Micron Solutions, Inc. Reports Fourth Quarter and Full Year 2021 Results, Announces Amendment to its Credit Facility and Authorizes Stock Repurchase Program

Micron Solutions, Inc. Reports Fourth Quarter and Full Year 2021 Results, Announces Amendment to its Credit Facility and Authorizes Stock Repurchase Program




Micron Solutions, Inc. Reports Fourth Quarter and Full Year 2021 Results, Announces Amendment to its Credit Facility and Authorizes Stock Repurchase Program

FITCHBURG, Mass., March 30, 2022 (GLOBE NEWSWIRE) — Micron Solutions, Inc. (OTCQB: MICR) (the “Company”), a diversified contract manufacturing organization, through its wholly-owned subsidiary, Micron Products, Inc., producing highly-engineered, innovative components requiring precision machining and injection molding, announced financial results for its fourth quarter and fiscal year ended December 31, 2021, an amendment to its Credit Facility with Berkshire Bank, and a stock repurchase program under which the Company may purchase up to $1,000,000 of the Company’s Common Stock through March 31, 2023.

In the fourth quarter of 2021, the Company reported $4,374,690 in net sales, as compared to $5,613,260 in the fourth quarter of 2020, a 22.1% decrease. Net loss for the fourth quarter of 2021 was ($928,491) compared to net income of $77,796 in the fourth quarter of 2020. Gross margin decreased to 5.1% in the fourth quarter of 2021, compared to 14.8%% in the fourth quarter of 2020.

Adjusted EBITDA for the fourth quarter of 2021 was ($517,000) compared to $518,000 in the fourth quarter of 2020.

For the fiscal year ended December 31, 2021, the Company reported $20,410,331 in net sales, as compared to $20,838,356 in net sales for the fiscal year ended December 31, 2020, a 2.1% decrease. Net income for the fiscal year of 2021 was $1,726,936 compared to net income of $1,147,889 for the fiscal year of 2020. Gross margin decreased to 9.1% for the fiscal year of 2021, compared to 17.0% for the fiscal year of 2020.

Adjusted EBITDA for the fiscal year ended December 31, 2021 was ($104,000) compared to $1,742,000 for the fiscal year ended December 31, 2020.

CEO Bill Laursen commented, “In 2021, Micron’s EBITDA was severely impacted by the COVID-19 pandemic, resulting in business disruptions, supply chain shortages, delays and price increases. We have sought to counter these challenges with increased investments in engineering, production and supply chain management while strengthening our pipeline and our abilities to support onboarding new customers and product development. As COVID subsides, we expect sales growth and margins to normalize. We are currently seeing significant bid activity from companies looking to move manufacturing back to the U.S., and believe Micron is well positioned to capitalize on this trend. Also of note, in 2021 we completed a sale lease back on our main facility which allowed us to retire all of our debt at that time. Going forward, our balance sheet provides us the flexibility to invest in the growth of the business, while at the same time supporting a program to return capital to shareholders.”

The Company also announced that it has entered into an amended Credit Facility with its institutional lender Berkshire Bank. The terms of the amendment include a waiver of the debt service coverage covenant for the period ending December 31, 2021 and the prior quarter, a waiver of the tangible capital base covenant for the period ending December 31, 2021, a resetting of the covenants to levels that Micron projects to be compliant with, and a modification in the maximum amount of availability under the revolving and equipment facilities. The revised credit agreement also provides consent for Micron’s Stock Repurchase Program under certain conditions. CFO Glen Bunnell commented, “Based on current expectations, we are confident that the revised banking agreement provides adequate liquidity for our current operating needs.”

The Company’s Board of Directors has approved a stock repurchase program under which the Company may purchase up to $1,000,000 of its Common Stock, but not to exceed 300,000 shares of Common Stock, or approximately 10% of the company’s outstanding shares. Stock repurchases under the Company’s stock repurchase program may be made in the open market or in privately negotiated transactions or otherwise, with the amount and timing of repurchases subject to market conditions, contractual restrictions, assessments of corporate needs, available financing consistent with our amended credit facility, and other factors. Open market repurchases will be structured to occur within the pricing and volume requirements of Rule 10b-18. This Company’s stock repurchase program does not obligate the Company to acquire any particular amount of Common Stock and the program may be extended, modified, suspended or discontinued at any time at the Company’s discretion.

Andrei Soran, Chairman of Micron’s Board of Directors commented: “The share repurchase authorization reflects our confidence in the value of the company while offering shareholders liquidity.”

About Micron Solutions, Inc.

