Highlights of the quarter:
- Net revenues of $13,414,000 for the
quarter ended June 30, 2018
- A year over year increase of
$1,481,000, or 12%
- Gross Profit of $6,170,000, or 46%
of revenue, for the quarter ended June 30, 2018
- A year over year increase of
$2,826,000, or 85% (2017 gross profit includes $1,930,000
impairment charge)
- Net loss of $180,000 for the quarter
ended June 30, 2018
- Compared to a net loss of $1,370,000
for the same period last year
- Non-GAAP Adjusted EBITDA of
$1,076,000 for the quarter ended June 30, 2018
- A year over year increase of $169,000,
or 19%
- New customer orders of $11,871,000
for the quarter ended June 30, 2018
- Compared to new customer orders of
$12,110,000 for the same period last year
- June 30, 2018 order backlog of
$8,801,000
- A year over year increase of
$1,831,000
Wireless Telecom Group, Inc. (NYSE AMERICAN: WTT) (the
“Company”) announced today results for the second quarter ended
June 30, 2018.
For the quarter ended June 30, 2018, the Company reported
consolidated net revenues of $13,414,000, compared to $11,933,000
for the same period in 2017, an increase of 12%. Net revenues in
the Network Solutions segment were $5,636,000, compared to
$5,617,000 for the same period in 2017, an increase of .3%. Net
revenues in the Test & Measurement segment were $3,534,000,
compared to $3,316,000 for the same period in 2017, an increase of
6.6%. Net revenues in the Embedded Solutions segment were
$4,244,000, compared to $3,000,000 for the same period in 2017, an
increase of 41.5%.
The Company also reported consolidated gross profit of
$6,170,000, or 46% of revenue, for the quarter ended June 30, 2018,
compared to $3,344,000, or 28% of revenue, for the same period in
2017. The 2017 second quarter gross profit was adversely affected
by a non-cash inventory impairment charge of $1,930,000.
For the quarter ended June 30, 2018, gross profit in the Network
Solutions segment was $2,468,000, or 43.8%, compared to $1,182,000,
or 21%, for the same period in 2017. Network Solutions gross profit
in the 2017 quarter was adversely affected by approximately $1.2
million of an inventory impairment charge. Gross profit in the Test
& Measurement segment was $1,815,000, or 51.4%, for the quarter
ended June 30, 2018, compared to $832,000, or 25.1%, for the same
period in 2017. Test & Measurement gross profit in the 2017
quarter was adversely affected by approximately $725,000 of an
inventory impairment charge. Gross profit in the Embedded Solutions
segment was $1,887,000, or 44.5% for the quarter ended June 30,
2018, compared to $1,330,000, or 44.3%, for the same period in
2017.
For the quarter ended June 30, 2018, the Company reported
consolidated operating expenses of $6,137,000, compared to
$5,614,000 for the same period in 2017, an increase of $523,000.
Non GAAP operating expenses were $5,265,000 for the three months
ended June 30, 2018 compared to $4,467,000 for the year ago
period.
The Company reported a net loss of $180,000 for the quarter
ended June 30, 2018, compared to a net loss of $1,370,000 for the
same period in 2017.
Non-GAAP Adjusted EBITDA for the quarter ended June 30, 2018 was
$1,076,000, compared to non-GAAP Adjusted EBITDA of $907,000 for
the same period in 2017.
The Company defines EBITDA as its net earnings before interest
expense, provisions for taxes, depreciation expense and
amortization expense. “Adjusted EBITDA” is EBITDA excluding our
stock compensation expense, restructuring charges, acquisition
expenses, integration expenses, the one-time non-cash inventory
impairment charges, unrealized and realized foreign exchange gains
and losses, and other non-recurring costs. A reconciliation of net
income to non-GAAP Adjusted EBITDA is included as an attachment to
this press release.
The Company reported cash flow provided by operations of
$196,000 for the six months ending June 30, 2018 compared to cash
provided by operations of $489,000 for the same period in 2017.
Cash flow from operations for the six months ended June 30, 2018
was impacted by higher working capital which reflects the improved
funnel and backlog and the mix of sales to our larger customers
with longer payment terms.
The Company reported customer orders of $11,871,000 during the
quarter ending June 30, 2018, compared to $12,110,000 of customer
orders for the same period in 2017. The consolidated backlog of
firm orders to be shipped in the next twelve months was
approximately $8,801,000 at June 30, 2018, a year over year
increase of $1,831,000 over the backlog of $6,970,000 at June 30,
2017.
