RF Industries(US:RFIL)2021-06-14 20:03Financial Performance - Net sales for the fiscal 2021 quarter increased by 6%, or $0.7 million, to $11.1 million compared to the fiscal 2020 quarter, driven by a 13% increase in the Custom Cabling segment[99] - For the fiscal 2021 six-month period, net sales decreased by 7%, or $1.7 million, to $21.1 million, primarily due to a weaker first quarter[107] - For the fiscal 2021 quarter, net income was $4.8 million, with fully diluted earnings per share of $0.48, compared to a net loss of $0.2 million and a loss per share of $0.02 in the fiscal 2020 quarter[106] - For the fiscal 2021 six-month period, net income was $4.4 million, with fully diluted income per share of $0.44, compared to a net loss of $0.2 million and a loss per share of $0.02 in the fiscal 2020 six-month period[114] Profitability - Gross profit for the fiscal 2021 quarter rose by $2.2 million to $4.8 million, with gross margins increasing to 43.1% from 24.9% in the fiscal 2020 quarter, primarily due to the ERC[100] - Gross profit for the fiscal 2021 six-month period increased by $1.5 million to $7.4 million, with gross margins rising to 35.0% from 25.6% in the fiscal 2020 six-month period[108] Expenses - Engineering expenses decreased by $0.3 million to $0.2 million in the fiscal 2021 quarter, attributed to the ERC for engineering employees[101] - Selling and general expenses decreased by $0.3 million to $1.9 million, representing 17% of sales, compared to 22% in the fiscal 2020 quarter, also due to the ERC[102] Cash and Liquidity - As of April 30, 2021, the company had cash and cash equivalents of $14.8 million, down from $15.8 million as of October 31, 2020[92] - The company reported a working capital of $29.2 million and a current ratio of approximately 6.7:1 as of April 30, 2021[92] - The backlog as of April 30, 2021, was $15.6 million, significantly up from $6.3 million as of October 31, 2020[93] - During the six months ended April 30, 2021, the company used $1.4 million of cash in operating activities despite a net income of $4.5 million[94] - The company has not used its $5.0 million revolving line of credit, which was closed on December 30, 2020[97] Government Assistance - The company qualified for the Employee Retention Credit (ERC) and recorded an eligible amount of $2.4 million, which will reduce labor costs[91] - The company received approximately $2.8 million in Paycheck Protection Program (PPP) loans, which were fully forgiven in February 2021[90] Future Outlook - The company does not anticipate making material additional capital equipment purchases in the next twelve months[96] - The company may pursue future acquisitions to diversify its product offerings and customer base, which could impact liquidity and capital resources[98] Segment Performance - For the fiscal 2021 six-month period, pretax income for the Custom Cabling segment was $0.1 million, while the RF Connector segment reported $1.9 million, compared to a loss of $1.2 million and income of $1.0 million in the fiscal 2020 six-month period[112] Taxation - The effective tax rate for the fiscal 2021 quarter was 24.2%, compared to (1.4%) for the fiscal 2020 quarter, driven by various permanent book-tax differences[105]