RF Industries Reports Sales Growth of 34% and Net Income Growth of 41% in First Quarter of Fiscal 2019
March 12 2019 - 4:01PM
RF Industries, Ltd, (NASDAQ: RFIL), a national
manufacturer and marketer of interconnect products and systems,
today announced its financial results for the first quarter of
fiscal 2019 ended January 31, 2019.
First Quarter Fiscal 2019 Financial
Highlights:
- Net sales increased 34% year over year to $10.6 million
- Gross margin was 30%, the sixth straight quarter with gross
margin of at least 30%
- Net income increased 41% year over year to $640,000, or $0.07
per diluted share
- Backlog of $10.6 million at January 31, 2019 on first quarter
bookings of $10.9 million
- Declared $0.02 per share dividend, the Company’s 35th
consecutive quarterly dividend
Robert Dawson, President and CEO
of RF Industries, commented:
“We are pleased to report another strong quarter that includes
solid year-over-year growth in both sales and net income. We drove
higher sales in both reporting segments over the prior year with
the Custom Cabling segment growing 38% and the RF Connector segment
growing 24% in what is seasonally our most difficult quarter. These
increases are directly related to the channel strategies that we
implemented over the past year as part of the strategic
transformation of our business. We continue to focus on building on
our strong customer relationships and leveraging our channel
partnerships to expand our market presence. We are beginning to see
increased business from our distribution channels and we continue
to prove that even with some general market uncertainty we are able
to be profitable at varying levels of revenue. The recent
announcement of the pending C Enterprises acquisition reflects our
commitment to grow both organically and through strategic
acquisitions of companies that give us access to new capabilities,
product sets, customers, and market segments.”
First Quarter Fiscal 2019 Results
Net sales in the first quarter of fiscal 2019 were $10.6
million, an increase of 34%, or $2.7 million, compared to $8.0
million in the first quarter of fiscal 2018. The increase in sales
was primarily driven by increased sales at the Company’s Custom
Cabling Manufacturing segment. The increase in net sales at this
segment is primarily attributable to project work in the OEM and
wireless carrier markets in addition to an increase in traditional
run rate business.
Gross profit for the first quarter was $3.1
million, an increase of $682,000 compared to $2.5 million in the
first quarter last year. Gross margins were 30%, the sixth straight
quarter with gross margins of at least 30%.
Selling and general expenses were $2.0 million compared to $1.8
million in the first quarter last year, reflecting higher
compensation paid as a result of the sales gains at the Custom
Cabling segment. Despite this increase in expenses, selling and
general expenses as a percentage of sales declined to 19% of sales,
compared to 22% of sales in the first quarter last year.
Net income for the first quarter increased 41% to $640,000, or
$0.07 per diluted share, compared to net income of $454,000, or
$0.05 per diluted share, in the first quarter last year.
Balance Sheet Data; Dividends
At January 31, 2019, the Company reported working capital of
$24.8 million, including cash and cash equivalents of $14.0
million, a current ratio of 7.5-to-1 and no outstanding debt.
At its March 8, 2019 meeting, the Company’s Board of Directors
declared a quarterly cash dividend of $0.02 per common share,
payable on April 15, 2019 to stockholders of record on March 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 Daylight Time (4:30 p.m. EDT) to discuss its
first quarter 2019 financial results. To access the conference
call, dial 800-458-4121 (US and Canada) or 323-794-2093
(International). The conference ID is 3287666. 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
3287666.
