of 4%. The decrease in bookings of 4% was due to a 4% volume increase offset by an 8% currency impact.

Headquartered in Amherst, NY, Allied Motion designs, manufactures and sells motion control products into applications that serve many industry sectors. Allied Motion is a leading supplier of precision and specialty motion control components and systems to a broad spectrum of customers throughout the world.

The statements in this press release and in the Company’s August 6, 2015 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 of the Company to differ materially from the forward-looking statements. The risks and uncertainties include those associated with the present economic circumstances in the United States and throughout Europe, general business and economic conditions in the Company’s motion markets, introduction of new technologies, products and competitors, the ability to protect the Company’s intellectual property, the ability of the Company to sustain, manage or forecast its growth and product acceptance, success of new corporation strategies and implementation of defined critical issues designed for growth and improvement in profits, the continued success of the Company’s customers to allow the Company to realize revenues from its order backlog and to support the Company’s expected delivery schedules, the continued viability of the Company’s customers and their ability to adapt to changing technology and product demand, the loss of significant customers or enforceability of the Company’s contracts in connection with a merger, acquisition, disposition, bankruptcy, or otherwise, the ability of the Company to meet the technical specifications of its customers, the continued availability of parts and components, increased competition and changes in competitor responses to the Company’s products and services, changes in government regulations, availability of financing, the ability of the Company’s lenders and financial institutions to provide additional funds if needed for operations or for making future acquisitions or the ability of the Company to obtain alternate financing if present sources of financing are terminated, the ability to attract and retain qualified personnel who can design new applications and products for the motion industry, the ability of the Company to identify and consummate favorable acquisitions to support external growth and new technology, the ability of the Company to successfully integrate an acquired business into the Company’s business model without substantial costs, delays, or problems, the ability of the Company to establish low cost region manufacturing and component sourcing capabilities, and the ability of the Company to control costs, including relocation costs, for the purpose of improving profitability. The Company’s ability to compete in this market depends upon its capacity to anticipate the need for new products, and to continue to design and market those products to meet customers’ needs in a competitive world. 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. 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.

For the three months ended For the six months ended
June 30, June 30,
HIGHLIGHTS OF OPERATING RESULTS           2015       2014 2015       2014
Revenues $     60,479 $     62,069 $     120,059 $     122,504
Cost of goods sold       42,492         43,501         84,572         86,844  
Gross margin 17,987 18,568 35,487 35,660
Operating costs and expenses:
Selling expenses 2,063 2,232 4,271 4,342
General and administrative expenses 5,822 6,709 11,375 12,925
Engineering and development expenses 3,707 3,472 7,153 6,989
Amortization of intangible assets       660         670         1,322         1,348  
Total operating costs and expenses 12,252 13,083 24,121 25,604
Other expense (income):
Interest expense 1,511 1,649 3,026 3,287
Other income, net       (19 )       53         (285 )       (299 )
Income before income taxes 4,243 3,783 8,625 7,068
Provision for income taxes       (1,118 )       (1,090 )       (2,524 )       (2,227 )
Net income $     3,125   $     2,693   $     6,101   $     4,841  
Diluted earnings per share $     0.34   $     0.29   $     0.66   $     0.53  
Diluted weighted average common shares       9,264         9,152         9,225         9,136  
June 30, December 31,
CONDENSED BALANCE SHEETS         2015       2014
Current Assets:
Cash and cash equivalents $     11,336 $     13,113
Trade receivables, net 32,571 27,745
Inventories, net 25,998 25,371
Other current assets       4,665       4,555
Total Current Assets 74,570 70,784
Property, plant and equipment, net 36,173 37,041
Deferred income taxes 2,515 2,723
Intangible assets, net 31,327 32,791
Goodwill 17,840 18,303
Other long-term assets, net       4,395       3,998
Total Assets $     166,820 $     165,640
Liabilities and Stockholders’ Equity
Current Liabilities:
Debt obligations $ 9,884 $ 7,723
Accounts payable 16,754 15,510
Accrued liabilities       10,646       12,723
Total Current Liabilities 37,284 35,956
Long-term debt 63,375 67,125
Deferred income taxes 1,129 1,299
Other long-term liabilities       5,866       5,309
Total Liabilities 107,654 109,689
Stockholders’ Equity       59,166       55,951
Total Liabilities and Stockholders’ Equity $     166,820 $     165,640
For the six months ended
June 30,
Cash flows from operating activities:      
Net income $     6,101 $     4,841
Depreciation and amortization 3,665 3,481
Other 1,750 2,808
Changes in working capital       (7,917 )       (4,772 )
Net cash provided by operating activities 3,599 6,358
Cash flows from investing activities:
Purchase of property and equipment (2,708 ) (1,571 )
Proceeds from working capital adjustment on acquisition               1,399  
Net cash used in investing activities (2,708 ) (172 )
Cash flows from financing activities:
Borrowings on lines-of-credit, net 1,398 (2,591 )
Principal payments of long-term debt (3,000 ) (2,500 )
Dividends paid to stockholders (465 ) (499 )
Stock transactions under employee benefit stock plans       223         304  
Net cash used in financing activities (1,844 ) (5,286 )
Effect of foreign exchange rate changes on cash       (824 )       (83 )
Net (decrease) increase in cash and cash equivalents (1,777 ) 817
Cash and cash equivalents at beginning of period       13,113         10,171  
Cash and cash equivalents at end of period $     11,336   $     10,988  

Reconciliation of Non-GAAP Financial Measures

The Company believes EBITDA is often a useful measure of a Company’s operating performance and is a significant basis used by the Company’s management to measure the operating performance of the Company’s business because EBITDA excludes charges for depreciation and amortization, and interest expense resulting from our debt financings, as well as our provision for income tax expense. EBITDA is frequently used as one of the bases for comparing businesses in the Company’s industry. 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 EBITDA for the three and six months ended June 30, 2015 and 2014 is as follows (in thousands):

For the three months ended For the six months ended
June 30, June 30,
            2015       2014       2015         2014
Net income $     3,125       $     2,693 $     6,101         $     4,841
Interest expense 1,511 1,649 3,026 3,287
Provision for income tax 1,118 1,090 2,524 2,227
Depreciation and amortization               1,858               1,793             3,665               3,481
EBITDA $     7,612         $     7,225       $     15,316         $     13,836

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 for entities reporting in currencies other than US dollars. Constant currency results are calculated by translating current period results in local currency using the prior year’s currency conversion rate.

For the three months ended For the six months ended
June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014

$ in

% increase
compared to
prior year


$ in

$ in

% increase
compared to
prior year

$ in

2015 revenues, as reported $       60,479 -3% $     62,069 $     120,059 -2% $   122,504
Currency impact         5,031 8%             9,407 8%    
2015 revenues,
at 2014 exchange rates $       65,510 5% $     62,069 $     129,466 6% $   122,504
Net income
2015 net income, as reported $ 3,125 16% $ 2,693 $ 6,101 26% $ 4,841
Currency impact         366 14%             677 14%    
2015 net income,
at 2014 exchange rates $       3,491 30% $     2,693 $     6,778 40% $   4,841
Earnings per share
2015 earnings per share,
as reported $ 0.34 16% $ 0.29 $ 0.66 25% $ 0.53
Currency impact         0.04 14%             0.07 14%    
2015 earnings per share,
at 2014 exchange rates $       0.38 30% $     0.29 $     0.73 39% $   0.53

Allied Motion Technologies Inc.
Robert Maida or Sue Chiarmonte


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