Highlights for the quarter ended December
31, 2017:
- Net revenues of $12,036,000
- A year over year increase of
$3,032,000, or 34%, over the same period 2016
- Includes $3,418,000 of Embedded
Solutions revenue
- Gross Margin of $5,471,000, or
45.5%
- Net loss of $2,547,000 inclusive of
a $2,740,000 tax provision, reflecting the impact of the new Tax
Cuts and Jobs Act
- Non-GAAP Adjusted EBITDA of
$830,000
- New Customer orders of
$11,940,000
Highlights for the year ended December 31,
2017:
- Net revenues of $46,078,000
- A year over year increase of
$14,751,000, or 47%, over the same period 2016
- Includes $9,646,000 of Embedded
Solutions revenue
- Gross Margin of $19,261,000, or
41.8%
- Net loss of $4,493,000 inclusive of
a $1,247,000 tax provision, reflecting the impact of the new Tax
Cuts and Jobs Act
- Non-GAAP Adjusted EBITDA of
$3,645,000
- 2017 Year-end customer order backlog
of $9,888,000
- An increase of $5,874,000, or 146%,
over the backlog of firm orders at December 31, 2016
- Includes $3,956,000 of Embedded
Solutions backlog
Wireless Telecom Group, Inc. (NYSE American: WTT) (the
“Company”) announced today results for the fourth quarter and
twelve months ended December 31, 2017.
For the quarter ended December 31, 2017, the Company reported
consolidated net revenues of $12,036,000, compared to $9,004,000
for the same period in 2016, an increase of 34%. For the twelve
months ended December 31, 2017, the Company reported consolidated
net revenues of $46,078,000 compared to $31,327,000 for the same
period in 2016, an increase of 47%.
For the quarter ended December 31, 2017, net revenues in the
Network Solutions segment were $5,492,000, compared to $5,002,000
for the same period in 2016, an increase of 9.8%. For the twelve
months ended December 31, 2017, net revenues in the Network
Solutions segment were $23,052,000 compared to $20,199,000 for the
same period in 2016, an increase of 14.1%.
For the quarter ended December 31, 2017, net revenues in the
Test & Measurement segment were $3,126,000, compared to
$4,002,000 for the same period in 2016, a decrease of 21.9%. For
the twelve months ended December 31, 2017, net revenues in the Test
& Measurement segment were $13,380,000 compared to $11,128,000
for the same period in 2016, an increase of 20.2%.
For the quarter ended December 31, 2017, net revenues in the
Embedded Solutions segment were $3,418,000, compared to zero in the
same period in 2016. Net revenues in the Embedded Solutions segment
for the period of ownership February 17, 2017 through December 31,
2017 were $9,646,000.
The Company also reported consolidated gross profit of
$5,471,000, or 45.5%, for the quarter ended December 31, 2017,
compared to $3,280,000, or 36.4%, for the same period in 2016.
Consolidated gross profit was $19,261,000, or 41.8%, for the year
ended December 31, 2017, compared to $13,162,000, or 42.0%, for the
same period in 2016.
Gross profit in the Network Solutions segment was $9,063,000, or
39.3%, for the year ended December 31, 2017, compared to
$8,443,000, or 41.8%, for the same period in 2016. Gross profit in
the Test & Measurement segment was $5,855,000, or 43.8%, for
the year ended December 31, 2017, compared to $4,719,000, or 42.4%,
for the same period in 2016. Gross profit in the Embedded Solutions
segment was $4,343,000, or 45.0%, for the period of ownership
February 17, 2017 through December 31, 2017.
For the quarter ended December 31, 2017, the Company reported
consolidated operating expenses of $5,210,000, compared to
$4,822,000 for the same period in 2016, an increase of $388,000.
For the twelve months ended December 31, 2017, the Company reported
consolidated operating expenses of $22,206,000, compared to
$15,710,000 for the same period in 2016, an increase of $6,496,000.
Included in 2017 operating expenses are operating, acquisition and
integration expenses related to our purchase of CommAgility,
contingent consideration gains, restructuring charges related to
the departure of executives, as well higher intangible amortization
and purchase accounting charges.
