SAN DIEGO, Jan. 27, 2017 /PRNewswire/ -- RF
Industries, Ltd. (NASDAQ: RFIL) today announced results for the
fourth quarter and fiscal year ended October
31, 2016.
Fourth Quarter Results
Net sales for the fourth
quarter of fiscal 2016 were $8.1
million compared to net sales of $8.7
million for the same quarter last year. The net loss
for the quarter was $3.0 million, or
$0.34 per share, compared to net
income of $270,000, or $0.03 per diluted share, in the same quarter last
year. The fourth quarter net loss was primarily the result of
a non-cash goodwill impairment charge of $2.8 million. Net sales declined, primarily
associated with lower sales at the Company's Custom Cabling
Manufacturing and Assembly ("Custom Cabling") segment, which
contributed only $5.3 million,
compared to $5.9 million of net sales
in the same quarter last year.
Howard Hill, interim President
and CEO said, "Although sales at the Custom Cabling segment
continue to be affected by weak demand for our telecommunications,
data and wireless products, fourth quarter sales improved at the RF
Connector and Cable Assembly segment, compared to the same quarter
last year. While we have significantly reduced operating
expenses, fourth quarter fiscal 2016 selling and general expenses
were affected by certain one-time expenses associated with changes
in management personnel. Going forward, we anticipate that
our on-going efforts to reduce expenses should result in annual
savings of approximately $750,000 for
the coming fiscal year."
Gross profit for the fourth quarter of fiscal 2016 declined to
$2.0 million, or 24.3% of sales,
compared to $2.8 million, or 32.6% of
sales, in the same quarter last year due to lower gross margins at
all Company divisions. Selling and general expenses increased
slightly to $2.3 million from
$2.2 million in the fourth quarter
last year, and increased, as a percentage of sales, to 28.4% from
25.6% in the same quarter last year, primarily due to one-time
expenses related to changes in senior management personnel.
These one-time expenses were partly offset by reduced headcount and
improved expense controls at the Custom Cabling segment, where
fourth quarter selling and general expenses declined 23.9% to
$919,000, or 17.2% of sales, compared
to $1,208,000, or 20.4% of sales in
the same quarter last year. Operating income in the fourth
quarter of fiscal 2016 was affected by the one-time, non-cash
accounting charge of $2.8 million for
the write-down of the Company's goodwill investment in its Cables
Unlimited subsidiary.
Fiscal Year Results
Net sales for the fiscal year
ended October 31, 2016 were
$30.2 million, compared to net sales
of $30.9 million in fiscal
2015. The net loss in fiscal 2016 was $4.1 million, or $0.47 per share, including the non-cash goodwill
impairment charge of $2.8
million. Net income last year was $994,000 or $0.11
per diluted share. While net sales at the Custom Cabling
segment increased 8.8%, to $20.9
million, compared to $19.2
million in fiscal 2015, fiscal 2016 net sales at Custom
Cabling benefited from twelve months of sales at Rel-Tech, compared
to only four months in fiscal 2015. Net sales at the RF
Connector segment declined to $9.4
million, compared to $11.7
million in fiscal 2015, when sales benefitted from
$883,000 in sales at the Aviel
division, which was sold in the first quarter of fiscal 2016.
"In fiscal 2016, we shut down and sold underperforming divisions
that no longer fit in our core operations. We are optimistic
that the rapidly growing Distributed Antenna Systems market, the
improving strength of certain telecom industry segments and our
significant expense reductions at the Custom Cabling segment will
lead to improved sales and to profitability in the coming year,"
said Hill.
Fiscal 2016 gross profit declined to 28% from 33.8% of sales
last year primarily due to higher sales from the lower margin
Custom Cabling segment. Gross margins at this segment were
20.9% of sales, compared to 23.4% of sales in fiscal 2015.
Gross margins at the RF Connector and Cable Assembly segment were
43.8% compared to 50.9% in fiscal 2015.
Selling and general expenses for fiscal 2016 increased
$672,000, to $9.6 million, or 31.6% of sales, compared to
$8.9 million, or 28.8% of sales in
fiscal 2015. The Custom Cabling segment accounted for a
$412,000 increase in general and
administrative expenses, primarily due to operating expenses at
Rel-Tech, which the Company owned for the full fiscal year 2016,
compared to only four months in fiscal 2015. An additional
$256,000 of one-time expenses related
to an abandoned strategic business combination, together with
expenses related to management personnel changes, added
$441,000 to general and
administrative expenses for fiscal 2016. Fiscal 2016
operating income was affected by the one-time non-cash expense of
$2.8 million related to an accounting
write-down of approximately 90% of the Company's remaining goodwill
and intangibles investment in Cables Unlimited.
Balance Sheet Data
At October
31, 2016, the Company reported working capital of
$12.8 million, including cash and
cash equivalents of $5.3 million, a
current ratio of approximately 4.3-to-1, no long-term debt, and
stockholders' equity of $21.4
million. During fiscal 2016, the Company used net cash
of $1.1 million to pay cash dividends
of $0.13 per share to its
shareholders.
