SAN DIEGO, June 14, 2016 /PRNewswire/ -- RF
Industries, Ltd. (NASDAQ: RFIL) today announced results for the
fiscal second quarter ended April 30,
2016.
Second Quarter Results
Sales for the second quarter
increased 2%, or $143,000, to
$7.7 million compared to sales of
$7.6 million for the same quarter
last year. Income from continuing operations was $69,000, or $0.01
per diluted share, compared to income from continuing operations of
$364,000, or $0.04 per diluted share in the same quarter last
year. A loss from discontinued operations of $182,000, or $0.02
per share, primarily associated with the announced closure of the
Company's Bioconnect Division in March
2016, contributed to a second quarter net loss of
$113,000, or $0.01 per share. In the second quarter last
year, income from discontinued operations of $84,000, or $0.01
per share, contributed to net income of $448,000, or $0.05
per diluted share. The Company's new Rel-Tech subsidiary
contributed sales of $1.8 million
during the second quarter and the Comnet subsidiary added sales of
$2.4 million. Second quarter
operating profit of these two new divisions more than offset the
operating loss at the RF Connectors and Cable Assembly segment,
where sales continue to be affected by the slowdown in wireless
infrastructure investment. The Company did not own Rel-Tech
in the second quarter last year.
Gross profit for the second quarter of 2016 was $2.4 million, or 30% of sales, compared to gross
profit of $2.9 million, or 38% of
sales in the same period last year. Overall gross profit
declined primarily due to lower sales and lower margins at the
Connector and Cable Assembly segment and a higher sales
contribution by the Custom Cabling Manufacturing and Assembly
segment. The Custom Cabling Manufacturing and Assembly
segment, which includes the Cables Unlimited, Rel-Tech and Comnet
divisions, historically has had lower margins than the Connector
and Cable Assembly segment.
Operating expenses for the second fiscal quarter were
$2.4 million, or 31% of sales,
compared to $2.3 million or 30% of
sales in the same quarter last year. The increase is mainly
attributable to the operating expenses of Rel-Tech, which the
Company did not own in the comparable quarter of 2015.
CEO Comments
Johnny
Walker, President and CEO said, "We improved the Company's
operating profitability in our second fiscal quarter, compared to
our recent first fiscal quarter, by substantially reducing
operating losses at the RF Connector and Cable Assembly and Cables
Unlimited divisions. The sale and closure of Aviel and Bioconnect,
respectively, earlier this year, has enabled the Company to reduce
expenses and improve profitability at our remaining core business
segments. The results of these actions, along with other cost
saving initiatives, reduced our pre-tax operating loss from
continuing operations to $50,000,
compared to a pre-tax operating loss from continuing operations of
$611,000 (as reported) in the first
quarter of 2016.
"Going forward, the Company is focused on increasing sales
growth at the Custom Cabling Manufacturing and Assembly segment,
now our largest business operation, and enhancing our distribution
and OEM customer base at RF Connector and Cable Assembly
segment. To accomplish this, we are actively exploring sales
opportunities for all Company segments through direct demand
creation efforts and partnerships with other companies in the
Distributed Antenna Systems (DAS) market, specifically in the
public safety sector. Additionally, the Company is pursuing
new and existing opportunities and targeting additional OEM
expansion into international markets, including Europe and Mexico, with newly designed solutions for
fiber optics, cable assemblies and DAS components."
Six Months Results
For the first half of fiscal 2016,
sales increased 4%, or $610,000, to
$14.5 million compared to sales of
$13.9 million for the same period
last year. The Company had loss from continuing operations of
$247,000, or $0.03 per share, compared to income from
continuing operations of $306,000, or
$0.04 per share in the same period
last year. Losses from discontinued operations of
$220,000 or $0.02 per share, primarily associated with the
closure of the Bioconnect division, resulted in a net loss of
$467,000, or $0.05 per share. In the first half last
year, net income from discontinued operations of $208,000, or $0.02
per share, contributed to net income of $514,000, or $0.06
per share. The Company's Rel-Tech subsidiary achieved sales
of $3.3 million and the Comnet
subsidiary added sales of $4.6
million in the first half of fiscal 2016. The Company
did not own Rel-Tech in the same period last year.
Gross profit for the first half of fiscal 2016 was $4.4 million, or 30% of sales, compared to gross
profit of $5.1 million, or 37% of
sales, in the first half last year. The decline in gross
profit is primarily the result of lower sales and margins at the
Connector and Cable Assembly segment and higher sales of typically
lower margin products in the Custom Cabling Manufacturing and
Assembly Segment.
Operating expenses for the first half of fiscal 2016 increased
by $385,000 to $5.0 million, or 35% of sales, from $4.6 million, or 33% of sales in the same period
last year, primarily due to expenses incurred at Rel-Tech, a
division that the Company did not own in the comparable period in
2015.
Financial Data; Dividends
At April 30, 2016, the Company reported working
capital of $14.4 million, including
cash and cash equivalents of $5.0
million, a current ratio of approximately 5.4-to-1, no
long-term debt and stockholders' equity of $25.1 million. During the first half of
fiscal 2016, the Company paid out cash dividends of $0.09 per share, or $787,000, to common stock shareholders.