The net loss for the quarter ended December 31, 2017 was
$2,547,000, compared to a net loss of $1,159,000 for the same
period in 2016. The net loss for the year-ended December 31, 2017
was $4,493,000 compared to a net loss of $1,832,000 for the
year-ended December 31, 2016.
As a result of the Tax Cuts and Jobs Act enacted in December
2017, fundamental changes were made to the taxation of
multinational corporations, including a reduction of the U.S.
corporate income tax rate. Included in the Company’s net loss is
$1,247,000 of net tax expense for the year ended 2017 which
includes $2,481,000 of deferred tax expense from revaluing the
Company’s deferred tax assets to reflect the new U.S. corporate tax
rate.
Non-GAAP Adjusted EBITDA for the quarter ended December 31, 2017
was $830,000, compared to a $278,000 non-GAAP Adjusted EBITDA loss
for the same period in 2016. Non-GAAP Adjusted EBITDA for the year
ended December 31, 2017 was $3,645,000, compared to $0 of non-GAAP
Adjusted EBITDA for the same period in 2016.
The increase in non-GAAP Adjusted EBITDA from 2016 is primarily
attributable to the $14,751,000 increase in revenues and $6,099,000
increase in gross profit.
The Company defines EBITDA as its net earnings before interest
expense, provisions for taxes, depreciation expense and
amortization expense. “Adjusted EBITDA” is EBITDA excluding our
stock compensation expense, restructuring charges, insurance
settlement gains, inventory impairment charge, M&A expenses,
integration expenses and other non-recurring costs. A
reconciliation of net income to non-GAAP Adjusted EBITDA is
included as an attachment to this press release.
The Company’s consolidated backlog of firm orders to be shipped
in the next twelve months was approximately $9,888,000 at December
31, 2017, an increase of $5,874,000, or 146% compared to the
backlog at December 31, 2016. The consolidated backlog at December
31, 2017 includes $3,956,000 of Embedded Solutions backlog compared
to zero at December 31, 2016.
Tim Whelan, CEO of Wireless Telecom Group, Inc., commented, “We
are very pleased with our 2017 accomplishments which included a 47%
consolidated revenue increase and a return to Adjusted EBITDA
profitability of $3,645,000. In addition to the $9,646,000 of
revenue growth from our successful acquisition and integration of
CommAgility in the year, we were able to realize organic revenue
growth of $5,105,000, or 16%, in our Network Solution and Test
& Measurement segments in 2017. This is attributable to our
investments and improvements in our product portfolio, our sales
channels and our digital strategy to improve how we do business
with our customers. Additionally, across the consolidated
enterprise, our increased revenues and gross profits helped us
generate $1,403,000 of cash flow from operations.”
Mr. Whelan continued, “We have made considerable progress on our
plans to invest in and energize our existing segments and integrate
the new business. The acquisition of CommAgility positions us to
benefit from long-term investment opportunities driven by 5G and
private LTE buildout and we continue to look at North America and
our existing sales channels as opportunities to drive growth in
this business. We are enthusiastic with the Company alignment
towards long-term industry trends of investments in wireless
technology and communications which includes carrier network
densification, industrial private LTE network deployment, and
anticipated defense spending increases.”
The Company expects the following financial results for the
quarter ended March 31, 2018 which will include a full quarter of
operations of the Embedded Solutions segment as compared to a
partial period of ownership in the same period last year:
- Revenue between $13.0 million - $13.5
million
- Gross margins of approximately 46%
- Non-GAAP operating expenses between
$5.2 and $5.4 million (specifically, the Company’s expected GAAP
operating expenses, less depreciation expense, amortization
expense, stock compensation expense, M&A costs, and integration
expenses, which cannot be itemized with particularity for
reconciliation to the comparable GAAP measure at this time).
The purchase price for CommAgility, as reflected in the purchase
agreement, provided for several incremental earn-out payments as
well as reductions of equity for the purpose of providing an
alignment of interest between the Company and its shareholders and
the former owners of CommAgility. As a result of these provisions,
there will be no earn-out payments in 2018 for 2017 performance and
approximately 2,092,516 shares will be forfeited in the first
quarter of 2018 in accordance with the equity claw back provisions
of the CommAgility purchase agreement. For the full year 2017, the
Embedded Solutions segment contributed gross profit of $4,343,000,
or 45% of its revenue.
