RF Industries Reports Third Quarter Sales Increase

Net Income $211,000, or $0.02 Per Diluted Share

Board of Directors Declares Quarterly Cash Dividend of $0.07 per share

Sep 11, 2015, 08:00 ET from RF Industries, Ltd.

SAN DIEGO, Sept. 11, 2015 /PRNewswire/ -- RF Industries, Ltd. (NASDAQ: RFIL) today announced results for the three and nine-month periods ended July 31, 2015.

Third Quarter Results
Net sales for the third quarter of fiscal 2015 increased 61%, or $3.4 million, to $8.9 million compared to $5.5 million in the same quarter last year.  Net income was $211,000, or $0.02 per diluted share, compared to $372,000, or $0.04 per diluted share, in the same quarter last year.  The third quarter 2015 net sales increase was the result of additional net sales of $2.8 million and $1.2 million, respectively, from the Company's newly acquired Comnet Telecom Supply and Rel-Tech Electronics subsidiaries.  Both the Comnet and Rel-Tech subsidiaries were acquired in fiscal 2015.

Third quarter gross profit increased $347,000, to $2.8 million, or 32% of net sales, compared to $2.5 million, or 45% of net sales in the same quarter last fiscal year.  Margins decreased in the 2015 quarter primarily due to the additional sales from the recently acquired Comnet and Rel-Tech subsidiaries, which have historically lower gross margins. Margins were also affected by lower sales and gross margins at the RF Connector and Cable Assembly segment.

Selling and general expenses increased $823,000, to $2.5 million from $1.6 million in the third quarter of fiscal 2014, primarily due to the additional operating expenses attributable to the acquisitions of Comnet and Rel-Tech and related amortization of intangible assets and acquisition costs. Selling and general expenses declined, as a percent of net sales, to 28%, from 29% of net sales in the third quarter last year, due to the increase in sales from the recent acquisitions.

Johnny Walker, CEO/President said, "Our revenue increase was the result of our recent acquisitions of Comnet Telecom and Rel-Tech Electronics, which were both profitable and met our sales expectations for the quarter.  However, the continuing slowdown in the wireless infrastructure market affected sales and profitability at the RF Connector and Cable Assembly division, which decrease affected our overall sales and profitability.  While we are tightly controlling expenses and working to improve the profitability of all of our divisions, our primary focus is on pursuing opportunities for sales growth at each of our business segments."

Nine Months Results
For the first nine months of fiscal 2015, net sales increased 39%, or $6.7 million, to $23.9 million compared to $17.2 million in the same period last fiscal year.  Net income was $724,000, or $0.08 per diluted share, compared to $1.1 million, or $0.14 per diluted share, in the same period last fiscal year.  The first nine months of fiscal 2015 include additional net sales of $9.0 million from the newly acquired Comnet and Rel-Tech subsidiaries.

Third quarter gross profit increased $582,000, to $8.4 million, or 35% of net sales, compared to $7.8 million, or 46% of net sales in the same period last fiscal year.  Gross profit as a percentage of net sales was lower for the 2015 period due to the Company's acquisition of the lower margin Comnet and Rel-Tech businesses in the current fiscal year. Margins were also affected by lower sales and gross margins at the RF Connector and Cables Assembly segment.

Selling and general expenses in for the first nine months of fiscal 2015 increased $1.4 million to $6.8 million from $5.4 million in the same period last fiscal year, reflecting increased operating expenses attributable to the acquisitions of the Comnet and Rel-Tech businesses and related amortization of intangible assets and acquisition costs. Selling and general expenses declined to 29% of net sales, compared to 31% of net sales, in the same period of fiscal 2014.

Balance Sheet Data
At July 31, 2015, the Company reported working capital of $15.7 million, including cash and cash equivalents of $7.9 million, a current ratio of approximately 4.2‑to‑1, no long‑term debt, and stockholders' equity of $26.2 million.  During the first nine months of fiscal 2015, the Company used net cash of $5.1 million and issued 302,848 shares of unregistered common stock to acquire the Comnet and Rel-Tech subsidiaries and to purchase a new, patented line of connector products known as CompPro.  The Company also paid cash dividends of $0.07 per share in each of its first three quarters of fiscal 2015, or a total of $1.8 million, to its stockholders.

Dividend
At its September 4, 2015 meeting, the Company's Board of Directors declared a quarterly cash dividend of $0.07 per share, payable on October 15, 2015 to stockholders of record on September 30, 2015. All cash dividends are made at the discretion of our board of directors, subject to applicable laws, and depend on a number of factors, including our financial condition, results of operations, capital requirements, plans for future acquisitions, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant.

