Wireless Telecom Group, Inc. (NYSE American: WTT) (the “Company”),
today announced preliminary unaudited revenue for the three and
twelve months ended December 31, 2021 and gross profit margin for
the twelve months ended December 31, 2021. In addition, the Company
is providing additional information in response to shareholder
feedback related to the definitive proxy statement on Schedule 14A
filed on January 18, 2022 for its solicitation efforts related to
the use of proceeds and strategic growth plan following the pending
sale of its Microlab business to RF Industries, Inc.
Record Fourth
Quarter Sales Drive
Highest Annual Sales in Three Years
The Company estimates record fourth quarter
consolidated revenues of approximately $13.1 million, compared to
$10.3 million for the same period in 2020, an increase of 26.4%.
For the year ended December 31, 2021, net consolidated revenues are
estimated to increase 18.0% to $49.2 million, compared to $41.7
million for the same period a year ago. Excluding Microlab, which
is the Radio Frequency Component (“RFC”) product group, the
Company’s Test & Measurement (“T&M”) and Radio, Baseband,
and Software (“RBS”) product groups delivered approximately 31%
revenue growth, 12.7% bookings growth, and 30.4% backlog growth
when comparing the full year 2021 to 2020.
Consolidated gross profit margin for the year
ended December 31, 2021 is expected to exceed 50% of revenue.
Consolidated bookings were $52.1 million for the
year ended December 31, 2021, an increase of $5.4 million, or 11.7%
over the same period last year. 2021 full-year bookings increased
in each of the product groups compared to 2020.
Tim Whelan, the Company’s CEO, stated, “Record
fourth quarter revenue is encouraging and reflects the success of
our 2020 strategic growth plan, our CommAgility and Holzworth
acquisitions, and improving global demand for our products and
services. We grew revenues both sequentially and year-over-year
despite continued Covid disruptions and extraordinary global supply
chain issues. This accomplishment is a testament to the hard work
of our global employees and partners. In addition, I am excited by
the robust revenue expansion we achieved during 2021 driven
primarily by our T&M and RBS product groups, which increased
revenues 10% and 150%, respectively. T&M and RBS revenue growth
reflects continued organic growth in T&M instrument sales,
increased 5G software and services revenue in our CommAgility RBS
solutions, and overall improved bookings activity throughout the
year leading to an approximately 41% increase of our consolidated
backlog at December 31, 2021.”
Business Update and Strategy
Review
As part of the Company’s ongoing strategy to
enhance its Board, over the past 14 months the Company added new
Board members including Jennifer Fritzsche and C. Scott Gibson. Ms.
Fritzsche and Mr. Gibson both possess significant experience within
the telecommunications industry, as well as the capital markets.
With these additions, the average tenure of the Company’s six
independent directors is under five years. In addition, in April
2021, the Company announced the formation of a Board Strategy
Oversight Committee.
Mr. Gibson, the Chairman of the Strategic
Oversight Committee, stated, “The purpose of the committee is to
contribute to the Company’s long-term strategic planning, including
M&A transactions, product and technology roadmap and R&D
strategies. The proposed sale of Microlab was reviewed in
connection with the objectives of the Strategy Oversight Committee,
which remains focused on pursuing initiatives aimed at creating
value for all Wireless Telecom Group, Inc. shareholders.” Mr.
Gibson continued, “An active and broad strategic review process is
currently underway with consultants and advisors to evaluate all
options. The Company expects to analyze and consider a wide array
of potential strategies to increase shareholder value while
preserving the strength of its balance sheet. We expect further
investment and capital allocation decisions, including the use of
any excess cash, upon the conclusion of the strategic review
process and the completion of the evaluation of tax efficient
capital returns. These are expected to be completed and
communicated in connection with the Annual Shareholder
Meeting”.
