Earnings Call Transcript - RFIL Q1 2022

Operator, Operator

Greetings, welcome to the RF Industries First Quarter Fiscal 2022, Financial Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If you have any questions or comments please refer to the Operator Instructions. We do ask that if you are listening on a speakerphone to please pick up your handset for optimum sound quality. Please note this conference is being recorded. I would now like to turn the call over to your host, Mr. Todd Kehrli of MKR Investor Relations. Thank you. You may begin.

Todd Kehrli, Investor Relations

Thank you, Operator. Good morning and welcome to RF Industries first quarter fiscal 2022, financial results conference call. With me on today's call are RF Industries President and CEO Rob Dawson, and Senior Vice President and Chief Financial Officer, Peter Yin. Before I turn the call over to Rob and Peter, I would like to cover a few quick items. This morning, RF Industries issued a press release announcing its first quarter fiscal 2022 financial results. That release is available on the Company's website at RF Industries.com. This call is being broadcast live over the internet for all interested parties, and the webcast will be archived on the Investor Relations page of the company website. I want to remind everyone that during today's call management will make forward-looking statements that involve risks and uncertainties. Please note that except for the historical statements, statements on this call today may constitute forward-looking statements within the meaning of Section 21E, of the Securities Exchange Act of 1934. When used, the words anticipate, believe, expect, intend, future, and other similar expressions identify forward-looking statements. These forward-looking statements reflect management's current views with respect to future events and financial performance and are subject to risks and uncertainties. Actual results may differ materially from outcomes contained in any forward-looking statements. Factors that could cause these forward-looking statements to differ from actual results include delays in development, marketing, or sales of products, and other risks and uncertainties discussed in the company's periodic reports. RF Industries undertakes no obligation to update or revise any forward-looking statements. Additionally, throughout this call, we will be discussing certain non-GAAP financial measures. Today's earnings release and the related current report describe the differences between our GAAP and non-GAAP reporting and present the reconciliation between the two for the periods reported in the release. With that, I'll turn the conference over to Rob Dawson, President and Chief Executive Officer. Rob?

