SAN DIEGO, Sept. 14, 2016 /PRNewswire/ -- RF
Industries, Ltd. (NASDAQ: RFIL) today announced results for the
third quarter and nine months ended July 31,
2016.
Third Quarter Results
Net sales for the third quarter of fiscal 2016 decreased 8% to
$7.6 million compared to $8.3 million in the same quarter last year.
The net loss for the quarter was $597,000, or $0.07
per share, including one-time expenses of $256,000 for an unconsummated strategic
transaction to enhance sales growth in the emerging Distributed
Antenna Systems (DAS) marketplace. This compares to net
income of $211,000, or $0.02 per diluted share, in the third quarter of
fiscal 2015.
Net sales at the RF Connector and Cable Assembly segment
declined 11% to $2.6 million compared
to $2.9 million in the third quarter
last year. Segment sales in the third quarter last year
included sales of $225,000 from the
Aviel Electronics division, which was sold in December, 2015.
Excluding Aviel, the RF Connector and Cable Assembly segment net
sales declined 4% compared to the third quarter last year but
increased 24% compared to net sales in the recent fiscal second
quarter. Net sales at the Custom Cabling and Manufacturing
segment declined 6% to $5.1 million
from $5.4 million in the same quarter
last year. The recently acquired Comnet and Rel-Tech
divisions of the Custom Cabling and Manufacturing segment were
profitable in the third quarter of fiscal 2016 and contributed net
sales of $3.9 million compared to
$4.0 million in the third quarter
last year.
The Company's third quarter gross profit was 28% of sales,
compared to 31% of sales in the same quarter last year, due to a
lower margin product mix at the RF Connector and Cable Assembly
segment, combined with reduced sales at the Cables Unlimited
division.
Selling and general expenses of the Company increased
$180,000, to $2.6 million, or 34% of sales, from $2.4 million, or 29% of sales, in the third
quarter last year. Expenses increased primarily due to the
one-time expenses of $256,000 related
to the strategic transaction and additional operating expenses of
$77,000 for the Rel-Tech division,
which the Company did not own for the entire comparable quarter of
2015. Excluding expenses related to the strategic transaction and
Rel-Tech, selling and general expenses decreased $153,000 or 6% compared to the same quarter last
year.
Johnny Walker, RFI's CEO and
President said, "We are focusing marketing and product development
efforts on the rapidly growing DAS market to accelerate sales of
core products and improve operating margins. While we
continue our efforts to partner with, acquire businesses in the DAS
market or develop new products to support sales growth in this
marketplace, we are also taking efforts to increase sales in the
Company's historical markets. Sales to the wireless
infrastructure industry have recently declined, but appear to have
stabilized. We are supplementing efforts to increase sales in
the wireless market with concrete steps to improve operating
profitability at the RF Connector and Cable Assembly segment and
Cables Unlimited division. By the end of the calendar year,
our goal is to reduce headcount and eliminate other expenses in
order to lower annual operating expenses by up to $1.5 million."
Walker noted that in the past twelve months, excluding the
additional reductions mentioned above, the Company has lowered
headcount and closed or sold marginal businesses, reducing annual
fiscal 2016 operating expenses by over a million dollars.
Nine Months Results
Net sales of $22.2 million for the
first nine months of fiscal 2016 were relatively flat compared to
the same period last year. The net loss for the first nine
months of fiscal 2016 was $1.1
million, or $0.11 per share,
including one-time expenses of $256,000 related to the strategic efforts in the
emerging DAS marketplace. This compares to net income of
$724,000, or $0.09 per diluted share, for the first nine
months of fiscal 2015.
RF Connector and Cable Assembly segment net sales for the first
nine months of fiscal 2016 declined 26% to $6.6 million compared to $8.9 million for the same period last year.
Results for the same period in fiscal 2015 included sales of
$770,000 from the Aviel Electronics
division, which was sold in December
2015. Custom Cabling and Manufacturing segment net
sales for the first nine months of fiscal 2016 increased 17% to
$15.5 million from $13.3 million in the same period last year and
its Rel-Tech division, acquired in June
2015, contributed $5.0 million
of net sales in the first nine months of fiscal 2016 compared to
net sales of only $1.2 million in the
same period last year.
Overall gross profit for the first nine months of fiscal 2016
was 29% of sales, compared to 34% of sales in the same period last
year, primarily due to lower margin product sales at the RF
Connector and Cable Assembly segment and the Cables Unlimited
division.
Selling and general expenses for the first nine months of fiscal
2016 increased $593,000, to
$7.3 million, or 33% of sales, from
$6.7 million, or 30% of sales, in the
same period last year, due to one-time expenses of $256,000 for DAS market efforts and additional
$394,000 of expenses for the Rel-Tech
division, which was included in Company operations for only two
months of fiscal 2015. Excluding expenses related to the strategic
transaction and the addition of Rel-Tech, selling and general
expenses decreased $57,000 or 1%
compared to the same period in fiscal 2015.
Balance Sheet Data
At July 31, 2016, the Company
reported working capital of $13.7
million, including cash and cash equivalents of $4.6 million, a current ratio of 4.7-to-1, no
outstanding debt, and stockholders' equity of $24,549,000. During the first nine months
of fiscal 2015, the Company used net cash of $1.0 million to pay common stock dividends to its
stockholders.