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, including the Company's ability to
improve sales, reduce expenses, and attain profitability.
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; 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.
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED) (in thousands, except share and per share amounts)
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
October 31,
|
|
October 31,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Net sale
|
$
8,082
|
|
$
8,685
|
|
30,241
|
|
$
30,908
|
Cost of sales
|
6,121
|
|
5,857
|
|
21,778
|
|
20,446
|
|
|
|
|
|
|
|
|
Gross profit
|
1,961
|
|
2,828
|
|
8,463
|
|
10,462
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Engineering
|
190
|
|
198
|
|
747
|
|
775
|
Goodwill
and other intangible impairment
|
2,844
|
|
--
|
|
2,844
|
|
--
|
Selling and
general
|
2,299
|
|
2,220
|
|
9,560
|
|
8,888
|
Total operating expenses
|
(5,333)
|
|
2,418
|
|
13,151
|
|
9,663
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
(3,372)
|
|
410
|
|
(4,688)
|
|
799
|
|
|
|
|
|
|
|
|
Other income
|
9
|
|
16
|
|
5
|
|
35
|
|
|
|
|
|
|
|
|
Income (loss)
from continuing
operations
before provision for income taxes
|
(3,363)
|
|
426
|
|
(4,683)
|
|
834
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
(322)
|
|
97
|
|
(652)
|
|
140
|
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations
|
(3,041)
|
|
329
|
|
(4,031)
|
|
694
|
|
|
|
|
|
|
|
|
Income (loss)
from
discontinued
operations, net of tax
|
17
|
|
(59)
|
|
(58)
|
|
300
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(3,024)
|
|
$
270
|
|
$
(4,089)
|
|
$
994
|
|
|
|
|
|
|
|
|
Earnings (loss)
per basic share:
|
|
|
|
|
|
|
|
Continuing operations
|
$
(0.34)
|
|
$
0.04
|
|
$
(0.46)
|
|
$
0.08
|
Discontinued operations
|
0.00
|
|
(0.01)
|
|
(0.01)
|
|
0.04
|
|
|
|
|
|
|
|
|
Net income (loss) per share
|
$
(0.34)
|
|
$
0.03
|
|
$
(0.47)
|
|
$
0.12
|
|
|
|
|
|
|
|
|
Earnings (loss)
per diluted share:
|
|
|
|
|
|
|
|
Continuing operations
|
$
(0.34)
|
|
$
0.04
|
|
$
(0.46)
|
|
$
0.08
|
Discontinued operations
|
0.00
|
|
(0.01)
|
|
(0.01)
|
|
0.03
|
|
|
|
|
|
|
|
|
Net income (loss) per share
|
$
(0.34)
|
|
$
0.03
|
|
$
(0.47)
|
|
$
0.11
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
8,834,747
|
|
8,636,029
|
|
8,786,510
|
|
8,494,111
|
|
|
|
|
|
|
|
|
Diluted
|
8,834,747
|
|
8,980,304
|
|
8,786,510
|
|
8,862,217
|
|
|
|
|
|
|
|
|
RF INDUSTRIES, LTD.
|
CONSOLIDATED BALANCE SHEETS
|
(in thousands, except share and per share amounts)
|
|
|
|
October 31,
|
2016
|
|
2015
|
|
|
|
|
|
(audited)
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
Cash and cash equivalents
|
$
5,258
|
|
$
7,595
|
Trade accounts receivable, net
|
4,077
|
|
3,980
|
Inventories
|
6,022
|
|
6,928
|
Other current assets
|
1,436
|
|
728
|
Deferred tax assets
|
--
|
|
426
|
|
|
|
|
TOTAL CURRENT ASSETS
|
16,793
|
|
19,657
|
|
|
|
|
Property and equipment, net
|
828
|
|
921
|
Goodwill
|
3,219
|
|
5,913
|
Amortizable intangible assets, net
|
3,619
|
|
4,268
|
Non-amortizable intangible assets
|
1,237
|
|
1,387
|
Note receivable from stockholder
|
--
|
|
67
|
Other assets
|
141
|
|
39
|
|
|
|
|
TOTAL ASSETS
|
$ 25,837
|
|
$ 32,252
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
Accounts payable
|
$
1,138
|
|
$
1,493
|
Accrued expenses
|
2,770
|
|
2,868
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
3,908
|
|
4,361
|
|
|
|
|
Deferred tax liabilities
|
409
|
|
1,143
|
Other long-term
liabilities
|
128
|
|
377
|
|
|
|
|
TOTAL LIABILITIES
|
4,445
|
|
5,881
|
|
|
|
|
COMMITTMENTS 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 October 31, 2016
and 2015, respectively
|
88
|
|
87
|
Additional paid-in capital
|
19,379
|
|
19,129
|
Retained earnings
|
1,925
|
|
7,155
|
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY
|
21,392
|
|
26,371
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ 25,837
|
|
$ 32,252
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/rf-industries-reports-fourth-quarter-and-fiscal-2016-results-300397797.html
SOURCE RF Industries, Ltd.