SAN DIEGO, March 21, 2016 /PRNewswire/ -- RF
Industries, Ltd. (NASDAQ: RFIL) today announced results for the
fiscal first quarter ended January 31,
2016.
First Quarter Results
Sales for the fiscal first
quarter 2016 increased 1%, or $100,000, to $7.0
million compared to sales of $6.9
million for the same quarter last year. However, the
Company incurred a net loss for the fiscal first quarter 2016 of
$353,000, or $0.04 per diluted share, compared to net income
of $65,000, or $0.01 per diluted share, in the same quarter last
year. The net loss was primarily the result of the operating loss
incurred by the Company's Connectors and Cable Assembly, Cables
Unlimited and Bioconnect divisions and to a lesser extent, to a
decrease in gross margins across all divisions. First quarter 2016
results include sales from the Company's new Rel-Tech Electronics
subsidiary, which contributed sales of $1.5
million during the first quarter of fiscal 2016. The Company
did not own Rel-Tech in the first fiscal quarter 2015.
Gross profit for the first quarter 2016 was $2.1 million, or 30% of sales, compared to gross
profit of $2.5 million, or 36% of
sales in the first quarter last year. The decline in gross
profit is the result of lower sales and lower gross margins from
both the RF Connector and Cable Assembly and the Medical Cabling
and Interconnector segments compared to the first quarter last
fiscal year. Gross margin was also affected by the typically higher
volume, lower margin sales prevalent in the Custom Cabling
Manufacturing and Assembly Segment.
Selling and general expenses increased by $232,000 the first quarter 2016 compared to the
same quarter last year. The increase in selling and general
expenses is primarily attributable to the additional expenses
incurred at Rel-Tech, a division that the Company did not own in
the comparable quarter in 2015. Excluding Rel-Tech, selling
and general expenses increased approximately $84,000 in the first quarter, compared to the
same quarter last year, primarily due to an increase in sales and
marketing efforts.
CEO Comments
Johnny
Walker, President and CEO said, "First quarter sales, which
is typically our seasonally weakest quarter, in combination with
the continuing weakness in the wireless infrastructure market,
negatively impacted sales and margins at the Connector and Cable
Assembly and the Cables Unlimited divisions. We sold our Aviel
Division, which had not materially contributed to our net sales or
net income, on December 22, 2015 for
a gain of approximately $35,000. We believe that the disposition of
the non-core divisions will allow us to focus on developing
additional markets for our primary line of products. We also
believe that there are significant growth opportunities in the
Distributed Antenna Systems (DAS) market, specifically in the
Public Safety sector."
DAS is an in-building solution providing internal wireless
cellular, public safety, or any other RF signals throughout a
structure. The public safety requirement is being driven by the
International Fire Code which requires first responder in-building
coverage standards and new building codes adopted by jurisdictions
throughout the country. These in-building antenna systems utilize a
large quantity of products currently marketed by RF Industries and
are being installed in office buildings, hotels, hospitals, sports
centers and gaming centers throughout the United States. The
Company is a sponsoring member of the Safer Building Coalition
(SaferBuildings.org), an organization closely involved in reviewing
standards and procedures for public safety DAS market
applications.
Mr. Walker further stated: "DAS installations include custom
fiber solutions, coaxial cabling assemblies, plenum cables and a
number of additional passive products that are currently being
designed and manufactured by our existing divisions. These DAS
product offerings will provide additional revenue opportunities for
our other divisions."
"To fund future acquisitions and to improve our ability to
properly address all markets, our Board of Directors has decided to
reduce the quarterly cash dividend in favor of allocating our cash
resources to the expansion of our sales staff, supporting our
current businesses and to increase our penetration of the rapidly
growing Public Safety DAS market."
Financial Data; Dividends
At January 31, 2016, the Company reported working
capital of $14.5 million, including
cash and cash equivalents of $5.8
million, a current ratio of approximately 4.7-to-1, no
long-term debt and stockholders' equity of $25.5 million. During the first quarter,
the Company paid out cash dividends of $0.07 per share, or $610,000, to common stock shareholders.
At its March 3, 2016 meeting, the
Company's Board of Directors declared a quarterly cash dividend of
$0.02 per common share, payable
April 15, 2016 to shareholders of
record on March 31, 2016. All cash
dividends are made at the discretion of our board of directors,
subject to applicable laws, and depend on a number of factors,
including our financial condition, results of operations, capital
requirements, plans for future acquisitions, contractual
restrictions, general business conditions and other factors that
our board of directors may deem relevant.
On March 3, 2016 the Board of
Directors also approved the closure of the Company's Bioconnect
division which comprised the entire operations of the Company's
Medical Cabling and Interconnector segment. The closure is part of
the Company's on-going plan to close or dispose of underperforming
divisions that are not part of the Company's core operations.
About RF Industries
RF Industries is a leading
designer and manufacturer of innovative interconnect products and
complex cable assemblies across diversified, high growth markets
including wireless carriers & infrastructure, and industrial.
