Aetrium Inc. (ATRM, Financial) filed Quarterly Report for the period ended 2010-06-30.
Aetrium Inc. has a market cap of $30.7 million; its shares were traded at around $2.87 with and P/S ratio of 3.5. ATRM is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Jim Simons of Renaissance Technologies LLC.
Net Sales. Net sales for the six months ended June 30, 2010 were $9.6 million compared with $2.9 million for the same period in 2009, a 228% increase. Net sales for the three months ended June 30, 2010 were $5.0 million compared with $1.2 million for the same period in 2009, a 323% increase. Net sales in 2010 increased across all our product lines as a result of improved economic conditions and a semiconductor industry recovery that began in the second half of 2009 and continued into 2010. Sales of test handlers were $6.5 million in the first six months of 2010 compared with $1.2 million for the same period in 2009, an increase of 454%. Sales of reliability test equipment products were $1.8 million in the first six months of 2010 compared with $0.7 million in the same period in 2009, an increase of 173%. Sales of change kits and spare parts were $1.3 million in the first six months of 2010 compared with $1.1 million for the same period in 2009, an increase of 22%.
Selling, General and Administrative. Selling, general and administrative expenses for the six months ended June 30, 2010 were $2.7 million compared with $2.3 million for the comparable period in 2009, a 15% increase. Commissions, travel, and warranty expenses increased $0.4 million, $0.1 million, and $0.1 million, respectively, as a result of significantly increased sales and service activity. These increases were partially offset by a credit of $0.2 million recorded in 2010 related to the settlement of a legal dispute with a subtenant of our former leased facility in Poway, California. Selling, general and administrative expenses for the three months ended June 30, 2010 were $1.6 million compared with $1.1 million for the comparable period in 2009, a 38% increase. Commissions and travel expenses increased $0.3 million and $0.1 million, respectively, due to significantly increased sales and service activity, and compensation costs increased by approximately $0.1 million.
Research and Development. Research and development expenses for the six months ended June 30, 2010 were $1.5 million compared with $1.0 million for the comparable period in 2009, a 50% increase. Contract services and materials costs increased $0.3 million and $0.1 million, respectively. Research and development expenses for the three months ended June 30, 2010 were $0.8 million compared with $0.5 million for the comparable period in 2009, a 54% increase. Contract services and materials costs increased $0.3 million and $0.1 million, respectively. Research and development expenses increased in 2010 over 2009 levels as we accelerated development activities for both our test handler and reliability test equipment product lines. Research and development expenses represented 15.7% of total net sales for the six month period ended June 30, 2010 compared with 34.2% of total net sales for the comparable period in 2009. New product development is an essential part of our strategy to gain market share. Over time, we expect to invest approximately 12% to 15% of our revenues in research and development although we may exceed this range in periods of reduced revenues as was the case in fiscal year 2009.
Cash and cash equivalents increased by approximately $0.5 million in the six months ended June 30, 2010. We generated $0.3 million of cash from operating activities during this period. Cash generated from net income of $0.3 million and $0.3 million in non-cash depreciation and share-based compensation expense was partially offset by $0.3 million in working capital changes. Working capital changes using cash consisted primarily of a $1.1 million increase in accounts receivable and a $0.1 million increase in inventories, partially offset by a $0.9 million increase in accounts payable. Accounts receivable increased due to a significant increase in net sales in the second quarter of 2010 compared with the fourth quarter of 2009. Inventories increased primarily to support customer evaluations and initial shipments anticipated for our new eight site test handler. Accounts payable increased primarily due to higher levels of inventory purchases in the second quarter of 2010 compared with the fourth quarter of 2009. Net cash flows from investing activities for the six months ended June 30, 2010 were insignificant. Net cash provided by financing activities for the six months ended June 30, 2010 consisted primarily of $0.2 million in net proceeds from employee stock option exercises.
period, which included our net loss of $1.6 million plus a $0.8 million non-cash income tax benefit, partially offset by $0.3 million of non-cash depreciation and share-based compensation expense and $0.8 million in working capital changes. Working capital changes contributing to cash consisted primarily of a $0.9 million decrease in accounts receivable and a $0.5 million decrease in inventories, partially offset by a $0.2 million decrease in accounts payable and a $0.2 million decrease in other accrued liabilities. Accounts receivable decreased primarily due to a significant decrease in net sales in the second quarter of 2009 compared with the fourth quarter of 2008. Inventories and accounts payable decreased primarily due to significantly reduced inventory purchases in the second quarter of 2009 compared with the fourth quarter of 2008 in response to lower sales levels. The decrease in other accrued liabilities reflected the payment of severance benefits associated with a workforce reduction we implemented in December 2008 and a reduction in accrued warranty and accrued commissions due to lower sales volume.
