TUALATIN, Ore., March 14, 2018 /PRNewswire/ -- CUI Global, Inc.
(NASDAQ: CUI), today reported its unaudited financial results for
the fourth quarter and full fiscal year ended December 31, 2017.
Full Year 2017 vs. Full Year 2016
- Revenue was $83.3 million
compared to $86.5 million;
- Gross profit was $27.9 million
compared to $32.3 million;
- Gross margin was 33.5% compared to 37.3%
- Consolidated net loss was $(12.6)
million compared to $(7.3)
million;
- Loss per diluted share was $(0.56) compared to $(0.35) per diluted share;
- Adjusted EBITDA was $(7.4)
million compared to $(3.2)
million;
- Cash and cash equivalents were $12.6
million at December 31,
2017;
- Power and Electromechanical (P&EM) segment unaudited
backlog was $20.2 million at
December 31, 2017;
- Energy segment unaudited backlog was $12.6 million at December
31, 2017.
Fourth Quarter 2017 vs. Fourth Quarter 2016
- Revenue was $21.1 million
compared to $19.4 million;
- Gross profit was $6.5 million
compared to $6.5 million;
- Gross margin was 30.9% compared to 33.4%
- Consolidated net loss was $(5.3)
million compared to $(2.6)
million;
- Loss per diluted share was $(0.20) compared to $(0.12) per diluted share;
- Adjusted EBITDA was $(2.3)
million compared to $(2.3)
million.
Note: Full year and fourth quarter 2017 financial results
include a $3.2 million goodwill
impairment charge associated with the Company's Orbital UK
subsidiary to reflect the longer than expected temporary halt in
shipping of GasPT devices under its current contract for the
national gas transmission company in Italy and softness in its UK market due to
post-Brexit-vote business uncertainty.
"Our performance in fiscal 2017 attests to a robust rebound in
our Power & Electromechanical business segment and continued
effective development activities in our Energy segment," said
William Clough, president and CEO of
CUI Global. "P&EM revenues increased over 10% year-over-year
and well above the electronics industry average as steps taken to
broaden our base of business, coupled with strengthening industry
fundamentals, drove double-digit growth across almost all of our
product lines. In our Energy segment, we continued to lay the
groundwork for greater adoption of our gas technology products
across all key geographies while work under our Italian contract
was suspended.
"We also made considerable progress over the year advancing our
market-changing technologies," continued Mr. Clough. "Our ICE
technology is well-received and setting a new standard for power
infrastructure utilization in the data center market. P&EM
backlog at year-end included our first order for ICE Switch, and
after the close of the year, we received our first ICE Block order
valued at $2.9 million. Having
recently secured UL certification for ICE Block, we can now pursue
opportunities in this growing market in a much more vigorous
manner.
"In our Energy segment, our ability to leverage integration
sales to drive for greater adoption of our gas technology products
became evident in 2017 as integration awards began to include a
product component. We recently secured a $4.6 million integration project for the UK's gas
transmission network that included in its tender proposal a
requirement for our GasPT and VE thermowells," continued Mr.
Clough. "Business development activities for our energy products
has resulted in an elevated industry profile and greater business
activity as prospective customers respond favorably to the GasPT
and VE technology's respective value propositions. Our pipeline of
potential Energy product opportunities today comprises a larger
number of major energy producers than a year ago, including a
broader footprint in North America
where we are positioning our GasPT device as a fiscal monitoring
solution in addition to its use in process control applications. We
are seeing demand build for our VE sampling probes and systems
across a broad array of applications and have made significant
inroads raising this technology's visibility to major market
participants. In the fourth quarter, we secured a second order for
our sampling system for a second ethylene plant."
Concluded Mr. Clough, "As we enter fiscal 2018, we have ahead of
us multiple paths for growth in both segments of our business. With
our new, larger facility in Houston in operation, we now have access to
larger integration opportunities from energy operators in the
region, while in Europe we see the
return of large projects that had been put on hold following the
Brexit vote. Our efforts have already begun to yield results with
almost $7.0 million in Energy
projects secured year-to-date. In North
America and Europe, we have
seeded opportunities for GasPT and VE technology sales that we
believe will bear fruit this year. We expect continued strength in
our direct OEM and distribution channel businesses with incremental
gains from sales of our ICE products. We have the technology,
business development foundation and financial strength to pursue
our growth goals and ensure our long-term success."
