Arrhythmia Research Technology, Inc. Reports 2015 Second Quarter Results

• Achieved second quarter net sales of $5.7 million and diluted earnings per share of $0.04
• $370 thousand increase in net income from continuing operations compared with the trailing first quarter of 2015
• Second quarter gross margin improved over the 2014 period and trailing first quarter of 2015

FITCHBURG, Mass., Aug. 13, 2015 (GLOBE NEWSWIRE) -- Arrhythmia Research Technology, Inc. (NYSE MKT:HRT) (the "Company"), through its wholly-owned subsidiary, Micron Products, Inc., a diversified contract manufacturing organization that produces highly-engineered, innovative medical device technologies requiring precision machining and injection molding, announced today results for its second quarter ended June 30, 2015.

Salvatore Emma, Jr., President and CEO, commented, "Improvements in production efficiency in the second quarter enabled us to overcome an approximately $200 thousand decrease in sales and post a $370 thousand profit from continuing operations over the trailing first quarter. Our second quarter also demonstrated the success of our efforts to grow our contract manufacturing business while expanding our gross margin. Looking forward, we will continue to build our capabilities and capacity to best serve our customers' increasing demands. Our investments in automation and skilled people will make us more efficient and improve our ability to scale over the long run."

Second Quarter 2015 Review

Net sales for the second quarter of 2015 were $5.7 million compared with $5.9 million in the trailing first quarter and $6.3 million in the 2014 second quarter. Net sales of custom thermoplastic injection molding and orthopedic implant components were up 53.3% year-over-year due primarily to increased orders for automotive and military and law enforcement products. Those increases helped to partially offset a 39.9% decline in sensor net sales due to a combination of lower volume and a decrease in the average price of silver versus the same prior-period. 

Despite lower sales, the Company was able to expand its gross margin over the prior-year period and 4.6 points over the trailing first quarter of 2015. This was due to lower material costs which helped to offset the impact of product mix and lower sales volume.   Additionally, increased expenditures of $137 thousand in our manufacturing quality function resulted in reduced gross profit when compared with the prior-year period.   

Selling and marketing expenses were $263 thousand, or 4.6% of net sales, in the second quarter of 2015 compared with $258 thousand, or 4.4% of net sales, in the trailing first quarter and $240 thousand, or 3.8% of net sales, in the second quarter of 2014.  Higher selling and marketing expenses were primarily related to the Company's increased involvement in trade shows for orthopedic implants.   

General and administrative expenses in the 2015 second quarter were $526 thousand, or 9.3% of net sales, compared with $648 thousand, or 11.1% of net sales, in the trailing first quarter and $543 thousand, or 8.7% of net sales, in the prior-year quarter.  Lower personnel expenses and variable compensation of $35 thousand in bonus accruals more than offset higher legal, insurance and governance costs.