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RF Industries Reports Sales Growth of 94% Year Over Year for the Second Quarter of Fiscal 2022 and Raises Full Year Revenue Guidance

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SAN DIEGO, CA / ACCESSWIRE / June 14, 2022 /RF Industries, Ltd., (NASDAQ:RFIL), a national manufacturer and marketer of interconnect products and systems, today announced its unaudited financial results for the second quarter of fiscal 2022 ended April 30, 2022.

Second Quarter Fiscal 2022 Highlights and Operating Results:

  • Net sales increased 94% year over year to $21.5 million; excluding Microlab, net sales increased 64% year over year to $18.1 million.

  • Backlog of $27.6 million at April 30, 2022 on second quarter bookings of $18.8 million; excluding Microlab, backlog of $22.8 million and bookings of $13 million. As of today, backlog stands at $34 million.

  • Gross profit margin was 28%, compared to 24% in the preceding first quarter, and 27% in the second quarter of fiscal 2021 (which excludes the impact of the Employee Retention Tax Credits ("ERC")).

  • Operating income was $746,000 (which includes $637,000 in acquisition related and other one-time charges), compared to operating income of $42,000 in the second quarter of fiscal 2021 (which excluded the impact of the ERC and forgiveness of loans from the Paycheck Protection Program ("PPP")).

  • Net income was $503,000, or $0.05 per diluted share, compared to net income of $4.8 million, or $0.48 per diluted share, in the second quarter of fiscal 2021 (which included the positive impact of the ERC and the forgiveness from the PPP loans).

  • Non-GAAP net income was $1.3 million, or $0.13 per diluted share, compared to non-GAAP net income of $5.0 million, or $0.49 per diluted share, in the second quarter of fiscal 2021 (which included the positive impact of the ERC and the forgiveness from the PPP loans).

  • Adjusted EBITDA was $2.0 million, compared to an Adjusted EBITDA of $355,000 in the second quarter of fiscal 2021.

  • Cash and cash equivalents were $3.8 million and the Company's full $3 million revolver remains available.

See "Note Regarding Use of Non-GAAP Financial Measures," "Unaudited Reconciliation of GAAP to non-GAAP Net Income" and "Unaudited Reconciliation of Net Income to Adjusted EBITDA" below for additional information.

Fiscal 2022 Financial Guidance

For the fiscal 2022 year ending October 31, 2022, RF Industries expects:

  • Full year total revenue of $80 million, up from its previous guidance of $75 million.

  • Gross margins expected to increase as product mix changes and supply chain impact moderates.

  • Should favorable market conditions persist, the Company expects profitability and liquidity to further improve in the second half of the fiscal year from operational efficiencies, inventory rationalization, and other key initiatives.

Robert Dawson, President and CEO of RF Industries, commented:

"Our strong sequential and year-over-year revenue growth and improved gross margins for the second quarter reflect organic growth in all our divisions, as well as the benefit of two months of higher margin revenue contribution from our successful acquisition of Microlab that we completed during the quarter. In addition to the continued growth we are generating in our core business, we are excited about the expanded customer opportunities we are already seeing with our broader product offering from Microlab that will provide additional scale and opportunity for overall margin improvement and further revenue growth.

"Yesterday we announced a significant set of orders for our Optiflex hybrid fiber cabling solution supporting a new wireless carrier customer's next generation 4G/5G infrastructure build. These kinds of new relationships demonstrate the increasing value that we're providing in the market and reiterate our expected growth opportunities. As we continue to focus on successfully executing our long-term plan to grow both organically and through strategic acquisitions, we are increasing our guidance for fiscal 2022 of annual revenue from $75 million to $80 million, which will include approximately eight months of Microlab revenue we expect to receive this fiscal year. And with this expected 40% increase in full year revenue versus fiscal year 2021, we continue to expect significant growth in our Adjusted EBITDA as our profitability increases throughout the year."

Conference Call and Webcast

RF Industries will host a conference call and live webcast today at 4:30 p.m. Eastern Time (1:30 p.m. PT) to discuss its second quarter fiscal 2022 financial results. To access the conference call, dial 877-545-0523 (US and Canada) or 973-528-0016 (International) and give the participant passcode 592178. 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 877-481-4010 (US and Canada) or 919-882-2331 (International). The replay conference ID is 45791.

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, North Kingstown, Rhode Island and Parsippany, New Jersey. 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 the Company's ability to successfully integrate acquired businesses, improve operational efficiencies, and add innovative products and solutions to its portfolio, 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: successfully integrating new products and teams, the duration and continuing impact of the coronavirus pandemic on the U.S. economy and the Company's customers; 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 Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. 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.

Note Regarding Use of Non-GAAP Financial Measures

To supplement our condensed financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), this earnings release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures, including adjusted earnings before interest, taxes, depreciation, amortization (Adjusted EBITDA), non-GAAP net income and non-GAAP earnings per share (non-GAAP EPS). We believe these financial measures provide useful information to investors with which to analyze our operating trends and performance.

In computing Adjusted EBITDA, non-GAAP net income, and non-GAAP EPS, we exclude stock-based compensation expense, which represents non-cash charges for the fair value of stock options and other non-cash awards granted to employees, acquisition related costs and expenses, and severance. For Adjusted EBITDA we also exclude depreciation, amortization, and provision for income taxes. Because of varying available valuation methodologies, subjective assumptions, and the variety of equity instruments that can impact a company's non-cash operating expenses, we believe that providing non-GAAP financial measures that exclude non-cash expense and non-recurring costs and expenses allows for meaningful comparisons between our core business operating results and those of other companies, as well as providing us with an important tool for financial and operational decision-making and for evaluating our own core business operating results over different periods of time.