Alan Bazaar, the Company’s Board Chairman,
stated, “The sale of our Microlab division is part of the Board’s
commitment to create sustained value for our shareholders and
reflects the Company’s strategic decision to pursue our
higher-growth, higher-margin T&M and RBS businesses. Over the
near-term, we are focused on completing the sale of Microlab,
prudent expense management and maintaining a strong balance sheet
to support various growth opportunities. This may include continued
R&D investment to accelerate growth in RBS to take advantage of
significant market opportunities and demand for specialized 5G
private network solutions. As our go forward business and strategy
refresh develops, we will look at longer-term opportunities to
return excess cash to shareholders, which may include a share
repurchase program or special dividends, as well as other corporate
actions to create value for shareholders.”
After the Microlab transaction is completed, the
Company will be debt free and management estimates it will have
approximately $17.0 million in cash and cash equivalents.
Management and the Board believe it is prudent to maintain a strong
balance sheet and capital position given the fluid business
environment. In addition, the Company believes the benefits of a
strengthened balance sheet and streamlined business model will
support and accelerate long-term growth opportunities as the
Company evaluates strategic opportunities as well as investments in
its high-growth, high-margin T&M and RBS businesses.
Mr. Whelan concluded, “We are looking forward to
completing the Microlab transaction in the coming weeks and
focusing on our streamlined T&M and RBS businesses. We expect
to reorganize around our two remaining businesses and report them
as two separate segments in 2022. The strong sales results we
produced in 2021 increases our confidence in these markets going
forward and we believe we are well positioned to drive growth in
2022 and beyond. With a 30% backlog increase, we expect the T&M
and RBS segments to grow again in 2022. Additionally, we expect a
higher software revenue mix at RBS which will favorably impact our
gross margins. I look forward to updating shareholders on our
progress again at our Annual Shareholder meeting and throughout the
year.”
The proxy materials related to our Special
Meeting of Shareholders to be held on Friday, February 25, 2022 can
be found on the Investor Relations section of our website
(www.wirelesstelecomgroup.com) under Financial Information.
Our financial statements for the three and
twelve months ended December 31, 2021, are not yet available.
Accordingly, the information presented above reflects our
preliminary estimates subject to the completion of our financial
closing procedures. As a result, these preliminary estimates may
differ from the actual results that will be reflected in our
financial statements when they are completed and publicly
disclosed. These preliminary estimates may change and those changes
may be material.
Our expectations with respect to our preliminary
estimates for the three and twelve months ended December 31, 2021,
are based upon management estimates and are the responsibility of
management. Our independent registered public accounting firm has
not audited, reviewed or performed any procedures with respect to
these preliminary results and, accordingly, does not express an
opinion or any other form of assurance about them.
These estimates should not be viewed as a
substitute for our full interim or annual financial statements
prepared in accordance with GAAP. Accordingly, you should not place
undue reliance on these preliminary financial results. These
estimated preliminary results should be read in conjunction with
the “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and “Risk Factors” sections of our
historical consolidated financial statements, including the notes
thereto, in our Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March 19, 2021 and in other
reports that we filed with the Securities Exchange Commission.
Additional Information and Where to Find
It
In connection with the proposed transaction, on
January 18, 2022, the Company filed with the SEC a definitive proxy
statement on Schedule 14A and accompanying proxy card, as well as
other relevant documents regarding the proposed transaction. In
connection with the filing of its definitive proxy statement with
the SEC, the Company mailed its definitive proxy statement and a
proxy card to its shareholders entitled to vote at the special
meeting to be held on February 25, 2022 at 9 a.m. EST, seeking
their approval of the transaction. The definitive proxy statement
contains important information about the proposed transaction and
related matters. SHAREHOLDERS OF THE COMPANY ARE URGED TO READ
THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO)
AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSATION
THAT THE COMPANY MAY FILE WITH THE SEC WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY
AND THE PROPOSED TRANSACTION THAT THE COMPANY’S SHAREHOLDERS SHOULD
CONSIDER BEFORE MAKING ANY VOTING DECISION. This release is not a
substitute for the definitive proxy statement or for any other
document that the Company may file with the SEC and send to its
shareholders in connection with the proposed transaction.
