SAN DIEGO, Sept. 12, 2017 /PRNewswire/ -- RF
Industries, Ltd. (NASDAQ: RFIL) today announced results for the
third quarter and nine months ended July 31,
2017.
Third Quarter Highlights
- Revenues increased for the third consecutive quarter and
year-over-year
- Distributed Antenna Systems (DAS) product sales continue to
grow
- Net income increased $0.8
million
- Achieved $0.02 diluted EPS vs.
loss of $0.07 in the same quarter
last year.
- Strong balance sheet maintained with positive cash flow
- Declared quarterly dividend of $.02 per share
- 29th consecutive quarterly dividend
|
Q3
2017
|
|
Q3
2016
|
|
Q2
2017
|
|
Q1
2017
|
Revenue
|
$
|
7.8M
|
|
$
|
7.6M
|
|
$
|
7.6M
|
|
$
|
6.6M
|
Diluted
EPS
|
$
|
0.02
|
|
$
|
(0.07)
|
|
$
|
0.01
|
|
$
|
(0.02)
|
Operating
margin
|
|
2.4%
|
|
|
(8.7)%
|
|
|
0.1%
|
|
|
(5.4)%
|
Cash
balance
|
$
|
5.5M
|
|
$
|
4.6M
|
|
$
|
4.3M
|
|
$
|
4.4M
|
Message from Robert Dawson,
President and CEO:
"It was my pleasure to join the Company
during the third quarter and I feel energized with the results
that the team delivered to improve our profitable growth. Third
quarter net income more than doubled from our recent second quarter
results, and our cash position has significantly improved. I am
encouraged by the Company's increasing DAS product sales, the
return to profitability in our hybrid fiber optic product business,
and improving sales in our cable assembly and wiring business.
"The RFI team has done a great job of putting strong cost
controls in place. We are now focusing our efforts on increasing
sales through improved go-to-market strategies and channel models
across all of the Company's divisions. We have great quality
products, a strong balance sheet, a solid team, and long-standing
customer and vendor relationships. With those core
fundamentals in place, the coming quarters are really about getting
all of our businesses cranked up to deliver positive results.
While we still have work to do, I am optimistic about the remainder
of the fiscal year. In coming quarters I look forward to
communicating more frequently about our ongoing strategies to
profitably grow the business while maintaining the same level of
quality we have delivered for over 35 years."
Third Quarter Results
Net sales for the third quarter
of fiscal 2017 increased 2.2% to $7.8
million compared to $7.6
million in the same quarter last year. Net sales at the RF
Connector and Cable Assembly (RF Connector) segment increased
$0.4 million or 15.1% to $3.0 million compared to $2.6 million in the same quarter last year, on
the back of continuing strong sales growth of DAS products.
Custom Cabling and Manufacturing (Custom Cabling) segment net sales
declined 4.3% to $4.8 million from
$5.1 million in the same quarter last
year. While our sales into the data center and equipment
markets were down, this segment is benefitting from growing demands
for fiber optic, cable assembly products and custom wiring
harnesses and services.
Third quarter fiscal 2017 overall gross margins were
substantially unchanged compared to the same quarter last year.
However, the Company's cost cutting efforts reduced selling and
general expenses by $760,000, to
$1.8 million, compared to
$2.6 million in the same quarter last
year. Selling and general expenses in the third quarter last
year were affected by one-time expenses of $256,000 related to an abandoned strategic
transaction.
Although third quarter fiscal 2017 sales and gross margins
improved slightly over the comparable prior year period, as a
direct result of its cost cutting efforts the Company was able to
increase its operating income by $0.9
million from a loss of $0.7
million in fiscal 2016 to a profit of $0.2 million in fiscal 2017. Net income for the
quarter was $192,000, or $0.02 per diluted share, compared to a net loss
of $597,000, or $0.07 per share. We believe that our cost cutting
efforts have positioned the Company to take advantage of improved
future sales growth.
Nine Months Results
Net sales of $22.1 million for the first nine months of fiscal
2017 remained consistent compared to sales of $22.2 million in the same period last year.
Growing DAS product sales in the first nine months of fiscal 2017
largely contributed to a 22.6% increase in net sales at the RF
Connector segment, to $8.1 million,
compared to $6.6 million in the same
period last year. Sales for the same period last year
included $86,000 from the Aviel
division, which was sold in December, 2015. Custom Cabling
net sales for the first nine months of fiscal 2017 declined 10.2%,
to $14.0 million compared to
$15.6 million for the same period
last year, due to sluggish sales into the wireless and telecom
markets. Slower sales of our fiber optic, cable assembly products
and custom wiring harnesses and services in the first half of
fiscal 2017 also contributed to the decline.
Overall gross margin for the first nine months of fiscal 2017
was 27.3% of sales, compared to 29.3% of sales in the same period
last year. Gross margin was affected by a lower margin
product mix at the RF Connector segment and a decline in sales at
the Custom Cables segment. However, the Company's cost cutting
efforts helped reduce selling and general expenses for the first
nine months of fiscal 2017 by $1.8 million
to $5.5 million from $7.3
million.
Although the nine month fiscal 2017 sales remained relatively
unchanged and gross margins decreased over the comparable prior
year period, as a direct result of its cost cutting efforts the
Company was able to decrease its operating loss by $1.2 million to a loss of $0.1 million in fiscal 2017. Net income for the
fiscal 2017 period improved to $77,000, or $0.01
per diluted share, compared to a net loss of $1.1 million, or $0.12 per diluted share, for the same period last
year.
