8-K
R F INDUSTRIES LTD (RFIL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (date of earliest event reported): June 14, 2021 | ||
|---|---|---|
| RF INDUSTRIES, LTD. | ||
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| (Exact name of registrant as specified in its charter) | ||
| Nevada<br><br> <br>(State or Other Jurisdiction<br> of Incorporation) | 0-13301<br><br> <br>(Commission File Number) | 88-0168936<br><br> <br>(I.R.S. Employer<br> Identification No.) |
| --- | --- | --- |
| 7610 Miramar Road, Bldg. 6000<br><br> <br>San Diego, California 92126-4202<br><br> <br>(Address of Principal Executive Offices)<br><br> <br><br><br> <br>(858) 549-6340<br><br> <br>(Registrant’s Telephone Number) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.01 par value per share | RFIL | NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On June 14, 2021, RF Industries, Ltd. (the “Company”) issued a press release announcing information regarding the Company’s financial results for the second quarter ended April 30, 2021. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
The information furnished under this Item 2.02, including the accompanying Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall such information be deemed to be incorporated by reference in any subsequent filing by the Company under the Securities Act of 1933 or the Exchange Act, regardless of the general incorporation language of such filing, except as specifically stated in such filing.
| Item 9.01 | Financial Statements and Exhibits |
|---|---|
| (d) | Exhibits. |
| --- | --- |
| Exhibit No. | Description |
| --- | --- |
| 99.1 | Press Release of RF Industries, Ltd., dated June 14, 2021. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| June 14, 2021 | By: | /s/ Robert Dawson |
|---|---|---|
| Robert Dawson<br><br> <br>President and Chief Executive Officer |
ex_256790.htm
Exhibit 99.1
| FOR IMMEDIATE RELEASE | |
|---|---|
| Contacts:<br><br> <br><br><br> <br>RF Industries, Ltd.<br><br> <br>Peter Yin<br><br> <br>SVP/ CFO<br><br> <br>(858) 549-6340<br><br> <br>rfi@rfindustries.com | MKR Investor Relations<br><br> <br>Todd Kehrli<br><br> <br>Analyst/ Investor Contact<br><br> <br>(213) 277-5550<br><br> <br>rfil@mkr-group.com |
RF Industries Reports Sequential Sales Growth of 11% in Second Quarter of Fiscal 2021; Reiterates Guidance for Year-Over-Year Growth in Full-Year 2021 Revenue
SAN DIEGO, CA, June 14, 2021 – RF Industries, Ltd, (NASDAQ: RFIL), a national manufacturer and marketer of interconnect products and systems, today announced its financial results for the second quarter of fiscal 2021 ended April 30, 2021. As noted below, these financial results include the impact of forgiveness of approximately $2.8 million in loans from the Paycheck Protection Program (“PPP”) and $2.6 million in Employee Retention Tax Credits (“ERC”) recognized in the second quarter.
Second Quarter Fiscal 2021 Highlights and Operating Results:
| ● | Net sales increased 11% sequentially to $11.1 million. |
|---|---|
| ● | Backlog of $15.6 million at April 30, 2021 on second quarter bookings of $19.6 million. As of today, backlog stands at $22.8 million. |
| --- | --- |
| ● | Gross profit margin was 43%, which includes the impact of the ERC received during the quarter. Excluding the impact of the ERC, gross profit margin was 27%, up from 26% in the preceding first quarter. |
| --- | --- |
| ● | Net income was $4.8 million, or $0.48 per diluted share, which includes the impact of the ERC and forgiveness from the PPP. |
| --- | --- |
| ● | Operating income was $42,000, which excludes the impact of the ERC and PPP, up from an operating loss of $589,000 in the preceding first quarter. |
| ● | Non-GAAP net income was $5.0 million, or $0.49 per diluted share, which includes the impact of ERC and forgiveness from the PPP. |
| --- | --- |
| ● | Adjusted EBITDA was $355,000, which excludes the impact of the ERC and the forgiveness from the PPP. |
| --- | --- |
| ● | Cash and cash equivalents were $14.8 million. |
| --- | --- |
Robert Dawson, President and CEO of RF Industries, commented:
“We are pleased to report sequential growth in both sales and profits in the second quarter. We are also starting to see signs of recovery in the wireless carrier ecosystem spend, as reflected in the sizeable orders we have recently received for our Optiflex hybrid fiber solution that brought our current backlog to the highest level in the Company’s history. We expect the carrier market spend to continue to recover and grow, and we see increasing opportunities to expand further into this market with our complete product offering. Our industrial OEM customers and distribution partners are returning to more normalized levels and we anticipate sales expansion in both segments. Looking ahead, we expect to achieve sequential sales growth in the current fiscal third quarter, and continue to expect a return to year-over-year revenue growth this year.”
