Highlights:
- Net revenues of $14,019,000 for the 3
months ended September 30, 2018, an increase of 11.6% over the same
period last year
- Net income of $558,000 or $0.03 per
basic and diluted share for the 3 months ended September 30, 2018,
a decrease of $95,000 over the same period last year
- Non-GAAP adjusted EBITDA of $1,754,000
for the 3 months ended September 30, 2018, an increase of 20.4%
over the same period last year
- Cash flow from Operations of $1,351,000
for the nine months ended September 30, 2018, an increase of
$899,000 over the same period last year
Wireless Telecom Group, Inc. (NYSE AMERICAN: WTT) (the
“Company”) announced today results for the third quarter ended
September 30, 2018.
For the quarter ended September 30, 2018, the Company reported
consolidated net revenues of $14,019,000, an increase of 11.6%
compared to $12,560,000 for the same period in 2017. The increase
in net revenues is attributable to our Embedded Solutions segment
which realized higher demand for our hardware cards, offset by
slight declines in our Test & Measurement and Network Solutions
segments.
Net revenues in the Network Solutions segment were $6,034,000,
compared to $6,428,000 for the same period in 2017, a decrease of
$394,000. Net revenues in the Test & Measurement segment were
$3,683,000, compared to $3,901,000 for the same period in 2017, a
decrease of $218,000. Net revenues in the Embedded Solutions
segment were $4,302,000, compared to $2,231,000 for the same period
in 2017, an increase of $2,071,000.
The Company reported consolidated gross profit of $6,464,000, or
46.1% of revenue, for the quarter ended September 30, 2018,
compared to $6,113,000, or 48.7% of revenue, for the same period in
2017, an increase of $351,000. Our consolidated gross profit as a
percentage of revenue was negatively impacted by product mix in
Test & Measurement and lower volumes in Network Solutions,
offset by higher volumes in Embedded Solutions.
Third quarter 2018 gross profit in the Network Solutions segment
was $2,640,000, or 43.8%, compared to $2,981,000, or 46.4%, for the
same period in 2017. Gross profit in the Test & Measurement
segment was $1,850,000, or 50.2%, for the third quarter 2018,
compared to $2,166,000, or 55.5%, for the same period in 2017.
Gross profit in the Embedded Solutions segment was $1,974,000, or
45.9% for the quarter ended September 30, 2018, compared to
$966,000, or 43.3%, for the same period in 2017.
For the quarter ended September 30, 2018, the Company reported
consolidated operating expenses of $5,545,000, compared to
$5,309,000 for the same period in 2017, an increase of $236,000.
Non-GAAP operating expenses were $4,950,000 for the third quarter
2018 compared to $4,705,000 for the year ago period, an increase of
$245,000.
The Company reported net income of $558,000 for the quarter
ended September 30, 2018, compared to net income of $653,000 for
the same period in 2017, a decrease of $95,000. Basic and diluted
earnings per share were $.03 for both the quarter ending September
30, 2018, and the quarter ending September 30, 2017.
Non-GAAP Adjusted EBITDA for the quarter ended September 30,
2018 was $1,754,000, compared to non-GAAP Adjusted EBITDA of
$1,457,000 for the same period in 2017, an increase of $297,000.
(An explanation of our non-GAAP measures and a reconciliation of
net income to non-GAAP Adjusted EBITDA are included as an
attachment to this press release.)
The Company reported cash flow provided by operating activities
of $1,351,000 for the nine months ending September 30, 2018
compared to cash flow provided by operating activities of $452,000
for the same period in 2017, an increase of $899,000.
The Company reported customer orders of $11,297,000 in the third
quarter 2018 compared to $15,488,000 for the same period in 2017.
The consolidated backlog of firm orders expected to be shipped in
the next twelve months was approximately $6,122,000 at September
30, 2018, compared to backlog of $9,950,000 at September 30, 2017.
The decrease in customer orders and backlog reflects several large
projects in 2017.
Tim Whelan, CEO of Wireless Telecom Group, Inc., commented, “We
are very pleased with the strong quarter of results which were
above our expectations and reflect significant organic revenue
growth in our Embedded Solutions segment as well as consistently
solid performance of the Network Solutions and Test &
Measurement segments. We are also especially pleased to have
achieved improved third quarter GAAP operating income of $919,000,
or 6.6% of revenue, and to have continued the improving trend of
non-GAAP Adjusted EBITDA at 12.5% of revenue. Over the last 9
months, we have generated $4,442,000 of Non-GAAP Adjusted EBITDA,
reflecting our continued focus on investing for growth while
staying focused on profitability and cash flow.”
