Aetrium Inc. (ATRM, Financial) filed Quarterly Report for the period ended 2010-03-31.
Aetrium Inc. has a market cap of $29.89 million; its shares were traded at around $2.82 with and P/S ratio of 3.46. 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 three months ended March 31, 2010 were $4.6 million compared with $1.8 million for the same period in 2009, a 164% increase. Net sales in 2010 increased across all our product lines as a result of improving economic conditions and a semiconductor industry recovery that began in the second half of 2009 and has continued into 2010. Sales of test handlers were $3.4 million in the first three months of 2010 compared with $1.2 million for the same period in 2009, an increase of 187%. Sales of reliability test equipment products were $0.5 million in the first three months of 2010 compared with $0.3 million in the same period in 2009, an increase of 97%. Sales of change kits and spare parts were $0.7 million in the first three months of 2010 compared with $0.3 million for the same period in 2009, an increase of 134%.
Selling, General and Administrative. Selling, general and administrative expenses for the three months ended March 31, 2010 were $1.1 million compared with $1.2 million for the comparable period in 2009, a 7% decrease. Expenses for the three-month period ended March 31, 2010 included a credit of $0.2 million related to the settlement of a legal dispute with a subtenant of our former leased facility in Poway, California. This credit was partially offset by a $0.1 million increase in commission expense resulting from higher sales in 2010.
balance sheet. In accordance with Accounting Standards Codification (ASC) 740, “Income Taxes,” we record a valuation allowance to reduce the carrying value of our deferred tax assets if, based on all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. At December 31, 2008, our deferred tax assets amounted to $24.3 million and we recorded a valuation allowance of $21.7 million that reduced the carrying value of such assets to $2.6 million at that date. In fiscal year 2009, we incurred losses such that our deferred tax assets increased to $25.7 million. At December 31, 2009, we assessed the realizability of our deferred tax assets and the amount of our valuation allowance. Although our operating results improved in the second half of 2009, we incurred an operating loss in the fourth quarter that placed us in a three year cumulative loss position at December 31, 2009. Although we expected that our operating results would likely improve in early 2010, we determined there was not sufficient positive evidence regarding our potential for future profits to outweigh the negative evidence of our three year cumulative loss position under the guidance provided in ASC 740. Therefore, we determined that our valuation allowance should be increased to $25.7 million to fully reserve our deferred tax assets at December 31, 2009. We expect to continue to maintain a full valuation allowance until we determine that we can sustain a level of profitability that demonstrates our ability to realize these assets. To the extent we determine that the realization of some or all of these benefits is more likely than not based upon expected future taxable income, a portion or all of the valuation allowance will be reversed. Such a reversal would be recorded as an income tax benefit and, for some portion related to deductions for stock option exercises, an increase in shareholders' equity.
Cash and cash equivalents decreased by approximately $0.2 million in the three months ended March 31, 2010. We used $0.2 million of cash to fund operating activities during this period. Cash generated from net income of $0.2 million and $0.2 million in non-cash depreciation and share-based compensation expense was offset by $0.6 million in working capital changes. Working capital changes using cash consisted primarily of a $1.3 million increase in accounts receivable, partially offset by a $0.7 million increase in accounts payable. Accounts receivable increased due to a significant increase in net sales in the first quarter of 2010 compared with the fourth quarter of 2009. Accounts payable increased primarily due to increased inventory purchases to support higher sales levels. Net cash flows from investing activities in the three months ended March 31, 2010 were insignificant. Net cash provided by financing activities in the three months ended March 31, 2010 included $56,000 in proceeds from employee stock option exercises.
Cash and cash equivalents decreased by approximately $0.5 million in the three months ended March 31, 2009. We used $0.5 million of cash to fund operating activities during this period, which included our net loss of $0.7 million plus a $0.4 million non-cash income tax benefit, partially offset by $0.2 million of non-cash depreciation and share-based compensation expense and $0.4 million in working capital changes. Working capital changes contributing to cash consisted primarily of a $0.3 million decrease in accounts receivable and a $0.6 million decrease in inventories, partially offset by a $0.3 million decrease in accounts payable and a $0.1 million decrease in other accrued liabilities. Accounts receivable decreased primarily due to a significant decrease in net sales in the first quarter of 2009 compared with the fourth quarter of 2008. Inventories and accounts payable decreased primarily due to significantly reduced inventory purchases in the first quarter of 2009 compared with the fourth quarter of 2008 in response to lower sales levels. The decrease in other accrued liabilities reflects the payment of severance benefits associated with a workforce reduction we implemented in December 2008.
