Gross margin was 43.8% in the first quarter, a 340-basis point contraction compared with the prior-year period primarily due to the timing of the acquisition, volume and product mix. Due to the stub period of ownership and timing of revenue and costs, the acquisition was dilutive to gross margin by 100 basis points. Operating expenses increased primarily because of $350,000 of incremental expenses gained from the acquisition, $650,000 of incremental corporate development expenses and approximately $200,000 in higher professional fees associated with reporting of 2023 financials and Sarbanes-Oxley Act compliance. These costs were somewhat offset by lower selling costs and expense management.
With the benefit of other income in the quarter of $0.4 million, net earnings were $0.7 million, or $0.05 per diluted share. Adjusted net earnings (Non-GAAP) 2 were $1.2 million, or $0.10 adjusted EPS (Non-GAAP) 2.
Balance Sheet and Cash Flow Review
Cash and cash equivalents (including restricted cash) at the end of the first quarter of 2024 were $27.3 million, down from $45.3 million at the end of December 31, 2023 as a result of approximately $19 million in cash used for the acquisition. During the quarter, the Company generated $2.1 million in cash from operations. Capital expenditures were $0.3 million in the first quarter of 2024, similar to the prior-year period.
At quarter end, total debt was $20.4 million which includes approximately $9.4 million assumed with the acquisition. The Company repaid approximately $1 million in debt in the quarter. At March 31, 2024, the Company had $30 million available under its delayed draw term loan facility and no borrowings under the $10 million revolving credit facility. On May 2, 2024, the Company extended the maturity of its delayed draw term loan and revolving credit facility to May 2, 2031. In addition, the allowed window to draw on the term loan was extended to May 2, 2026.
_______________________
2 Adjusted net earnings, adjusted EPS, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP financial measures. Further information can be found under “Non-GAAP Financial Measures.” See also the reconciliations of GAAP financial measures to non-GAAP financial measures that accompany this press release |
First Quarter 2024 Orders and Backlog (see orders by market in accompanying tables)
|
Three Months Ended |
|||||||||||||||
($ in 000s) |
|
|
Change |
|
Change |
|||||||||||
|
3/31/2024 |
3/31/2023 |
$ |
% |
12/31/2023 |
$ |
% |
|||||||||
Orders |
$ |
22,799 |
$ |
30,824 |
$ |
(8,025 |
) |
-26.0 |
% |
$ |
27,523 |
$ |
(4,724 |
) |
-17.2 |
% |
Backlog (at quarter end) |
$ |
55,481 |
$ |
45,705 |
$ |
9,776 |
|
21.4 |
% |
$ |
40,130 |
$ |
15,351 |
|
38.3 |
% |