Rob Dawson, President and CEO

Thank you, Todd. Good morning, everyone. Happy Saint Patrick's Day and happy first day of March Madness for those of you who care about that, me included. Welcome to our first quarter of fiscal 2022 earnings conference call. I'd like to start with a brief review of our first quarter results, then discuss what we're seeing now in the market and what we expect going forward before turning the call over to Peter to give some commentary on the financials. Starting with the first quarter, we're pleased to report our fourth consecutive quarter of strong year-over-year revenue growth. Sales for the quarter came in at $16.9 million, a 69% increase over the first quarter last year. As anticipated, revenue was down sequentially compared to the fourth quarter, but still very strong as our fiscal first quarter is typically our slowest quarter seasonally. On the bottom line, we reported a net loss of $364,000, non-GAAP net income of $628,000, and adjusted EBITDA of $691,000. We had lots of one-time and acquisition-related charges in those numbers which Peter will share more on later in the call. Our margins and bottom line continue to reflect the impact of the current state of the supply chain, as well as increased material and shipping costs. As I've noted before, this is largely impacting our concentrated Tier-1 business and is not unexpected given our hybrid fiber solution has been such a large piece of our sales. We're obviously happy to oversee these multiple large orders from our Tier-1 wireless carrier customers this past fiscal year. But also had to lock-in pricing at the time these deals were signed, which was before some of the supply chain-related costs began to increase significantly. The good news is that we continue to work through these orders. We expect our overall margins to improve to more normal levels as we move through the fiscal year. We believe that the first quarter was our low point for margins this year, and things will get better as the year goes on. Let me just reiterate that point. While Q1 was impacted by a tough environment and product mix, we believe that it was a low point for margins this year, and we expect increases from here. On the M&A front, we're excited to have announced earlier this month that we completed our acquisition of Microlab. Microlab designs and manufactures high-performance RF and microwave products, enabling signal distribution and deployment of in-building distributed antenna systems, wireless base stations, and small cell networks. Their products are known worldwide for their superior quality and performance and are considered the gold standard in RF and microwave distribution systems. This acquisition is in line with our strategic plan to drive revenue growth, both organically and through targeted acquisitions. It creates significant opportunity to accelerate our product roadmap, drive innovations, and provide additional scale and opportunity for overall margin improvement and further revenue growth. Microlab brings us access to a new set of high-performance network operator approved products that we can sell through our growing customer base and through our extensive distribution channel. Their diverse portfolio includes products for wireless connectivity, public safety, and medical applications that are highly complementary to our existing portfolio and broaden our value-added offerings, particularly with our focus on the significant growth opportunities we expect to see in the small cell and DAS markets. Once we fully integrate Microlab, we anticipate realizing meaningful operating synergies and significant opportunities to drive innovation by combining portfolios and infrastructures. We add manufacturing capacity as well as greater scale that we expect to accelerate our growth. We're also expanding our capabilities with Microlab's highly experienced product and engineering team and extending our production platform with additional automated production lines and lean methods. These enhance our innovation capabilities, particularly with their added expertise in distributed antenna systems and small cell deployments. Microlab also strengthens our market positioning and enhances our customer partnerships. They provide us with additional strong direct and distribution relationships, and give us a higher percentage of the bill of materials in carrier DAS and small cell applications. They have a strong brand and customer list, which in combination with ours, provides complementary large and mid-tier customers and enhances our customer value proposition. The combined company is well-positioned to reach a broader customer base and deepen existing relationships by cross-selling and establishing inroads with new customers while driving innovations. We expect Microlab's business to improve as we work to combine our go-to-market approach and teams. We believe that at a steady-state, it should generate $20 million or more in annual revenue in future fiscal years. That's before any major new initiatives that we help drive. And with margins that are better than our overall historical blended margins, we expect this acquisition to be immediately accretive to both our gross margin and bottom line. Plus, we anticipate driving further margin expansion through increased sales growth rates at the combined companies while realizing meaningful synergies that will benefit bottom line profitability. Financially, this deal made a ton of sense for us. Over time, some of the other intangibles like the strength of the brand, market positioning, and the team will become more clear. Now let me quickly comment on our existing product areas and market segments and how they performed during the quarter. Our core distribution business remains healthy and diverse and continues to grow. Our RF coaxial cable and Connecticut products and our C Enterprises fast-turn fiber products together make up our primary offering sold through distribution. Both of these major product areas showed meaningful year-over-year growth during the quarter, and we expect to see continued steady growth from these two areas throughout the remainder of our fiscal year as we continue to build this baseline of core revenue. Our custom cabling segment, including the OptiFlex hybrid fiber products, continues to have strong sales results. We continue to produce and deliver hybrid fiber cables in large volumes for our Tier-1 wireless carrier customer while we also pursue new opportunities with other customers in the market. This is becoming a more competitive space, but our team in Long Island is performing extremely well, and we feel good about our position in the market. Turning to our small cell and DAC thermal cooling offerings, these continue to be huge opportunities that we expect will increase sales this year. The pipeline continues to build and we have a strong backlog of orders. We have products actively shipping to several key small cell players, as well as ongoing discussions regarding future deployments with others. While spending is still not back to the full level where we expect it to be, it's getting better. From our conversations, it feels like it will continue to improve as the year goes on, and we believe that we're moving closer to a more normal generational build cycle later this year. As I mentioned on our last call, we conducted trials with a few large customers with some new and innovative products. To give a little more color, we had an innovative new small cell shroud that has been in labs with two large players in the Tier-1 wireless carrier ecosystem. During the quarter, we saw our first purchase order for this product. We think it's the first of many and we look forward to sharing more details soon. This is an example of what we've been working to achieve with our product roadmap, having a standard offering and then innovating in the markets where we're relevant. That was one of the primary reasons behind our acquisition of Schroff Tech in 2019. Now we think the addition of Microlab will further accelerate this innovation because we now have a deeper engineering and RF technical team compared to where the company has been historically. We will definitely have more to share on future calls related to innovation and product roadmap as part of our growth plan. On the topic of acquisitions, while we're laser-focused on completing the successful integration of Microlab, we're continuing to look for further acquisitions that fit our strategic plan of acquiring good quality companies with passive components that allow us to offer more of the bill of materials in key applications and provide us with access to new products that we can sell through both new channels and to our existing and growing distribution channel. We're focused on providing shareholder value by patiently and diligently investing capital. We believe that our approach to acquisitions and our organic investments over the last few years support this. Finally, in early February, we announced that we signed a lease on a larger building in the San Diego area. The new building will serve as our corporate headquarters and will allow us to consolidate the operations of our RF connector and cable assembly divisions and our C Enterprises division, both of which are located in the San Diego area. We're excited about this new larger advanced production facility that provides a significant opportunity to increase our output and better support our inventory and production needs as we continue to grow. The building is currently being renovated, and we expect to move in at the end of 2022. The combined operation will include more than 150 employees and will provide a much better experience for our team and a positive cultural impact. The facility will also allow for production methodology improvements and cross-training for the team that we anticipate will drive meaningful cost savings synergies. As we look ahead, we continue to expect our core revenue to increase throughout the year. Because of this and as a result of completing the Microlab acquisition, we are increasing our annual revenue guidance for fiscal 2022 from greater than $63 million to greater than $75 million, which includes some expected further organic growth and approximately eight months of Microlab revenue this fiscal year. Any additional orders from our Tier-1 carrier customer would be upside to that number. With this expected increase in full-year revenue of at least 31% year-over-year, we expect our adjusted EBITDA for the full year to also increase significantly as our gross margins and overall profitability grow throughout the remainder of the fiscal year. Overall, we're excited about the start of 2022 and we're confident about what lies ahead for the rest of the year. Our core business continues to be diverse and growing nicely. And with the acquisition of Microlab, we're increasing our scale with higher margin business and positioning ourselves with future revenue growth. With that, I'll now turn the call over to Peter for review and discussion of the financial results for the quarter. Peter.

