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Q4 2008 Allied Motion Technologies, Inc. Earnings Conference Call - Final.

Article Excerpt
OPERATOR: Good day, ladies and gentlemen. Welcome to the fourth-quarter 2008 Allied Motion Technologies Incorporated earnings conference call.

At this, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of the conference. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the call over to Ms. Sue Chiarmonte, Vice President, Secretary and Treasurer of Allied Motion Technologies, Inc. You may proceed, ma'am.

SUE CHIARMONTE, VP, SECRETARY, TREASURER, ALLIED MOTION TECHNOLOGIES, INC.: Welcome to Allied Motion's conference call to discuss the quarter and year ended December 31, 2008. We appreciate your joining us for this call. We distributed the press release earlier today, and a copy is available on our Web site at www.AlliedMotion.com.

Today's call is being recorded and will be available for replay until March 9, 2009. The call-back number for the replay is 1-888-286-8010 and the passcode is 97387884. This call is also being broadcast live on the Internet and will be available for replay immediately after the call for 90 days. To access the Internet broadcast and replay, go to the Company's Web site and click on the webcast icon.

As a reminder, please note that the Safe Harbor statements included in our press release also apply to all comments made on this conference call.

I will now turn the call over to Dick Smith, Chief Executive Officer of Allied Motion Technologies.

DICK SMITH, CEO, CFO, ALLIED MOTION TECHNOLOGIES, INC.: Thank you, Sue. Good afternoon and thank you for joining us today. As usual, I have Dick Warzala, our President and Chief Operating Officer, on the call with me. He will be making part of the presentation today.

Our agenda is that I will start with some general comments. I will then review the numbers for the quarter and year. Dick will then discuss the operations. I will then make a brief closing statement, and then we'll open up the call for questions at the end.

I will start with an overview of our results for this year. Net profit for the year was up 21% over last year to $2.909 million. Revenues also were up almost 2% to just under $86 million. Fully-diluted earnings per share was $.39 per share for the year compared to $.33 per share last year. Our gross profit margin improved to 26% compared to 24% last year.

EBITDA increased 3% to $8 million this year. Our cash balance increased by $3.7 million to a balance of $4.2 million at December 31.

We paid down our bank debt by $1.6 million during the year, leaving the balance of our bank debt at year end at $2.8 million. Finally, our book value per share improved to $5.05 this year from $4.90 last year.

Overall, we had a good year despite the devastating fire that occurred at our Chatsworth, California plant in October and the falloff of our business in the fourth quarter caused by the global economic downturn. While we were able to achieve continuous improvements in sales and profit through our third quarter, the global economic downturn caught up to us in the fourth quarter, resulting in a drop in sales and profit compared to last year and to the third quarter. The economic downturn started to have an adverse effect on us earlier in the year in our banking and construction-related markets, and then in the third quarter, we started to experience softness in more of our markets. Then in the fourth quarter, the downturn adversely affected most of our markets to varying degrees.

Our backlog at year end is down 26% from the same time last year to a balance of $23.6 million. Now, in response to these events, we have and will continue to take actions to mitigate the adverse effects the economic downturn has on the Company and are diligently working to adjust our costs and expenses to keep them in line with the changes in revenues. While the economy is down, we will continue to improve our efficiencies, finish development of new products and put ourselves in a strong position to begin growing the Company once the economy turns around, begins to turn around.

Also, on a more positive note, we do have a number of opportunities for new business with both new and existing customers. Some of these opportunities are being driven by our new products and some by market conditions which will help mitigate the adverse effects of the economy. We do have a strong balance sheet, which will help us get through this difficult period and to posture ourselves to take advantage of growth opportunities that may arise during this period.

Finally, as we reported on January...

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