Investors and security holders may obtain copies
of these documents and any other documents filed with or furnished
to the SEC by the Company free of charge through the website
maintained by the SEC at www.sec.gov, or under the Investor
Relations section of the Company’s website at
www.wirelesstelecomgroup.com.
Participants in the
Solicitation
The Company, its directors and executive
officers, and the Company’s proxy solicitor, Advantage Proxy, Inc.,
will solicit proxies in respect of the proposed transaction.
Information about the Company’s directors and executive officers is
available in the Company’s definitive proxy statement filed by the
Company with the SEC on January 18, 2022, which is available free
of charge from the sources indicated above.
Other information regarding the participants in
the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, is contained
in the definitive proxy statement and other relevant materials that
may be filed with the SEC regarding the proposed transaction.
Investors should read the definitive proxy statement carefully
before making any voting or investment decisions. You may obtain
free copies of these documents from the Company using the sources
indicated above.
Investor Contacts
If you have additional questions about the
transaction, need assistance in submitting your proxy or voting
your shares of our common stock, or need additional copies of the
proxy statement or proxy card, please contact us in writing at
Wireless Telecom Group, Inc., 25 Eastmans Road, Parsippany, New
Jersey 07054, Attention: Corporate Secretary, or by telephone:
973-386-9696 OR our proxy solicitor, Advantage Proxy,
Inc., PO Box 13581, Des Moines, WA 98198, Attention: Karen Smith,
or toll free at (877) 870-8565 or collect at (206) 870-8565 or by
email to ksmith@advantageproxy.com.
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,
our expectation to continue to drive revenue growth, improve
operating margins, explore strategic opportunities and growth
opportunities, as well as statements regarding use of excess cash.
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 but are not limited to, the ongoing impact that the
COVID-19 pandemic may have on our business, including on our supply
chain, and the general economy in the future, our dependency on
capital spending on data and communication networks by our
customers and end users, our dependency on the deployment of 4G LTE
and 5G NR private networks and related services to grow our
business, the impact of the loss of any significant customers, the
ability of our management to successfully implement our business
plan and strategy, our ability to raise additional capital to fund
our operations given our degree of leverage, product demand and
development of competitive technologies in our market sector, the
impact of competitive products and pricing, our abilities to
protect our intellectual property rights and our ability to manage
risks related to our information technology and cyber security, and
our ability to consummate the pending transaction for sale of the
Microlab business, among others. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those
anticipated, estimated or projected. These risks and uncertainties
are disclosed in our Annual Report on Form 10-K for the year ended
December 31, 2020 and subsequent quarterly reports filed with the
SEC. The Company’s forward-looking statements speak only as of the
date of this release. The Company undertakes no obligation to
publicly update or review any forward-looking statements, whether
as a result of new information, future developments or otherwise,
except as required by law.
- END -
About Wireless Telecom
Group
Wireless Telecom Group, Inc.,
comprised of Boonton, CommAgility, Holzworth, 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 existing and emerging wireless
technologies. With a product portfolio including peak power meters,
signal generators, phase noise analyzers, signal processing
modules, LTE PHY/stack software, power splitters and combiners, GPS
repeaters, public safety components, noise sources, and
programmable noise generators, Wireless Telecom Group supports the
development, testing, and deployment of wireless technologies
around the globe. Wireless Telecom Group, Inc.’s website address is
wirelesstelecomgroup.com.
Investor Contact Andrew M. BergerManaging
DirectorSM Berger& Company(216) 464-6400andrew@smberger.com
Contact Michael Kandell: +1 (973) 386-969625
Eastmans RoadParsippany, NJ 07054Tel: (973) 386-9696Fax: (973)
386-9191www.wtcom.com
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