Tim Whelan, CEO of Wireless Telecom Group, Inc., commented, “We
are very pleased with a stronger than expected quarter of results
and we are especially pleased with the organic growth realized in
our Test & Measurement and Embedded Solutions segment. We
believe these results reflect the investments we have made in our
channels, our products and in the acquisition of CommAgility.”
Whelan continued, “We are continuing to improve our operational
and financial performance through top line growth, lean
manufacturing and supply chain improvements. We continue to invest
in our R&D roadmaps and we are excited by our products for 5G
and millimeter wave development which we recently showcased. We are
adding value to our customers in their continued investments in
long-term network densification, 4G and 5G testing applications,
government and military radar applications, and LTE network
deployments. Our most recent product announcement is focused on new
products for in-building public safety networks, an area of
investment with new requirements from local governments and
investments related to FirstNet deployments. We expect to see
continued strong customer bookings and financial results in the
third quarter.”
The Company expects the following in the quarter ended September
30, 2018 for the three combined segments:
- Revenue between $13,000,000 and
$13,500,000
- Gross margins between 45% and 46%
- Non-GAAP operating expenses between
$5.4 and $5.5 million (specifically, the Company’s GAAP operating
expenses, excluding depreciation expense, amortization expense,
stock compensation expense, restructuring charges, purchase
accounting adjustments in accordance with US GAAP, and
non-recurring CommAgility acquisition and integration expenses,
which cannot be itemized for reconciliation to the comparable
future GAAP measure at this time).
Conference Call
As previously announced, Wireless Telecom Group Inc. will host a
conference call today at 8:30 a.m. ET in which management will
discuss second quarter 2018 results and related matters. To
participate in the conference call, dial 800-346-7359 or
973-528-0008. The conference identification number is 740345. The
call will also be webcast over the internet at the following
URL:
https://www.webcaster4.com/Webcast/Page/1690/26930
A replay will be made available on the Wireless Telecom website
for a limited period of time following the conference call.
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 constitutes 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 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
This press release 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. In some cases, such forward-looking statements may be
identified by terms such as believe, expect, seek, may, will,
intend, project, anticipate, plan, estimate, guidance or similar
words. Forward-looking statements include, among others, statements
regarding revenue, gross margins, non-GAAP operating expenses and
customer bookings for the quarter ending September 30, 2018 and
free cash flow and debt reduction in the second half of the year.
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, including, among others, the Company’s ability to
successfully integrate acquired businesses, the ability of
management to successfully implement the Company’s business plan
and strategy, product demand and development of competitive
technologies in the Company’s market sector, the impact of
competitive products and pricing, the loss of any significant
customers of the Company, and other risks and uncertainties set
forth in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2017. These forward-looking statements speak
only as of the date of this release and the Company does not
undertake any obligation to update or revise any forward-looking
information to reflect changes in assumptions, the occurrence of
unanticipated events, or otherwise, as except as required by
law.
About Wireless Telecom Group, Inc.
Wireless Telecom Group, Inc., comprised of Boonton
Electronics, CommAgility, Microlab and Noisecom, is a global
designer and manufacturer of advanced RF and microwave components,
modules, systems and instruments. Serving the wireless,
telecommunication, satellite, military, aerospace, semiconductor
and medical industries, Wireless Telecom Group products enable
innovation across a wide range of traditional and emerging wireless
technologies. With a unique set of high-performance products
including peak power meters, signal analyzers, signal processing
modules, LTE PHY and stack software, power splitters and combiners,
GPS repeaters, public safety monitors, noise sources, and
programmable noise generators, Wireless Telecom Group supports the
development, testing, and deployment of wireless technologies
