Rf Industries, Ltd. · NASDAQ:RFIL
Rf Industries — Investor Presentation (October 2019)
29 slides from Rf Industries's investor presentation, October 2019
Slide 1: Leading Designer and Manufacturer of Interconnect Products
Leading Designer and Manufacturer of Interconnect Products Q3 2019 NASDAQ: RFIL © RF Industries Ltd. |1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward-looking statements contained in this presentation involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially and adversely from those expressed or implied by such forward-looki
Slide 3: Executive Team
Executive Team Robert Dawson Mark Turfler President and CEO Senior Vice President and CFO Joined: July 2017 Joined: June 2013 Added to Board: July 2018 Prior Industry Experience Finance Experience 2014-2016 President and CEO, Vision 35 years of accounting and finance experience Technology Serv
Slide 4: We've Seen A Significant Improvement In Our Results!
We’ve Seen A Significant Improvement In Our Results! Revenue Net Income (in millions) (in millions) $50.2 $5.8 $21.6 $23.0 $0.4 2016 2017 2018 ($4.1) 2016 2017 2018 © RF Industries Ltd. |4
Slide 5: NASDAQ: RFIL
: RFIL Headquarters San Diego, CA Statistics 10/2/19 4 production locations Stock Price $7.09 (2 Northeast, 2 Southwest) $5.14 / Corning Gold, ISO 9001:2015 Certified 52 Week Low-High $11.00 Founded 1979 Avg. Vol. (3 months) 21K IPO 1984 Shares Outstanding 9.3M Employees 277 Price to Sales (TTM) 1.4
Slide 6: Coaxial Cable Assemblies, Fiber Optic Cable and Components
Coaxial Cable Fiber Optic Cable FTTA Cable Wiring Harnesses Assemblies Assemblies Assemblies RF Coaxial RF Coaxial Adapters Low PIM Products Passive Components Connectors © RF Industries Ltd. |6
Slide 7: Cell Tower Site Materials, Small Cells, Distributed Antenna System
Cell Tower Site Materials Small Cells Distributed Antenna System (DAS) Design, Engineer and Build Hybrid Fiber Cable assemblies and components for Our components are used to provide & Power Cables for 4G and 5G Network small cell applications to support enhanced wireless coverage in Deployment (You
Slide 8: Advanced Oilfield Technology, Aerospace, Transportation
Advanced Oilfield Aerospace Transportation Technology Build & test control stick Transit doors and gates - Build control wiring for wiring for flight control stick designed for light and heavy drilling equipment for military helicopters rail applications © RF Industries Ltd. |8
Slide 9: Global Connector Market = $80.4B by 2023
Global Connector Market = $80.4B by 2023₁ N.A. Cable Assembly Market = $33.4B₂ 5G Build-Out Spend = $130B in 2024₃ DAS Market = $8B growing to $18B in 2026⁴ Small Cell= 80% of future infrastructure deployments will be small cells.5 OEM opportunities in markets like defense, transportation, agricultu
Slide 10: Distribution 60% and Direct/OEM 40%
Distribution – 60% Biggest opportunities are in distribution centric markets (force multiplier) • Access to thousands of customers • No A/R collection issues (99% of sales are in US and Canada) • No inventory obsolescence issues • Focus on what we do best Direct/OEM – 40% • Highly customized cable a
Slide 11: Distribution Partners and OEM Customers
Distribution Partners OEM Customers © RF Industries Ltd. | 11
Slide 12: Who's Our Competition?
Who’s Our Competition? Large Competitors Small Competitors Multinational with Local/Regional Broad Offering Our Value Proposition and Differentiation Fast – Faster lead times than larger competitors Flexible – Customized product (labor intensive; can’t buy off the shelf) High Quality – High qu
Slide 13: Annual Financial Performance
Annual Financial Performance (ended Oct. 31) Revenue Income from Diluted EPS from (in millions) Continuing Ops. Continuing Ops. (in millions) $50.2 $0.63 $6.0 $0.2 $0.02 $21.6 $23.0 2016 2017 2018 2016 2017 2018 ($4.5) ($0.51) 2016 2017 2018 -4% +6% +118% -20.8% 0.1% 12.0% -564% +104% +3050% Year-ov
Slide 14: Q3 Financial Performance
Q3 Financial Performance (ended Jul. 31) Revenue Income from Diluted EPS from (in millions) Continuing Ops. Continuing Ops. (in thousands) $1,642 $0.17 $15.5 $11.8 $1,038 $0.11 $5.9 $187 $0.02 $5.6 2016 2017 2018 2019 2016 2017 2018 2019 ($744) ($0.08) 2016 2017 2018 2019 -8.2% +5.4% +100.0% +31.4%
Slide 15: Quarterly Revenue Trend
