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Wednesday, November 13, 2013

1 Million Float ARCW Reports Blow Out Earnings And Mentions 3D Printing Top Priority Going Forward

ARCW which I have been in and recommended since $8.65, reported super strong results and I contend that this is comparable to PRLB which has a P/E of 60.

ARCW 10-Q Filing

ARCW Earnings Press Release

4 Reasons From These Filings That Shorts Are In Big Trouble

1) Current Results

2) MIM AND 3D Printing ! New 3D Printing comments ! "3D Printing Top Priority Going Forward"

3) Organic growth in the key division was 22% Excluding impact of acquisitions

4) Strong Future Outlook

1) Current Results


For the quarter ended September 29, 2013 compared to the quarter ended September 30, 2012 (fiscal first quarter) :

• Net Revenues Increased 38.1%, to $18.4 Million

• Adjusted EBITDA Increased 80.8% to a Record $3.4 Million

• Earnings Increased from a Prior Year Period Loss to $1.3 million

• Adjusted EPS Increased 47.8% to a Record $0.34

Bank Debt Paid Down by 42.2%, or $10.6 Million

2) MIM AND 3D Printing ! New 3D Printing comments ! "3D Printing Top Priority Going Forward"

Mr. Jason Young, Chairman and CEO, said, “I am pleased to report outstanding quarterly results that reflect continued growth in revenue, cash flow, and earnings per share. As the leader in Metal Injection Molding and other niche manufacturing businesses, we continue to focus on building our market position in these areas, both organically and through acquisitions.” He further added, “We are also focused on bringing technology and innovation to manufacturing. We have made good progress utilizing 3D printing and view it to be a key area of future growth for ARC in production and prototypes.”

The Precision Components segment also utilizes 3D printing to provide a more complete solution to its customers. It ’ s applications in the business have increased in the past two years and the Company has committed technical development resources to utilize the technology to dramatically reduce time to market from months to weeks. ARC views 3D printing to be a burgeoning area of growth for the Company, both in production and prototypes. The Company is making 3D printing a top priority going forward, given the strategic fit to the Precision Components product and customer base.

3) Organic growth in the key divisions was 22% Excluding impact of acquisitions

Sales for the Precision segment increased significantly, by $5.2 million or 45.7%, over the comparable prior year period. The AFT Acquisition in fiscal 2013 contributed $2.7 million in additional sales in the first quarter of fiscal year 2014. Excluding the Acquisition’s impact, sales growth compared to the comparable prior year period still increased $2.5 million, or 22.0%. The firearms market segment at AFT continued to grow, as the Company was able to meet increased demand for, and secure several new programs, from their customers in this market segment. In addition, AFT-HU contributed to the sales growth through increased demand related to the automotive turbocharger customers. FloMet saw a slight increase in sales over the prior year quarter as a result of additional production volume in the consumer market segment. Tekna Seal did not experience growth over the prior year period as a large, intermittently recurring order did not occur in the current quarter. However, Tekna Seal did recently receive an annual blanket order from a new customer in the aerospace industry which is encouraging progress.

4) Strong Future Outlook

The MIM businesses received 15 new tools this quarter representing approximately $2.0 million in potential incremental revenue at anticipated production volumes. Additional capacity in AFT-US is also being added to accommodate the continued growth in the firearms market segment for product lines already tooled on which volumes are forecasted to increase as soon as that additional capacity is in place. Further, new firearms business, which was tooled within the last three quarters, is expected to launch in the next two quarters. FloMet received new orders from several medical device customers in the period that will impact revenues later in this fiscal year, including a new customer in China. Separately, we expect continued demand in Europe for automotive turbochargers, which we hope will translate into increased revenues at AFT-HU. Tekna Seal saw positive indications across its markets with orders for new prototype applications having been received. Prototypes typically represent future production orders commencing between one and three years from original submission. In addition, Tekna Seal is experiencing increases in new medical customer orders, prototype and production orders from another aerospace controls customer, and for new development technologies associated with power storage devices. These increases in revenue may however be offset by typical customer attrition, but our goal is to add as much incremental revenue as possible. Finally, the Company believes its continued investment in technology and innovation, specifically those related to automation, robotics, 3D printing and molding, will continue to improve efficiencies and hopefully provide new sources of revenue.

I am long this stock originally from $8.65 and have taken some profit in the $20's and still own some shares. This is not a blog post that I am going to chase this stock today for a new positions after the big move it has made. But for being long like I am from the $8-$12 area there is no reason to me why this stock cannot be compared to a PRLB which has a P/E of 60. Anyone short ARCW after this report in my opinion is in trouble and we could see a big short squeeze today. This blog is not investment advice and please see all disclaimers at the bottom. Chasing low float stocks can be dangerous and risky.

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