Whelan continued, “We expect to operate our business with the
goal of driving meaningful growth over the next several years,
improving both our revenue scale and profitability metrics. We
intend to accomplish this through agile investments in new products
and markets, aggressive go-to-market and sales strategies that
expand our customer base, a disciplined merger and acquisition
process, and continuous lean improvements to drive operating
leverage. We are enthusiastic about our sales funnel and some large
opportunities currently in the bidding and quoting stage. We expect
to finish fiscal year 2018 with more than $52 million of revenue,
or 13% revenue growth year over year, which would represent our
second consecutive year of double digit growth and a return to
profitability.”
With respect to the fourth quarter ending December 31, 2018, the
Company expects to see seasonally lower sequential revenue compared
to the third quarter which is consistent with the prior year. The
Company expects the following in the quarter ended December 31,
2018 for the three combined segments:
- Revenue between $11,750,000 and
$12,250,000
- Gross margins between 43% and 44%
- Non-GAAP operating expenses between
$5,100,000 and $5,200,000 (specifically, the Company’s GAAP
operating expenses, excluding depreciation expense, amortization
expense, stock compensation expense, restructuring charges,
purchase accounting adjustments in accordance with US GAAP, and
non-recurring CommAgility acquisition and integration expenses,
which cannot be itemized for reconciliation to the comparable
future GAAP measure at this time).
Conference Call
As previously announced, Wireless Telecom Group Inc. will host a
conference call today at 8:30 a.m. ET in which management will
discuss third quarter 2018 results and related matters. To
participate in the conference call, dial 800-346-7359 or
973-528-0008. The conference identification number is 285641. The
call will also be webcast over the internet at the following
URL:
https://www.webcaster4.com/Webcast/Page/1690/28096
A replay will be made available on the Wireless Telecom website
for a limited period of time following the conference call.
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 constitutes 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 defines EBITDA as its net earnings before interest,
taxes, depreciation and amortization. “Adjusted EBITDA” is EBITDA
excluding our stock compensation expense, restructuring charges,
acquisition expenses, integration expenses, the one-time non-cash
inventory impairment charges, unrealized and realized foreign
exchange gains and losses, and other non-recurring costs and
includes cash received in 2018 related to revenue that would have
been recognized in 2018 but for the adoption of ASU 606. A
reconciliation of net income to non-GAAP Adjusted EBITDA is
included as an attachment to this press release.
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 and non-recurring 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 operating the business to meaningfully grow the business
over the next several years and improve revenue scale and
profitability, revenue, gross margins, and non-GAAP operating
expenses, for the quarter and year ending December 31, 2018.
Investors are cautioned that any 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
to successfully integrate acquired businesses; the ability of
management to successfully implement the Company’s business plan
and strategy; product demand and development of competitive
technologies in the Company’s market sector; the impact of
competitive products and pricing; the loss of any significant
customers of the Company; and 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 GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME/(LOSS) (In thousands, except per share