Our Adjusted EBITDA, non-GAAP net income, and non-GAAP EPS measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. Our Adjusted EBITDA, non-GAAP Net income, and non-GAAP EPS are not measurements of financial performance under GAAP, and should not be considered as an alternative to operating or net income or as an indication of operating performance or any other measure of performance derived in accordance with GAAP. We do not consider these non-GAAP measures to be a substitute for, or superior to, the information provided by GAAP financial results. A reconciliation of specific adjustments to GAAP results is provided in the last two tables at the end of this press release.

RF INDUSTRIES, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)

April 30,
2022

October 31,
2021

ASSETS

(unaudited)

(audited)

CURRENT ASSETS

Cash and cash equivalents

$

3,752

$

13,053

Trade accounts receivable, net

14,706

13,523

Inventories, net

19,168

11,179

Other current assets

3,926

2,893

TOTAL CURRENT ASSETS

41,552

40,648

Property and equipment, net

981

708

Operating lease right of use asset, net

1,568

1,453

Goodwill

7,457

2,467

Amortizable intangible assets, net

14,456

2,739

Non-amortizable intangible assets

2,874

1,174

Deferred tax assets

325

389

Other assets

434

70

TOTAL ASSETS

$

69,647

$

49,648

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

$

3,008

$

3,504

Accrued expenses

8,097

5,034

Current portion of Term loan

2,424

-

Current portion of operating lease liabilities

1,073

832

TOTAL CURRENT LIABILITIES

14,602

9,370

Operating lease liabilities

524

675

Term Loan, net of debt issuance cost

14,344

-

TOTAL LIABILITIES

29,470

10,045

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

Common stock, authorized 20,000,000 shares of $0.01 par value;
10,118,685 and 10,058,571 shares issued and outstanding at
April 30, 2022 and October 31, 2021, respectively

102

101

Additional paid-in capital

24,648

24,301

Retained earnings

15,427

15,201

TOTAL STOCKHOLDERS' EQUITY

40,177

39,603

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

69,647

$

49,648

RF INDUSTRIES, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)

Three Months Ended

Six Months Ended

April 30,

April 30,

2022

2021

2022

2021

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Net sales

$

21,505

$

11,057

$

38,423

$

21,059

Cost of sales

15,425

6,287

28,259

13,683

Gross profit

6,080

4,770

10,164

7,376

Operating expenses:

Engineering

857

202

1,310

633

Selling and general

4,477

1,884

8,470

4,647

Total operating expenses

5,334

2,086

9,780

5,280

Operating income

746

2,684

384

2,096

Other (expense) income

(107

)

2,809

(102

)

2,800

Income before provision for income taxes

639

5,493

282

4,896

Provision for income taxes

136

648

56

454

Net income

$

503

$

4,845

$

226

$

4,442

Earnings per share - Basic

$

0.05

$

0.49

$

0.02

$

0.45

Earnings per share - Diluted

$

0.05

$

0.48

$

0.02

$

0.44


Weighted average shares outstanding:

Basic

10,107,687

9,963,291

10,087,309

9,927,776

Diluted

10,243,636

10,129,472

10,229,704

10,096,916

RF INDUSTRIES, LTD. AND SUBSIDIARIES
Unaudited Reconciliation of GAAP to Non-GAAP Net Income
(In thousands, except per share amounts)

Three Months Ended

Six Months Ended

April 30,

April 30,

2022

2021

2022

2021

Net income

$

503

$

4,845

$

226

$

4,442

Stock-based compensation expense

168

137

307

260

Acquisition-related and other one-time charges

637

-

1,371

-

Non-GAAP net income

$

1,308

$

4,982

$

1,904

$

4,702

Non-GAAP earnings per share:

Basic

$

0.13

$

0.50

$

0.19

$

0.47

Diluted

$

0.13

$

0.49

$

0.19

$

0.47

Weighted average shares outstanding

Basic

10,107,687

9,963,291

10,087,309

9,927,776

Diluted

10,243,636

10,129,472

10,229,704

10,096,916

RF INDUSTRIES, LTD. AND SUBSIDIARIES
Unaudited Reconciliation of Net Income to Adjusted EBITDA
(In thousands)

Three Months Ended

Six Months Ended

April 30,

April 30,

2022

2021

2022

2021

Net income

$

503

$

4,845

$

226

$

4,442

Stock-based compensation expense

168

137

307

260

Acquisition-related and other one-time charges

637

-

1,371

-

Amortization expense

328

95

423

252

Depreciation expense

110

82

195

162

Other expense (income) *

107

(2,809

)

102

(2,800

)

Employee retention credit

-

(2,643

)

-

(2,643

)

Provision from income taxes

136

648

56

454

Adjusted EBITDA

$

1,989

$

355

$

2,680

$

127

* In the three and six months ended April 30, 2021, other income consists of the $2.8M PPP Loans that were forgiven.

CONTACT:

RF Industries, Ltd.
Peter Yin
SVP/ CFO
(858) 549-6340
rfi@rfindustries.com

MKR Investor Relations
Todd Kehrli
Analyst/ Investor Contact
(213) 277-5550
rfil@mkr-group.com

SOURCE: RF Industries, Ltd.



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https://www.accesswire.com/705088/RF-Industries-Reports-Sales-Growth-of-94-Year-Over-Year-for-the-Second-Quarter-of-Fiscal-2022-and-Raises-Full-Year-Revenue-Guidance