RF Industries(RFIL) - 2025 Q3 - Quarterly Results

Press Release Overview Third Quarter Fiscal 2025 Highlights and Operating Results RF Industries reported strong Q3 FY2025 results with 17.5% net sales growth, 34% gross profit margin, and a return to profitability Third Quarter Fiscal 2025 Key Financial Metrics | Metric | Q3 FY2025 (in thousands) | Q3 FY2024 (in thousands) | YoY Change (%) | | :-------------------------- | :----------------------- | :----------------------- | :------------- | | Net sales | $19,790 | $16,836 | 17.5% | | Gross profit margin | 34% | 29.5% | +4.5 ppts | | Operating income (loss) | $720 | $(419) | N/A | | Consolidated net income (loss) | $392 | $(705) | N/A | | Non-GAAP net income (loss) | $1,110 | $(95) | N/A | | Adjusted EBITDA | $1,556 | $460 | 238.3% | - Quarter-end backlog reached $19.7 million, with Q3 bookings of $24.5 million; current backlog is $16.1 million[8] Management Commentary Management highlighted strong execution, exceeding gross profit targets, achieving consistent operating profit, and successful diversification into new markets - Achieved four consecutive quarters of operating profit and a 34% gross profit, surpassing the 30% target[6] - The long-term strategy to become a technology-solutions provider is effective, with high-value solutions such as DAC thermal cooling and small cell products gaining traction[7] - Customer base successfully diversified into new end markets including aerospace, transportation, and data centers, preparing for future stadium and venue buildouts[7] Company Information About RF Industries RF Industries manufactures and markets interconnect products and systems for diversified markets including telecom, data communications, and industrial sectors - RF Industries designs and manufactures interconnect products for diversified markets including wireless/wireline telecom, data communications, and industrial[11] - Product portfolio includes RF connectors, adapters, cables, wire harnesses, cooling systems, and integrated small cell enclosures[11] Forward-Looking Statements This section outlines forward-looking statements concerning future events, profitability, and market trends, subject to inherent risks and uncertainties - Forward-looking statements cover expectations regarding profitability, revenues, industry trends, market demand, backlog, and financial goals[12] - Actual results may differ due to factors like liquidity, going concern ability, credit facility compliance, telecom industry changes, new product timing, tariffs, and margin maintenance[12] Non-GAAP Financial Measures Explanation Note Regarding Use of Non-GAAP Financial Measures RF Industries uses non-GAAP measures like Adjusted EBITDA and non-GAAP net income to clarify operating trends by excluding non-cash and one-time expenses - Non-GAAP financial measures (Adjusted EBITDA, non-GAAP net income/loss, non-GAAP EPS) supplement GAAP results, offering insights into operating trends by excluding non-cash and one-time expenses[13][14] - Non-GAAP exclusions include stock-based compensation, non-cash/one-time charges, severance, amortization expense, and for Adjusted EBITDA, depreciation and interest expense[15] - Bookings represent new orders received, while backlog signifies orders where revenue is not yet recognized, both indicating future revenues[17] Financial Statements Condensed Consolidated Balance Sheets The balance sheets as of July 31, 2025, show increased total assets, driven by cash and receivables, with a corresponding rise in liabilities and stockholders' equity Condensed Consolidated Balance Sheets (in thousands) | ASSETS (in thousands) | Jul. 31, 2025 | Oct. 31, 2024 | | :-------------------- | :------------ | :------------ | | Cash and cash equivalents | $3,000 | $839 | | Trade accounts receivable, net | $15,348 | $12,119 | | Inventories | $14,169 | $14,725 | | TOTAL CURRENT ASSETS | $34,086 | $29,113 | | TOTAL ASSETS | $73,201 | $71,046 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | | | | Accounts payable and