ATRM
Holdings, Inc. (NASDAQ: ATRM), through wholly-owned subsidiaries KBS Builders,
Inc. and Maine Modular Haulers, Inc., manufactures, sells and distributes
modular housing units for commercial and residential applications. The
company’s offerings include single family homes; multi-family housing units,
such as apartment buildings, condominiums, townhouses and dormitories; and
commercial structures, including hospitals, office buildings and other
constructions. ATRM utilizes a combination of direct sales staff and
independent dealers and contractors in order to market and sell its products.
Since
acquiring KBS Builders in April 2014, ATRM has turned much of its focus toward
strengthening its balance sheet and implementing organizational, process and
contractual improvements designed to boost commercial project performance. In
June, the company took a significant step toward achieving this goal when it
announced a settlement agreement that greatly decreased outstanding debt
related to the KBS acquisition. In addition to reducing the principal debt from
$5.5 million to $2.5 million, ATRM successfully restructured the payments in
order to facilitate financial growth in the months to come.
“This
settlement agreement is a very favorable outcome for the company,” Dan Koch,
president and chief executive officer of ATRM, stated in a news release.
“Reducing our debt and restructuring the payments over 25 months will allow us
to better utilize cash flow for additional operating improvements, gaining
efficiencies and ultimately growing our business.”
In the
second quarter of 2015, the company also made considerable progress in single
family home sales, recording a 26 percent year-over-year increase for the
period. Despite a sharp decline in commercial sales, ATRM also made significant
headway toward profitability by decreasing its net loss from the previous year
by $4.5 million. This was achieved as a result of substantially decreased costs
and expenses for the quarter, as well as the implementation of a strategic shift
away from site-related expenses, which have historically resulted in losses for
the company.
“The
problems with several commercial projects that were under contract at the time
of the acquisition have adversely impacted our gross margins, including our margins
in Q2 2015, but have essentially been eradicated,” continued Koch. “We expect
that our commercial projects will be significantly more profitable in the
future due to the changes we have made. We believe we are positioned to achieve
sales in the second half of 2015 of at least $16 million with continued
improvement in gross margins and operating results.”
For
prospective shareholders, ATRM’s progress toward streamlining its operations
following the acquisition of KBS Builders is a promising indication of the
company’s potential moving forward. Look for ATRM to bolster its current cash
position through a planned offering of its common stock in the coming weeks,
effectively setting the stage for a strengthened balance sheet and sustainable
returns in the growing modular construction market.
For more
information, visit www.atrmholdings.com
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MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
Please see disclaimer on the MissionIR website http://www.missionir.com/disclaimer.html