About RF Industries
RF Industries is a leading designer and manufacturer of innovative interconnect products and complex cable assemblies across diversified, high growth markets including wireless carriers and infrastructure, medical and industrial. The Company's products include RF connectors, coaxial and custom cable assemblies, fiber optic cables, wiring harnesses and medical wiring. The Company's connectivity products are used throughout the growing and evolving infrastructure of wireless communications.  Through its newly acquired Rel-Tech Electronics, Inc. and Comnet Telecom Supply, Inc. subsidiaries, the Company also manufactures and sells other cabling technologies and data center equipment solutions.  The Company has reported 21 consecutive years of profitability and is headquartered in San Diego, California with operations in Las Vegas, Nevada, Yaphank, New York, East Brunswick, New Jersey and Milford, 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 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 and the uncertainty of impact upon the Company's operations of the recent acquisitions of Comnet Telecom Supply, the patented braided cable product line, and Rel‑Tech Electronics.  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.

 


RF INDUSTRIES, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED) (in thousands, except share and per share amounts)




Three Months Ended


Nine Months Ended

July 31,


July 31,

2015


2014


2015


2014









Net sales

$     8,899


$     5,536


$   23,868


$   17,150

Cost of sales

6,064


3,048


15,464


9,328









Gross profit

2,835


2,488


8,404


7,822









Operating expenses:








  Engineering

247


228


688


697

  Selling and general

2,455


1,632


6,833


5,395









Total operating expenses

2,702


1,860


7,521


6,092









Operating income

133


628


883


1,730









Other income - interest

5


7


19


22









Income before provision for income taxes

138


635


902


1,752









Provision (benefit) for income taxes

(44)


277


220


670









Income from continuing operations

182


358


682


1,082









Income from discontinued operations, net of tax

29


14


42


32









Net income

$        211


$        372


$        724


$     1,114









Earnings per basic share:








  Continuing operations

$       0.02


$       0.05


$       0.08


$       0.14

  Discontinued operations

0.00


0.00


0.01


0.00









Net income per share

$       0.02


$       0.05


$       0.09


$       0.14









Earnings per diluted share:








  Continuing operations

$       0.02


$       0.04


$       0.08


$       0.13

  Discontinued operations  

0.00


0.00


0.00


0.00









Net income per share

$       0.02


$       0.04


$       0.08


$       0.13









Weighted average shares outstanding:








  Basic

8,545,300


8,250,042


8,446,223


8,200,476









  Diluted

8,916,643


8,718,656


8,820,438


8,763,593

 

RF INDUSTRIES, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)










Jul. 31,


Oct. 31,

2015


2014

(Unaudited)


(Audited)

ASSETS








CURRENT ASSETS




  Cash and cash equivalents

$   7,908


$ 14,718

  Trade accounts receivable, net

3,915


2,428

  Inventories

7,263


5,259

  Other current assets

1,041


618

  Deferred tax assets

416


416





     TOTAL CURRENT ASSETS

20,543


23,439





Property and equipment, net

962


829

Goodwill

5,913


3,076

Amortizable intangible assets, net

4,440


1,187

Non-amortizable intangible assets

1,387


410

Note receivable from stockholder

67


67

Other assets

38


21





     TOTAL ASSETS

$ 33,350


$ 29,029









LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES




  Accounts payable

$   1,979


$      867

  Accrued expenses

2,882


1,422

  Income taxes payable

--


73





     TOTAL CURRENT LIABILITIES

4,861


2,362





Deferred tax liabilities

1,299


811

Other long-term liabilities

946


--





     TOTAL LIABILITIES

7,106


3,173





COMMITMENTS AND CONTINGENCIES








STOCKHOLDERS' EQUITY




  Common stock - authorized 20,000,000 shares of $0.01 par




    value; 8,571,831 and 8,255,979 shares issued and outstanding




    at July 31, 2015 and October 31, 2014, respectively

86


83

Additional paid-in capital

18,664


17,230

Retained earnings

7,494


8,543





     TOTAL STOCKHOLDERS' EQUITY

26,244


25,856





     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 33,350


$ 29,029





 

Logo - http://photos.prnewswire.com/prnh/20140904/143210

 

SOURCE RF Industries, Ltd.



RELATED LINKS

http://www.rfindustries.com