Peter Yin, CFO

Thank you, Rob. Good morning, everyone. We're happy to share that we achieved strong year-over-year revenue growth this quarter. Our sales for the first quarter were 16.9 million, a decrease of 20% from the fourth quarter, but an increase of 69% compared to the first quarter last year. The first quarter is usually slow for us, so we expected this controlled drop in revenue compared to Q4. The growth of $6.9 million from last year indicates a solid start as we maintain the momentum we had in fiscal 2021. Our gross profit margin stood at 24%, down from 25% in Q4 and 26% in the same quarter last year. While the margin is lower than we prefer, it is understandable given the circumstances this quarter. Our margin decline can be traced back to supply chain issues and product mix. We have been observing rising costs in raw materials, labor, and shipping. Additionally, our concentrated Tier-1 business, which accounted for about 30% of our Q1 sales, typically has a lower margin compared to our overall business. We anticipate that our margins will recover to more typical levels as we progress through the fiscal year. We are actively collaborating with customers on pricing adjustments and working with suppliers to secure materials at fixed costs where possible. Furthermore, our sales team is dedicated to pursuing higher margin opportunities. Regarding higher-margin business, we expect the acquisition of Microlab, completed after the close of Q1, to positively impact our gross margin and net income right away. We will delve into that shortly. Our balance sheet is robust, showing cash and cash equivalents of $13.5 million, and working capital of $31.3 million at the end of the quarter. We also significantly increased our inventory by 20% or $2.3 million from Q4 and approximately 50% or $4.5 million from last year. Having adequate inventory is crucial in our markets, especially during supply chain fluctuations. We believe that strategically increasing our inventory positions us better to meet our customers' demands amid current delays and longer lead times. In Q1, we filed an S3 shelf registration statement for a potential sale of up to $100 million in our common stock, debt securities, or warrants, to provide flexibility for future financing opportunities, supporting general corporate purposes or acquisitions, effective for three years. In Q1, we also announced the acquisition of Microlab for $24 million, completing it on March 1st. Prior to closing, we secured a $3 million revolving credit facility and a $17 million term loan at 3.76% interest. At the closing of the acquisition, we contributed $17 million of the purchase with cash derived from the term loan, and the remaining $7.3 million was paid from our cash reserves. We have not utilized the $3 million revolving credit yet. Our adjusted EBITDA for Q1 was $691,000, in contrast to an adjusted EBITDA loss of $229,000 in the first quarter of last year. Primarily due to the Microlab acquisition, we incurred one-time charges of $734,000 in Q1, which covered legal, advisory, due diligence, and similar fees. Due to the timing of the acquisition announcement and its closure, we expect to incur additional one-time charges related to the acquisition in Q2. As we integrate Microlab and streamline our operations and manufacturing, we anticipate further one-time charges, which will ultimately help us achieve significant cost synergies. Our backlog was $27.9 million at January 31, 2022, on first quarter bookings of $11.5 million. Currently, our backlog stands at $25 million. Now, regarding our outlook. As Rob mentioned, after completing the Microlab acquisition, we are raising our annual revenue guidance for fiscal 2022 from at least $63 million to at least $75 million, reflecting the anticipated eight months of revenue contribution from Microlab this fiscal year. Any additional hybrid fiber orders from our Tier-1 customer or new major project wins would provide upside potential to this figure. This expected growth in full-year revenue of at least 31% year-over-year represents a mix of organic and inorganic growth. Regarding profitability, we foresee a significant increase in our adjusted EBITDA for the full year as our overall profitability improves throughout the rest of the fiscal year. That wraps up my comments. Operator, we're now ready for questions.