accrued expenses | $11,140 | $8,045 | | Line of Credit | $7,828 | $8,197 | | TOTAL CURRENT LIABILITIES | $21,013 | $18,090 | | TOTAL LIABILITIES | $38,429 | $36,980 | | TOTAL STOCKHOLDERS' EQUITY | $34,772 | $34,066 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $73,201 | $71,046 | Condensed Consolidated Statements of Operations Statements of operations for Q3 and 9 months ended July 31, 2025, show significant improvements, with 17.5% net sales growth and a return to profitability Condensed Consolidated Statements of Operations (in thousands, except per share) | (In thousands, except share and per share amounts) | Three Months Ended Jul. 31, 2025 | Three Months Ended Jul. 31, 2024 | Nine Months Ended Jul. 31, 2025 | Nine Months Ended Jul. 31, 2024 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net sales | $19,790 | $16,836 | $57,900 | $46,404 | | Cost of sales | $13,071 | $11,875 | $39,514 | $33,316 | | Gross profit | $6,719 | $4,961 | $18,386 | $13,088 | | Operating expenses | $5,999 | $5,380 | $17,504 | $16,007 | | Operating income (loss) | $720 | $(419) | $882 | $(2,919) | | Income (loss) before provision for income taxes | $480 | $(757) | $161 | $(3,595) | | Consolidated net income (loss) | $392 | $(705) | $(98) | $(6,361) | | Earnings (loss) per share - Diluted | $0.04 | $(0.07) | $(0.01) | $(0.61) | Unaudited Reconciliation of GAAP to Non-GAAP Net Income (Loss) This reconciliation adjusts GAAP net income to non-GAAP net income by adding back specific non-cash and one-time expenses, resulting in $1.1 million non-GAAP net income for Q3 FY2025 Unaudited Reconciliation of GAAP to Non-GAAP Net Income (Loss) (in thousands, except per share) | (In thousands, except share and per share amounts) | Three Months Ended Jul. 31, 2025 | Three Months Ended Jul. 31, 2024 | Nine Months Ended Jul. 31, 2025 | Nine Months Ended Jul. 31, 2024 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Consolidated net income (loss) | $392 | $(705) | $(98) | $(6,361) | | Provision (benefit) from income taxes | $88 | $(52) | $259 | $2,766 | | Stock-based compensation expense | $219 | $241 | $640 | $744 | | Non-cash and other one-time charges | - | - | $123 | $145 | | Severance | - | - | $51 | $56 | | Amortization expense | $411 | $421 | $1,233 | $1,266 | | Non-GAAP net income (loss) | $1,110 | $(95) | $2,208 | $(1,384) | | Non-GAAP earnings (loss) per share - Diluted | $0.10 | $(0.01) | $0.21 | $(0.13) | Unaudited Reconciliation of Net Income (Loss) to Adjusted EBITDA This reconciliation adjusts consolidated net income to Adjusted EBITDA by adding back various non-cash and one-time expenses, resulting in $1.6 million Adjusted EBITDA for Q3 FY2025 Unaudited Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | (In thousands) | Three Months Ended Jul. 31, 2025 | Three Months Ended Jul. 31, 2024 | Nine Months Ended Jul. 31, 2025 | Nine Months Ended Jul. 31, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Consolidated net income (loss) | $392 | $(705) | $(98) | $(6,361) | | Stock-based compensation expense | $219 | $241 | $640 | $744 | | Non-cash and other one-time charges | - | - | $123 | $145 | | Severance | - | - | $51 | $56 | | Amortization expense | $411 | $421 | $1,233 | $1,266 | | Depreciation expense | $206 | $217 | $615 | $638 | | Other expense | $240 | $338 | $721 | $676 | | Provision (benefit) from income taxes | $88 | $(52) | $259 | $2,766 | | Adjusted EBITDA | $1,556 | $460 | $3,544 | $(70) | Investor Relations Conference Call and Webcast RF Industries hosted a conference call and webcast on September 11, 2025, to discuss its fiscal Q3 2025 financial results - A conference call and live webcast were held on September 11, 2025, at 4:30 p.m. Eastern Time to discuss Q3 FY2025 financial results[10] Contact Information Contact information for RF Industries' SVP and CFO, Peter Yin, and IR contact, Donni Case, is provided for inquiries - Contact information for RF Industries' SVP and CFO, Peter Yin, and IR Contact, Donni Case of Financial Profiles, Inc., is provided[18]