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Aetrium Inc. has a market cap of $29.89 million; its shares were traded at around $2.82 with and P/S ratio of 3.46. 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 three months ended March 31, 2010 were $4.6 million compared with $1.8 million for the same period in 2009, a 164% increase. Net sales in 2010 increased across all our product lines as a result of improving economic conditions and a semiconductor industry recovery that began in the second half of 2009 and has continued into 2010. Sales of test handlers were $3.4 million in the first three months of 2010 compared with $1.2 million for the same period in 2009, an increase of 187%. Sales of reliability test equipment products were $0.5 million in the first three months of 2010 compared with $0.3 million in the same period in 2009, an increase of 97%. Sales of change kits and spare parts were $0.7 million in the first three months of 2010 compared with $0.3 million for the same period in 2009, an increase of 134%.
Selling, General and Administrative. Selling, general and administrative expenses for the three months ended March 31, 2010 were $1.1 million compared with $1.2 million for the comparable period in 2009, a 7% decrease. Expenses for the three-month period ended March 31, 2010 included a credit of $0.2 million related to the settlement of a legal dispute with a subtenant of our former leased facility in Poway, California. This credit was partially offset by a $0.1 million increase in commission expense resulting from higher sales in 2010.
balance sheet. In accordance with Accounting Standards Codification (ASC) 740, “Income Taxes,” we record a valuation allowance to reduce the carrying value of our deferred tax assets if, based on all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. At December 31, 2008, our deferred tax assets amounted to $24.3 million and we recorded a valuation allowance of $21.7 million that reduced the carrying value of such assets to $2.6 million at that date. In fiscal year 2009, we incurred losses such that our deferred tax assets increased to $25.7 million. At December 31, 2009, we assessed the realizability of our deferred tax assets and the amount of our valuation allowance. Although our operating results improved in the second half of 2009, we incurred an operating loss in the fourth quarter that placed us in a three year cumulative loss position at December 31, 2009. Although we expected that our operating results would likely improve in early 2010, we determined there was not sufficient positive evidence regarding our potential for future profits to outweigh the negative evidence of our three year cumulative loss position under the guidance provided in ASC 740. Therefore, we determined that our valuation allowance should be increased to $25.7 million to fully reserve our deferred tax assets at December 31, 2009. We expect to continue to maintain a full valuation allowance until we determine that we can sustain a level of profitability that demonstrates our ability to realize these assets. To the extent we determine that the realization of some or all of these benefits is more likely than not based upon expected future taxable income, a portion or all of the valuation allowance will be reversed. Such a reversal would be recorded as an income tax benefit and, for some portion related to deductions for stock option exercises, an increase in shareholders' equity.
Cash and cash equivalents decreased by approximately $0.2 million in the three months ended March 31, 2010. We used $0.2 million of cash to fund operating activities during this period. Cash generated from net income of $0.2 million and $0.2 million in non-cash depreciation and share-based compensation expense was offset by $0.6 million in working capital changes. Working capital changes using cash consisted primarily of a $1.3 million increase in accounts receivable, partially offset by a $0.7 million increase in accounts payable. Accounts receivable increased due to a significant increase in net sales in the first quarter of 2010 compared with the fourth quarter of 2009. Accounts payable increased primarily due to increased inventory purchases to support higher sales levels. Net cash flows from investing activities in the three months ended March 31, 2010 were insignificant. Net cash provided by financing activities in the three months ended March 31, 2010 included $56,000 in proceeds from employee stock option exercises.
Cash and cash equivalents decreased by approximately $0.5 million in the three months ended March 31, 2009. We used $0.5 million of cash to fund operating activities during this period, which included our net loss of $0.7 million plus a $0.4 million non-cash income tax benefit, partially offset by $0.2 million of non-cash depreciation and share-based compensation expense and $0.4 million in working capital changes. Working capital changes contributing to cash consisted primarily of a $0.3 million decrease in accounts receivable and a $0.6 million decrease in inventories, partially offset by a $0.3 million decrease in accounts payable and a $0.1 million decrease in other accrued liabilities. Accounts receivable decreased primarily due to a significant decrease in net sales in the first quarter of 2009 compared with the fourth quarter of 2008. Inventories and accounts payable decreased primarily due to significantly reduced inventory purchases in the first quarter of 2009 compared with the fourth quarter of 2008 in response to lower sales levels. The decrease in other accrued liabilities reflects the payment of severance benefits associated with a workforce reduction we implemented in December 2008.
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