WTT Wireless Telecom

Wireless Telecom Group, Inc. (NYSE MKT:WTT) announced today results for the third quarter ended September 30, 2016.

Highlights:

• $11 million in new sales orders, a sequential increase of 25% from the second quarter 2016 sales orders of $8.8m
• $8.3 million in revenue for the quarter, a sequential increase of 10% from second quarter 2016 revenues of $7.6m
• Gross profit margin of 45.8% in the quarter, a sequential increase of 190 basis points from the second quarter 2016 gross profit margin of 43.9%
• Net income of $122,000, a sequential improvement from the second quarter net loss of ($218,000)

Tim Whelan, CEO of Wireless Telecom Group, Inc., commented, “As expected, our third quarter results reflected a return to profitability and sequential improvement throughout the income statement. We are pleased with the third quarter’s growth in revenues and higher gross margins along with careful management of our operating costs. We expect continued improvement in financial performance in Q4 compared to Q3.”

Mr. Whelan added, “We are also excited about the third quarter’s 25% sequential increase in new sales orders which reflected improvements in both of our segments and all three of our brands, Microlab, Boonton, and Noisecom. We attribute this to large project execution in our Network Solutions segment of in-building-wireless distributed antenna systems by carriers, and increased spending by both enterprise and government customers in our Test & Measurement segment.”

Continued Whelan, “In addition to driving operational excellence, we are accelerating our efforts evaluating strategic growth opportunities and continuing to focus on organic product growth initiatives as we prepare for 2017.”

For the quarter ended September 30, 2016, the Company reported total net revenues of $8,344,000, compared to $8,339,000 for the same period in 2015, basically no change, but an increase of 10% over the sequential quarter. Net revenues in the Network Solutions segment were $5,507,000 for the quarter, compared to $5,482,000 for the same period in 2015, an increase of less than 1%, and an increase of 1% over the sequential quarter. Net revenues in the Test & Measurement segment were $2,837,000 for the quarter, compared to $2,857,000 for the same period in 2015, a decrease of 1%, however an increase of 33% over the sequential quarter.

Non-GAAP Adjusted EBITDA for the quarter ended September 30, 2016 was $652,000, compared to $412,000 for the same period in 2015. Our non-GAAP Adjusted EBITDA results do not include the Company’s tax provision, depreciation and amortization, stock compensation expense, severance charges related to restructuring, as well as professional fees related to our Strategic Planning and Operating Committee’s strategic evaluations. A reconciliation of net income to non-GAAP Adjusted EBITDA results is included as an attachment to this press release.

The Company reported net income of $122,000, or $0.01 per diluted share, for the third quarter of 2016, compared to net income of $75,000, or $0.00 per diluted share, for the third quarter of 2015, and a loss of ($0.01) per diluted share in the second quarter of 2016.

For the nine months ended September 30, 2016, the Company reported total net revenues of $22,323,000 for the period, compared to $25,180,000 for the same period in 2015, a decrease of 11%. Net revenues in the Network Solutions segment were $15,197,000, compared to $16,708,000 for the same period in 2015, a decrease of 9%. Net revenues in the Test and Measurement segment were $7,126,000 for the period, compared to $8,472,000 for the same period in 2015, a decrease of 16%.

Non-GAAP Adjusted EBITDA for the nine months ended September 30, 2016 was of $179,000, compared to $1,345,000 for the same period in 2015.

Use of Non-GAAP Financial Measures

The Company reports its financial results in accordance with generally accepted accounting principles (“GAAP”). Management believes, however, that certain non‐GAAP financial measures used in managing the Company’s business may provide users of this financial information with additional meaningful comparisons between current results and prior reported results. Certain of the information set forth herein and certain of the information presented by the Company from time to time may constitute non‐GAAP financial measures within the meaning of Regulation G adopted by the Securities and Exchange Commission. We have presented herein a reconciliation of these measures to the most directly comparable GAAP financial measure. The non‐GAAP measures presented herein may not be comparable to similarly titled measures presented by other companies. The foregoing measures have limitations and do not serve as a substitute and should not be construed as a substitute for GAAP performance, but provide supplemental information concerning our performance that our investors and we find useful.

The Company views Adjusted EBITDA as an important indicator of performance, consistent with the manner in which management measures and forecasts the Company’s performance. We believe Adjusted EBITDA is an important performance metric because it facilitates the analysis of our results, exclusive of certain non‐cash items, including items which do not directly correlate to our business operations.

The Company believes that Adjusted EBITDA metrics provide qualitative insight into our current performance; we use these measures to evaluate our results, the performance of our management team and our management’s entitlement to incentive compensation; and we believe that making this information available to investors enables them to view our performance the way that we view our performance and thereby gain a meaningful understanding of our core operating results, in general, and from period to period.

Forward-Looking Statements

Except for historical information, the matters discussed in this news release may be considered "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 include declarations regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results. Specifically, no assurances can be made with respect to: improvement in financial performance in Q4 compared to Q3; and continued increases in new sales orders, leading to improvements in order flow in both of our segments and all three of our brands, Microlab, Boonton and Noisecom; and our ability to accelerate our efforts evaluating strategic growth opportunities. Further information regarding risks and uncertainties that could affect the Company’s results are identified in the Company's reports and registration statements filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2015.

