Wireless Telecom Group Announces Second Quarter 2018 Financial Results
PARSIPPANY, N.J.--(BUSINESS WIRE)--Aug 9, 2018--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).
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:
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.
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.
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