Recent Business and Operational Highlights:
- CUI Global announced that its Orbital UK subsidiary secured
contracts totaling $4.58 million to
enhance fuel gas metering and compressor efficiency on the UK's gas
transmission network. The award is the Company's first
non-biomethane project to include GasPT and VE thermowells
products;
- The Company received UL 9540 certification for its ICE Block
data center hardware. With the receipt of UL certification, ICE
Block is now fully certified and saleable in the market;
- CUI Global announced that its Orbital Gas Systems North America
(Orbital N.A.) subsidiary was awarded a $2.1
million integration project from a large U.S.-based energy,
procurement, and construction firm for which Orbital N.A. is the
sole-source integrator. The award follows the recent opening of
Orbital N.A.'s new, larger production facility in Houston to service bigger opportunities with
the region's largest gas operators;
- The Company's CUI Inc. subsidiary received an initial purchase
order for 400 of its ICE Block devices and additional ICE Switches
valued at approximately $2.9 million
for delivery in the fourth quarter of 2018;
- CUI Global's Orbital N.A. was awarded a fourth purchase order
in as many months for its GasPTi device from a leading U.S.-based
power and energy producer. The devices are being utilized in a
process control application to optimize the efficiency and minimize
maintenance on certain of the customer's gas-fired compressor
turbines in the northeastern United
States;
- CUI Global was awarded project approval for an open-invitation
competition by French pipeline operator ENGIE's Lab Crigen research
and operational expertise center whose goal is to identify projects
that use innovative solutions for testing the quality of
biomethane.
Conference Call
Management will host a conference call today, March 14, 2018 at 8:30
a.m. ET to discuss these results as well as recent corporate
developments. After management's opening remarks, there will be a
question and answer period. To access the call, please dial (888)
734-0328 and provide conference ID 4378747. For international
callers, please dial (678) 894-3054. The live webcast of the
conference call and accompanying slide presentation can be accessed
through the 'Events & Presentations' page of the CUI Global
Investor Relations website (www.cuiglobal.com).
For those unable to attend the live call, a telephonic replay
will be available until March 29,
2018. To access the replay of the call dial (855) 859-2056
or (404) 537-3406 and provide conference ID 4378747. An archived
copy of the webcast and slide presentation will also be available
on the 'Events & Presentations' page of the CUI Global Investor
Relations website.
About CUI Global, Inc.
Delivering Innovative Technologies for an Interconnected
World . . . . .
CUI Global, Inc. is a publicly traded company dedicated to
maximizing shareholder value through the acquisition and
development of innovative companies, products and technologies.
From Orbital Gas Systems' advanced GasPT2 platform targeting the
energy sector, to CUI Inc.'s digital power platform serving the
networking and telecom space, CUI Global and its subsidiaries have
built a diversified portfolio of industry leading technologies that
touch many markets. As a publicly traded company, shareholders are
able to participate in the opportunities, revenues, and profits
generated by the products, technologies, and market channels of CUI
Global and its subsidiaries. But most importantly, a commitment to
conduct business with a high level of integrity, respect, and
philanthropic dedication allows the organization to make a
difference in the lives of their customers, employees, investors
and global community.
For more information please visit www.cuiglobal.com.
Important Cautions Regarding Forward Looking
Statements
This document 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.
Such statements are subject to risks and uncertainties that could
cause actual results to vary materially from those projected in the
forward-looking statements. The Company may experience significant
fluctuations in future operating results due to a number of
economic, competitive, and other factors, including, among other
things, our reliance on third-party manufacturers and suppliers,
government agency budgetary and political constraints, new or
increased competition, changes in market demand, and the
performance or reliability of our products. These factors and
others could cause operating results to vary significantly from
those in prior periods, and those projected in forward-looking
statements. Additional information with respect to these and other
factors, which could materially affect the Company and its
operations, are included in certain forms the Company has filed
with the Securities and Exchange Commission.
Media
Contact:
|
External IR
Counsel:
|
CUI Global,
Inc.
|
LHA Investor
Relations
|
Jeff
Schnabel
|
Sanjay M.