around the globe. 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.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)
(In thousands, except share and per
share amounts, Unaudited)
Three Months Ended June 30 Six Months Ended June
30
2018
2017
2018
2017
NET REVENUES $ 13,414 $ 11,933 $ 26,678 $ 21,482 COST
OF REVENUES 7,244 8,589
14,239 13,805
GROSS PROFIT 6,170 3,344 12,439 7,677 Operating
Expenses Research and Development 1,313 1,130 2,469 2,217 Sales and
Marketing 1,933 1,663 3,844 3,215 General and Administrative 2,678
2,821 5,311 6,233 Loss on change in fair valueof contingent
consideration 213 -
213 - Total Operating
Expenses 6,137 5,614 11,837 11,665 Operating income/(loss)
33 (2,270 ) 602 (3,988 ) Other income/(expense) 33 (2 ) (13
) (3 ) Interest Expense (141 ) (110 )
(234 ) (159 )
(Loss)/Income
before taxes (75 ) (2,382 ) 355 (4,150 ) Tax
Provision/(Benefit) 105 (1,012 )
161 (1,551 )
Net (Loss)/Income
$ (180 ) $ (1,370 ) $ 194 $
(2,599 ) Other Comprehensive (Loss)/Income: Foreign currency
translation adjustments (963 ) 635
(383 ) 576
Comprehensive (Loss) $ (1,143 ) $ (735 ) $
(189 ) $ (2,023 ) Net (Loss)/Income per
common share: Basic $ (0.01 ) $ (0.07 ) $ 0.01 $ (0.13 ) Diluted $
(0.01 ) $ (0.07 ) $ 0.01 $ (0.13 ) Weighted average shares
outstanding: Basic 20,864,428 19,765,101 20,755,027 19,577,271
Diluted 20,864,428 19,765,101 21,510,539 19,577,271
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share and par
value amounts)
June 30 December 31 2018 2017
(Unaudited) CURRENT ASSETS Cash & cash
equivalents $ 2,635 $ 2,458 Accounts receivable - net of reserves
of $66 and $44, respectively 10,979 9,041 Inventories - net of
reserves of $1,661 and $1,856, respectively 7,565 6,526 Prepaid
expenses and other current assets 1,358
4,733
TOTAL CURRENT ASSETS 22,537 22,758
PROPERTY PLANT AND EQUIPMENT - NET 2,760 2,730
OTHER ASSETS Goodwill 10,066 10,260 Acquired Intangible
Assets, net 3,864 4,511 Deferred income taxes 6,146 5,939 Other
647 723
TOTAL OTHER
ASSETS 20,723 21,433
TOTAL
ASSETS $ 46,020 $ 46,921
CURRENT LIABILITIES Short term debt $ 2,583 $ 1,335 Accounts
payable 4,007 4,109 Accrued expenses and other current liabilities
5,133 2,894 Deferred Revenue 376
629
TOTAL CURRENT LIABILITIES 12,099 8,967
LONG TERM LIABILITIES Long term debt 418 494 Other long term
liabilities 98 1,590 Deferred Tax Liability 1,033
767
TOTAL LONG TERM LIABILITIES
1,549 2,851
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY Preferred stock, $.01 par value,
2,000,000 shares authorized, none issued - - Common stock, $.01 par
value, 75,000,000 shares authorized, 34,168,252 and 33,868,252
shares issued, 20,979,651 and 22,772,167 shares outstanding 342 339
Additional paid in capital 48,127 47,494 Retained earnings 7,791
7,176 Treasury stock at cost, 13,188,601 and 11,096,085 shares,
respectively (24,509 ) (20,910 ) Accumulated Other Comprehensive
Income 621 1,004
TOTAL
SHAREHOLDERS' EQUITY 32,372 35,103
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 46,020
$ 46,921
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS
(In thousands, Unaudited)
For the Six Months Ended June 30
2018
2017
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES Net Income/(Loss) $ 194
$ (2,599 ) Adjustments to reconcile net income/(loss) to net cash
provided by operating activities: Depreciation and amortization
1,237 1,059 Amortization of debt issuance fees 39 29 Share-based
compensation expense 348 284 Deferred rent 7 13 Deferred income
taxes 88 (1,492 ) Provision for (recovery of) doubtful accounts 22
(4 ) Inventory reserves 45 1,278 Changes in assets and liabilities,
net of acquisition: Accounts receivable (2,090 ) 658 Inventories
(1,101 ) 1,005 Prepaid expenses and other assets (154 ) 84 Accounts
payable (50 ) (771 ) Accrued expenses and other liabilities
1,611 945 Net cash provided by
operating activities 196 489
CASH FLOWS (USED) BY INVESTING ACTIVITIES Capital
expenditures (583 ) (318 ) Proceeds from asset disposal - 7
Acquisition of business net of cash acquired (811 )
(8,842 ) Net cash (used) by investing activities
(1,394 ) (9,153 ) CASH FLOWS
PROVIDED BY FINANCING ACTIVITIES Revolver borrowings 19,721 15,794
Revolver repayments (18,473 ) (14,272 ) Term loan borrowings - 760
Term loan repayments (76 ) (38 ) Debt issuance fees - (215 )
Proceeds from exercise of stock options 288
38 Net cash provided by financing activities
1,460 2,067 Effect of
exchange rate changes on cash and cash equivalents (85 ) 61 NET
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 177 (6,536 )
Cash and cash equivalents, at beginning of period
2,458 9,351 CASH AND CASH
EQUIVALENTS, AT END OF PERIOD $ 2,635 $ 2,815
SUPPLEMENTAL INFORMATION: Cash paid during the period
for interest $ 78 $ 73 Cash paid during the period for income taxes
$ 24 $ 34
WIRELESS TELECOM GROUP, INC.
