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, 2019.
Fourth Quarter Fiscal 2019 Highlights:
- Net sales increased 57% year over year to $15.5 million
- Net income increased 70% year over year to $782,000, or $0.08
per diluted share
- Declared $0.02 per share dividend, the Company’s 38th
consecutive quarterly dividend
Fiscal 2019 Highlights:
- Net sales increased 10% year over year to $55.3 million
- Net income of $3.5 million, or $0.36 per diluted share
- Acquired C Enterprises on March 15, 2019
- RF Connector Segment sales increased 16% year-over-year
Robert Dawson, President and CEO
of RF Industries, commented:
“We are pleased to report another strong quarter with sales
growth of 57% over the fourth quarter of last year, reflecting the
continued progress we are making in the multi-year transformation
of our business. During the fiscal year, we steadily grew our core
distribution business, while also completing a successful
acquisition that broadened and strengthened our product offering
for the telecom, data center, and wireless markets. As we move into
fiscal 2020, we continue to put the pieces in place to further
build a platform for continued growth, including our recent
acquisition of Schroff Technologies International and the addition
of talent to our leadership team. Finally, we remain focused on our
long-term growth plan of reaching $100 million in sales.”
Fourth Quarter Fiscal 2019 Results
Net sales in the fourth quarter of fiscal 2019 were $15.5
million, consistent with the preceding third quarter, and an
increase of 57%, or $5.6 million, compared to $9.9 million in the
fourth quarter of fiscal 2018. The year-over-year increase in net
sales reflects sales contribution from the Company’s acquisition of
C Enterprises, as well as growth in both its traditional run rate
business and its project work in the OEM and wireless carrier
markets.
Gross profit for the fourth quarter was $4.1 million, compared
to $4.3 million in the preceding third quarter, and an increase of
40%, or $1.2 million, compared to $3.0 million in the fourth
quarter of fiscal 2018. Gross margins were 27% of net sales,
compared to 30% of net sales in the fiscal 2018 fourth quarter
primarily due to product mix at the Custom Cabling segment as well
as increased wages for the Company’s production team.
Selling and general expenses increased $1.1 million to $2.7
million (17% of sales) compared to $1.6 million (16% of net sales)
in the fourth quarter last year primarily due to the absorption of
the additional selling and general expenses of newly acquired C
Enterprises.
Net income for the fourth quarter was $782,000, or $0.08 per
diluted share, compared to $1.0 million, or $0.11 per diluted
share, in the preceding third quarter, and up 70% compared to
$460,000, or $0.05 per diluted share, in the fourth quarter of
fiscal 2018.
Fiscal 2019 Full Year Results
Net sales in fiscal 2019 were $55.3 million, an increase of 10%,
or $5.1 million, compared to $50.2 million in fiscal 2018, which
included the largest series of orders in Company history.
Gross profit for fiscal 2019 was $15.6 million, compared to
$17.1 million for fiscal 2018. Gross margins were 28% of net sales
compared to 34% of net sales in fiscal 2018 primarily due to
product mix at the Custom Cabling segment as well as increased
wages for the Company’s production team.
Selling and general expenses for fiscal 2019 increased to $9.7
million (18% of sales), compared to $8.2 million (16% of sales) for
fiscal 2018. The increase in selling and general expenses was
primarily due to the absorption of the selling and general expenses
of the newly acquired C Enterprises.
Net income for fiscal 2019 was $3.5 million, or $0.36 per
diluted share, compared to $5.8 million, or $0.61 per diluted
share, in fiscal 2018.
Balance Sheet Data; Dividends
At October 31, 2019, the Company reported working capital of
$27.6 million, including cash and cash equivalents of $12.5
million, a current ratio of 5.5-to-1 and no outstanding debt.
Cash and accounts receivable increased during the year by $4.1
million or 20% over prior year end.
At its December 13, 2019 meeting, the Company’s Board of
Directors declared a quarterly cash dividend of $0.02 per common
share, payable on January 15, 2020 to stockholders of record on
December 31, 2019.
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 2019 financial results. To access the conference
call, dial 800-263-0877 (US and Canada) or 323-794-2094
(International). The conference ID is 5069719. 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
5069719.
