RF Industries(US:RFIL)2022-06-14 20:06Sales Performance - For the six months ended April 30, 2022, 70% of total sales were generated from the Custom Cabling segment, while the RF Connector segment accounted for 30%[90]. - Net sales for the fiscal 2022 quarter increased by 94%, or $10.4 million, to $21.5 million compared to the fiscal 2021 quarter[99]. - Net sales for the six months ended April 30, 2022, were $38.4 million, an increase of 82% or $17.4 million compared to the same period in 2021, driven by the Custom Cabling segment's growth[106]. Profitability - Gross profit for the fiscal 2022 quarter increased by $1.3 million to $6.1 million, with gross margins decreasing to 28.3% of sales compared to 43.1% in the fiscal 2021 quarter[100]. - Gross profit for the fiscal 2022 six-month period increased by $2.8 million to $10.2 million, while gross margins decreased to 26.5% from 35.0% in the fiscal 2021 six-month period[107]. - For the fiscal 2022 quarter, net income was $0.5 million, down from $4.8 million in the fiscal 2021 quarter, with fully diluted earnings per share at $0.05 compared to $0.48[105]. - For the fiscal 2022 six-month period, net income was $0.2 million, a decrease from $4.4 million in the fiscal 2021 six-month period, with fully diluted earnings per share at $0.02 compared to $0.44[113]. Expenses - Engineering expenses increased by $0.7 million to $0.9 million in the fiscal 2022 quarter compared to $0.2 million in the fiscal 2021 quarter, primarily due to additional expenses from Microlab and ERC claims[101]. - Selling and general expenses rose by $2.6 million to $4.5 million (21% of sales) in the fiscal 2022 quarter, compared to $1.9 million (17% of sales) in the prior year, with Microlab accounting for $0.6 million of the increase[102]. - Selling and general expenses for the fiscal 2022 six-month period increased by $3.9 million to $8.5 million (22% of sales), with Microlab contributing $0.6 million to the increase[109]. - Engineering expenses for the fiscal 2022 six-month period rose to $1.3 million from $0.6 million in the fiscal 2021 six-month period, primarily due to the Microlab acquisition[108]. Cash Flow and Financial Position - As of April 30, 2022, the company had a total of $3.8 million in cash and cash equivalents and working capital of $27 million[93]. - The company recorded a $1.7 million receivable for the Employee Retention Credit (ERC) as of April 30, 2022[92]. - The company experienced a net cash outflow of $1.7 million in operating activities during the six months ended April 30, 2022, despite a net income of $0.2 million[95]. - The company spent $24.2 million on the purchase of Microlab, offset by $17 million from a Term Loan[96]. Acquisition and Future Plans - The acquisition of Microlab in March 2022 required $7.3 million in cash and resulted in a $3.4 million increase in net sales due to consolidation[99]. - The company plans to continue expanding operations through acquisitions, which may require additional capital resources[98]. Backlog and Segment Performance - The backlog as of April 30, 2022, was $27.6 million, down from $33.3 million as of October 31, 2021[94]. - Pretax income for the Custom Cabling segment was $1.1 million and $0.6 million for the RF Connector segment in the fiscal 2022 six-month period, compared to $0.1 million and $1.9 million, respectively, in the prior year[111]. Taxation - The effective tax rate for the fiscal 2022 quarter was 21%, down from 24.2% in the fiscal 2021 quarter, influenced by various permanent book-tax differences[104].