Bohemia, NY, May 14, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- AmpliTech Group, Inc. (AMPG): Amplitech’s momentum continued in the first quarter of 2019, reporting strong sales, improved profits, increased cash on hand, an expanded Board and an agreement to buy Specialty Microwave Corporation (SMW), a complementary business to Amplitech with complementary products and common customers.
Sales in the first quarter were $678.3 thousand, up from $428.5 thousand a year earlier, an improvement of $249.8 thousand, or 58.3 percent.
Gross profits in the first quarter were $324.1 thousand, up from $254.9 thousand a year earlier, an improvement of $69.2 thousand, or 27.1 percent. Gross margins in the first quarter were 47.8 percent, down from 59.5 percent the prior year. Gross margins were lower in 2019 vs 2018 due to a large order placed by a customer that was outsourced at a lower margin. In the longer term, Amplitech is seeking to have an optimal mix of higher volume, lower margin, outsourced business with higher margin, lower volume, more complex/higher performance components/systems, resulting in the highest possible throughput at the highest possible operating margins. In addition, outsourced production frees up the Amplitech facility to produce higher margin, lower volume, engineered solutions for its customers’ needs, which can be transitioned to an outsourced model if/when the customer moves to increased volumes in that particular line.
Operating Income in the first quarter increased to $82.6 thousand, up from $44.2 thousand a year earlier, an improvement of $38.4 thousand, or 86.9 percent. Earnings before interest, tax, depreciation and amortization (EBITDA) for the first quarter increased to $119.7 thousand from $52.1 thousand the prior year, an increase of $67.6 thousand, or 129.8 percent. EBITDA margins for the current quarter were 17.6 percent vs 12.2 percent in 2018, an improvement of 44.3 percent. The improved EBITDA and EBITDA margins were driven by increased throughput and a more optimal use of in-house and outsourced production.
Cash on hand increased from $442.1 thousand in the first quarter of 2018 to $783.6 thousand in 2019, helped by improved profits as well as a new term debt facility which was secured in the first quarter.
Amplitech also announced its intention to acquire the assets of SMW last week. The acquisition of SMW’s assets by Amplitech is expected to result in increased sales ($4.5-5.0 million), an increased order book ($2.1-2.5 million) and increased EBITDA ($800-900 thousand) on an annualized proforma basis, upon completion of the acquisition, which is expected by the end of July 2019. The acquisition will be funded with cash on hand and through the issue of 5 year, 6 percent interest only, promissory notes issued to the owner of SMW. As such, the acquisition is not expected to result in any issue of new Amplitech shares and should result in improved earnings per share for existing Amplitech shareholders.
In commenting on the most recent quarter, Fawad Maqbool, Founder and CEO of Amplitech, said: “This past quarter was a breakthrough quarter for our company. We grew our business organically, significantly improved our balance sheet, expanded our Board, agreed on our first acquisition and improved relations with capital providers, and, importantly, kicked off a concerted strategy of growing both organically and through acquisitions in a responsible, measured approach while ensuring that we minimize any dilution to our shareholders in the medium term.”
About AmpliTech Group, Inc.
AmpliTech Group, Inc. designs, develops, and manufactures custom and standard state-of-the-art RF components for the Domestic and International, SATCOM, Space, Defense and Military markets. These designs cover the frequency range from 50 kHz to 40 GHz - eventually, offering designs up to 100 GHz. AmpliTech also provides consulting services to help with any microwave components or systems design problems. Our steady growth over the past 13+ years has come about because we can provide complex, custom solutions for nearly ANY custom requirements that are presented us. In addition, we have the best assemblers, wires, and technicians in the industry and can provide contract assembly of customers' own designs. Click here to view AmpliTech video. Website: http://www.AmpliTechinc.com
This release contains statements that constitute forward-looking statements. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company's financing plans; (ii) trends affecting the Company's financial condition or results of operations; (iii) the Company's growth strategy and operating strategy. The words "may," "would," "will," "expect," "estimate," "anticipate," "believe," "intend," and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company's ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors.
Fawad Maqbool, CEO and Chairman