Quarterly Revenue Trend Revenue (in millions) $20.5 $15.5 $13.6 $11.8 $9.9 $10.6 $7.0 $8.0 $4.8 $5.3 $5.9 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 -17.2% +10.4% +11.3% +18.6% +14.3% +156.3% -42.4% -16.1% +7.1% +28.3% +14.0% Quarter-over-Quarter Growth R
Slide 16: Balance Sheet Supports Growth
Balance Sheet Supports Growth Oct. 31, Oct.31, Jul. 31, $ in millions 2017 2018 2019 Cash Balances (in millions) Cash $5.2 $16.3 $13.3 $16.3 $13.3 Total Assets $25.1 $32.5 $36.1 Stockholders’ $21.4 $27.8 $30.6 Equity $5.2 Total Debt $0 $0 $0 2017 2018 Q3 2019 © RF Industries Ltd. | 16
Slide 17: Organic and Inorganic Growth
Organic Run rate business Core fast-turn production 10-15% annual growth Project business transitioning to long-term relationships Get our product spec’d in customer projects and included on customer BOMs Deliver a quality, customized solution where others cannot Convert this into ru
Slide 18: C Enterprises Acquisition
C Enterprises – Acquisition announced March 11, 2019 Based in Vista, California West coast fiber optic manufacturing capabilities Corning Gold certificate member 2018 unaudited revenues of $8.7M Expected to be accretive to earnings in fiscal 2019 Brings strong fiber optic and copper prod
Slide 19: Building a platform for long term growth
Building a platform for long term growth Deliver more consistent and predictable results 3-year plan to grow to $100 million in sales Organic growth – low to mid-teens – leveraging distribution and OEM relationships Inorganic growth – remain committed to adding another $20-$30 million in s
Slide 20: Our products are everywhere and make lots of things work
Our products are everywhere and make lots of things work Recent results have rewarded shareholders with higher stock price plus a long-standing dividend Revenue growth, margin growth, profit growth Our new sales model is driving growth We’re faster and more flexible while delivering high q
Slide 21: RF Industries, Ltd. and MKR Investor Relations
RF Industries, Ltd. MKR Investor Relations Mark Turfler Todd Kehrli SVP/CFO Analyst/Investor Contact (858) 549-6340 (323) 468-2300 [email protected] [email protected] © RF Industries Ltd. | 21
Slide 22: Appendix
Appendix INDUSTRIES © RF Industries Ltd. | 22
Slide 23: Financial Statement Trends through July 31, 2019
Financial Statement Trends through July 31, 2019
Slide 24: Income Statement
2019 2018 2017 2016 2015 Q3 YTD Full Year Full Year Full Year Full Year (in millions) Unaudited Audited Audited Audited Audited Income Statement Net sales $ 39.7 $ 50.2 $ 23.0 $ 21.6 $ 22.5 Cost of sales 28.2 33.1 16.0 15.3 13.8 Gross profit 11.5 17.1 7.0 6.3 8.7 Operating expenses: Engineering 1.0
Slide 25: Balance Sheet
July 31, October 31, 2019 2018 2017 2016 2015 (in millions) Unaudited Audited Audited Audited Audited ASSETS: Current assets: Cash and cash equivalents $ 13.3 $ 16.3 $ 5.2 $ 4.3 $ 6.3 Trade accounts receivable, net 9.9 4.3 2.9 2.5 2.9 Inventories 8.1 7.1 5.6 5.4 6.5 Other current assets 0.7 0.8 0.5
Slide 26: Statement of Cash Flows
July 31, October 31, 2019 2018 2017 2016 2015 (in millions) Unaudited Audited Audited Audited Audited Operating Activities: Statement of Cash Flows Consolidated net income (loss) $ 2.7 $ 5.8 $ 0.4 $ (4.1) $ 1.0 Net income from discontinued operations - Comnet $ - $ (0.2) $ 0.2 $ 0.4 $ 0.6 Net income
Slide 27: (Quarterly) Income Statement
Income Statement 2019 2018 2017 Q1 Q2 Q3 YTD Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD (in millions) Unaudited Unaudited Unaudited Audited Unaudited Audited Net sales $ 10.6 $ 13.6 $ 15.5 $ 39.7 $ 8.0 $ 20.5 $ 11.8 $ 9.9 $ 50.2 $ 4.8 $ 5.3 $ 5.9 $ 7.0 $ 23.0 Cost of sales 7.5 9.5 11.2 28.2 5.5 12.9 7.8 6.9 33
Slide 28: (Quarterly) Balance Sheet
2019 2018 2017 Jan. 31 Apr. 30 Jul. 31 Jan. 31 Apr. 30 Jul. 31 Oct. 31 Jan. 31 Apr. 30 Jul. 31 Oct. 31 (in millions) Unaudited Unaudited Audited Unaudited Audited ASSETS: Current assets: Cash and cash equivalents $ 14.0 $ 13.9 $ 13.3 $ 4.9 $ 7.1 $ 10.5 $ 16.3 $ 3.3 $ 3.4 $ 4.4 $ 5.2 Trade accounts r
Slide 29: (Quarterly) Statement of Cash Flows
Statement of Cash Flows 2019 2018 2017 Q1 Q2 Q3 YTD Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD (in millions) Unaudited Unaudited Unaudited Audited Unaudited Audited Operating Activities: Consolidated net income (loss) $ 0.6 $ 1.1 $ 1.0 $ 2.7 $ 0.5 $ 3.2 $ 1.7 $ 0.4 $ 5.8 $ (0.2) $ 0.1 $ 0.2 $ 0.3 $ 0.4 Net inc