The Company's products include RF connectors, coaxial and custom
cable assemblies, fiber optic cables, and wiring harnesses. The
Company's connectivity products are used throughout the growing and
evolving wireless infrastructure. Through its newly acquired
Rel-Tech Electronics, Inc. and Comnet Telecom Supply, Inc.
subsidiaries, the Company also manufactures and sells other cabling
technologies and data center equipment solutions. The Company is
headquartered in San Diego,
California with operations in Yaphank, New York, and East Brunswick, New Jersey and Milford, Connecticut. Please visit the RF
Industries website at www.rfindustries.com.
Forward-Looking Statements
This press release
contains forward-looking statements with respect to future events
which are subject to a number of factors that could cause actual
results to differ materially. Factors that could cause or
contribute to such differences include, but are not limited to:
changes in the telecommunications industry; the Company's reliance
on certain distributors for a significant portion of anticipated
revenues and the uncertainty of impact upon the Company's
operations of the recent acquisition of Comnet Telecom Supply, the
patented braided cable product line, and Rel-Tech Electronics.
Further discussion of these and other potential risk factors may be
found in the Company's public filings with the Securities and
Exchange Commission (www.sec.gov) including its Form 10-K.
All forward-looking statements are based upon information available
to the Company on the date they are published and the Company
undertakes no obligation to publicly update or revise any
forward-looking statements to reflect events or new information
after the date of this release.
RF INDUSTRIES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) (in thousands, except share and per share amounts)
|
|
|
|
Three Months Ended
|
|
January 31,
|
|
2016
|
|
2015
|
|
|
|
|
Net sales
|
$ 6,984
|
|
$ 6,894
|
Cost of sales
|
4,908
|
|
4,394
|
Gross profit
|
2,076
|
|
2,500
|
|
|
|
|
Operating expenses:
|
|
|
|
Engineering
|
198
|
|
217
|
Selling and general
|
2,489
|
|
2,257
|
Total Operating Expenses
|
2,687
|
|
2,474
|
|
|
|
|
Operating income (loss)
|
(611)
|
|
26
|
|
|
|
|
Other income
|
--
|
|
5
|
Income (loss) from
continuing operations before benefit for income taxes
|
(611)
|
|
31
|
|
|
|
|
Benefit for income taxes
|
(256)
|
|
(21)
|
Income (loss)
from continuing operations
|
(355)
|
|
52
|
|
|
|
|
Income from discontinued operations, net of tax
|
2
|
|
13
|
Net income
(loss)
|
$ (353)
|
|
$
65
|
|
|
|
|
Earnings (loss)
per basic share:
|
|
|
|
Continuing operations
|
$ (0.04)
|
|
$ 0.01
|
Discontinued operations
|
0.00
|
|
0.00
|
Net income (loss)
per basic share
|
$ (0.04)
|
|
$ 0.01
|
|
|
|
|
Earnings (loss)
per diluted share:
|
|
|
|
Continuing operations
|
$ (0.04)
|
|
$ 0.01
|
Discontinued operations
|
0.00
|
|
0.00
|
Net (loss)
income per diluted share
|
$ (0.04)
|
|
$ 0.01
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
Basic
|
8,716,712
|
|
8,286,831
|
Diluted
|
8,716,712
|
|
8,667,771
|
|
|
|
|
RF INDUSTRIES, LTD.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands, except share and per share amounts)
|
|
|
|
Jan. 31,
|
|
Oct. 31,
|
2016
|
|
2015
|
|
|
(audited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
Cash and cash equivalents
|
$ 5,766
|
|
$ 7,595
|
Trade accounts receivable, net
|
3,865
|
|
3,980
|
Inventories
|
7,020
|
|
6,928
|
Other current assets
|
1,341
|
|
728
|
Deferred tax assets
|
427
|
|
426
|
|
|
|
|
TOTAL CURRENT ASSETS
|
18,419
|
|
19,657
|
|
|
|
|
Property and equipment, net
|
829
|
|
921
|
Goodwill
|
5,913
|
|
5,913
|
Amortizable intangible assets, net
|
4,096
|
|
4,268
|
Non-amortizable intangible assets
|
1,387
|
|
1,387
|
|
|
|
|
Note receivable from stockholder
|
67
|
|
67
|
Other assets
|
205
|
|
39
|
|
|
|
|
TOTAL ASSETS
|
$ 30,916
|
|
$ 32,252
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
Accounts payable
|
$ 1,649
|
|
$ 1,493
|
Accrued expenses
|
2,269
|
|
2,868
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
3,918
|
|
4,361
|
|
|
|
|
Deferred tax liabilities
|
1,143
|
|
1,143
|
Other long-term
liabilities
|
377
|
|
377
|
|
|
|
|
TOTAL LIABILITIES
|
5,438
|
|
5,881
|
|
|
|
|
COMMITTMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Common stock, authorized 20,000,000 shares of
$0.01 par value; 8,718,914 and 8,713,664 shares issued and
outstanding at January 31, 2016 and October 31, 2015,
respectively
|
87
|
|
87
|
Additional paid-in capital
|
19,200
|
|
19,129
|
Retained earnings
|
6,191
|
|
7,155
|
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY
|
25,478
|
|
26,371
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ 30,916
|
|
$ 32,252
|
|
|
|
|
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SOURCE RF Industries, Ltd.