ATRM is one of the companies we follow in the
INFRASTRUCTURE "universe". Here's what I wrote last week on them...
AETRIUM MAKING NEWS
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Aetrium Incorporated (ATRM) announced two news items in the last two days we wish to highlight. First, they have entered into an agreement to acquire substantially all of the assets of Forward Systems Automation Inc. (FSA), a closely held maker of automated test handlers and other equipment for the semiconductor industry. Terms of the transaction were not disclosed.
Based in Grand Prairie, Texas, FSA was founded in 1991 by Farid Sabounchi and it has 60 employees. They are a producer of automated handling equipment, including handlers used during the final test of small outline transistors (SOTs) and other so-called discrete components. Handling equipment for discrete components is a reasonably sized niche market and one new to Aetrium. INFRASTRUCTURE has no prior knowledge of FSA and they are not tracked in handler market research data. We suspect that their revenues are likely to be in the $4 to $8 million range and key customers probably include semiconductor manufacturers like Motorola (MOT) - they make a significant portion of the SOT packaged devices for applications such as wireless products.
Today brought the second news item. ATRM announced that it has received orders totaling $16 million from more than one North American producer of memory integrated circuits for Aetrium's model M3200, a 32-site pick-and-place test handler. The M3200 is a pick-and-place test handler produced by Aetrium's San Diego Division. This division was the former SymTek Systems which Aetrium acquired and has turned around effectively.
The company stated that the sales represent the largest single order in their history. They did not disclose the customer names, but our sources lead us to believe that there are two companies involved: IBM and Micron. The IBM location is an existing customer that has been helping Aetruim / SymTek with the early evaluation of the M3200 handler (formerly known as the "VersaPak" handler). The Micron location is "Micron CMS" which is the group that takes Micron Semiconductor's DRAM rejects and screens them to reclaim lower specification parts. This has been a significant customer for SymTek gravity handlers in the past and while not the main DRAM manufacturing arm of Micron, is a key part of Micron's business to maximize the profits from the DRAM operation.
This handler has been in development prior to the acquisition in 1994 and as part of the turn-around, it has required significant debug and
completion. These two orders give endorsement to the potential success of the M3200. We anxiously await to see if it can penetrate mainstream
merchant memory chip manufacturers.
Aetrium reported $58.4 million in revenues for 1996 and last quarter
posted $11 million. With a current annual run rate of $44 million, these units should make a significant impact to 1997 revenue performance; the units will be shipped over the next 12 months. ATRM is clearly forging strongly along its stated aggressive strategy of acquisitions. As we find out more about the FSA acquisition, we will get a better feel for revenue and profit upside. Clearly, the market liked the news as the stock moved up $3 to $16 today.
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Regards,
Ron Leckie
ron@infras.com
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