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