About Wireless Telecom Group, Inc.

Wireless Telecom Group designs and manufactures radio frequency (RF) and microwave-based products for wireless and advanced communications industries and markets its products and services worldwide under the Boonton, Microlab and Noisecom brands. Its complementary suite of high performance components and instruments includes RF combiners and broadband combiner boxes for in-building distributed antenna systems deployments (DAS), RF power splitters and diplexers, hybrid couplers, peak power meters, signal analyzers, noise modules, precision noise and generators. The Company serves both commercial and government markets with workflow-oriented, WiFi, WiMAX, satellite, cable, radar, avionics, medical, and computing applications. Wireless Telecom Group is headquartered in Parsippany, New Jersey, in the New York City metropolitan area, and maintains a global network of Sales and Service offices for excellent product service and support. Wireless Telecom Group’s website address is http://www.wtcom.com.

See following Selected Financial Results

SELECTED FINANCIAL RESULTS (In thousands, except per share amounts)           Three months ended Nine months ended

September 30,

September 30,

(unaudited) (unaudited)

2016

   

2015

2016

   

2015

Statement of Operations Data: Net revenues $8,344 $8,339 $22,323 $25,180   Gross profit 3,823 3,623 9,882 11,053   Operating expenses Research and development 949 1,026 3,043 2,899 Sales and marketing 1,216 1,225 3,704 3,912 General and administrative 1,390 1,210 4,142 3,593 Total operating expenses 3,555 3,461 10,888 10,404   Operating income (loss) 268 162 (1,006) 649   Other expense - net 27 6 79 3   Income (loss) before income taxes 241 157 (1,085) 646   Net income (loss) $122 $75 $(673) $353   Net income (loss) per common share: Basic $0.01 $0.00 $(0.04) $0.02 Diluted $0.01 $0.00 $(0.04) $0.02   Weighted average shares outstanding: Basic 18,721 19,626 18,650 19,550 Diluted 19,359 20,150 19,144 20,465   Three months ended Nine months ended

September 30,

September 30,

(unaudited) (unaudited)

2016

2015

2016

2015

Reconciliation of GAAPNet Income (Loss) to Non-GAAP

EBITDA and Adjusted EBITDA: GAAP net income (loss) $122 $ 75 $(673) $ 353 Tax expense (benefit) 119 81 (412) 293 Depreciation and amortization 131 115 364 339 Non-GAAP EBITDA 372 271 (721) 985   Stock compensation expense 236 51 433 223 Severance charges - 90 51 137 Other non-recurring costs (1) 44 - 416 - Non-GAAP Adjusted EBITDA $652 $412 $230 $1,345   (1) Includes professional fees related to our Strategic Planning and Operating Committee’s strategic evaluations.         September 30,     December 31,

2016

2015

(unaudited)  

Balance Sheet Data:

Cash & cash equivalents $8,102 $9,726 Accounts receivable 5,636 5,451 Inventories 9,451 8,069 Prepaid expenses & other current assets 672 587 Total Current Assets 23,861 23,833   Property, plant & equipment – net 2,136 1,743   Goodwill 1,351 1,351 Deferred income taxes 7,448 7,014 Other assets 695 765 Total other assets 9,494 9,130   Total assets $35,491 $34,706   Accounts payable

$2,138

$1,046

Accrued expenses & other current

 

liabilities

679

648

Equipment leases payable

14

74

Total current liabilities

2,831

1,768

 

 

Deferred rent

61

34

 

Common stock

297

296

Additional paid-in-capital

40,297

39,865

Retained earnings

12,828

13,501

Treasury stock

(20,823)

(20,758)

Total shareholders’ equity

32,599

32,904

 

 

Total liabilities & shareholders’ equity

$35,491

$34,706

 

 

 

         

Nine months ended

Nine monthsended

September 30, 2016

September 30,2015

(Unaudited) (Unaudited) Statement of Cash Flows Data:

Cash Flows (Used) Provided by Operating Activities:

Net income (loss)

$(673)

$353

Adjustments to reconcile net income (loss) to

 

 

net cash (used) provided by operating activities:

Depreciation and amortization

364

339 Share-based compensation expense 433 223 Deferred rent 27 22 Deferred income taxes (434) 217 Provision for doubtful accounts

Inventory reserves

(9)

221

5

36

Changes in assets and liabilities: Accounts receivable (176) (436) Inventories (1,603) (211) Prepaid expenses and other assets (14) 568 Accounts payable 1,091 171 Accrued expenses and other current liabilities 31 (768) Net cash (used) provided by operating activities (742) 519   Cash Flows (Used) by Investing Activities: Capital Expenditures (715) (372)   Cash Flows (Used) by Financing Activities: Proceeds from exercise of stock options - 23 Repayments of equipment leases payable (101) (116) Repurchase of common stock (66) - Net cash (used) for financing activities (167) (93)   Net (Decrease) Increase in Cash and Cash Equivalents (1,624) 54   Cash and Cash Equivalents, at beginning of period 9,726 10,724   Cash and Cash Equivalents, at end of period $8,102 $10,778  

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For Wireless Telecom Group, Inc.Robert Censullo, 973-386-9696