NET REVENUES AND GROSS PROFIT BY
SEGMENT
(In thousands, Unaudited)
Three months ended June 30 Revenue % of
Revenue Change 2018 2017
2018 2017 Amount Pct.
Network solutions $ 5,636 $ 5,617 42.0
% 47.1 % $ 19 0.3 % Test
and measurement 3,534 3,316 26.4 % 27.8 % 218 6.6 % Embedded
solutions 4,244 3,000
31.6 % 25.1 % 1,244
41.5 % Total net revenues $ 13,414 $ 11,933
100.0 % 100.0 % $ 1,481
12.4 %
Three months ended June 30 Gross
Profit Gross Profit % Change 2018
2017 2018 2017
Amount Pct. Network solutions $ 2,468 $ 1,182
43.8 % 21.0 % $ 1,286 108.8 % Test and measurement 1,815 832 51.4 %
25.1 % 983 118.1 % Embedded solutions 1,887
1,330 44.5 % 44.3 %
557 41.9 % Total gross profit $ 6,170
$ 3,344 46.0 % 28.0 %
$ 2,826 84.5 %
Six months ended June 30 Revenue % of Revenue
Change 2018 2017 2018
2017 Amount Pct. Network
solutions $ 11,147 $ 11,133 41.8 % 51.8 % $ 14 0.1 % Test and
measurement 7,297 6,352 27.3 % 29.6 % 945 14.9 % Embedded solutions
8,234 3,997 30.9 %
18.6 % 4,237 106.0 %
Total net revenues $ 26,678 $ 21,482
100.0 % 100.0 % $ 5,196
24.2 %
Six months ended June 30 Gross Profit
Gross Profit % Change 2018 2017
2018 2017 Amount
Pct. Network solutions $ 4,911 $ 3,643 44.1 % 32.7 % $ 1,268
34.8 % Test and measurement 3,660 2,166 50.2 % 34.1 % 1,494 69.0 %
Embedded solutions 3,868 1,868
47.0 % 46.7 % 2,000
107.1 % Total gross profit $ 12,439 $
7,677 46.6 % 35.7 % $
4,762 62.0 %
WIRELESS TELECOM GROUP, INC.
RECONCILIATION OF NET INCOME TO
NON-GAAP EBITDA AND NON-GAAP ADJUSTED EBITDA
(In thousands, Unaudited)
Three Months Ended June 30
Six Months Ended June 30
2018
2017
2018
2017
GAAP Net Income $ (180 ) $ (1,370 ) $ 194 $ (2,599 ) Tax
Provision/(Benefit) 105 (1,012 ) 161 (1,551 ) Depreciation And
Amortization Expense 610 645 1,237 1,059 Interest Expense
141 110 234
159 Non-GAAP EBITDA 676 (1,627 ) 1,826 (2,932
) Stock Compensation Expense 161 (18 ) 348 284 ASC 606 Adjustment -
- 188 - Mergers and Acquisitions Expenses 64 17 64 1,290
Integration Expenses 11 117 60 164 Inventory Impairment - 1,930 -
1,930 Inventory Recovery (6 ) - (14 ) - FX (Gain)/Loss (43 ) - 4 -
US GAAP Purchase Accounting 213 18 213 71 Restructuring Charges and
othernon-recurring costs - 470
- 550 Non-GAAP
Adjusted EBITDA $ 1,076 $ 907 $ 2,689
$ 1,357
WIRELESS TELECOM GROUP, INC.
RECONCILIATION OF TOTAL OPERATING
EXPENSES TO NON-GAAP OPERATING EXPENSES
(In thousands, Unaudited)
Three Months Ended June 30 Six Months Ended June
30
2018
2017
2018
2017
Total Operating Expenses $ 6,137 $ 5,614 $ 11,837 $ 11,665
M&A/Integration (75 ) (135 ) (124 ) (1,454 )
Restructuring - (470 ) - (550 ) Stock Comp (161 ) 18 (348 ) (284 )
Depreciation and amort. (ex. COGS) (424 ) (559 ) (888 ) (889 )
Contingent Consideration (213 )
- (213 )
-
Non GAAP Operating Expenses
$ 5,265 $
4,467 $ 10,264
$ 8,488
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180809005067/en/
Wireless Telecom Group, Inc.Mike Kandell, 973-386-9696orIMSJohn
Nesbett or Jen Belodeau, 203-972 9200
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