Use of Non-GAAP Financial Measures
The Company reports its financial results in accordance with
generally accepted accounting principles (“GAAP”). Management
believes, however, that certain non-GAAP financial measures used in
managing the Company’s business may provide users of this financial
information with additional meaningful comparisons between current
results and prior reported results. Certain of the information set
forth herein and certain of the information presented by the
Company from time to time may constitute non-GAAP financial
measures within the meaning of Regulation G adopted by the
Securities and Exchange Commission. We have presented herein a
reconciliation of these measures to the most directly comparable
GAAP financial measure. The non-GAAP measures presented herein may
not be comparable to similarly titled measures presented by other
companies. The foregoing measures do not serve as a substitute and
should not be construed as a substitute for GAAP performance, but
provide supplemental information concerning our performance that
our investors and we find useful.
The Company views Adjusted EBITDA as an important indicator of
performance, consistent with the manner in which management
measures and forecasts the Company’s performance. We believe
Adjusted EBITDA is an important performance metric because it
facilitates the analysis of our results, exclusive of certain
non-cash items, including items which do not directly correlate to
our business operations.
The Company believes that Adjusted EBITDA metrics provide
qualitative insight into our current performance; we use these
measures to evaluate our results, the performance of our management
team and our management’s entitlement to incentive compensation;
and we believe that making this information available to investors
enables them to view our performance the way that we view our
performance and thereby gain a meaningful understanding of our core
operating results, in general, and from period to period.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. In some cases, such forward-looking statements may be
identified by terms such as believe, expect, seek, may, will,
intend, project, anticipate, plan, estimate, guidance or similar
words. Forward-looking statements include, among others, statements
regarding revenue, gross margins and non-GAAP operating expenses in
the quarter ending March 31, 2018. Investors are cautioned that
such forward-looking statements are not guarantees of future
performance and involve a number of risks and uncertainties that
could materially affect actual results, including, among others,
the Company’s ability to continue the successful integration of the
acquired business, product demand and development of competitive
technologies in the Company’s market sector, the retention of key
customers, fluctuations between the dollar and British pound,
compliance with changing laws and regulations, as well as other
risks and uncertainties set forth in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2017. These
forward-looking statements speak only as of the date of this
release and the Company does not undertake any obligation to update
or revise any forward-looking information to reflect changes in
assumptions, the occurrence of unanticipated events, or otherwise,
as except as required by law.
About Wireless Telecom Group, Inc.
Wireless Telecom Group, Inc., comprised of Boonton
Electronics, CommAgility, Microlab and Noisecom, is a global
designer and manufacturer of advanced RF and microwave components,
modules, systems and instruments. Serving the wireless,
telecommunication, satellite, military, aerospace, semiconductor
and medical industries, Wireless Telecom Group products enable
innovation across a wide range of traditional and emerging wireless
technologies. With a unique set of high-performance products
including peak power meters, signal analyzers, signal processing
modules, LTE PHY and stack software, power splitters and combiners,
GPS repeaters, public safety monitors, noise sources, and
programmable noise generators, Wireless Telecom Group supports the
development, testing, and deployment of wireless technologies
around the globe. Wireless Telecom Group is headquartered in
Parsippany, New Jersey, in the New York City metropolitan area, and
maintains a global network of Sales and Service offices for
excellent product service and support. Wireless Telecom Group’s
website address is http://www.wtcom.com.
Wireless Telecom
GroupINC.