Dividend
At its September 8, 2016 meeting,
the Company's Board of Directors declared a quarterly cash dividend
of $0.02 per share, payable on
October 15, 2016 to stockholders of
record on September 30, 2016.
Cash dividends are made at the discretion of the Company's 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 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, 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; the success it
has with newly designed solutions for fiber optics, cable
assemblies and DAS components and its ability to
successfully reduce its operating expenses as planned.
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. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(UNAUDITED) (In
thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
July 31,
|
|
July 31,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Net sales
|
$
7,640
|
|
$
8,315
|
|
$
22,159
|
|
$
22,223
|
Cost of sales
|
5,513
|
|
5,765
|
|
15,657
|
|
14,589
|
Gross profit
|
2,127
|
|
2,550
|
|
6,502
|
|
7,634
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Engineering
|
217
|
|
210
|
|
557
|
|
577
|
Selling and general
|
2,577
|
|
2,397
|
|
7,261
|
|
6,668
|
Total Operating Expenses
|
2,794
|
|
2,607
|
|
7,818
|
|
7,245
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
(667)
|
|
(57)
|
|
(1,316)
|
|
389
|
|
|
|
|
|
|
|
|
Other income (loss)
|
(32)
|
|
4
|
|
(4)
|
|
19
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations
|
|
|
|
|
|
|
|
before provision (benefit)
for income taxes
|
(699)
|
|
(53)
|
|
(1,320)
|
|
408
|
Provision (benefit) for income taxes
|
45
|
|
(112)
|
|
(330)
|
|
43
|
Income (loss) from continuing operations
|
(744)
|
|
59
|
|
(990)
|
|
365
|
|
|
|
|
|
|
|
|
Income (loss) from
|
|
|
|
|
|
|
|
discontinued operations, net of tax
|
147
|
|
152
|
|
(74)
|
|
359
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
(597)
|
|
$
211
|
|
$
(1,064)
|
|
$
724
|
|
|
|
|
|
|
|
|
Earnings (loss) per share - Basic:
|
|
|
|
|
|
|
|
Continuing operations
|
$
(0.08)
|
|
$
0.01
|
|
$
(0.11)
|
|
$
0.04
|
Discontinued operations
|
0.01
|
|
0.01
|
|
(0.01)
|
|
0.05
|
Net income (loss) per share
|
$
(0.07)
|
|
$
0.02
|
|
$
(0.12)
|
|
$
0.09
|
|
|
|
|
|
|
|
|
Earnings (loss) per share - Diluted:
|
|
|
|
|
|
|
|
Continuing operations
|
$
(0.08)
|
|
$
0.01
|
|
$
(0.11)
|
|
$
0.04
|
Discontinued operations
|
0.01
|
|
0.01
|
|
(0.01)
|
|
0.04
|
Net income (loss) per share
|
$
(0.07)
|
|
$
0.02
|
|
$
(0.12)
|
|
$
0.08
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
8,834,747
|
|
8,545,300
|
|
8,770,375
|
|
8,446,223
|
Diluted
|
8,834,747
|
|
8,916,643
|
|
8,770,375
|
|
8,820,438
|
|
|
|
|
|
|
|
|
RF INDUSTRIES, LTD. AND
SUBSIDIARIES
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands, except share and per share amounts)
|
|
|
|
Jul. 31,
|
|
Oct. 31,
|
2016
|
|
2015
|
(Unaudited)
|
|
(Audited)
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
Cash and cash equivalents
|
$
4,649
|
|
$
7,595
|
Trade accounts receivable, net
|
4,314
|
|
3,980
|
Inventories
|
6,492
|
|
6,928
|
Other current assets
|
1,525
|
|
728
|
Deferred tax assets
|
426
|
|
426
|
TOTAL CURRENT ASSETS
|
17,406
|
|
19,657
|
|
|
|
|
Property and equipment, net
|
938
|
|
921
|
Goodwill
|
5,913
|
|
5,913
|
Amortizable intangible assets, net
|
3,766
|
|
4,268
|
Non-amortizable intangible assets
|
1,387
|
|
1,387
|
Note receivable from stockholder
|
--
|
|
67
|
Other assets
|
155
|
|
39
|
TOTAL ASSETS
|
$
29,565
|
|
$
32,252
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
Accounts payable
|
$
1,172
|
|
$
1,493
|
Accrued expenses
|
2,540
|
|
2,868
|
TOTAL CURRENT LIABILITIES
|
3,712
|
|
4,361
|
|
|
|
|
Deferred tax liabilities
|
1,143
|
|
1,143
|
Other long-term liabilities
|
161
|
|
377
|
TOTAL LIABILITIES
|
5,016
|
|
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 July 31, 2016 and October 31, 2015, respectively
|
88
|
|
87
|
Additional paid-in capital
|
19,334
|
|
19,129
|
Retained earnings
|
5,127
|
|
7,155
|
TOTAL STOCKHOLDERS' EQUITY
|
24,549
|
|
26,371
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
29,565
|
|
$
32,252
|
|
|
|
|
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SOURCE RF Industries, Ltd.