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 executed a
definitive agreement to acquire the assets and operations of
Spectrum Semiconductor Materials Inc., a rapidly growing global
specialty distributor of semiconductor components based in San
Jose, CA. The transaction is expected to close within our
fiscal year 2021, subject to the satisfaction of certain closing
conditions.
The purchase is expected to deliver significant
strategic and top and bottom-line benefits while also building on
AmpliTech’s technical and management expertise and distribution
reach. Spectrum is on track to achieve unaudited 2021 revenue of
$10M - $11M, representing double-digit growth over Spectrum
Semiconductor Materials sales in fiscal 2020, with 2021 pre-tax net
income of approximately 25% of revenue. Spectrum achieves such
strong net margins by stocking a wide variety of specialty products
and employing disruptive digital inventory practices that optimize
operating efficiency. AmpliTech’s revenue for the past four
quarters was $3.5M and recently announced a record order backlog of
$3.4M following $1.2m in new orders. Spectrum Semiconductors has a
record current order backlog of $8M in orders anticipated to ship
through June 30, 2022.
The purchase price is $8.0M in cash plus $1.5M
to be held in escrow through December 2022, to fund any purchase
price or other adjustments, plus the grant of 188,442 restricted
shares of AmpliTech common stock. The parties have 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. On September 30th AmpliTech had approximately $28M
in cash, cash equivalents, and marketable securities, and no
long-term debt.
Of strategic importance, Spectrum Semiconductors
provides a powerful distribution platform in the U.S., Europe, and
Asia for AmpliTech’s new line of monolithic microwave integrated
circuit (MMIC) chip designs, and Spectrum has been building its
radio frequency (RF) focused semiconductor revenue base.
AmpliTech’s innovative MMIC chip designs integrate its
industry-leading low noise signal amplification (LNA), signal
filter, and signal attenuator technologies into the much smaller
and more flexible chip form factor. Foundry production of initial
MMIC chipsets is targeted for commercial availability by the end of
Q1 2022.
Each company brings proven sales personnel and
relationships that will complement each other in addressing the
combined company’s expanded market opportunity. Furthermore, as
AmpliTech develops its new MMIC line, Spectrum can package the
designs for high-volume applications expected to drive sales
growth. The acquisition is expected to bring AmpliTech a
substantial business development presence in Silicon Valley and
international markets, building on its existing East Coast and
Texas teams to create a broad global footprint.
AmpliTech CEO, Fawad Maqbool, commented,
“Spectrum Semiconductors is a perfect fit for advancing AmpliTech’s
strategic goals and delivering shareholder value. With Spectrum, we
will add a well-managed, growing business with a long-term track
record for high quality and excellent customer service and the
ideal distribution platform for the launch of our MMIC chip
solutions. This transaction will allow us to more than triple our
current annual revenue run rate, while also being immediately
accretive to our bottom line.
“Of equal importance, Spectrum brings us a
highly satisfied, long-term, and global customer base with
excellent penetration in our core end markets of aerospace,
defense, automotive, and computing, along with a deep Silicon
Valley presence, to support the launch of MMIC chip solutions we
plan to bring to market by the end of Q1 2022. We expect AmpliTech
and Spectrum will play a key role in improving the speed and
efficiency of communications systems around the world in
high-growth applications such as 5G cellular, MEO and LEO
satellites, quantum computing, and autonomous vehicles.
Importantly, AmpliTech is well funded to complete this transaction
and to then execute on the growth opportunities of the combined
business.”
Robert Larson, Spectrum CEO, commented, “Joining
forces with AmpliTech is a big win for our company, our customers,
and our suppliers. It provides us with a broader base of
opportunity and exciting growth potential as we collaborate to
bring AmpliTech’s premier MMIC chip solutions to market. I look
forward to collaborating with the transition efforts with the
AmpliTech team to execute on this exciting growth.”
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) 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 Company's ability to
execute its business plan as anticipated; (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 Information
This 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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