amounts, Unaudited) Three Months Ended
September 30 Nine Months Ended September 30
2018
2017
2018
2017
NET REVENUES $ 14,019 $ 12,560 $ 40,697 $ 34,042 COST
OF REVENUES 7,555 6,447
21,794 20,252
GROSS
PROFIT 6,464 6,113 18,903 13,790 Operating Expenses
Research and Development 1,191 1,051 3,660 3,268 Sales and
Marketing 1,795 1,946 5,639 5,161 General and Administrative 2,559
2,312 7,870 8,522 Loss on Change in Fair Valueof Contingent
Consideration - - 213
- Total Operating Expenses 5,545 5,309
17,382 16,951 Operating Income/(Loss) 919 804 1,521 (3,161 )
Other Income/(Expense) (60 ) (23 ) (73 ) (49 ) Interest
Expense (115 ) (71 ) (349 )
(229 )
Income/(Loss) before taxes 744 710
1,099 (3,439 ) Tax Provision/(Benefit) 186
57 347 (1,494 )
Net Income/(Loss)
$ 558 $ 653 $ 752 $ (1,945 )
Other Comprehensive Income/(Loss): Foreign Currency
Translation Adjustments (217 ) 547
(601 ) 1,123
Comprehensive
Income/(Loss) $ 341 $ 1,200 $ 151
$ (822 ) Earnings/(Loss) Per Share: Basic $
0.03 $ 0.03 $ 0.04 $ (0.10 ) Diluted $ 0.03 $ 0.03 $ 0.03 $ (0.10 )
Weighted Average Shares Outstanding: Basic 20,972 20,236
20,820 19,799 Diluted 21,555 20,822 21,582 19,799
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands,
except share and par value amounts) September
30 December 31 2018 2017
(Unaudited) CURRENT ASSETS Cash & Cash
Equivalents $ 3,774 $ 2,458
Accounts Receivable - net of reserves of
$66 and $44, respectively
11,399 9,041
Inventories - net of reserves of $1,808
and $1,856, respectively
7,456 6,526 Prepaid Expenses and Other Current Assets 1,180
4,733
TOTAL CURRENT ASSETS
23,809 22,758
PROPERTY PLANT AND EQUIPMENT - NET
2,610 2,730
OTHER ASSETS Goodwill 9,949 10,260
Acquired Intangible Assets, net 3,542 4,511 Deferred Income Taxes
6,098 5,939 Other 588 723
TOTAL OTHER ASSETS 20,177 21,433
TOTAL ASSETS $ 46,596 $ 46,921
CURRENT LIABILITIES Short Term Debt 2,700 1,335 Accounts
Payable 3,582 4,109 Accrued Expenses and Other Current Liabilities
5,795 2,894 Deferred Revenue 230 629
TOTAL CURRENT LIABILITIES 12,307 8,967
LONG TERM LIABILITIES Long Term Debt 380 494 Other Long Term
Liabilities 115 1,590 Deferred Tax Liability 925
767
TOTAL LONG TERM LIABILITIES 1,420 2,851
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, 34,243,252 and 33,868,252
shares issued, 21,055,252 and 22,772,167 shares outstanding 343 339
Additional Paid in Capital 48,283 47,494 Retained Earnings 8,349
7,176 Treasury Stock at Cost, 13,188,601 and 11,096,085 shares,
respectively (24,509 ) (20,910 ) Accumulated Other Comprehensive
Income 403 1,004
TOTAL
SHAREHOLDERS' EQUITY 32,869 35,103
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 46,596
$ 46,921
WIRELESS TELECOM GROUP,
INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands, Unaudited) For the Nine
Months Ended September 30 2018 2017 CASH FLOWS
PROVIDED BY OPERATING ACTIVITIES Net Income/(Loss) $ 752 $ (1,945 )
Adjustments to reconcile net income/(loss) to net cash provided by
operating activities: Depreciation and Amortization 1,773 1,346
Amortization of Debt Issuance Fees 59 49 Share-based Compensation
Expense 505 508 Deferred Rent 9 18 Deferred Income Taxes 34 (1,419
) Provision for Doubtful Accounts 23 12 Inventory Reserves 204
1,315 Changes in Assets and Liabilities, Net of Acquisition:
Accounts Receivable (2,552 ) (529 ) Inventories (1,154 ) 1,820
Prepaid Expenses and Other Assets (99 ) 238 Accounts Payable (487 )
(1,776 ) Accrued Expenses and Other Current Liabilities
2,284 815 Net Cash Provided by Operating
Activities 1,351 452 CASH FLOWS (USED)
BY INVESTING ACTIVITIES Capital Expenditures (633 ) (588 ) Proceeds
from Asset Disposal - 7 Acquisition of Business, Net of Cash
Acquired (805 ) (9,138 ) Net Cash (Used) by Investing
Activities (1,438 ) (9,719 ) CASH FLOWS
PROVIDED BY FINANCING ACTIVITIES Revolver Borrowings 29,046 25,282
Revolver Repayments (27,681 ) (24,010 ) Term Loan Borrowings - 760