CONSOLIDATED STATEMENT OF OPERATIONS
AND COMPREHENSIVE LOSS
(In thousands, except share and per
share amounts)
Three Months Ended Twelve Months Ended
December 31 December 31 Unaudited
2017
2016
2017
2016
NET REVENUES $ 12,036 $ 9,004 $ 46,078 $ 31,327 COST
OF REVENUES 6,565 5,724 26,817
18,165
GROSS PROFIT 5,471 3,280
19,261 13,162 Operating Expenses Research and development
1,127 1,003 4,395 4,046 Sales and marketing 1,799 1,493 6,960 5,196
General and administrative 2,537 2,326 11,104 6,468 Gain on change
in fair valueof contingent consideration (253)
- (253) - Total Operating
Expenses 5,210 4,822 22,206 15,710 Operating income/(loss)
261 (1,542) (2,945) (2,548) Other income/(expense) (1) 443
(5) 364 Interest Expense (67) -
(296) -
Income/(loss) before
taxes 193 (1,099) (3,246) (2,184) Tax
Provision/(Benefit) 2,740 60 1,247 (352)
Net Loss $ (2,547)
$ (1,159) $ (4,493) $ (1,832) Other
Comprehensive Income/(Loss) Foreign currency translation
adjustments (120) - 1,004
-
Comprehensive Loss $ (2,667) $
(1,159) $ (3,489) $ (1,832) Net Loss
per common share Basic $ (0.12) $ (0.06) $ (0.22) $ (0.10) Diluted
$ (0.12) $ (0.06) $ (0.22) $ (0.10) Weighted average shares
outstanding Basic 20,515,599 18,506,540 19,983,747 18,464,022
Diluted 20,515,599 18,506,540 19,983,747 18,464,022
CONSOLIDATED BALANCE SHEET
(In thousands, except share
amounts)
December 31 December 31 2017
2016 CURRENT ASSETS Cash & cash equivalents $
2,458 $ 9,351 Accounts receivable - net of reserves of $44 and $11,
respectively 9,041 5,184 Inventories - net of reserves of $1,856
and $1,549, respectively 6,526 8,453 Prepaid expenses and other
current assets 4,733 865
TOTAL CURRENT ASSETS 22,758 23,853
PROPERTY PLANT
AND EQUIPMENT - NET 2,730 2,167
OTHER ASSETS
Goodwill 10,260 1,351 Acquired intangible assets, net 4,511 -
Deferred income taxes 5,939 7,404 Other 723
660
TOTAL OTHER ASSETS 21,433 9,415
TOTAL ASSETS $ 46,921 $
35,435
CURRENT LIABILITIES Short term debt $ 1,335 $
- Accounts payable 4,109 2,987 Accrued expenses and other current
liabilities 2,894 673 Deferred revenue 629
-
TOTAL CURRENT LIABILITIES 8,967 3,660
LONG TERM LIABILITIES Long term debt 494 - Other long term
liabilities 1,590 69 Deferred tax liability 767
-
TOTAL LONG TERM LIABILITIES 2,851 69
COMMITMENTS AND CONTINGENCIES SHAREHOLDERS'
EQUITY Preferred stock, $.01 par value, 2,000,000 shares
authorized, none issued - - Common stock, $.01 par value,
75,000,000 shares authorized, 33,868,252 and 29,786,224 shares
issued, 22,772,167 and 18,751,346 shares outstanding 339 298
Additional paid in capital 47,494 40,562 Retained earnings 7,176
11,669 Treasury stock at cost, - 11,096,085 and 11,034,878 shares,
respectively (20,910) (20,823) Accumulated other comprehensive
income 1,004 -
TOTAL
SHAREHOLDERS' EQUITY 35,103 31,706
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 46,921
$ 35,435
CONSOLIDATED STATEMENT OF CASH
FLOWS
(In thousands)
For the Twelve Months Ended December 31
2017
2016
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES Net loss $ (4,493) $
(1,832) Adjustments to reconcile net loss to net cash provided by
operating activities Depreciation and amortization 1,747 503
Amortization of debt issuance fees 68 - Share-based compensation
expense 536 699 Deferred rent 23 36 Deferred income taxes 1,395
(390) Provision for (recovery of) doubtful accounts 33 (95)
Inventory reserves 1,357 439 Changes in assets and liabilities, net
of acquisition: Accounts receivable (1,456) 362 Inventories 1,713
(823) Prepaid expenses and other assets (119) (173) Accounts
payable (210) 1,873 Accrued expenses and other current liabilities
809 25 Net cash provided by operating activities
