Wireless Telecom Group, Inc., has announced its results for the fourth quarter and twelve months that ended December 31, 2020. Comprising of RF companies - Boonton, CommAgility, Holzworth, Microlab and Noisecom, the Wireless Telecom Group is a leading global designer and manufacturer of advanced RF and microwave components, modules, systems and instruments.
According to Tim Whelan, the CEO of Wireless Telecom Group Inc., 2020 was a year of progress as the company worked hard to overcome the challenges associated with the global pandemic and the declines in demand from its former largest customer. WTG's progress is a testament to the resilience and dedication of its employees, as well as the power of its global brands. During one of the most challenging years for any business, the company controlled its costs, increased gross profit margins, diversified customer base and built its backlog with four strong quarters of bookings heading into 2021.
Mr. Whelan continued, “We also successfully completed and integrated the Holzworth acquisition during 2020. Holzworth continues to exceed our expectations as a result of the integration into our sales channels and customer base, and we realized strong revenue growth with new customers. We also announced our NXP collaboration, which in its first year has already led to new customers and new software contracts. Holzworth and our NXP partnership are expected to meaningfully contribute to our growth in 2021 and beyond.”
“Across all our product groups, we are focused on aligning our resources to the expected secular growth in 5G investments, increasing demands for test & measurement solutions and the requirements of private network buildouts. Looking into 2021, we expect to make meaningful progress against our strategic plan outlined during last year’s annual meeting, which includes our goals of returning to double-digit organic growth, maintaining gross margin above 50% and improving operating margins.” said Whelan.
The company expects first quarter 2021 revenues and bookings to be comparable to the fourth quarter of 2020.
Full Year 2020 Operating Results:
- Net revenues declined 14.7% from the prior year due to lower sales of digital signal processing hardware cards, partially offset by higher margin software and services revenue and the revenue contribution from Holzworth.
- Gross profit margin increased from 45.6% to 50.2% due to higher margin CommAgility software and services revenue and the contribution of higher margin Holzworth product sales.
- Backlog increased $4.5 million, or 117% year-over-year, representing a $1.2 million increase from the addition of Holzworth, as well as strong bookings and an increased backlog for our CommAgility solutions.
- Operating expenses increased $5.3 million from the prior year due to $5.0 million in onetime non-cash charges, $1.1 million of additional Holzworth earn-out charges, and the inclusion of Holzworth operating expenses of $2.6 million, partially offset by other operating expense reductions.
- GAAP net loss of $8.1 million compared to a net loss of $0.4 million in the prior year. The increase in net loss was driven primarily by $5.0 million of non-cash charges and $1.1 million of additional Holzworth earn-out charges and lower gross profit.
- Adjusted EBITDA was $1.8 million compared to $2.5 million in the prior year. Non-GAAP adjusted EBITDA is a metric the Company uses to measure our core operations. A reconciliation of non-GAAP adjusted EBITDA to GAAP net loss is provided later in this press release.
Cash Flow and Balance Sheet
- Cash flow from operations of $3.0 million.
- Cash of $4.9 million at December 31, 2020, compared to $4.2 million at December 31, 2019.
- No outstanding borrowings under the asset-based revolver and availability of $7.2 million after giving effect to borrowing base calculations as of December 31, 2020.