Hurry
|
Main:
503-612-2300
|
212-838-3777
|
press@cuiglobal.com
|
cuiglobal@lhai.com
|
- Financial Tables to Follow -
CUI Global,
Inc.
|
Condensed
Consolidated Balance Sheets
|
|
|
December
31,
|
|
December
31,
|
(In thousands, except
share and per share data)
|
2017
|
|
2016
|
Assets:
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
12,646
|
|
|
$
|
4,617
|
|
Trade accounts
receivable, net of allowance of $135
|
|
|
|
and $151,
respectively
|
10,833
|
|
|
9,375
|
|
Inventories, net of
allowance of $946 and $774, respectively
|
13,892
|
|
|
13,202
|
|
Costs in excess of
billings
|
2,299
|
|
|
2,735
|
|
Prepaid expenses and
other
|
1,606
|
|
|
2,174
|
|
Total current
assets
|
41,276
|
|
|
32,103
|
|
Property and
equipment, less accumulated depreciation of
|
|
|
|
$4,155 and $3,299,
respectively
|
11,242
|
|
|
10,952
|
|
Goodwill
|
17,641
|
|
|
20,125
|
|
Other intangible
assets, less accumulated amortization of $11,900
|
|
|
|
and $9,438,
respectively
|
15,568
|
|
|
16,201
|
|
Investment
|
—
|
|
|
—
|
|
Note receivable, less
current portion
|
317
|
|
|
362
|
|
Deposits and other
assets
|
1,865
|
|
|
100
|
|
Total
assets
|
$
|
87,909
|
|
|
$
|
79,843
|
|
|
|
|
|
Liabilities and
Stockholders' Equity:
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
|
5,110
|
|
|
$
|
6,170
|
|
Mortgage note
payable, current portion
|
94
|
|
|
89
|
|
Capital lease
obligation, current portion
|
4
|
|
|
28
|
|
Accrued
expenses
|
4,182
|
|
|
4,542
|
|
Billings in excess of
costs
|
1,840
|
|
|
1,977
|
|
Unearned
revenue
|
7,684
|
|
|
4,932
|
|
Total current
liabilities
|
18,914
|
|
|
17,738
|
|
|
|
|
|
Long term mortgage
note payable, less current portion
|
3,256
|
|
|
3,350
|
|
Long term note
payable, related party
|
5,304
|
|
|
5,304
|
|
Capital lease
obligation, less current portion
|
9
|
|
|
12
|
|
Derivative
liability
|
356
|
|
|
467
|
|
Deferred tax
liabilities
|
2,414
|
|
|
4,120
|
|
Other long-term
liabilities
|
170
|
|
|
217
|
|
Total
liabilities
|
30,423
|
|
|
31,208
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
Preferred stock. par
value $0.001; 10,000,000 shares authorized
|
|
|
|
no shares issued at
December 31, 2017 or 2016
|
—
|
|
|
—
|
|
Common stock, par
value $0.001; 325,000,000 shares
|
|
|
|
authorized;
28,406,856 shares issued and outstanding at
|
|
|
|
December 31, 2017 and
20,916,848 shares issued and
|
|
|
|
outstanding at
December 31, 2016
|
28
|
|
|
21
|
|
Additional paid-in
capital
|
169,527
|
|
|
150,174
|
|
Accumulated
deficit
|
(108,559)
|
|
|
(95,970)
|
|
Accumulated other
comprehensive loss
|
(3,510)
|
|
|
(5,590)
|
|
Total stockholders'
equity
|
57,486
|
|
|
48,635
|
|
Total liabilities and
stockholders' equity
|
$
|
87,909
|
|
|
$
|
79,843
|
|
CUI Global,
Inc.
|
Condensed
Consolidated Statements of Operations
|
|
|
(unaudited)
|
|
|
|
(In thousands, except
share and
per share amounts)
|
For the three months
ended December 31,
|
|
For the year
ended December 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
21,135
|
|
|
$
|
19,403
|
|
|
$
|
83,275
|
|
|
$
|
86,461
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
14,614
|
|
|
12,931
|
|
|
55,406
|
|
|
54,200
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
6,521
|
|
|
6,472
|
|
|
27,869
|
|
|
32,261
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
8,443
|
|
|
7,912
|
|
|
33,921
|
|
|
34,239
|
|
|
Depreciation and
amortization
|
526
|
|
|
557
|
|
|
2,163
|
|
|
2,366
|
|
|
Research and
development
|
605
|
|
|
471
|
|
|
2,525
|
|
|
2,016
|
|
|
Provision for (credit
to) bad debt
|
7
|
|
|
44
|
|
|
(13)
|
|
|
93
|
|
|
Impairment of
goodwill and
intangible assets
|
3,152
|
|
|
—
|
|
|
3,155
|
|
|
—
|
|
|
Other operating
expenses
|
38
|
|
|
52
|
|
|
47
|
|
|
57
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
12,771
|
|
|
9,036
|
|
|
41,798
|
|
|
38,771
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(6,250)
|
|
|
(2,564)
|
|
|
(13,929)
|
|
|
(6,510)
