ARC Group Worldwide, Inc., a leading global provider of advanced manufacturing solutions including Metal Injection Molding and Additive Manufacturing, has announced its fiscal year 2014 (June 30, 2014) results and preliminary fiscal first quarter 2015 (September 28, 2014) revenue results.
Overall fiscal year 2014 results represent a record year of performance for ARC. Sales for the year were $82.9 million, reflecting 21.0% growth over fiscal year 2013. The company states that the strength in its sales largely reflects the robust demand across the high growth markets served, including the medical/dental, aerospace, automotive and firearm/defence industries. Gross profit was $24.2 million, an increase of 32.2% over the prior year period.
Adjusted EBITDA was $13.7 million for the year, an increase of 42.7% over the prior year period. Adjusted EBITDA margins improved to 16.5% from 14.0%, year over year. Adjusted Earnings were $5.5 million, an increase of 27.9%, and adjusted EPS was $0.38 per share, an increase of 22.6%.
Fiscal year Q4 operating results
Fiscal year fourth quarter 2014 revenue was $23.7 million, an increase of 21.5% compared to the prior year period. The increase, stated ARC, was largely the product of acquisitions completed during the period. The modest organic sales growth reflects a recent slowdown in the firearm/defence industry and the sales cycle inherent in the overall business. Given the nature of the production cycle, the company regularly experiences ‘non-linear’ quarterly orders. Gross profit for the period was $5.8 million, an increase of 3.6% compared to the prior year period. Adjusted EBITDA was $2.2 million, a decline of 38.9% over the prior year period.
Q1 2015 preview
Based on preliminary results for the first quarter ended September 28, 2014, ARC expects record sales of approximately $28 million, an increase of over 50% compared to the first fiscal quarter of 2014. The increase in sales is again attributed to ARC’s recent acquisitions.
Jason Young, Chairman and CEO, commented, “We are pleased to report strong annual results. We believe our holistic strategy of combining additive and subtractive manufacturing, along with the implementation of technology in traditional manufacturing, will continue to position ARC as an ideal supplier to our customer base, while helping clients accelerate their speed-to-market.”
Young further added, “On the heels of three record quarters, we are not surprised by the more modest organic sales results of the fourth quarter. Also, as we experienced with the Advance Forming Technologies (AFT) acquisition, the first several quarters post acquisition tend to lag as we incur upfront costs and the combined companies implement procedures and processes geared towards long-term improvement. Now two years since the AFT acquisition, we have more than doubled EBITDA at those facilities.”
Young continued, “ARC’s fiscal 2012 total annual revenue was approximately $30 million. Two years later, we are approaching that level of revenue in only three months based on our preliminary 2015 fiscal first quarter results. As such, we remain convinced in our market opportunity, business model, and strategy.”