via NEWMEDIAWIRE --
RF Industries, Ltd, (NASDAQ:
RFIL), a national manufacturer and marketer of
interconnect products and systems, today announced its financial
results for the fourth quarter and fiscal year ended October 31,
2018.
Fourth Quarter Fiscal 2018 Financial
Highlights:
- Net sales increased 34% year over year to $12 million including
sales from the recently sold Comnet subsidiary
- Net sales increased 41% year over year to $9.9 million,
excluding Comnet
- Gross margin was 30%, the fifth straight quarter with gross
margin of at least 30%
- Income from continuing operations was $917,000, or $0.09 per
diluted share, up from $229,000, or $0.03 per diluted share, a year
ago
- Including $457,000 net loss from the sale of Comnet, or ($.04)
per diluted share, net income was $460,000, or $0.05 per diluted
share
- Backlog increased to $11 million at October 31, 2018 on Q4
bookings of $13 million
- Declared $0.02 per share dividend, the Company’s 34th
consecutive quarterly dividend
Fiscal 2018 Financial Highlights:
- Including sales from Comnet, net sales increased 89% year over
year to $58.5 million
- Net sales increased 118% year over year to $50.2 million,
excluding Comnet, and still the Company’s highest annual sales
ever
- Gross margin increased to 34%, up from 30% in fiscal 2017
- Income from continuing operations was $6.0 million, or $0.63
per diluted share, up from $170,000, or $0.02 per diluted share, a
year ago
- Record net income of $5.8 million, or $0.61 per diluted share,
includes $180,000 net loss, or ($0.02) per diluted share, from the
sale of Comnet
- Cash generated was $10.3 million, resulting in a cash balance
of $16.3 million at October 31, 2018
Robert Dawson, President and CEO
of RF Industries, commented:
“Our record annual sales and net income in fiscal 2018 reflect
the significant progress we made this past year with the strategic
transformation of our business. These positive results include
solid fourth quarter income from operations and record income from
operations for the fiscal year. As part of our ongoing focus on
realigning operations and driving profitable growth, we divested
our Comnet division at the end of the fourth quarter, which reduced
sales redundancies, improved margins, enhanced our profitability,
and increased our total available cash. Our offering of
high-quality products, flexibility in design, and fast turn-around
time is resonating in the market, and our continued focus in fiscal
2019 will be to build on our strong customer relationships and
leverage our channel partnerships to further expand our market
presence in a profitable manner.”
Fourth Quarter Fiscal 2018 Results
Net sales in the fourth quarter of fiscal 2018 were $9.9
million, an increase of 41%, or $2.9 million, compared to $7.0
million in the fourth quarter of fiscal 2017. These results exclude
the Company’s Comnet Telecom Supply (Comnet) subsidiary that was
sold on October 31, 2018. Including Comnet sales, net sales in the
fourth quarter of fiscal 2018 were $12.0 million, an increase of
34%, or $3.1 million, compared to $8.9 million in the fourth
quarter of fiscal 2017. The increase in sales was primarily driven
by increased sales at the Custom Cabling Manufacturing and Assembly
(Custom Cabling) segment. The increase in net sales at this segment
is primarily attributable to an increase in demand for its fiber
optics cable used primarily in the build out of wireless carrier 4G
and 5G network deployment.
Increased sales at the Custom Cabling segment largely
contributed to a $743,000 increase in gross profit for the fourth
quarter to $3.0 million, compared to $2.2 million in the fourth
quarter last year. Gross margins were 30%, the fifth straight
quarter with gross margins of at least 30%.
Selling and general expenses were $1.6 million, an $81,000
decrease compared to $1.7 million in the fourth quarter last year,
reflecting the Company’s increased operational efficiencies.
Selling and general expenses as a percentage of sales declined to
16% of sales, compared to 24% of sales in the fourth quarter last
year.
Income from continuing operations in the fourth quarter
increased to $917,000 (9% of net sales), or $0.09 per diluted
share, compared to $229,000 (3% of net sales), or $0.03 per diluted
share in the fourth quarter last year.
The Company sold Comnet for $4.2 million in cash on October 31,
2018. Accordingly, Comnet’s financial results for the entire fiscal
year 2018 are reported as discontinued operations. Loss from
discontinued operations in the fourth quarter was $457,000, net of
tax, compared to income of $77,000, net of tax, in the fourth
quarter last year.
Net income for the fourth quarter increased 50% to $460,000, or
$0.05 per diluted share, compared to net income of $306,000, or
$0.04 per diluted share, in the fourth quarter last year.
Fiscal 2018 Full Year Results
Net sales in fiscal 2018 were $50.2 million, an increase of
118%, or $27.2 million, compared to $23.0 million in fiscal 2017.