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
65
|
|
|
14
|
|
|
234
|
|
|
(251)
|
|
|
Interest
expense
|
(126)
|
|
|
(104)
|
|
|
(500)
|
|
|
(467)
|
|
|
|
|
|
|
|
|
|
|
|
Loss before
taxes
|
(6,311)
|
|
|
(2,654)
|
|
|
(14,195)
|
|
|
(7,228)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense
|
(1,046)
|
|
|
(44)
|
|
|
(1,606)
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
(5,265)
|
|
|
$
|
(2,610)
|
|
|
$
|
(12,589)
|
|
|
$
|
(7,266)
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
weighted
average number of shares
outstanding
|
26,635,684
|
|
|
20,916,559
|
|
|
22,397,865
|
|
|
20,897,812
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per
common share
|
$
|
(0.20)
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.56)
|
|
|
$
|
(0.35)
|
|
|
|
|
|
|
|
|
|
|
|
CUI Global,
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
|
(in
thousands)
|
For the year ended
December 31,
|
|
2017
|
|
2016
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net loss
|
$
|
(12,589)
|
|
|
$
|
(7,266)
|
|
Adjustments to
reconcile net (loss) to net cash used in
|
|
|
|
operating
activities:
|
|
|
|
Depreciation
|
1,009
|
|
|
925
|
|
Amortization of
intangibles
|
1,841
|
|
|
1,923
|
|
Stock and options
issued and stock to be issued for compensation, royalties and
services
|
425
|
|
|
734
|
|
Unrealized gain on
derivative liability
|
(111)
|
|
|
(113)
|
|
Non-cash royalties,
net
|
(3)
|
|
|
19
|
|
(Credit to) provision
for bad debt expense and returns allowances
|
(13)
|
|
|
93
|
|
Provision for bad
debt expense and returns allowances
|
(16)
|
|
|
—
|
|
Deferred income
taxes
|
(1,767)
|
|
|
(107)
|
|
Non-cash unrealized
foreign currency (gains)/losses
|
(362)
|
|
|
172
|
|
Impairment of
intangible assets
|
3,155
|
|
|
—
|
|
Inventory
reserve
|
138
|
|
|
312
|
|
Loss on disposal of
assets
|
47
|
|
|
57
|
|
|
|
|
|
(Increase) decrease
in operating assets:
|
|
|
|
Trade accounts
receivable
|
(1,150)
|
|
|
4,432
|
|
Inventories
|
(411)
|
|
|
(1,672)
|
|
Costs in excess of
billings
|
591
|
|
|
(1,454)
|
|
Prepaid expenses and
other current assets
|
(421)
|
|
|
105
|
|
Deposits and other
assets
|
(506)
|
|
|
(25)
|
|
Increase (decrease)
in operating liabilities:
|
|
|
|
Accounts
payable
|
(1,163)
|
|
|
495
|
|
Accrued
expenses
|
(448)
|
|
|
(518)
|
|
Contingent
consideration
|
3
|
|
|
(54)
|
|
Unearned
revenue
|
2,666
|
|
|
1,179
|
|
Billings in excess of
costs
|
(284)
|
|
|
162
|
|
NET CASH USED IN
OPERATING ACTIVITIES
|
(9,369)
|
|
|
(601)
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchase of property
and equipment
|
(893)
|
|
|
(824)
|
|
Proceeds from sale of
property and equipment
|
8
|
|
|
27
|
|
Investments in other
intangible assets
|
(638)
|
|
|
(850)
|
|
Proceeds from notes
receivable
|
39
|
|
|
—
|
|
NET CASH USED IN
INVESTING ACTIVITIES
|
(1,484)
|
|
|
(1,647)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Proceeds from
overdraft facility
|
9,782
|
|
|
—
|
|
Payments on overdraft
facility
|
(9,782)
|
|
|
—
|
|
Proceeds from line of
credit
|
22,332
|
|
|
—
|
|
Payments on line of
credit
|
(22,332)
|
|
|
—
|
|
Payments on capital
lease obligations
|
(29)
|
|
|
(41)
|
|
Payments on notes and
loans payable
|
(89)
|
|
|
(85)
|
|
Payments on
contingent consideration
|
(61)
|
|
|
(59)
|
|
Proceeds from sales
of common stock, net of offering costs
|
18,905
|
|
|
—
|
|
NET CASH PROVIDED BY
(USED IN) FINANCING ACTIVITIES
|
18,726
|
|
|
(185)
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
156
|
|
|
(217)
|
|
Net increase
(decrease) in cash and cash equivalents
|
8,029
|
|
|
(2,650)
|
|
Cash and cash
equivalents at beginning of year
|
4,617
|
|
|
7,267
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF YEAR
|
$
|
12,646
|
|
|
$
|
4,617
|
|
Reconciliation of Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA and Adjusted Net Income (loss) are
non-GAAP financial measures and are reconciled in the table below.
