ARC Group Worldwide Inc (NASDAQ:ARCW), a leading provider of advanced manufacturing and metal 3D printing solutions reported its results for the period ending April 1, 2018. The company had the sales of $21.5 million which is an increase of 16.9 percent while its gross profit was of $1.1 million, an increase of 398.9 percent. The … Continued
ARC Group Worldwide Inc (NASDAQ:ARCW), a leading provider of advanced manufacturing and metal 3D printing solutions reported its results for the period ending April 1, 2018.
The company had the sales of $21.5 million which is an increase of 16.9 percent while its gross profit was of $1.1 million, an increase of 398.9 percent. The company said that they had a cash flow of $1.3 million from operations which is an increase of 1,053.6 percent.
As quoted in the press release:
Fiscal third quarter 2018 revenue from continuing operations was $21.5 million, compared to $18.4 million in the prior sequential period. The increase in revenue was primarily driven by higher metal injection molding (“MIM”) and plastics sales, the combination of higher sales and orders by customers in the aerospace, medical, and firearm and defense markets. Separately, the Company’s international performance continues to improve as revenues from Hungarian operations increased 7.9% sequentially to $2.3 million.
Gross Profit from continuing operations was $1.1 million in the fiscal third quarter, compared to $(0.4) million in the previous sequential quarter. The aforementioned revenue growth, along with ongoing cost reduction initiatives, were the primary drivers of Gross Profit improvement. This improvement was achieved despite expenses of $1.3 million incurred due to planned, ongoing inventory reductions, primarily in our Colorado MIM entity.
EBITDA from Continuing Operations was $1.3 million in the fiscal third quarter compared to $(0.2) million in the prior sequential quarter. Similar to Gross Profit, EBITDA was positively impacted by the increased revenues and lower costs. These gains were partially offset by the aforementioned inventory reduction efforts of $1.3 million, which added additional expense in the third fiscal quarter.
Fiscal third quarter Cash Flow from Operations was $1.3 million, compared to $(0.1) million in the prior sequential quarter. The increase in Cash Flow from Operations was driven by a lower net loss coupled by modest improvement in working capital management.
At the end of the fiscal third quarter the debt level was $37.3 million, compared to $45.1 million in fiscal second quarter. The lower debt levels were due to the use of our Rights Offering proceeds coupled with our improved cash flow generation.
ARC’s CEO, Alan Quasha, commented, “While we still have a long way to go, we are making great progress. During our fiscal third quarter, we have seen a marked improvement over our prior quarter. Management’s focus on repositioning our sales team, cost reductions, and inventory efficiency efforts all have begun to show meaningful positive impacts. At the same time, we have begun to see some of our key, strategic customers in the defense and firearm industry return to more normal levels of demand. Despite the improving conditions both internally and externally, Management remains focused on returning the Company to profitability and improving cash flow generation by driving existing product revenue, increasing operational efficiency, and rightsizing the balance sheet. We expect to see continued progress over the coming quarters.”