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, data cables, wire harnesses, fiber optic
cables, custom cabling, energy-efficient cooling systems
and integrated small cell enclosures. The Company is
headquartered in San Diego, California with additional operations
in Long Island, New York, Vista, California, Milford, Connecticut
and North Kingstown, Rhode Island. 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, improved
profitability, and future net sales goals, 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 and customers 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 INCOME |
(UNAUDITED) (In thousands, except share and per share amounts) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
October 31, |
|
October 31, |
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
Net sales |
$ |
15,541 |
|
|
$ |
9,893 |
|
|
$ |
55,325 |
|
|
$ |
50,196 |
|
Cost of sales |
|
11,409 |
|
|
|
6,941 |
|
|
|
39,688 |
|
|
|
33,096 |
|
|
|
|
|
|
|
|
|
Gross profit |
|
4,132 |
|
|
|
2,952 |
|
|
|
15,637 |
|
|
|
17,100 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Engineering |
|
435 |
|
|
|
259 |
|
|
|
1,468 |
|
|
|
1,480 |
|
Selling and general |
|
2,662 |
|
|
|
1,580 |
|
|
|
9,710 |
|
|
|
8,173 |
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
3,097 |
|
|
|
1,839 |
|
|
|
11,178 |
|
|
|
9,653 |
|
|
|
|
|
|
|
|
|
Operating income |
|
1,035 |
|
|
|
1,113 |
|
|
|
4,459 |
|
|
|
7,447 |
|
|
|
|
|
|
|
|
|
Other income |
|
23 |
|
|
|
28 |
|
|
|
98 |
|
|
|
47 |
|
|
|
|
|
|
|
|
|
Income from continuing
operations before provision for income taxes |
|
1,058 |
|
|
|
1,141 |
|
|
|
4,557 |
|
|
|
7,494 |
|
Provision for income taxes |
|
276 |
|
|
|
224 |
|
|
|
1,036 |
|
|
|
1,468 |
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
782 |
|
|
|
917 |
|
|
|
3,521 |
|
|
|
6,026 |
|
|
|
|
|
|
|
|
|
Income from discontinued operations, net of tax |
|
-- |
|
|
|
(457 |
) |
|
|
-- |
|
|
|
(180 |
) |
|
|
|
|
|
|
|
|
Net income |
$ |
782 |
|
|
$ |
460 |
|
|
$ |
3,521 |
|
|
$ |
5,846 |
|
|
|
|
|
|
|
|
|
Earnings per share - Basic: |
|
|
|
|
|
|
|
Continuing operations |
$ |
0.08 |
|
|
$ |
0.10 |
|
|
$ |
0.38 |
|
|
$ |
0.66 |
|
Discontinued operations |
|
-- |
|
|
|
(0.05 |
) |
|
|
-- |
|
|
|
(0.02 |
) |
|
|
|
|
|
|
|
|
Net income per share |
$ |
0.08 |
|
|
$ |
0.05 |
|
|
$ |
0.38 |
|
|
$ |
0.64 |
|
|
|
|
|
|
|
|
|
Earnings per share - Diluted: |
|
|
|
|
|
|
|
Continuing operations |
$ |
0.08 |
|
|
$ |
0.09 |
|
|
$ |
0.36 |
|
|
$ |
0.63 |
|
Discontinued operations |
|
-- |
|
|
|
(0.04 |
) |
|
|
-- |
|
|
|
(0.02 |
) |
|
|
|
|
|
|
|
|
Net income per share |
$ |
0.08 |
|
|
$ |
0.05 |
|
|
$ |
0.36 |
|
|
$ |
0.61 |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
9,405,627 |
|
|
|
9,283,620 |
|
|
|
9,358,836 |
|
|
|
9,105,406 |
|
Diluted |
|
9,869,531 |
|
|
|
9,876,397 |
|
|
|
9,854,604 |
|
|
|
9,593,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RF INDUSTRIES, LTD. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(in thousands, except share and per share amounts) |
|
|
Oct. 31, |
|
Oct. 31, |
2019 |
|
2018 |
|
|
|
|
ASSETS |
(unaudited) |
|
(audited) |
|
|
|
|
CURRENT ASSETS |
|
|
|
Cash and cash equivalents |
$ |
12,540 |
|
|
$ |
16,334 |
|
Trade accounts receivable, net |
|
12,190 |
|
|
|
4,255 |
|
Inventories, net |
|
8,245 |
|
|
|
7,113 |
|
Other current assets |
|
685 |
|
|
|
828 |
|
|
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS |
|
33,660 |
|
|
|
28,530 |
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
839 |
|
|
|
559 |
|
Goodwill |
|
1,340 |
|
|
|
1,340 |
|
Amortizable intangible assets, net |
|
1,092 |
|
|
|
1,367 |
|
Non-amortizable intangible assets |
|
657 |
|
|
|
657 |
|
Other assets |
|
112 |
|
|
|
49 |
|
|
|
|
|
TOTAL ASSETS |
$ |
37,700 |
|
|
$ |
32,502 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
Accounts payable |
$ |
2,406 |
|
|
$ |
1,342 |
|
Accrued expenses |
|
3,653 |
|
|
|
3,377 |
|
Income Taxes Payable |
|
21 |
|
|
|
-- |
|
|
|
|
|
TOTAL CURRENT LIABILITIES |
|
6,080 |
|
|
|
4,719 |
|
|
|
|
|
Other
long-term liabilities |
|
87 |
|
|
|
-- |
|
|
|
|
|
TOTAL LIABILITIES |
|
6,167 |
|
|
|
4,719 |
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
Common stock, authorized 20,000,000 shares of $0.01
par value; |
|
|
|
9,462,267 and 9,291,201 shares issued and outstanding
at October 31, 2019 and October 31, 2018, respectively |
|
95 |
|
|
|
93 |
|
Additional paid-in capital |
|
21,949 |
|
|
|
20,974 |
|
Retained earnings |
|
9,489 |
|
|
|
6,716 |
|
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY |
|
31,533 |
|
|
|
27,783 |
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
37,700 |
|
|
$ |
32,502 |
|
|
|
|
|
|
|
|
Contacts: |
|
|
|
RF Industries
Ltd.Mark Turfler SVP/CFO (858)
549‑6340 rfi@rfindustries.com |
|
MKR Investor
RelationsTodd Kehrli Analyst/Investor Contact (323)
468-2300 rfil@mkr-group.com |
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