These non-GAAP financial measures do not represent funds available
for management's discretionary use and is not intended to represent
cash flow from operations. EBITDA, Adjusted EBITDA and Adjusted Net
Income (loss) should not be construed as a substitute for net loss
or as a better measure of liquidity than cash flow from operating
activities, which is determined in accordance with United States generally accepted accounting
principles ("GAAP"). EBITDA, Adjusted EBITDA and Adjusted Net
Income (loss) exclude components that are significant in
understanding and assessing the company's results of operations and
cash flows. In addition, EBITDA, Adjusted EBITDA and Adjusted Net
Income (loss) are not terms defined by GAAP and as a result our
measure of EBITDA, Adjusted EBITDA and Adjusted Net Income (loss)
might not be comparable to similarly titled measures used by other
companies. However, EBITDA, Adjusted EBITDA and Adjusted Net Income
(loss) are used by management to evaluate, assess and benchmark the
company's operational results and the company believes EBITDA,
Adjusted EBITDA, and Adjusted Net Income (loss) are relevant and
useful information which are often reported and widely used by
analysts, investors and other interested parties in the Company's
industry. Accordingly, the Company is disclosing this information
to permit a more comprehensive analysis of its operating
performance, to provide an additional measure of performance and
liquidity and to provide additional information with respect to the
Company's ability to meet future debt service, capital expenditure
and working capital requirements. Adjusted Net Income (loss)
eliminates the amortization expenses associated with intangible
assets acquired with Orbital Gas Systems Limited and CUI-Canada,
non-cash expenses associated with stock and stock options for
compensation, royalties and services during the period, and
impairment of goodwill and intangible assets.
(In
thousands)
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
For the Three Months
Ended
|
|
For the year
ended
|
|
|
December
31
|
|
December
31
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
EBITDA:
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
$
|
(5,265)
|
|
|
$
|
(2,610)
|
|
|
$
|
(12,589)
|
|
|
$
|
(7,266)
|
|
Plus: Interest
expense
|
|
126
|
|
|
104
|
|
|
500
|
|
|
467
|
|
Plus: (Benefit)
provision for taxes
|
|
(1,046)
|
|
|
(44)
|
|
|
(1,606)
|
|
|
38
|
|
Plus:
Depreciation and amortization
|
|
718
|
|
|
701
|
|
|
2,850
|
|
|
2,848
|
|
EBITDA
|
|
$
|
(5,467)
|
|
|
$
|
(1,849)
|
|
|
$
|
(10,845)
|
|
|
$
|
(3,913)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
Plus: Bad
debt
|
|
7
|
|
|
44
|
|
|
(13)
|
|
|
93
|
|
Plus: Impairment of
goodwill and intangible assets
|
|
3,152
|
|
|
—
|
|
|
3,155
|
|
|
—
|
|
Plus:
Unrealized (gain) loss on derivative
|
|
(56)
|
|
|
(211)
|
|
|
(111)
|
|
|
(113)
|
|
Plus: Stock and
options issued and stock to be
issued for compensation, royalties and services
|
|
112
|
|
|
(249)
|
|
|
425
|
|
|
734
|
|
Adjusted
EBITDA
|
|
$
|
(2,252)
|
|
|
$
|
(2,265)
|
|
|
$
|
(7,389)
|
|
|
$
|
(3,199)
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss):
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
$
|
(5,265)
|
|
|
$
|
(2,610)
|
|
|
$
|
(12,589)
|
|
|
$
|
(7,266)
|
|
Plus: Impairment of
goodwill and intangible assets
|
|
3,152
|
|
|
—
|
|
|
3,155
|
|
|
—
|
|
Plus:
Amortization expense of Orbital and CUI -
Canada acquisition intangibles
|
|
316
|
|
|
299
|
|
|
1,232
|
|
|
1,284
|
|
Plus: Stock and
options issued and stock to be
issued for compensation, royalties and services
|
|
112
|
|
|
(249)
|
|
|
425
|
|
|
734
|
|
Adjusted net income
(loss)
|
|
$
|
(1,685)
|
|
|
$
|
(2,560)
|
|
|
$
|
(7,777)
|
|
|
$
|
(5,248)
|
|
|
|
|
|
|
|
|
|
|
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SOURCE CUI Global, Inc.