Stock to Target: Allied Motion Technologies Inc. (NASDAQ-AMOT)

Shares of Allied Motion Technologies Inc. (NASDAQ-AMOT) closed the trading at a price of $35.53 with the positive/negative change of -1.82%. In the past session approximately 31,440 shares were exchanged against the average daily trading volume of 72,621 shares.

Allied Motion Technologies Inc. (AMOT) (“Company”), a designer and manufacturer that sells precision and specialty controlled motion products and solutions to the global market, recently stated financial results for its first quarter ended March, 31, 2019. Results include the TCI, LLC (“TCI”) acquisition that was completed December 6, 2018.

First Quarter 2019 Results (Narrative compares with prior-year period unless otherwise noted)

Record revenue of $93.9M was up $17.3M, or 22.6%. The raise was Because of growth across all of the Company’s served markets. The raise reflects organic growth of 12.8%, when not including a $3.1M unfavorable impact of changes in foreign currency exchange. The Company believes that Revenue not including foreign currency exchange impacts, which is a non-GAAP measurement, is a useful measure in analyzing organic sales results. See the attached table for a description of non-GAAP financial measures and reconciliation of Revenue to Revenue not including foreign currency exchange impacts. Sales to U.S. consumers were 54% of total sales for the quarter contrast with 53% from the first quarter last year, with the balance of sales to consumers primarily in Europe, Canada and Asia.

Gross margin was unchanged at 29.5%. The recent acquisition of TCI was margin accretive, but that benefit was offset by two atypical items, which negatively influenced gross margin by a total of about 90 basis points. The first relates to a supplier who is discontinuing operations and subsequently raised their prices for any new orders. The second item was the timing of investment into tooling and prototype samples related to new Vehicle market programs. Both impacts are predictable to moderate over the coming quarters.

Operating costs and expenses as a percent of revenue were up 60 basis points to 21.7% largely Because of additional personnel and engineering to support the Company’s growth, higher stock compensation expense and incremental intangible asset amortization of $562 thousand related to the TCI acquisition. General and administrative expense as a percent of revenue reduced 20 basis points to 9.5%, and engineering and development as a percent of revenue reduced 30 basis points to 6.2%.

Operating income raised 14% to $7.3M. Operating margin was 7.8% contrast with 8.4%. Lower operating margin reflected the impact of atypical items on gross margin, investments in growth and higher amortization expense from the TCI acquisition.

Interest expense raised $566 thousand to $1.2M on higher debt balances that funded acquisitions.

The effective tax rate was 27.5% contrast with 26.2% in the prior-year period. Net income raised to $4.5M, or $0.48 per diluted share, contrast with $4.2M, or $0.45 per diluted share. The Company anticipates its effective tax rate for fiscal 2019 to be in the range of 26% to 29%.

Earnings before interest, taxes, depreciation, amortization, stock compensation expense and business development costs (“Adjusted EBITDA”) was $11.7M, up $2.0M or 20%. As a percent of sales, Adjusted EBITDA was 12.5%, down 20 basis points. The Company believes that, when used in conjunction with measures prepared in accordance with U.S. generally accepted accounting principles, Adjusted EBITDA, which is a non-GAAP measure, assists in the understanding of its operating performance. See the attached table for a description of non-GAAP financial measures and reconciliation table for Adjusted EBITDA.

Analyst recommendation for this stock stands at 1.50. The P/E ratio was recorded at 20.55.The volatility in the previous week has experienced by 3.30% and observed of 3.66% in the previous month.54.00% ownership is held by institutional investors while insiders hold ownership of 13.40%.

 

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