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
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
INCOME(UNAUDITED) (In thousands, except share and per share
amounts)
|
|
Three Months Ended |
|
|
January 31, |
|
|
|
2019 |
|
|
2018 |
Net
sales |
$ |
10,647 |
|
$ |
7,966 |
Cost of
sales |
|
7,502 |
|
|
5,503 |
Gross
profit |
|
3,145 |
|
|
2,463 |
|
|
|
|
|
Operating
expenses: |
|
|
|
|
Engineering |
|
320 |
|
|
321 |
|
Selling and
general |
|
2,039 |
|
|
1,784 |
Total
Operating Expenses |
|
2,359 |
|
|
2,105 |
|
|
|
|
|
Operating
income |
|
786 |
|
|
358 |
Other
income |
|
22 |
|
|
2 |
Income from
continuing operations |
|
|
|
|
before provision for
income taxes |
|
808 |
|
|
360 |
Provision
for income taxes |
|
168 |
|
|
56 |
Income from
continuing operations |
|
640 |
|
|
304 |
Income from
discontinued operations, net of tax |
|
-- |
|
|
150 |
Net
income |
$ |
640 |
|
$ |
454 |
|
|
|
|
|
Earnings
per share - Basic: |
|
|
|
|
Continuing
operations |
$ |
0.07 |
|
$ |
0.03 |
|
Discontinued
operations |
|
0.00 |
|
|
0.02 |
Net income
per share |
$ |
0.07 |
|
$ |
0.05 |
|
|
|
|
|
Earnings
per share - Diluted: |
|
|
|
|
Continuing
operations |
$ |
0.07 |
|
$ |
0.03 |
|
Discontinued
operations |
|
0.00 |
|
|
0.02 |
Net income
per share |
$ |
0.07 |
|
$ |
0.05 |
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
Basic |
|
9,309,454 |
|
|
8,880,384 |
|
Diluted |
|
9,838,154 |
|
|
9,099,301 |
RF INDUSTRIES, LTD. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(In
thousands, except share and per share amounts)
|
|
|
January 31, |
|
October 31, |
|
|
|
2019 |
|
2018 |
|
|
|
|
|
(Audited) |
ASSETS |
|
|
|
CURRENT ASSETS |
|
|
|
|
Cash and
cash equivalents |
$ |
14,016 |
|
$ |
16,334 |
|
Trade
accounts receivable, net |
|
5,633 |
|
|
4,255 |
|
Inventories |
|
8,169 |
|
|
7,113 |
|
Other
current assets |
|
781 |
|
|
828 |
|
|
TOTAL CURRENT
ASSETS |
|
28,599 |
|
|
28,530 |
|
|
|
|
|
|
Property
and equipment, net |
|
564 |
|
|
559 |
Goodwill |
|
1,340 |
|
|
1,340 |
Amortizable
intangible assets, net |
|
1,298 |
|
|
1,367 |
Non-amortizable intangible assets |
|
657 |
|
|
657 |
Other
assets |
|
49 |
|
|
49 |
|
|
TOTAL
ASSETS |
$ |
32,507 |
|
$ |
32,502 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Accounts
payable |
$ |
1,744 |
|
$ |
1,342 |
|
Accrued
expenses |
|
2,059 |
|
|
3,377 |
|
|
TOTAL CURRENT
LIABILITIES |
|
3,803 |
|
|
4,719 |
Deferred
tax liabilities |
|
11 |
|
|
-- |
|
|
TOTAL
LIABILITIES |
|
3,814 |
|
|
4,719 |
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
Common
stock, authorized 20,000,000 shares of $0.01 par value; |
|
|
|
|
|
9,356,935 and 9,291,201
shares issued and outstanding at |
|
|
|
|
|
January 31, 2019 and
October 31, 2018, respectively |
|
94 |
|
|
93 |
|
Additional
paid-in capital |
|
21,429 |
|
|
20,974 |
|
Retained
earnings |
|
7,170 |
|
|
6,716 |
|
|
TOTAL
STOCKHOLDERS' EQUITY |
|
28,693 |
|
|
27,783 |
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
32,507 |
|
$ |
32,502 |
|
|
|
|
Contacts: RF IndustriesMark
Turfler SVP/CFO (858) 549‑6340
rfi@rfindustries.com |
|
MKR Investor
Relations Inc.Todd Kehrli Analyst/Investor
Contact (323) 468-2300 rfil@mkr-group.com
|
|
|
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