AMGY American Metal and Technology Inc (CE)

HEBEI, China, May 9 /PRNewswire-FirstCall/ -- American Metal & Technology, Inc. (OTC:AMGY) (BULLETIN BOARD: AMGY) ("American Metal," the "Company"), a leading manufacturer in the People's Republic of China engaged in the development, manufacture and sale of high-precision metal casting and metal fabrication products to European and U.S. markets and microprocessor-controlled electronic circuit boards in China, today announced its financial results for the first quarter ended March 31, 2008. First Quarter 2008 Highlights -- Net sales increased 133.3% year-over-year to $4.9 million -- Gross profit increased 121.6% year-over-year to $1.5 million -- Net income increased 161.3% year-over-year to $1.0 million, or $0.11 per diluted share -- Increased production capacity through the addition of nine high- precision lathe machines First Quarter 2008 Results In the first quarter of 2008, net sales increased 133.3% to $4.9 million from $2.1 million a year ago. The increase resulted from increased capacity during the quarter via the addition of nine new precision lathe machines, which allowed the Company to fill additional orders. Six of the machines were operational at the beginning of the quarter, while the remaining three machines entered service in March. "We are extremely pleased with our progress during the quarter, in which we achieved an optimal combination of high efficiency, excellent gross margin and a favorable mix of orders for metal casting and machining," said Mr. Chen Gao, Chairman and Chief Executive Officer of American Metal. "We continued to expand capacity during the quarter, which allowed us to fulfill additional orders from our existing customers." Gross profit during the quarter was $1.5 million, up 121.6% from gross profit of $0.7 million a year ago because of the increased production levels. Customers continued to increase their orders for cast parts, requiring the Company to purchase metals for casting before machining the parts. Parts that are both machined and cast by the Company typically yield a higher dollar margin but a lower percentage. The mix of cast parts and machining-only orders varies from quarter to quarter, resulting in variations in gross margin but overall increases in gross profit. Operating expenses for the quarter declined as a percentage of sales, to $0.5 million, or 10.2% of net sales, from $0.3 million, or 13.0% of net sales, in the first quarter of 2007. Operating expenses included several one-time expenses related to the ongoing second phase of the Company's capacity expansion, as it continued to upgrade equipment at its manufacturing facility in Hebei, China, and added employees to operate the new machines. Operating income increased 146.5% to $1.0 million, or 19.7% of sales, from $0.4 million, or 18.9% of sales, during the same quarter the prior year. Net income for the first quarter of 2008 increased 161.3% to $1.0 million, or $0.11 per diluted share, from net income of $0.4 million, or $0.05 per diluted share, for the first quarter of 2007. Earnings per share for the first quarter of 2007 have been adjusted for a 1-for-150 reverse stock split, effective December 3, 2007. Financial Condition As of March 31, 2008, American Metal had cash and cash equivalents of $6.8 million, working capital of $9.2 million, no long-term debt and shareholders' equity of $13.2 million. During the first quarter of 2008, the Company generated $0.6 million in cash from operations, compared to $0.1 million in the same quarter the prior year. Recent Events In February 2008, the Company announced plans to invest $3 million to build additional facilities at its Langfang manufacturing center. The new facilities mark the second phase of a four-phase plan to transform the Company's capacity and capabilities for the foreseeable future. This second phase of American Metal's four-phase expansion plan will add two buildings totaling 10,900 square meters, increasing annual capacity for casting products by 50%. Construction is due to be completed in December 2008, with full production beginning in January 2009. During the first quarter ended March 31, 2008, the Company acquired and put into operation nine new high-precision lathe machines, bringing the total number of machines in use to 59. Another late machine was delivered and became operable in April 2008, bringing the current number of high-precision machines to 60, compared to 40 lathe machines a year ago. Business Outlook For the 2008 fiscal year, the Company expects global industrial demand for its products to remain strong. The Company expects to meet an increasing amount of that demand as its additional capacity comes online. Given the favorable results in the first quarter, and the successful installation and operation of additional capacity during the quarter, the Company is increasing its expectation for full-year 2008 net income to a range of $3.2 million to $3.4 million, or earnings per share of $0.29 to $0.32, from net income of $2.9 million to $3.1 million, or $0.27 to $0.29 per diluted share. Full-year guidance assumes a limited contribution from the effective launch of the second phase of the capacity expansion, which the Company expects to complete during December 2008, a mix of multiple products at varying price points and increased efficiencies as the Company gains additional experience with its growing customer base. "The first quarter of 2008 was extremely favorable for American Metal, as we experienced very strong increases in revenues and net income because of greatly expanded production capacity," Mr. Gao said. "However, there are several potential factors that could temper our results in the remaining three quarters, including appreciation of the Renminbi, the potential lifting of the export tax holiday and rapidly rising raw materials costs. Even so, we remain optimistic about our opportunities for the remainder of 2008, and we look forward to further capacity expansion coming online in January 2009." About American Metal & Technology, Inc. American Metal & Technology, through its wholly-owned subsidiary American Metal Technology Group ("AMTG"), a Nevada Corporation, and through AMTG's subsidiaries, Beijing Tong Yuan Heng Feng Technology Co., Ltd. and American Metal Technology (Lang Fang) Co., Ltd., is a leading manufacturer of high-precision casting and machined products in the People's Republic of China. The subsidiaries operate in a 53,819-square-foot manufacturing plant. In 2006, AMTG expanded into the design and manufacture of electric circuit boards for home appliances and motion controllers. The Company recently announced facility expansion plans to increase casting product capacity by 50% and enhance the development and manufacturing of its circuit board solutions at its Langfang manufacturing center. To learn more about American Metal & Technology, Inc., please visit the Company's Web site at: http://www.ammyusa.com/. