Tue, 15 Jun 2021

DELAND, FL / ACCESSWIRE / May 10, 2021 / ARC Group Worldwide, Inc. ('ARC' or the 'Company'), a leading global provider of advanced manufacturing, today announced its operating results for the third quarter ended March 28, 2021.

Highlights for the third quarter of fiscal year 2021 compared to the third quarter fiscal year 2020 for Continuing Operations:

Highlights for the nine months ended March 28, 2021, compared to the nine months ended March 29, 2020 for Continuing Operations:

Prior year financials for the fiscal third quarter include the results of ARC Metal Stamping, LLC ('AMS'), which was divested in December 2019 and are presented as discontinued operations.

Quarterly Financial Summary

The following analysis is performed over Sales, Gross Profit, and EBITDA from Continuing Operations for the comparative periods identified unless otherwise noted.

Current year fiscal third quarter net sales were $16.4 million, compared to $12.8 million in our prior year same period. Revenue by industry for our precision injection molded components continued to see a shift year over year on a quarterly basis but manufacturing agility has allowed ARC to further drive profitable growth.

Despite all the market volatility, ARC ended its' fiscal third quarter with its highest recorded firm order backlog of $21.1 million.

Current fiscal third quarter gross profit was $4.0 million, compared to $1.8 million in our prior fiscal year quarter. Gross profit increases were driven by increased output via operational productivity, fixed cost drop through and disciplined cost controls at facilities heavily hit by COVID-19 driven industry fluctuations.

Current fiscal third quarter EBITDA was $3.5 million, compared to $1.3 million in our prior year same quarter, again driven by business related cost and productivity related improvements and continued cost control.

Fiscal Year to Date Financial Summary

Fiscal year to date 2021 net sales were $42.3 million, compared to $35.1 million in our fiscal year to date 2020.

Fiscal year to date 2021 gross profit was $9.2 million, compared to $4.4 million in our fiscal year to date 2020.

Fiscal year to date EBITDA was $8.1 million for the fiscal year to date 2021, compared to $6.0 million in our prior year to date. The $6.0 million from prior year to date included non-cash transaction related gain on the sale of an asset for $3.7 million, which skewed results. With that transaction gain excluded, Adjusted EBITDA for the fiscal year to date 2021 as compared prior fiscal year to date increased by 234.4%.

CEO Statement

Mr. Jed Rust, CEO of ARC Group Worldwide said, 'The past year of the pandemic has been ripe with challenges and opportunities. The flexibility and efforts of the ARC team have yielded robust increases in revenue and profitability in the face of a multimarket headwind.' Further he noted, 'I am pleased to see the continued quarterly trend in revenue and net income showing off the true nature of our customer relationships and operations. Seeing the backlog hit over $21M and our customers trusting us with more value add work reminds us of the continued and unending work of improving our daily operations.'

Strategic Restructuring

ARC initiated strategic restructuring at the end of the fiscal third quarter 2019 in order to streamline its operating model, increase profitability, reduce debt, strengthen the balance sheet and enhance financial flexibility. The Company has taken the following steps over the last several fiscal quarters:

The Company completed its restructuring during the fiscal quarter ended December 27, 2020.


While ARC's fiscal year to date revenues grew by 20.4% through March 28, 2021, the Company continues to see slow recovery in Medical, Aerospace, General Industry and Consumer Products sectors that have been significantly impacted by COVID-19.

While ARC has been proactive and implemented a number of measures to keep cost in line with business levels, due to the global scope and uncertain duration and impact of the COVID-19 pandemic, ARC cannot reasonably estimate the pace of recovery in its end markets, nor the related impact on financial results for the remainder of the fiscal year.

ARC's role providing customers with trusted solutions is as important in the current environment as it has ever been. The company remains focused on the safety of its employees and serving customer needs, even in the face of unprecedented challenges posed by COVID-19.

GAAP to Non-GAAP Reconciliation

The Company uses Adjusted EBITDA, a Non-GAAP financial measure as defined by the SEC, as a supplemental profitability measure because management finds it useful to understand and evaluate results, excluding the impact of non-cash depreciation and amortization charges, stock based compensation expenses, and nonrecurring expenses and outlays, prior to consideration of the impact of other potential sources and uses of cash, such as working capital items. This calculation may differ in method of calculation from similarly titled measures used by other companies and may be different than the EBITDA calculation used by our lenders for purposes of determining compliance with financial covenants. This Non-GAAP measure may have limitations when understanding performance as it excludes the financial impact of transactions such as interest expense necessary to conduct the Company's business and therefore is not intended to be an alternative to financial measures prepared in accordance with GAAP. The Company has not quantitatively reconciled its forward looking Adjusted EBITDA target to the most directly comparable GAAP measure because such items such as amortization of stock-based compensation and interest expense, which are specific items that impact these measures, have not yet occurred, are out of the Company's control, or cannot be predicted. For example, quantification of stock-based compensation is not possible as it requires inputs such as future grants and stock prices, which are not currently ascertainable.

Adjusted EBITDA from Continuing Operations, Adjusted Earnings, and Adjusted Earnings Per Share are non-GAAP financial measures. Adjusted EBITDA Margin from Continuing Operations is calculated by dividing EBITDA from Continuing Operations by sales.

The reconciliation to GAAP is as follows (dollars in thousands):

About ARC Group Worldwide, Inc.

ARC Group Worldwide, Inc. (OTCM: ARCW) is a leading global advanced manufacturing service provider. Founded in 1987, the Company offers its customers a compelling portfolio of advanced manufacturing technologies and cutting-edge capabilities to improve the efficiency of traditional manufacturing processes and accelerate their time to market. In addition to being a world leader in metal injection molding, ARC has significant expertise in prototyping, advanced tooling, automation, machining, plastic injection molding, lean manufacturing, and robotics. ARC's mission is to bring innovation and technology to manufacturing. Learn more at arcw.com.

Forward Looking Statements

This release includes certain forward-looking statements and projections of ARC Group Worldwide, Inc. Such statements are subject to risks and uncertainties that could cause results to differ materially from the Company's expectations. While the Company makes these statements in good faith, neither the Company nor its management can guarantee that anticipated future results will be achieved. The Company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the Company, whether as a result of new information, future events, or otherwise. All forward-looking statements attributable to the Company or persons acting on the Company's behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.


Investor Relations

Phone: (303)467-5236

Email: InvestorRelations@arcw.com

Unaudited Consolidated Statement of Operations
(in thousands, except for share and per share amounts)

Unaudited Consolidated Balance Sheets
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Unaudited Consolidated Statement of Cash Flows
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SOURCE: ARC Group Worldwide, Inc.

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