Operator, Operator

Thank you. The floor is now open for questions. We ask that if you are listening via speakerphone, please pick up your handset for optimum sound quality. Our first question today is from Aman Gulani at B. Riley Securities. Your line is live. You may begin.

Aman Gulani, Analyst

Hey guys, thanks for taking my question here. And my first question is about the integration timeline for Microlab. How should we think about the integration and then how should we think about margins throughout the year? I know you expect them to improve as supply chain headwinds start to ease, but I'm trying to get a sense for how much margins will improve due to Microlab and then also as supply chain issues start to sort of ease up. Do you think you could get margins maybe closer to like a 30% by the fourth quarter of the end of fiscal '22?

Rob Dawson, President and CEO

Thank you for the questions, Aman. Good morning. Regarding the integration timeline, we've made significant progress with Microlab. The two-month period between announcing the deal and its closing allowed us to prepare effectively, with our team on-site focusing on necessary infrastructure and other key areas. Upon closing the deal at the beginning of this month, we were well-prepared. While there are still some systems and integrations to address, a substantial portion of the challenging back-office tasks has already been completed successfully. Our team has done a remarkable job, and the integration process has been smooth thus far. One aspect we have not fully integrated is the sales organizations on both sides, which is critical for maintaining customer relationships during an acquisition. We wanted to ensure continuity and have kept things operating as usual, allowing us to organically determine the best approach moving forward. Our customers have responded positively to the completion of the deal and the merger of the two teams. Therefore, I have no concerns on that front. It's essential to navigate these integrations carefully without rushing to conclusions. We're making steady progress in creating a clearer organization for our customers, with about 90% of the integration timeline already complete and only a small portion remaining. As we proceed through the year, we expect to return to a margin level around 30%. I understand that we have been at that level in the past and it has been a while since we've seen those numbers. Although the impact of COVID and ongoing global challenges have influenced our pricing and supply chain, we are actively working on price increases and seeking cost savings from suppliers. Additionally, the product mix can fluctuate significantly quarter-to-quarter, especially with our large Tier-1 customers. This variability can affect our overall blended margins greatly. However, as we improve our supply chain management and as the price adjustments we made take effect, along with Microlab’s margins being higher than our typical blend, we believe we are on track to reach that 30% margin by year-end.

Aman Gulani, Analyst

Got it. That's helpful. And then you did mention in your prepared remarks that you did secure a new small cell customer. Just trying to get a sense for timing on that; is that something you expect to generate revenue from this year? And then what's the opportunity to get additional orders from that customer?

Rob Dawson, President and CEO

Yes. So we do and that was specifically around a new innovative small cell product that we've been working on for some time, and we received our first order on that from a new customer, so that's something that we anticipate shipping here in the next few months. We expect there to be more from them, but also from others on this product. I'm not trying to be coy and refer to it as 'this product.' I do not give specifics, but I think anyone who's spoken to me or listened to our calls over the last four or five years knows that we come out with information when we've got a definitive amount of dollars we can tie to it in a time-frame. It's harder to do that on a new product launch other than to say it's been a very well-received product. We will be putting out some press on it soon to explain it's innovative, why we think it's innovative, what the market is saying about it and what we expect that to drive. But in the case of the initial purchase order that we received from a customer, it was a six-figure purchase order and it's something that's going to ship here in the coming few months. We believe it's the first of many over the course of the next several years.

Aman Gulani, Analyst

Got it. That's helpful. And then, in terms of private network build out, are you starting to see maybe a little bit more deployment on that front now that people are starting to get back to venues and things like that?

Rob Dawson, President and CEO

So we are; I think projects overall on campuses have picked up. If the Super Bowl was an example, that stadium probably has as much technology as almost any stadium that's out there. Connectivity is a big piece of that. So anytime that a stadium is built or upgraded or retrofitted, they are adding capacity from a wireless perspective, and so we feel really good about those opportunities. Historically, we feel even better about those with Microlab as part of the team. There is a typical bill of materials that typically included on the bill of materials for those large venues. So we are seeing it recover. If I look at our results over the last few years and look through where Microlab has been as well, that's the kind of stuff that's been missing for a couple of years, is these $100, $200, $300,000 projects or more just of our products. So we think those are coming back. We also think that, as small cell deployments start to blur the lines with kind of traditional small cell in metropolitan areas, you're starting to see companies and other private campuses put in things like private LTE, CBRS, and other kinds of deployments that aren't always something that we can quantify and know for sure that our products are ending up there, because a lot of times that's just another build and wireless build. We can't always know exactly where that's going. But we do believe that those two technologies, and then on the public side, the C-band deployments are going to increase both distributed antenna systems and small cell in venues, and sort of any related types of deployments.