Micron Solutions, Inc., through its wholly-owned subsidiary, Micron Products, Inc., is a diversified contract manufacturing organization that produces highly-engineered, innovative medical device components requiring precision machining and injection molding. The Company also contract manufactures components, devices and equipment for military, law enforcement, industrial and automotive applications. In addition, the Company is a market leader in the production and sale of silver/silver chloride coated and conductive resin sensors used as consumable component parts in the manufacture of integrated disposable electrophysiological sensors. The Company’s strategy for growth is to build a best-in-class contract manufacturer with a specialized focus on plastic injection molding and highly-engineered medical devices and components requiring precision machining.

The Company routinely posts news and other important information on its website: http://www.micronsolutions.com


FINANCIAL TABLES FOLLOW

Fourth Quarter 2021 (unaudited)

$ In thousands   Q4 2021     Q4 2020     $ Change     % Change  
Net sales $ 4,375   $ 5,613   $ (1,238)     -22.1 %
Gross profit $ 223   $ 831   $ (608)     -73.2 %
Gross margin   5.1%     14.8%              
Net income (loss) $ (928)   $ 78   $ (1,006)        
Earnings (loss) per share $ (0.30)   $ 0.03   $ (0.33)        


Fiscal Year 2021 (unaudited)

$ In thousands   2021     2020     $ Change     % Change  
Net sales $ 20,410   $ 20,838   $ (428)     -2.1 %
Gross profit $ 1,851   $ 3,546   $ (1,695)     -47.8 %
Gross margin   9.1%     17.0%              
Net income (loss) $ 1,727   $ 1,148   $ 579        
Basic Earnings per share $ 0.57   $ 0.39   $ 0.18        


MICRON SOLUTIONS, INC.
ADJUSTED EBITDA RECONCILIATION (1)
($ in thousands)

    Three Months Ended     Year Ended
    December 31,     December 31,
    2021     2020     2021     2020  
Net income (loss) $ (928)   $ 78   $ 1,727   $ 1,148  
Interest expense   21     75     129     323  
Depreciation and amortization   255     303     1,110     1,296  
Share-based compensation   53     62     271     188  
(Gain)/Loss on sale of fixed assets   82         (3,341)      
Paycheck Protection Program Grant Income               (1,213)  
Adjusted EBITDA $ (517)   $ 518   $ (104)   $ 1,742  
Adjusted EBITDA margin % of Net Sales   -11.8%     9.2%     -0.5%     8.4%  


(1) Non-GAAP Financial Measures
In addition to reporting net income, a U.S. generally accepted accounting principles (“GAAP”) measure, this news release contains information about Adjusted EBITDA (income from continuing operations adjusted for income taxes, interest, depreciation and amortization, share-based compensation expense and certain non-recurring gain on sale of fixed assets), which is a non-GAAP measure. Share-based compensation includes directors fees paid by means of stock grants versus cash as well as non-cash incentives and the Gain/Loss on sale of fixed assets includes the gain resulting from the sale/leaseback transaction of our primary facility in 2021. The Company believes Adjusted EBITDA allows investors to view its performance in a manner similar to the methods used by management and provides additional insight into its operating results. Adjusted EBITDA is not calculated through the application of GAAP. Accordingly, it should not be considered as a substitute for the GAAP measure of net income (loss) and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure. The use of any non-GAAP measure may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.

Safe Harbor Statement

Forward-looking statements made herein, including statements related to projections and liquidity needs, are based on current expectations of Micron Solutions, Inc. (“our” or the “Company”) that involve a number of risks and uncertainties and should not be considered as guarantees of future performance. Therefore, actual results may differ materially from what is expressed in or implied by these forward-looking statements. The factors that could cause our actual results of operations, financial condition, performance or achievements to be affected materially include, but are not limited to, our ability to obtain and retain order volumes from customers who represent significant proportions of net sales; our ability to maintain our pricing model, offset higher costs with product price increases and/or decreases to our cost of sales; variability of customer delivery requirements; the level of and ability to generate sales of higher margin products and services; our ability to manage our level of debt, which higher debt levels could make the Company sensitive to the effects of economic downturns and limit our ability to react to changes in the economy or our industry; failure to comply with financial and other covenants in our credit facility; the impact on the Company’s operations and financial results due to economic uncertainty and disruption including, but not limited to, the COVID-19 pandemic; reliance on revenues from exports and impact on financial results due to economic uncertainty or downturns in foreign markets; volatility in commodity and energy prices and our ability to offset higher costs with price increases; continued availability of supplies or materials and components used in manufacturing at competitive prices, including managing disruptions in the supply chain and the availability of certain raw materials; variations in the mix of products sold; maintaining regulatory quality standards applicable to our manufacturing and quality processes; and the amount and timing of investments in capital equipment, sales and marketing, engineering and information technology resources. The Company assumes no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise. More information about the Company’s financial results is included in our most recent Annual Report for the fiscal year ended December 31, 2021, which are posted at https://www.otcmarkets.com/stock/MICR/ and https://micronsolutions.com/.

For more information, contact:

Mr. Glen Bunnell
Chief Financial Officer
978.345.5000