ARC Group Worldwide, Inc., DeLand, Florida, has reported the results for its first fiscal quarter 2019, ending September 30, 2018. Fiscal first quarter 2019 revenue was reported at $20.6 million, compared to $19.1 million for the fiscal first quarter 2018. This increase in revenue was primarily driven by higher Metal Injection Moulding and plastics component sales, due to the combination of higher sales with higher order volumes in the aerospace, medical and firearms and defence markets.
Fiscal first quarter 2019 gross profit was reported to be $3.1 million, compared to a gross profit of $1.2 million in the company’s fiscal first quarter 2018. This increase was said to be primarily the result of cost reduction initiatives completed during the fiscal year 2018 and the company’s continued diversification into higher margin aerospace and medical parts sales.
The effectiveness of cost reduction initiatives were said to be visible in both the Precision Components Group and Stamping Group, as sales increased by approximately $1.5 million in fiscal first quarter 2019 over fiscal first quarter 2018; however, gross profit increased by approximately $1.9 million over the same periods. Contributing to the increase in gross profit was an adjustment decreasing cost of sale by $1.0 million for an out-of-period adjustment identified during fiscal first quarter 2019 and recorded in the same period.
ARC Group stated that its planned sale of the 3D Material Technologies (3DMT) division has been progressing as expected. Management presentations have begun to be made to interested parties and, based on current projections, the company expects to sell 3DMT before the end of the third-quarter fiscal year 2019, with the funds being used to pay down debt.
Alan Quasha, ARC’s CEO, commented, “I am pleased that the company continues on its path to increased profitability, particularly as compared to the prior year. We expect this trend to continue. Our first quarter of fiscal year 2019 has vastly improved over our first quarter of fiscal 2018, with sales up $1.5 million and gross profit and EBITDA up approximately $2 million. We have been able to grow in an efficient and targeted manner while improving our bottom line.”
“The previous shift in internal goals will continue to focus our core divisions on making sound business decisions that lead to profitable growth for our future. The quarterly results demonstrate progress towards these goals, and illustrate how we are driving the company forward,” he continued.