Aman Gulani, Analyst

Got it. Okay. And then last question for me. What can you share in terms of build plans with your large Tier-1 wireless customers? I mean, I know you've got significant growth from that one customer that had done a lot of repeat orders through hybrid fiber. I'm saying in sense, is the customer pushing out orders due to supply chain? What are you seeing in that regard?

Rob Dawson, President and CEO

Yeah, I think with our customers overall and with the large Tier-1, we've been performing really well for them. The bigger issue is really radio availability, which has nothing to do with us, but it's been heavily reported for a long time. Chip sets are hard to come by and when you look at building a wireless network, the radio is a key piece. If you can't get your hands on the radio, whether that's macro or small cell or other, it tends to put a delay in the overall build plan. We're either early in that plan from a procurement perspective or we're the last thing that they purchased prior to deployment. We've certainly seen some project plans shift and change, but a lot of times it's been driven as much by technology change as it is supply chain difficulty in the last year or so. We believe that as this year goes on, you're going to see anybody's build plan, regardless of which carrier you're talking about, really start to increase and hit what I call a typical generational build cycle. It's not rare to have the early part of a year be a little strange in spending and deployment schedules, and then as the weather starts to thaw and the world starts to get going on this year's budgets, it starts to really crank. We think that's what's going to happen this year. Certainly as the year goes on, we expect the next few years to be just trying to get things deployed, that pent-up demand that's been out there for the last few years.

Aman Gulani, Analyst

Got it, thank you. I'll pass it on.

Rob Dawson, President and CEO

Thanks, Aman.

Operator, Operator

Thank you. Once again ladies and gentlemen if you have any questions or comments, please refer to the Operator Instructions. Our next question is coming from Hal Granger at Great Quarter Research. Your line is live. You may begin.

Hal Granger, Analyst

Thank you for taking my question. I wanted to start by noting that Mark Holdsworth mentioned a couple of months ago that we have acquired a 5.1% ownership of the Company. This is true, achieved through both personal funds and support from managers. I want to highlight that this level of commitment from the Chairman is quite rare in companies. So, great job to Rob for bringing him on board, and kudos to Mark for his dedication.

Rob Dawson, President and CEO

Yes. Thanks. Now, we obviously appreciate that and it's been great to have Mark as part of the Board and as the Chairman. He's obviously a believer in a whole bunch of ways. He has been very supportive and bullish on what we've done and where we're going. He has been a great partner for me in driving this next phase of growth for the Company. But thanks for noting that and certainly thanks to him.

Hal Granger, Analyst

Yes, thank you. I had a question about the capital structure. So as Peter noted, you filed a shelf registration a few months ago, which allowed you to offer DAS equity. You did this acquisition used bank financing, and I'm wondering how was that thought process of what you would use whether bank financing or bonds or equity. Regarding the Microlab acquisition and also potentially future acquisitions. And then the second part of that related to that is, in the past you have not had any debt, which is also extraordinary. But in my mind, not necessary because you get a certain amount of leverage having a certain amount of debt. In the future, what are you thinking about having debt as a part of your capital structure going forward?