Term Loan Repayments (114 ) (76 ) Debt Issuance Fees - (215 )
Proceeds from Exercise of Stock Options 288 425 Shares Withheld for
Employee Taxes - (87 ) Net Cash Provided by
Financing Activities 1,539 2,079 Effect
of Exchange Rate Changes on Cash and Cash Equivalents (136 ) 105
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 1,316 (7,083 )
Cash and Cash Equivalents, at Beginning of Period
2,458 9,351 CASH AND CASH EQUIVALENTS,
AT END OF PERIOD $ 3,774 $ 2,268 SUPPLEMENTAL
INFORMATION: Cash Paid During the Period for Interest $ 128 $ 90
Cash Paid During the Period for Income Taxes $ 33 $ 58
WIRELESS TELECOM GROUP, INC. NET REVENUES AND
GROSS PROFIT BY SEGMENT (In thousands, Unaudited)
Three months ended September 30 Revenue % of Revenue
Change 2018 2017 2018 2017
Amount Pct. Network Solutions $ 6,034 $ 6,428
43.0 % 51.2 % $ (394 ) -6.1 % Test and
Measurement 3,683 3,901 26.3 % 31.0 % (218 ) -5.6 % Embedded
Solutions 4,302 2,231 30.7 %
17.8 % 2,071 92.8 % Total Net Revenues
$ 14,019 $ 12,560 100.0 % 100.0 % $
1,459 11.6 %
Three months
ended September 30 Gross Profit Gross Profit %
Change 2018 2017 2018 2017 Amount
Pct. Network Solutions $ 2,640 $ 2,981 43.8 % 46.4 % $ (341
) -11.4 % Test and Measurement 1,850 2,166 50.2 % 55.5 % (316 )
-14.6 % Embedded Solutions 1,974 966
45.9 % 43.3 % 1,008 104.3 %
Total Gross Profit $ 6,464 $ 6,113 46.1 % 48.7
% $ 351 5.7 %
Nine
months ended September 30 Revenue % of Revenue
Change 2018 2017 2018 2017 Amount
Pct. Network Solutions $ 17,181 $ 17,560 42.2 % 51.6 % $
(379 ) -2.2 % Test and Measurement 10,980 10,254 27.0 % 30.1 % 726
7.1 % Embedded Solutions 12,536 6,228
30.8 % 18.3 % 6,308 101.3 %
Total Net Revenues $ 40,697 $ 34,042 100.0 %
100.0 % $ 6,655 19.5 %
Nine months ended September 30 Gross Profit Gross
Profit % Change 2018 2017 2018 2017
Amount Pct. Network Solutions $ 7,552 $ 6,624 44.0 %
37.7 % $ 928 14.0 % Test and Measurement 5,509 4,332 50.2 % 42.2 %
1,177 27.2 % Embedded Solutions 5,842 2,834
46.6 % 45.5 % 3,008 106.1
% Total Gross Profit $ 18,903 $ 13,790 46.4 %
40.5 % $ 5,113 37.1 %
WIRELESS TELECOM GROUP, INC. RECONCILIATION OF NON GAAP
MEASURES (In thousands, Unaudited)
Three Months Ended Nine Months Ended September
30 September 30 Unaudited Unaudited
2018
2017
2018
2017
Reconciliation of Net Income to Non-GAAP EBITDA and Non-GAAP
Adjusted EBITDA:
GAAP Net Income/(Loss), as
reported $ 558 $ 653 $
752 $ (1,945 ) Tax Provision/(Benefit)
186 57 347 (1,494 ) Depreciation and Amortization Expense 537 286
1,773 1,346 Interest Expense 115 71
349 229
Non-GAAP
EBITDA 1,396 1,067 3,221 (1,864
) Stock Compensation Expense 156 224 505 508 ASU 606
Adjustment 158 - 345 - Merger and Acquisition Expenses - - 64 1,290
Integration Expenses - 158 60 323 Inventory Impairment - - - 1,930
Inventory Recovery (9 ) (15 ) (23 ) (15 ) FX (Gain)/Loss 53 - 57 -
US GAAP Purchase Accounting - - - 71 Change in Fair Value of
Contingent Consideration - - 213 - Restructuring Charges and Other
Non-Recurring Costs - 23
- 573
Non-GAAP Adjusted EBITDA
$ 1,754 $ 1,457 $ 4,442
$ 2,816 Reconciliation of Total
Operating Expenses to Non GAAP Operating Expenses:
Three Months
Ended September 30 Nine Months Ended September 30
2018
2017
2018
2017
GAAP Opex $ 5,545 $ 5,309
$ 17,382 $ 16,951 M&A/Integration -
(158 ) (124 ) (1,613 ) Restructuring - (23 ) - (573 ) Stock Comp
(156 ) (224 ) (505 ) (508 ) Depreciation and Amort. (ex. COGS) (440
) (199 ) (1,328 ) (1,088 ) Contingent Consideration -
- (213 ) -
Non
GAAP Opex $ 4,950 $
4,705 $ 15,212 $
13,169
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181108005057/en/
Wireless Telecom Group, Inc.Mike Kandell(973) 386-9696orIMSJohn
Nesbett or Jen Belodeau(203) 972 9200
Wireless Telecom (AMEX:WTT)
Historical Stock Chart
From Sep 2024 to Oct 2024
Wireless Telecom (AMEX:WTT)
Historical Stock Chart
From Oct 2023 to Oct 2024