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Aetrium Inc. has a market cap of $30.7 million; its shares were traded at around $2.87 with and P/S ratio of 3.5. ATRM is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Aetrium s operating results generally followed the semiconductor equipment industry trend. Our net sales decreased to $1.8 million and $1.2 million in the first and second quarters of 2009, respectively. In mid-year we began to see signs of increased demand for our customers' products and generally improving equipment utilization rates. Accordingly, our net sales increased to $3.0 million and $2.7 million in the third and fourth quarters of 2009, respectively.Net Sales. Net sales for the six months ended June 30, 2010 were $9.6 million compared with $2.9 million for the same period in 2009, a 228% increase. Net sales for the three months ended June 30, 2010 were $5.0 million compared with $1.2 million for the same period in 2009, a 323% increase. Net sales in 2010 increased across all our product lines as a result of improved economic conditions and a semiconductor industry recovery that began in the second half of 2009 and continued into 2010. Sales of test handlers were $6.5 million in the first six months of 2010 compared with $1.2 million for the same period in 2009, an increase of 454%. Sales of reliability test equipment products were $1.8 million in the first six months of 2010 compared with $0.7 million in the same period in 2009, an increase of 173%. Sales of change kits and spare parts were $1.3 million in the first six months of 2010 compared with $1.1 million for the same period in 2009, an increase of 22%.
Selling, General and Administrative. Selling, general and administrative expenses for the six months ended June 30, 2010 were $2.7 million compared with $2.3 million for the comparable period in 2009, a 15% increase. Commissions, travel, and warranty expenses increased $0.4 million, $0.1 million, and $0.1 million, respectively, as a result of significantly increased sales and service activity. These increases were partially offset by a credit of $0.2 million recorded in 2010 related to the settlement of a legal dispute with a subtenant of our former leased facility in Poway, California. Selling, general and administrative expenses for the three months ended June 30, 2010 were $1.6 million compared with $1.1 million for the comparable period in 2009, a 38% increase. Commissions and travel expenses increased $0.3 million and $0.1 million, respectively, due to significantly increased sales and service activity, and compensation costs increased by approximately $0.1 million.
Research and Development. Research and development expenses for the six months ended June 30, 2010 were $1.5 million compared with $1.0 million for the comparable period in 2009, a 50% increase. Contract services and materials costs increased $0.3 million and $0.1 million, respectively. Research and development expenses for the three months ended June 30, 2010 were $0.8 million compared with $0.5 million for the comparable period in 2009, a 54% increase. Contract services and materials costs increased $0.3 million and $0.1 million, respectively. Research and development expenses increased in 2010 over 2009 levels as we accelerated development activities for both our test handler and reliability test equipment product lines. Research and development expenses represented 15.7% of total net sales for the six month period ended June 30, 2010 compared with 34.2% of total net sales for the comparable period in 2009. New product development is an essential part of our strategy to gain market share. Over time, we expect to invest approximately 12% to 15% of our revenues in research and development although we may exceed this range in periods of reduced revenues as was the case in fiscal year 2009.
Cash and cash equivalents increased by approximately $0.5 million in the six months ended June 30, 2010. We generated $0.3 million of cash from operating activities during this period. Cash generated from net income of $0.3 million and $0.3 million in non-cash depreciation and share-based compensation expense was partially offset by $0.3 million in working capital changes. Working capital changes using cash consisted primarily of a $1.1 million increase in accounts receivable and a $0.1 million increase in inventories, partially offset by a $0.9 million increase in accounts payable. Accounts receivable increased due to a significant increase in net sales in the second quarter of 2010 compared with the fourth quarter of 2009. Inventories increased primarily to support customer evaluations and initial shipments anticipated for our new eight site test handler. Accounts payable increased primarily due to higher levels of inventory purchases in the second quarter of 2010 compared with the fourth quarter of 2009. Net cash flows from investing activities for the six months ended June 30, 2010 were insignificant. Net cash provided by financing activities for the six months ended June 30, 2010 consisted primarily of $0.2 million in net proceeds from employee stock option exercises.
period, which included our net loss of $1.6 million plus a $0.8 million non-cash income tax benefit, partially offset by $0.3 million of non-cash depreciation and share-based compensation expense and $0.8 million in working capital changes. Working capital changes contributing to cash consisted primarily of a $0.9 million decrease in accounts receivable and a $0.5 million decrease in inventories, partially offset by a $0.2 million decrease in accounts payable and a $0.2 million decrease in other accrued liabilities. Accounts receivable decreased primarily due to a significant decrease in net sales in the second quarter of 2009 compared with the fourth quarter of 2008. Inventories and accounts payable decreased primarily due to significantly reduced inventory purchases in the second quarter of 2009 compared with the fourth quarter of 2008 in response to lower sales levels. The decrease in other accrued liabilities reflected the payment of severance benefits associated with a workforce reduction we implemented in December 2008 and a reduction in accrued warranty and accrued commissions due to lower sales volume.
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