Conference Call and Webcast
RF Industries will host a conference call and live webcast today at 1:30 p.m. Pacific Time (4:30 p.m. ET) to discuss its second quarter fiscal 2021. To access the conference call, dial 877-407-8031 (US and Canada) or 201-689-8031(International) and ask for the RF Industries second quarter call. 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 41537.
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 and North Kingstown, Rhode Island. 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 return of delayed project-based business and the Company’s long-term growth, 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: 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 diluted 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.
#
(tables attached)
| 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, | |||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||
| Net sales | $ | 11,057 | $ | 10,390 | $ | 21,059 | $ | 22,804 | ||
| Cost of sales | 6,287 | 7,804 | 13,683 | 16,965 | ||||||
| Gross profit | 4,770 | 2,586 | 7,376 | 5,839 | ||||||
| Operating expenses: | ||||||||||
| Engineering | 202 | 528 | 633 | 1,124 | ||||||
| Selling and general | 1,884 | 2,246 | 4,647 | 4,902 | ||||||
| Total operating expenses | 2,086 | 2,774 | 5,280 | 6,026 | ||||||
| Operating income (loss) | 2,684 | (188 | ) | 2,096 | (187 | ) | ||||
| Other income | 2,809 | 7 | 2,800 | 18 | ||||||
| Income (loss) before provision (benefit) for income taxes | 5,493 | (181 | ) | 4,896 | (169 | ) | ||||
| Provision (benefit) for income taxes | 648 | 3 | 454 | (11 | ) | |||||
| Net income (loss) | $ | 4,845 | $ | (184 | ) | $ | 4,442 | $ | (158 | ) |
| Earnings (loss) per share - Basic | $ | 0.49 | $ | (0.02 | ) | $ | 0.45 | $ | (0.02 | ) |
| Earnings (loss) per share - Diluted | $ | 0.48 | $ | (0.02 | ) | $ | 0.44 | $ | (0.02 | ) |
| Weighted average shares outstanding: | ||||||||||
| Basic | 9,963,291 | 9,704,880 | 9,927,776 | 9,633,935 | ||||||
| Diluted | 10,129,472 | 9,704,880 | 10,096,916 | 9,633,935 |
| RF INDUSTRIES, LTD. AND SUBSIDIARIES | |||
|---|---|---|---|
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||
| (in thousands, except share and per share amounts) | |||
| Oct. 31, | |||
| --- | --- | --- | --- |
| 2020 | |||
| (audited) | |||
| ASSETS | |||
| CURRENT ASSETS | **** | **** | **** |
| Cash and cash equivalents | 14,762 | $ | 15,797 |
| Trade accounts receivable, net | 6,364 | 5,669 | |
| Inventories, net | 9,574 | 8,586 | |
| Other current assets | 3,637 | 813 | |
| TOTAL CURRENT ASSETS | 34,337 | 30,865 | |
| Property and equipment, net | 814 | 810 | |
| Operating right of use asset, net | 976 | 1,421 | |
| Goodwill | 2,467 | 2,467 | |
| Amortizable intangible assets, net | 2,929 | 3,181 | |
| Non-amortizable intangible assets | 1,174 | 1,174 | |
| Deferred tax assets | - | 834 | |
| Other assets | 70 | 70 | |
| TOTAL ASSETS | 42,767 | $ | 40,822 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | **** | **** | **** |
