HEBEI, China, May 9 /PRNewswire-FirstCall/
-- American Metal & Technology, Inc. (OTC Bulletin Board:
AMGY -
News;
"American Metal," the "Company"), a leading manufacturer in the
People's Republic of China engaged in the development, manufacture
and sale of high-precision metal casting and metal fabrication
products to European and U.S. markets and microprocessor-controlled
electronic circuit boards in China, today announced its financial
results for the first quarter ended March 31, 2008.
First Quarter 2008 Highlights
-- Net sales increased 133.3% year-over-year to $4.9 million
-- Gross profit increased 121.6% year-over-year to $1.5 million
-- Net income increased 161.3% year-over-year to $1.0 million, or
$0.11 per diluted share
-- Increased production capacity through the addition of nine high-
precision lathe machines
First Quarter 2008 Results
In the first quarter of 2008, net
sales increased 133.3% to $4.9 million from $2.1 million a year ago.
The increase resulted from increased capacity during the quarter via
the addition of nine new precision lathe machines, which allowed the
Company to fill additional orders. Six of the machines were
operational at the beginning of the quarter, while the remaining
three machines entered service in March.
"We are extremely pleased with our
progress during the quarter, in which we achieved an optimal
combination of high efficiency, excellent gross margin and a
favorable mix of orders for metal casting and machining," said Mr.
Chen Gao, Chairman and Chief Executive Officer of American Metal.
"We continued to expand capacity during the quarter, which allowed
us to fulfill additional orders from our existing customers."
Gross profit during the quarter was
$1.5 million, up 121.6% from gross profit of $0.7 million a year ago
because of the increased production levels. Customers continued to
increase their orders for cast parts, requiring the Company to
purchase metals for casting before machining the parts. Parts that
are both machined and cast by the Company typically yield a higher
dollar margin but a lower percentage. The mix of cast parts and
machining-only orders varies from quarter to quarter, resulting in
variations in gross margin but overall increases in gross profit.
Operating expenses for the quarter
declined as a percentage of sales, to $0.5 million, or 10.2% of net
sales, from $0.3 million, or 13.0% of net sales, in the first
quarter of 2007. Operating expenses included several one-time
expenses related to the ongoing second phase of the Company's
capacity expansion, as it continued to upgrade equipment at its
manufacturing facility in Hebei, China, and added employees to
operate the new machines.
Operating income increased 146.5%
to $1.0 million, or 19.7% of sales, from $0.4 million, or 18.9% of
sales, during the same quarter the prior year.
Net income for the first quarter of
2008 increased 161.3% to $1.0 million, or $0.11 per diluted share,
from net income of $0.4 million, or $0.05 per diluted share, for the
first quarter of 2007. Earnings per share for the first quarter of
2007 have been adjusted for a 1-for-150 reverse stock split,
effective December 3, 2007.
Financial Condition
As of March 31, 2008, American
Metal had cash and cash equivalents of $6.8 million, working capital
of $9.2 million, no long-term debt and shareholders' equity of $13.2
million. During the first quarter of 2008, the Company generated
$0.6 million in cash from operations, compared to $0.1 million in
the same quarter the prior year.
Recent Events
In February 2008, the Company
announced plans to invest $3 million to build additional facilities
at its Langfang manufacturing center. The new facilities mark the
second phase of a four-phase plan to transform the Company's
capacity and capabilities for the foreseeable future. This second
phase of American Metal's four-phase expansion plan will add two
buildings totaling 10,900 square meters, increasing annual capacity
for casting products by 50%. Construction is due to be completed in
December 2008, with full production beginning in January 2009.
During the first quarter ended
March 31, 2008, the Company acquired and put into operation nine new
high-precision lathe machines, bringing the total number of machines
in use to 59. Another late machine was delivered and became operable
in April 2008, bringing the current number of high-precision
machines to 60, compared to 40 lathe machines a year ago.
Business Outlook
For the 2008 fiscal year, the
Company expects global industrial demand for its products to remain
strong. The Company expects to meet an increasing amount of that
demand as its additional capacity comes online. Given the favorable
results in the first quarter, and the successful installation and
operation of additional capacity during the quarter, the Company is
increasing its expectation for full-year 2008 net income to a range
of $3.2 million to $3.4 million, or earnings per share of $0.29 to
$0.32, from net income of $2.9 million to $3.1 million, or $0.27 to
$0.29 per diluted share. Full-year guidance assumes a limited
contribution from the effective launch of the second phase of the
capacity expansion, which the Company expects to complete during
December 2008, a mix of multiple products at varying price points
and increased efficiencies as the Company gains additional
experience with its growing customer base.
"The first quarter of 2008 was
extremely favorable for American Metal, as we experienced very
strong increases in revenues and net income because of greatly
expanded production capacity," Mr. Gao said. "However, there are
several potential factors that could temper our results in the
remaining three quarters, including appreciation of the Renminbi,
the potential lifting of the export tax holiday and rapidly rising
raw materials costs. Even so, we remain optimistic about our
opportunities for the remainder of 2008, and we look forward to
further capacity expansion coming online in January 2009."
Contact:
CCG Elite Investor Relations
Mark Collinson, Partner
Phone: (310) 231-8600 ext. 117
E-mail:
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