Micron Solutions, Inc. Reports 2018 Second Quarter Results

FITCHBURG, Mass., Aug. 14, 2018 (GLOBE NEWSWIRE) -- Micron Solutions, Inc. (NYSE American:MICR) (the “Company”), a diversified contract manufacturing organization, through its wholly-owned subsidiary, Micron Products, Inc., producing highly-engineered, innovative components requiring precision machining and injection molding, announced results for its second quarter ended June 30, 2018.

The Company reported that Adjusted EBITDA(1) for the second quarter ended June 30, 2018 was $527 thousand, or 9.9% of sales, an improvement of $537 thousand compared to the second quarter of 2017. Diluted earnings per share improved to $0.01 per share in the quarter ended June 30, 2018 compared with a loss of $0.18 per share the same quarter in 2017.

“I am pleased to report that management’s plan to reduce costs and improve efficiency has resulted in solid Adjusted EBITDA(1) growth and a return to profit in the quarter. The second quarter of 2018 was one of the best performing quarters since the second quarter of 2015,” said Salvatore Emma, Jr., President and Chief Executive Officer. “I am also pleased with the progress we have made to expand our network of sales representatives. We are quoting several new programs with the goal of filling the sales pipeline into 2019 and beyond. The level of activity from existing customers and new prospects is expected to result in stronger top line revenue growth. This, combined with better operating leverage, gives us confidence the Company will continue to deliver improved results for our shareholders.”

Second Quarter 2018 Review

           
$ In thousands Q2 2018
   Q2 2017
   $ Change
  % Change
 
Net sales$5,320  $5,391  $(71) (1.3%)
Gross profit$878  $382  $496  129.9%
Gross margin 16.5%  7.1%    
Net income (loss)$34  $(511) $545   
Diluted earnings (loss) per share$ 0.01  $ (0.18) $0.19   

Net sales of machined orthopedic implant components and instruments, sensors as well as thermoplastic injection molding all increased in the three months ended June 30, 2018 when compared to the same prior year period.  The increases were offset by decreased net sales of tooling.

The decrease in net sales of tooling was due primarily to the impact of higher tooling revenue in the second quarter of 2017 for customers in the automotive and medical device industries.  Largely offsetting this decrease was a 10.0% increase in net sales from machined orthopedic implant components and instruments, a 2.2% increase in net sales of thermoplastic injection molding and 0.7% increase in net sales of sensors.

The increase in gross profit for the three months ended June 30, 2018 when compared to the same prior year period was due largely to a 385% increase in gross profit from machined orthopedic implant components and instruments as well as increases in gross profit from sensors and thermoplastic injection molding, partly offset by a decrease in gross profit from tooling.

The increase in gross profit from machined orthopedic implant components and instruments was due in part to an increase in net sales as noted above, as well as the Company refining its production processes resulting in reduced rework, scrap, tooling, labor, expediting charges from suppliers, shift premiums and overtime to meet customer delivery requirements when compared to the second quarter of 2017. 

In addition to the improvement in gross margin, the Company reduced selling and marketing expenses by 13.1% and reduced general and administrative expenses by 4.3% in the three months ended June 30, 2018 compared to the same period in 2017.

For the three months ended June 30, 2018, the Company improved Adjusted EBITDA(1) to $527 thousand, or 9.9% of sales, compared to ($10) thousand, or (0.2%) of sales, for the three months ended June 30, 2017, an increase of $537 thousand. 

 (1)See attached table for additional important disclosures regarding the Company’s use of Adjusted EBITDA, as well as a reconciliation of net loss from operations to Adjusted EBITDA.

First Six Months 2018 Review

           
$ In thousands 2018     2017
    $ Change
  % Change
 
Net sales $ 10,439     $ 10,656     $ (217 )   (2.0 %)
Gross profit $ 1,609     $ 1,035     $ 574     55.4 %
Gross margin   15.4 %     9.7 %        
Net loss  $ (146 )   $ (810 )   $ 664      
Diluted loss per share $  (0.05 )   $  (0.29 )   $ 0.24      

For the six months ended June 30, 2018, net sales decreased when compared to the same period last year, due to lower sales of thermoplastic injection molded products and decreased net sales of tooling, partly offset by increased net sales of machined orthopedic implant components and instruments, as well as sensors.

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