Rob Dawson, President and CEO

Yes. Thanks. Good question. Let me start with the shelf and kind of our thought process around the use of funds and how we might fund future needs. So having a shelf out there is just a prudent thing to do. As you noted, the company hasn't had debt before. The company has also never had an S3 out there. These are the things that we worked through our next phase of growth. Noting that we were at $23 million a year sales in 2017. We've come a long way. We've done a lot, but we have a long way to go. I think that last piece of where we're going next and the next phase of growth relates directly to having a shelf and having it available to us for whatever strategic needs might come up. With that said, I'm not terribly interested in offering additional stock at the current price point of our stock. We think we're at a major inflection point again, for the fifth or sixth time in the last 4.5 years, where we're going through growth, we were recovering from some of the chaos of the last few years. We've just made a good acquisition. We're getting integration completed on prior acquisitions and starting to see some of the good things come out of those as well. If our stock price were higher, I think we'd be more inclined to tap into the equity side of the needs that are out there. But you look at the relating that to the debt we took on, where Peter talked about the percentage and what were sub-4%, it's 3.7% or something like that on our debt with the bank, which was great. We were happy to get that kind of a number. We're happy we locked it in, especially with the increases that are now going on in interest rates. We've got a good rate locked in, and debt service on that is very affordable for us, and it's a prudent thing to do. We've been sitting on a lot of cash for a long time, so deploying that cash in a good acquisition that we think is not only valuable but was very affordable in a great deal for us, allowed us to go out there and get the debt at sub-4% versus the cost of equity in a raise being, I don't know what, 15%, 18%, 20% depending on what you get into there. So as our stock goes up, which we expect it should based on our performance and certainly performance in future quarters, then it becomes more interesting to potentially use equity and tap into that shelf to do a larger raise or use equity in a larger deal. We continue to be interested in additional acquisitions. We're not going to fumble on the Microlab one. We've got to get that integration done and complete. As I mentioned, where most of the way there already. We continue to look for other good deals that match the criteria that we've telegraphed out there to the world for the last few years, exactly what we're trying to find and do. The punch line to all that, Hal, is I love having the debt. I love it if it's inexpensive, and I certainly love it. It's inexpensive compared to doing an equity raise, but there will come a time where we decide the timing is right to look at that equity and take advantage of the power that we have in the market with that shelf.

Hal Granger, Analyst

Great. And finally, let me ask a broader question regarding the time involved in considering potential acquisitions and assessing them. I imagine there’s a significant time investment in that process, as well as in integration. Which phase requires more time, finding the acquisition or integrating it?

Rob Dawson, President and CEO

Yes, good question. I think it's selflessly for me. I can say that the answer to that has evolved over the last few years as we've added some people to our team to help with integration, specifically on the operations side. Building out this leadership team with folks that I've worked with in the past at various companies and adding them to RF Industries in the last few years means that the time spent looking for acquisitions falls largely on me interacting with our strategic committee of our board, which includes Mark Holdsworth and Jerry Garland. We spend a lot of time talking through the acquisition pipeline. The time commitment on that is heavy at times, not always, but right now we're kind of getting back to it. When it was a little lighter commitments, as we tried to close the Microlab deal and then got that done, that meant to focus there on getting that completed and getting the integration started. I was able to hand that off to the team in various different functions to take it from there. It's a little lumpy in the way that it works. That team was head down pounding through integration stuff for a few months. Now we're starting to be able to pick our heads up and kind of look around again and resolve kind of the final ticks and tie-offs of getting that integration done. So now it's operational, and for me, I'm back to spending a meaningful amount of my time looking at acquisitions. The good news about the way we communicate is we try to be completely direct and transparent, and it's almost impossible not to know what we're going to do next because we laid out a plan a few years ago of what we were going to do and how we're going to acquire. We've done exactly what we said we were going to do, which I've been told is rare. I just say, I don't think I'm smart enough to have some tricky plan. It's just say what you're going to do and then go do it. We're back to looking at acquisitions, and that means that a lot of people are showing up with opportunities. The great thing about being inquisitive is the world starts to bring you opportunities, and it's not as difficult as it was a few years ago to find them. Now there's lots of things showing up all the time coming across my desk that we can do a quick review of, and some are more interesting than others. I love the idea that we've proven we're going to acquire, where we're getting better at it. The magnitude of these deals hasn't been going up and we expect that to continue to get some real economies of scale out of this and add some size to the company. We're still a small company, but the world starts to change when you get into these $15 to $20 million quarters versus $6, $8, $10 million quarters. It just looks and feels very different, though we still have a long way to go when we think acquisitions are a key piece of that.

Hal Granger, Analyst

Great. Thank you very much, Rob.

Rob Dawson, President and CEO

Thank you, Hal. Have a good day.

Operator, Operator

Thank you. We have no further questions in the queue at this time. I would now like to turn the call back over to Rob for closing remarks.

Rob Dawson, President and CEO

Great. Thank you, Kate. Thanks, everyone, for joining our call today. We appreciate your support of RF Industries. We're excited about our start to 2022 and what lies ahead for the rest of the year. Peter and I look forward to reporting our fiscal 2022 second-quarter results in June. Thank you again, and have a great day.

Operator, Operator

Thank you, ladies and gentlemen, this does conclude today's event. You may disconnect at this time and have a wonderful day. We thank you for your participation.