Balance Sheet Data
At July 31,
2017, the Company reported working capital of $13.1 million, including cash and cash
equivalents of $5.5 million, a
current ratio of 4.9-to-1, no outstanding debt, and stockholders'
equity of $21.1 million. During
the first nine months of fiscal 2017, the Company paid out cash
dividends of $0.06 per share, or
$530,000.
Dividend
At its September 8,
2017 meeting, the Company's Board of Directors declared a
quarterly cash dividend of $0.02 per
share, payable on October 15, 2017 to
stockholders of record on September
30, 2017. 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 the Company's financial
condition, results of operations, capital requirements, plans for
future acquisitions, contractual restrictions, general business
conditions and other factors that the Board of Directors may deem
relevant.
About RF Industries
RF Industries designs and
manufactures a broad range of interconnect products across
diversified, growing markets including wireless/wireline telecom,
data communications and industrial. The Company's products include
RF connectors, coaxial cables, wire harnesses, fiber optic cables,
custom cabling and data center equipment. The Company is
headquartered in San Diego,
California with operations in New
York, Connecticut and New
Jersey. 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,
including higher sales, increased future demand for the Company's
products, and improved profitability, 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 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,
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Net sales
|
$
7,808
|
|
$
7,640
|
|
$
22,065
|
|
$
22,159
|
Cost of sales
|
5,592
|
|
5,513
|
|
16,038
|
|
15,657
|
|
|
|
|
|
|
|
|
Gross profit
|
2,216
|
|
2,127
|
|
6,027
|
|
6,502
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Engineering
|
215
|
|
217
|
|
643
|
|
557
|
Selling and general
|
1,817
|
|
2,577
|
|
5,493
|
|
7,261
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
2,032
|
|
2,794
|
|
6,136
|
|
7,818
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
184
|
|
(667)
|
|
(109)
|
|
(1,316)
|
|
|
|
|
|
|
|
|
Other income (loss)
|
5
|
|
(32)
|
|
23
|
|
(4)
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations before provision (benefit)
for income taxes
|
189
|
|
(699)
|
|
(86)
|
|
(1,320)
|
Provision (benefit) for income taxes
|
18
|
|
45
|
|
(54)
|
|
(330)
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
171
|
|
(744)
|
|
(32)
|
|
(990)
|
|
|
|
|
|
|
|
|
Income (loss) from
discontinued operations, net of tax
|
21
|
|
147
|
|
109
|
|
(74)
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
192
|
|
$
(597)
|
|
$
77
|
|
$
(1,064)
|
|
|
|
|
|
|
|
|
Earnings (loss) per share - Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
$
0.02
|
|
$
(0.08)
|
|
$
0.00
|
|
$
(0.11)
|
Discontinued operations
|
0.00
|
|
0.01
|
|
0.01
|
|
(0.01)
|
|
|
|
|
|
|
|
|
Net income (loss) per share
|
$
0.02
|
|
$
(0.07)
|
|
$
0.01
|
|
$
(0.12)
|
|
|
|
|
|
|
|
|
Earnings (loss) per share - Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
$
0.02
|
|
$
(0.08)
|
|
$
0.00
|
|
$
(0.11)
|
Discontinued operations
|
0.00
|
|
0.01
|
|
0.01
|
|
(0.01)
|
|
|
|
|
|
|
|
|
Net income (loss) per share
|
$
0.02
|
|
$
(0.07)
|
|
$
0.01
|
|
$
(0.12)
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
8,838,027
|
|
8,834,747
|
|
8,835,852
|
|
8,770,375
|
|
|
|
|
|
|
|
|
Diluted
|
8,915,794
|
|
8,834,747
|
|
8,886,395
|
|
8,770,375
|
|
|
|
|
|
|
|
|
RF INDUSTRIES, LTD. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in thousands, except share and per share amounts)
|
|
|
|
Jul. 31,
|
|
Oct. 31,
|
2017
|
|
2016
|
|
|
|
|
|
|
|
(audited)
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
Cash and cash equivalents
|
$
5,498
|
|
$
5,258
|
Trade accounts receivable, net
|
3,793
|
|
4,077
|
Inventories, net
|
6,482
|
|
6,022
|
Other current assets
|
730
|
|
1,436
|
|
|
|
|
TOTAL CURRENT ASSETS
|
16,503
|
|
16,793
|
|
|
|
|
Property and equipment, net
|
665
|
|
828
|
Goodwill
|
3,219
|
|
3,219
|
Amortizable intangible assets, net
|
3,177
|
|
3,619
|
Non-amortizable intangible assets
|
1,237
|
|
1,237
|
Other assets
|
90
|
|
141
|
|
|
|
|
TOTAL ASSETS
|
$ 24,891
|
|
$ 25,837
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
Accounts payable
|
$
1,224
|
|
$
1,138
|
Accrued expenses
|
2,133
|
|
2,770
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
3,357
|
|
3,908
|
|
|
|
|
Deferred tax liabilities,
net
|
433
|
|
409
|
Other long-term
liabilities
|
--
|
|
128
|
|
|
|
|
TOTAL LIABILITIES
|
3,790
|
|
4,445
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
Common stock, authorized 20,000,000
shares of $0.01 par value;
8,852,246 and
8,835,483 shares issued and outstanding at
July 31, 2017 and October 31,
2016 respectively
|
89
|
|
88
|
Additional paid-in capital
|
19,540
|
|
19,379
|
Retained earnings
|
1,472
|
|
1,925
|
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY
|
21,101
|
|
21,392
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ 24,891
|
|
$ 25,837
|
|
|
|
|
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SOURCE RF Industries, Ltd.