Including Comnet sales, net sales in fiscal 2018 were $58.5
million, an increase of 89%, or $27.5 million, compared to $31.0
million in fiscal 2017. The increase in sales at the Custom Cabling
segment was primarily driven by increased demand for its fiber
optics cable used primarily in the build out of wireless carrier 4G
and 5G network deployment.
Gross profit for fiscal 2018 increased $10.1 million to $17.1
million, compared to $7.0 million for fiscal 2017. Gross margins
increased to 34% of sales from 30% of sales in fiscal 2017. The
improvement in gross margins was primarily due to the revenue
increase at the Custom Cabling segment, which had the effect of
spreading certain fixed manufacturing costs over a larger revenue
base.
Selling and general expenses for fiscal 2018 were $8.2 million,
a $2.2 million increase compared to $6.0 million in fiscal 2017,
primarily due to increased compensation resulting from the increase
in net sales. Despite this increase in expenses, selling and
general expenses as a percentage of sales declined to 16% of sales,
compared to 26% of sales in fiscal 2017, reflecting the Company's
increased operational efficiencies.
Income from continuing operations for fiscal 2018 increased to
$6.0 million (12% of sales), or $0.63 per diluted share, compared
to $170,000 (1% of sales), or $0.02 per diluted share in fiscal
2017.
Loss from discontinued operations for fiscal 2018 was $180,000,
net of tax, compared to income of $212,000, net of tax, in fiscal
2017.
Net income for fiscal 2018 was a record $5.8 million, or $0.61
per diluted share, compared to net income of $382,000, or $0.04 per
share, in fiscal 2017.
Balance Sheet Data; Dividends
At October 31, 2018, the Company reported working capital of
$23.8 million, including cash and cash equivalents of $16.3
million, a current ratio of 6-to-1, no outstanding debt, and
stockholders' equity of $27.8 million. During fiscal 2018, the
Company paid cash dividends of $0.08 per share, or $730,000.
At its December 17, 2018 meeting, the Company’s Board of
Directors declared a quarterly cash dividend of $0.02 per common
share, payable on January 15, 2019 to stockholders of record on
December 31, 2018. This is the 34th consecutive quarterly
dividend that RF Industries has paid to holders of common
stock.
Cash dividends are made at the discretion of the 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 considered relevant by our Board of Directors.
Conference Call and Webcast
RF Industries will host a conference call and live webcast today
at 1:30 p.m. Pacific Time (4:30 p.m. ET) to discuss its fourth
quarter and fiscal 2018 financial results. To access the conference
call, dial 888-394-8218 (US and Canada) or 323-794-2588
(International). The conference ID is 6812378. In addition, a live
and archived webcast of the conference call will be accessible on
the investor relations section of the Company’s website at
www.rfindustries.com. A phone replay of the conference call will
also be available beginning approximately two hours after
conclusion of the call and will remain available for two weeks. To
access the phone replay, dial 844-512-2921 (US and Canada) or
412-317-6671 (International). The replay conference ID is
6812378.
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
and custom cabling. The Company is headquartered in San Diego,
California with operations in New York and 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, including higher sales, increased future
demand for the Company's products, improved margins 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 impact of existing and
additional future tariffs imposed by U.S and foreign nations; the
Company's ability to execute on its new go-to-market strategies and
channel models; its ability to expand its OEM relationships; its
ability to continue to deliver newly designed and custom fiber
optic and cabling products to principal customers; its ability to
maintain strong margins and diversify its customer base, and its
ability to address the changing needs of the market. 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.