| CURRENT LIABILITIES | **** | **** | **** |
| Accounts payable | 1,236 | $ | 1,475 |
| Accrued expenses | 3,240 | 2,573 | |
| Current portion of PPP loans | - | 1,699 | |
| Current portion of operating lease liabilities | 691 | 874 | |
| Income taxes payable | - | 43 | |
| TOTAL CURRENT LIABILITIES | 5,167 | 6,664 | |
| Deferred tax liabilities | 2 | - | |
| Operating lease liabilities | 358 | 635 | |
| PPP loans | - | 1,089 | |
| Other long-term liabilities | - | 370 | |
| TOTAL LIABILITIES | 5,527 | 8,758 | |
| COMMITMENTS AND CONTINGENCIES | **** | **** | **** |
| STOCKHOLDERS' EQUITY | **** | **** | **** |
| Common stock, authorized 20,000,000 shares of 0.01 par value; 10,001,056 and 9,814,118 shares issued and outstanding at April 30, 2021 and October 31, 2020, respectively | 100 | 98 | |
| Additional paid-in capital | 23,678 | 22,946 | |
| Retained earnings | 13,462 | 9,020 | |
| TOTAL STOCKHOLDERS' EQUITY | 37,240 | 32,064 | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 42,767 | $ | 40,822 |
All values are in US Dollars.
RF INDUSTRIES, LTD. AND SUBSIDIARIES
Unaudited Reconciliation of GAAP to non-GAAP Net Income (Loss)
(In thousands, except per share amounts)
| Three Months Ended | Six Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| April 30, | April 30, | |||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||
| Net income (loss) | $ | 4,845 | $ | (184 | ) | $ | 4,442 | $ | (158 | ) |
| Stock-based compensation expense | 137 | 97 | 260 | 283 | ||||||
| Acquisition-related costs | - | 14 | - | 42 | ||||||
| Non-GAAP net income (loss) | $ | 4,982 | $ | (73 | ) | $ | 4,702 | $ | 167 | |
| Non-GAAP net income (loss) per share: | ||||||||||
| Basic | $ | 0.50 | $ | (0.01 | ) | $ | 0.47 | $ | 0.02 | |
| Diluted | $ | 0.49 | $ | (0.01 | ) | $ | 0.47 | $ | 0.02 | |
| Weighted average shares outstanding | ||||||||||
| Basic | 9,963 | 9,705 | 9,928 | 9,634 | ||||||
| Diluted | 10,129 | 9,705 | 10,097 | 9,881 |
RF INDUSTRIES, LTD. AND SUBSIDIARIES
Unaudited Reconciliation of Net Income (Loss) to Adjusted EBITDA
(In thousands)
| Three Months Ended | Six Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| April 30, | April 30, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net income (loss) | $ | 4,845 | $ | (184 | ) | $ | 4,442 | $ | (158 | ) | ||
| Stock-based compensation expense | 137 | 97 | 260 | 283 | ||||||||
| Acquisition-related costs | - | 14 | - | 42 | ||||||||
| Amortization expense | 95 | 173 | 252 | 346 | ||||||||
| Depreciation expense | 82 | 80 | 162 | 162 | ||||||||
| Other income * | (2,809 | ) | (7 | ) | (2,800 | ) | (18 | ) | ||||
| Employee retention credit | (2,643 | ) | - | (2,643 | ) | - | ||||||
| Provision (benefit) from income taxes | 648 | 3 | 454 | (11 | ) | |||||||
| Adjusted EBITDA | $ | 355 | $ | 176 | $ | 127 | $ | 646 |
* In the three and six months ended April 30, 2021, other income consists of the $2.8M PPP Loans that were forgiven.