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain of the statements made in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the Company's actual results to be materially different from the historical results or from any future results expressed or implied by such forward- looking statements. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms "believes," "belief," "intends," "anticipates" or "plans" to be uncertain and forward-looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company's reports filed with the Securities and Exchange Commission. Contact: CCG Elite Investor Relations Mark Collinson, Partner Phone: (310) 231-8600 ext. 117 E-mail: - FINANCIAL TABLES FOLLOW - AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES (FORMERLY MURRY UNITED DEVELOPMENT CORPORATION) CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME (Amounts expressed in U.S. dollars) Three months ended Three months ended March 31, 2008 March 31, 2007 Net sales $4,896,515 $2,108,963 Cost of goods sold 3,437,120 1,450,261 Gross profit 1,459,395 658,703 Operating expenses Selling expenses 16,258 6,835 Operating and administrative expenses 480,946 261,571 Total operating expenses 497,204 268,406 Income from operations 962,191 390,297 Other income (expense) Interest income 5,728 2,054 Gain on disposal of marketable securities 35,651 Other income (expense) 1,041 (2,698) Total other income 42,420 (644) Income before income taxes 1,004,612 389,653 Provision for income taxes - - Income before minority interests 1,004,612 389,653 Minority interests 12,585 (155) Net income 1,017,196 389,498 Unrealized loss from available securities (66,190) Foreign currency translation adjustment 547,366 79,716 Comprehensive income $1,498,372 $469,214 Basic weighted average shares outstanding 8,988,568 7,649,959 Basic net earnings per share $0.11 $0.05 Diluted weighted average shares outstanding 8,988,568 7,649,959 Diluted net earnings per share $0.11 $0.05 AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES (FORMERLY MURRY UNITED DEVELOPMENT CORPORATION) CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2008 and DECEMBER 31, 2007 ASSETS Current Assets March 31, 2008 December 31, 2007 Cash and cash equivalents $6,781,705 $6,037,193 Accounts receivable - net 1,628,323 1,332,664 Investment in marketable securities 107,581 93,196 Other receivables 156,641 134,275 Advances to suppliers 1,753,998 974,799 Inventories 606,372 547,579 Total Current Assets 11,034,619 9,119,706 Property, Plant and Equipment, net 3,071,313 3,020,972 Construction in Progress 462,305 377,240 Intangible Assets, net 707,035 692,167 Total Assets $15,275,272 $13,210,084 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable $1,067,565 $743,070 Accrued liabilities and other payables 166,450 75,765 Amount due to related parties 413,375 333,670 Unearned revenue 93,036 12,938 Total Current Liabilities 1,740,425 1,165,443 Minority Interests 324,706 337,291 Shareholders' Equity Common stocks; $0.0001 par value, 30,000,000 shares authorized, 10,402,687 shares issued and outstanding 1,040 1,040 Additional paid in capital 5,140,013 5,039,217 Statutory reserve 1,040,205 912,019 Accumulated other comprehensive income 1,475,267 994,092 Retained earnings 5,649,993 4,760,982 Total Stockholders' Equity 13,210,140 11,707,350 Total Liabilities and Shareholders' Equity $15,275,272 $13,210,084 AMERICAN METAL & TECHNOLOGY, INC. AND SUBSIDIARIES (FORMERLY MURRY UNITED DEVELOPMENT CORPORATION) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 (UNAUDITED) 2008 2007 Cash flows from operating activities: Net income $1,017,196 $389,498 Adjustments to reconcile net income to net cash provided by operating activities: Minority interest (12,585) 155 Issuance of warrants for services 4,418 - Depreciation and amortization 87,088 63,490 Gain on disposal of marketable securities (35,651) - Bad debt expenses 33,317 - (Increase)/decrease in assets: Accounts receivable, net (270,300) (735,048) Note receivable 29,334 606 Other receivables 81,202 (92,151) Inventory (35,971) (127,851) Advance to suppliers (724,723) 271,121 Prepaid expenses-LT - 138,596 Increase/(decrease) in liabilities: Accounts payable 288,502 251,089 Other payable and accrued expenses 65,421 (43,389) Unearned revenue 77,943 21,807 Net Cash Provided By Operating Activities 605,193 137,922 Cash flows from investing activities: Additions to construction in progress (68,427) - Increase in long-term investment - (129,750) Disposal (Purchase) of equipment and leasehold improvements (4,383) 114,889 Net Cash Used in Investing Activities (72,810) (14,861) Cash flows from financing activities: Purchase of marketable securities (40,620) - Proceed from loans - 116,070 Net Cash Provided By (Used in) Financing Activities (40,620) 116,070 Effects of Exchange Rate Change in Cash 252,750 8,934 Net Increase in Cash and Cash Equivalents 744,513 248,065 Cash and Cash Equivalents-Beginning Balance 6,037,193 787,444 Cash and Cash Equivalents-Ending Balance 6,781,705 1,035,509 Supplement disclosure of cash flow information: Income taxes paid $ - $ - Interest expenses paid $ - $ 627 DATASOURCE: American Metal & Technology, Inc. CONTACT: Mark Collinson, Partner of CCG Elite Investor Relations, +1-310-231-8600, ext. 117, , for American Metal & Technology, Inc. Web site: http://www.ammyusa.com/

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