1,403 624 CASH FLOWS (USED) BY INVESTING ACTIVITIES
Capital expenditures (927) (819) Proceeds from asset disposal 7 -
Acquisition of business net of cash acquired (9,434)
- Net cash (used by) investing activities (10,354)
(819) CASH FLOWS PROVIDED/(USED) BY FINANCING ACTIVITIES
Revolver borrowings 58,420 - Revolver repayments (57,237) - Term
loan borrowings 760 - Term loan repayments (114) - Debt issuance
fees (215) - Proceeds from exercise of stock options 437 -
Repayments of equipment lease payable - (115) Repurchase of common
stock - 42,995 shares - (65) Shares withheld for employee taxes
(87) - Net cash provided/(used by) financing
activities 1,964 (180) Effect of exchange rate
changes on cash and cash equivalents 94 - NET (DECREASE) IN CASH
AND CASH EQUIVALENTS (6,893) (375) Cash and cash
equivalents, at beginning of period 9,351 9,726
CASH AND CASH EQUIVALENTS, AT END OF PERIOD $ 2,458 $ 9,351
SUPPLEMENTAL INFORMATION Cash paid during the period for
interest $ 125 $ - Cash paid during the period for income taxes $
68 $ 117 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES Capital expenditures $ - $ (42) Equipment
lease payable $ - $ 42
NET REVENUE AND GROSS PROFIT BY
SEGMENT
(In thousands)
Three months ended December 31 (unaudited) Revenue
% of Revenue Change 2017 2016
2017 2016 Amount
Pct. Network solutions $ 5,492 $ 5,002
45.6% 55.6% $ 490
9.8% Test and measurement 3,126 4,002 26.0% 44.4% (876) -21.9%
Embedded solutions 3,418 -
28.4% - 3,418
- Total net revenues $ 12,036 $ 9,004
100.0% 100.0% $ 3,032
33.7% Three months ended December 31
(unaudited) Gross Profit Gross Profit %
Change 2017 2016 2017
2016 Amount Pct. Network solutions $
2,440 $ 1,644 44.4% 32.9% $ 796 48.4% Test and measurement 1,522
1,636 48.7% 40.9% (114) -6.9% Embedded solutions 1,509
- 44.1% -
1,509 - Total gross profit $ 5,471
$ 3,280 45.5% 36.4%
$ 2,191 66.8%
Twelve months ended December 31 Revenue % of
Revenue Change 2017 2016
2017 2016 Amount Pct.
Network solutions $ 23,052 $ 20,199 50.0% 64.5% $ 2,853 14.1% Test
and measurement 13,380 11,128 29.0% 35.5% 2,252 20.2% Embedded
solutions 9,646 - 21.0%
- 9,646 - Total
net revenues $ 46,078 $ 31,327 100.0%
100.0% $ 14,751 47.1%
Twelve months ended December 31 Gross Profit
Gross Profit % Change 2017
2016 2017 2016
Amount Pct. Network solutions $ 9,063 $ 8,443 39.3%
41.8% $ 620 7.3% Test and measurement 5,855 4,719 43.8% 42.4% 1,136
24.1% Embedded solutions 4,343 -
45.0% - 4,343
- Total gross profit $ 19,261 $ 13,162
41.8% 42.0% $ 6,099
46.3%
RECONCILIATION OF NET INCOME TO
NON-GAAP EBITDA AND NON-GAAP ADJUSTED EBITDA
(In thousands)
Three Months Ended Twelve Months Ended
December 31 December 31 Unaudited
2017
2016
2017
2016
GAAP Net loss $ (2,547) $ (1,159) $ (4,493) ($1,832) Tax
Provision/(Benefit) 2,740 60 1,247 (352) Depreciation And
Amortization Expense 402 173 1,747 636 Interest Expense 67
- 296 - Non-GAAP
EBITDA 662 (926) (1,203) (1,548) Stock Compensation Expense 28 267
536 699 Mergers and Acquisitions Expenses - 791 1,290 1,208
Integration Expenses 63 - 386 - Insurance Settlement Gain - (410) -
(410) Inventory Impairment - - 1,930 - Inventory Recovery (10) -
(25) - US GAAP Purchase Accounting - - 71 - Gain on Change in Fair
Value of Contingent Consideration (253) - (253) - Restructuring
Charges and other non-recurring costs 340
- 913 51 Non-GAAP Adjusted
EBITDA $ 830 $ (278) $ 3,645 $ -
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180312006169/en/
For Wireless Telecom Group, Inc.Mike Kandell, 973-386-9696
Wireless Telecom (AMEX:WTT)
Historical Stock Chart
From Oct 2024 to Nov 2024
Wireless Telecom (AMEX:WTT)
Historical Stock Chart
From Nov 2023 to Nov 2024