(tables attached)
RF INDUSTRIES, LTD. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(A) |
(UNAUDITED) (In thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
October 31, |
|
October 31, |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
Net sales |
$ |
9,893 |
|
|
$ |
7,028 |
|
$ |
50,196 |
|
|
$ |
22,983 |
Cost of sales |
|
6,941 |
|
|
|
4,819 |
|
|
33,096 |
|
|
|
15,996 |
Gross profit |
|
2,952 |
|
|
|
2,209 |
|
|
17,100 |
|
|
|
6,987 |
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Engineering |
|
259 |
|
|
|
196 |
|
|
1,480 |
|
|
|
824 |
Selling and general |
|
1,580 |
|
|
|
1,661 |
|
|
8,173 |
|
|
|
5,960 |
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
1,839 |
|
|
|
1,857 |
|
|
9,653 |
|
|
|
6,784 |
|
|
|
|
|
|
|
|
Operating income |
|
1,113 |
|
|
|
352 |
|
|
7,447 |
|
|
|
203 |
|
|
|
|
|
|
|
|
Other income |
|
28 |
|
|
|
6 |
|
|
47 |
|
|
|
29 |
Income from continuing |
|
|
|
|
|
|
|
operations before provision
for income taxes |
|
1,141 |
|
|
|
358 |
|
|
7,494 |
|
|
|
232 |
Provision for income taxes |
|
224 |
|
|
|
129 |
|
|
1,468 |
|
|
|
62 |
|
|
|
|
|
|
|
|
Income from continuing operations |
|
917 |
|
|
|
229 |
|
|
6,026 |
|
|
|
170 |
|
|
|
|
|
|
|
|
Income (loss)
from discontinued operations, net of tax |
|
(457 |
) |
|
|
77 |
|
|
(180 |
) |
|
|
212 |
Net income |
$ |
460 |
|
|
$ |
306 |
|
$ |
5,846 |
|
|
$ |
382 |
|
|
|
|
|
|
|
|
Earnings (loss)
per share - Basic: |
|
|
|
|
|
|
|
Continuing operations |
$ |
0.10 |
|
|
$ |
0.03 |
|
$ |
0.66 |
|
|
$ |
0.02 |
Discontinued operations |
|
(0.05 |
) |
|
|
0.01 |
|
|
(0.02 |
) |
|
|
0.02 |
Net income per share |
$ |
0.05 |
|
|
$ |
0.04 |
|
$ |
0.64 |
|
|
$ |
0.04 |
|
|
|
|
|
|
|
|
Earnings (loss)
per share - Diluted: |
|
|
|
|
|
|
|
Continuing operations |
$ |
0.09 |
|
|
$ |
0.03 |
|
$ |
0.63 |
|
|
$ |
0.02 |
Discontinued operations |
|
(0.04 |
) |
|
|
0.01 |
|
|
(0.02 |
) |
|
|
0.02 |
|
|
|
|
|
|
|
|
Net income per share |
$ |
0.05 |
|
|
$ |
0.04 |
|
$ |
0.61 |
|
|
$ |
0.04 |
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
9,283,620 |
|
|
|
8,834,747 |
|
|
9,105,406 |
|
|
|
8,840,895 |
Diluted |
|
9,876,397 |
|
|
|
8,834,747 |
|
|
9,593,066 |
|
|
|
8,915,764 |
|
|
|
|
|
|
|
|
- NOTE: Financial results for Comnet are reflected as a single
line item, “Income (loss) from discontinued operations, net of
tax.”
RF INDUSTRIES, LTD. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS
(A) |
|
|
|
Oct. 31, |
|
Oct. 31, |
|
2018 |
|
2017 |
ASSETS |
|
|
(audited) |
|
|
|
|
CURRENT ASSETS |
|
|
|
Cash and cash equivalents |
$ |
16,334 |
|
$ |
5,208 |
Trade accounts receivable, net |
|
4,255 |
|
|
2,903 |
Inventories, net |
|
7,113 |
|
|
5,543 |
Other current assets |
|
828 |
|
|
506 |
Current
assets held for sale |
|
- |
|
|
2,633 |
TOTAL CURRENT ASSETS |
|
28,530 |
|
|
16,793 |
|
|
|
|
Property and equipment, net |
|
559 |
|
|
565 |
Goodwill |
|
1,340 |
|
|
1,340 |
Amortizable intangible assets, net |
|
1,367 |
|
|
1,642 |
Non-amortizable intangible assets |
|
657 |
|
|
657 |
Other assets |
|
49 |
|
|
70 |
Noncurrent assets held
for sale |
|
- |
|
|
3,993 |
|
|
|
|
TOTAL ASSETS |
$ |
32,502 |
|
$ |
25,060 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
Accounts payable |
$ |
1,342 |
|
$ |
1,036 |
Accrued expenses |
|
3,377 |
|
|
1,791 |
Current
liabilities held for sale |
|
- |
|
|
771 |
TOTAL CURRENT LIABILITIES |
|
4,719 |
|
|
3,598 |
|
|
|
|
Deferred tax liabilities |
|
- |
|
|
119 |
|
|
|
|
TOTAL LIABILITIES |
|
4,719 |
|
|
3,717 |
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
Common stock, authorized 20,000,000 shares of $0.01
par value; |
|
|
|
9,291,201
and 8,872,246 shares issued and outstanding at |
|
|
|
October
31, 2018 and October 31, 2017, respectively |
|
93 |
|
|
89 |
Additional paid-in capital |
|
20,974 |
|
|
19,654 |
Retained earnings |
|
6,716 |
|
|
1,600 |
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY |
|
27,783 |
|
|
21,343 |
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
32,502 |
|
$ |
25,060 |
|
|
|
|
|
|
- NOTE: Financial results for Comnet on the condensed balance
sheets are reflected as “Current or Noncurrent assets held for
sale” and “Current Liabilities held for sale.”
Contacts:RF IndustriesMark
Turfler SVP/CFO (858) 549‑6340rfi@rfindustries.com |
|
MKR Group Inc.Todd Kehrli Analyst/Investor
Contact(323) 468-2300 rfil@mkr-group.com |
|
|
|
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