AmpliTech Group, Inc. (Nasdaq: AMPG), a designer, developer, and
manufacturer of state-of-the-art signal-processing components for
satellite and 5G communications networks, defense, space, and other
commercial applications, announced today that it has completed the
purchase of the assets and operations of Spectrum Semiconductor
Materials Inc., a global specialty distributor of semiconductor
components based in San Jose, CA.
Spectrum is expected to deliver significant
strategic and top and bottom-line benefits to AmpliTech. Spectrum
expects 2021 unaudited revenue of $13M ($2M higher than previously
announced), with a pre-tax net income margin of approximately 25%.
AmpliTech’s total revenue over the past four quarters was $3.5M.
AmpliTech and Spectrum have current order backlogs of $3.8M and
$7.6M, respectively, for a record consolidated backlog for
AmpliTech Group of $11.4M in orders expected to ship in the first
half of 2022.
Spectrum has achieved solid growth and
attractive net margins by building strong customer relationships
across a range of niche markets and supporting their specific needs
by stocking a wide variety of specialty products, unmatched by
larger competitors. Further, Spectrum leverages disruptive digital
inventory practices to optimize its operating efficiency and to
enhance its ability to meet customer needs.
The purchase price was $8.0M in cash, plus $1.5M to be held in
escrow through December 2022 to fund purchase price or other
adjustments, plus the issuance of 188,442 restricted shares of
AmpliTech common stock. The parties agreed to a purchase price
adjustment of 25% of Spectrum’s cumulative net revenue above or
below $20M in sales for calendar years 2021 and 2022 combined.
Post-closing, AmpliTech had approximately $17M in cash, cash
equivalents, and marketable securities, and no long-term debt.
Each company brings proven sales personnel and
relationships that will complement each other in addressing an
expanded market opportunity. Spectrum Semiconductors has been
building its radio frequency (RF) focused semiconductor revenue
base and is expected to provide a powerful distribution platform in
the U.S., Europe, and Asia for AmpliTech’s new line of monolithic
microwave integrated circuit (MMIC) chip designs. Spectrum is
positioned to package these and future designs for high-volume
applications.
AmpliTech’s innovative MMIC chip designs
integrate its industry-leading low noise signal amplification
(LNA), signal filter, and signal attenuator technologies into a
much smaller and more flexible chip form factor. Foundry production
of initial MMIC wafers has been completed, and they are now
undergoing initial testing. MMIC chipsets remain on schedule for
commercial availability and sampling during Q1 2022
AmpliTech CEO, Fawad Maqbool, commented,
“Through the Spectrum acquisition we have substantially increased
our revenue base with a well-managed, growing business known for
high quality and excellent customer service. We expect the
transaction will be immediately accretive to our top-and
bottom-line financial performance. Spectrum also provides an ideal
distribution platform to support the launch and commercialization
of our MMIC chip solutions in core end markets of aerospace,
defense, automotive, and computing. We expect AmpliTech and
Spectrum to play a key role in improving the speed and efficiency
of 5G cellular networks and medium earth orbit (MEO) and low earth
orbit (LEO) satellite communications systems around the world.”
Steve Ochoa, Spectrum’s President, commented, “We are very
excited to join forces with AmpliTech and are already focused on
several joint business development opportunities that should expand
the reach and value of our respective solutions and total market
opportunity.”
About Spectrum Semiconductor Materials, Inc. Spectrum is
a global authorized distributor of semiconductor components for
integrated circuit (IC) assembly for prototyping, testing and
production requirements. It has a 31-year track record for
delivering high-quality products, excellent customer service and
long-standing supplier relationships.
Spectrum’s particular strength is its flexibility and ability to
meet customer needs, stocking the broadest range of off-the-shelf
or custom package configurations and providing support in tooling
packages for specific technical requirements. Spectrum economies of
scale allow it to meet customers’ quantity requirements with quick
turn capabilities at highly competitive pricing.
Spectrum QMS is ISO 9001:2015 and AS9120B certified, meeting the
highest standards required by global and environmental directives.
Spectrum sources only the highest quality materials from major
manufacturers such as Kyocera, NTK and Materion Advanced
Materials.
About AmpliTech (www.AmpliTechinc.com)
AmpliTech Group, Inc. designs, develops, and
manufactures state-of-the-art radio frequency (RF) microwave
components for global satellite communications, telecom (5G &
IoT), space, defense, and quantum computing markets as well as
systems and component design consulting services. AmpliTech has a
13+ year track record of developing high performance, custom
solutions to meet the unique needs of some of the largest companies
in the global industries we serve. We are proud of the unique
skills, experience and dedication of our focused team which enables
us to deliver superior solutions, faster time to market,
competitive pricing and excellent customer satisfaction and repeat
business.
Safe Harbor Statement
This release contains statements that constitute
forward-looking statements. These statements appear in several
places in this release and include all statements that are not
statements of historical fact regarding the intent, belief or
current expectations of the Company, its directors or its officers
with respect to, among other things: (i) the impact of the
acquisition on the Company’s operating results; (ii) trends
affecting the Company's financial condition or results of
operations; (iii) the Company's growth strategy and operating
strategy. The words "may" "would" "will" "expect" "estimate"
"anticipate" "believe" "intend" and similar expressions and
variations thereof are intended to identify forward-looking
statements. Investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve
risks and uncertainties, many of which are beyond the Company's
ability to control, and that actual results may differ materially
from those projected in the forward-looking statements because of
various factors. Other risks are identified and described in more
detail in the “Risk Factors” section of the Company’s filings with
the SEC, all of which are available on our website. We undertake no
obligation to update, and we do not have a policy of updating or
revising, these forward-looking statements, except as required by
applicable law.
Non-GAAP Financial InformationThis press release includes
a statement relating to the Company’s and Spectrum’s order backlog.
Backlog represents the dollar amount of net sales that we expect to
recognize in the future from sales orders that have been received
from customers in the ordinary course of business. The Company
considers order backlog a relevant and preferred supplemental
measure for understanding the Company’s financial and market
position. However, such measure has inherent limitations, is not
required to be uniformly applied or audited and other companies may
use methodologies to calculate similar measures that are not
comparable. Readers should be aware of these limitations and should
be cautious as to their use of such measure.
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Company
Contact:
Shan Sawant, Director of
Communications
AmpliTech Group, Inc.
shan@AmpliTech.com
646-546-7128
Investor
Contact:David Collins or William JonesCatalyst
IRAMPG@catalyst-ir.com212-924-9800
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