At its June 8, 2016 meeting, the
Company's Board of Directors declared a quarterly cash dividend of
$0.02 per common share, payable
July 15, 2016 to shareholders of
record on June 30, 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.
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, the Company's ability to penetrate the Distributed
Antenna Systems (DAS) market; its ability to expand its OEM
relationships into international markets; and the success it has
with newly designed solutions for fiber optics, cable assemblies
and DAS components. . 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.
(tables attached)
RF INDUSTRIES,
LTD. AND SUBSIDIARY
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(UNAUDITED) (In
thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
April 30,
|
|
April 30,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Net sales
|
$ 7,735
|
|
$ 7,592
|
|
$ 14,519
|
|
$ 13,909
|
Cost of sales
|
5,383
|
|
4,735
|
|
10,144
|
|
8,824
|
|
|
|
|
|
|
|
|
Gross profit
|
2,352
|
|
2,857
|
|
4,375
|
|
5,085
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Engineering
|
179
|
|
188
|
|
340
|
|
368
|
Selling and general
|
2,251
|
|
2,065
|
|
4,684
|
|
4,271
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
2,430
|
|
2,253
|
|
5,024
|
|
4,639
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
(78)
|
|
604
|
|
(649)
|
|
446
|
|
|
|
|
|
|
|
|
Other income
|
28
|
|
10
|
|
28
|
|
15
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations before provision for income taxes
|
(50)
|
|
614
|
|
(621)
|
|
461
|
Provision (benefit) for income taxes
|
(119)
|
|
250
|
|
(374)
|
|
155
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
69
|
|
364
|
|
(247)
|
|
306
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations, net of tax
|
(182)
|
|
84
|
|
(220)
|
|
208
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$ (113)
|
|
$
448
|
|
$ (467)
|
|
$
514
|
|
|
|
|
|
|
|
|
Earnings (loss) per share - Basic:
|
|
|
|
|
|
|
|
Continuing operations
|
$ 0.01
|
|
$ 0.04
|
|
$ (0.03)
|
|
$ 0.04
|
Discontinued operations
|
(0.02)
|
|
0.01
|
|
(0.02)
|
|
0.02
|
|
|
|
|
|
|
|
|
Net income (loss) per share
|
$ (0.01)
|
|
$ 0.05
|
|
$ (0.05)
|
|
$ 0.06
|
|
|
|
|
|
|
|
|
Earnings (loss) per share - Diluted:
|
|
|
|
|
|
|
|
Continuing operations
|
$ 0.01
|
|
$ 0.04
|
|
$ (0.03)
|
|
$ 0.04
|
Discontinued operations
|
(0.02)
|
|
0.01
|
|
(0.02)
|
|
0.02
|
|
|
|
|
|
|
|
|
Net income (loss) per share
|
$ (0.01)
|
|
$ 0.05
|
|
$ (0.05)
|
|
$ 0.06
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
8,759,570
|
|
8,509,970
|
|
8,738,012
|
|
8,395,952
|
|
|
|
|
|
|
|
|
Diluted
|
8,759,570
|
|
8,883,182
|
|
8,738,012
|
|
8,773,667
|
|
|
|
|
|
|
|
|
RF INDUSTRIES, LTD.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands, except share and per share amounts)
|
|
|
|
Apr. 30,
|
|
Oct. 31,
|
2016
|
|
2015
|
|
|
(audited)
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
Cash and cash equivalents
|
$ 5,021
|
|
$ 7,595
|
Trade accounts receivable, net
|
4,015
|
|
3,980
|
Inventories
|
6,810
|
|
6,928
|
Other current assets
|
1,412
|
|
728
|
Deferred tax assets
|
426
|
|
426
|
|
|
|
|
TOTAL CURRENT ASSETS
|
17,684
|
|
19,657
|
|
|
|
|
Property and equipment, net
|
807
|
|
921
|
Goodwill
|
5,913
|
|
5,913
|
Amortizable intangible assets, net
|
3,924
|
|
4,268
|
Non-amortizable intangible assets
|
1,387
|
|
1,387
|
Note receivable from stockholder
|
--
|
|
67
|
Other assets
|
175
|
|
39
|
|
|
|
|
TOTAL ASSETS
|
$29,890
|
|
$32,252
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
Accounts payable
|
$1,094
|
|
$1,493
|
Accrued expenses
|
2,166
|
|
2,868
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
3,260
|
|
4,361
|
|
|
|
|
Deferred tax liabilities
|
1,143
|
|
1,143
|
Other long-term liabilities
|
377
|
|
377
|
|
|
|
|
TOTAL LIABILITIES
|
4,780
|
|
5,881
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
Common stock, authorized 20,000,000 shares of $0.01 par
value; 8,835,483 and
8,713,664 shares issued and outstanding at
April 30, 2016 and October 31, 2015, respectively
|
88
|
|
87
|
Additional paid-in capital
|
19,121
|
|
19,129
|
Retained earnings
|
5,901
|
|
7,155
|
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY
|
25,110
|
|
26,371
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$29,890
|
|
$32,252
|
|
|
|
|
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SOURCE RF Industries, Ltd.