The Wireless Telecom Group has announced financial results for the three months ended March 31, 2022. Consolidated net revenues decreased 7.2% from the prior year period due to lower hardware and software revenue at RBS of $1.3 million partially offset by increased revenues at T&M of $732,000.
Tim Whelan, CEO of Wireless Telecom Group, stated, “The successful close of the Microlab divestiture during the first quarter is a transformational event for the Company, allowing us to pay off our debt and streamline our business to focus on our higher growth segments of Test & Measurement and Radio, Baseband and Software. Our first quarter bookings reflected solid progress in T&M, including continued sales related to satellite communications, semiconductor development, and quantum computing applications. Our first quarter bookings included the cancellation of a $350,000 Russian contract and do not reflect approximately $2 million of RBS contracts in the final stages of approval, which were originally expected in the first quarter. We expect these new RBS contracts will be delivered throughout 2022, which will contribute to revenue and profitability during the second half of the year. The first quarter performance of our T&M segment was particularity strong with revenues increasing nearly 14% along with continued gross profit improvements, which we believe demonstrates our sustainable pricing power and ability to manage through the inflationary environment.”
Mr. Whelan continued, “We are keeping a close eye on the challenges associated with the global supply chain and we are working with our customers and suppliers to limit the effect on our business. Despite this, we remain confident in the expectation for revenue growth and profitability in 2022, supported by a robust funnel of opportunities across our global T&M and RBS segments. In addition, an active refresh of our strategic plan is in advanced stages and the Board of Directors is considering the use of up to $4 million for a share repurchase program that is expected to be approved in the next few days.”
First Quarter 2022 Operating Results:
- Microlab results are presented as discontinued operations in the Consolidated Statements of Operations. Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations.
- Consolidated net revenues decreased 7.2% from the prior year period due to lower hardware and software revenue at RBS of $1.3 million partially offset by increased revenues at T&M of $732,000.
- Gross profit margin decreased from 59.3% in the prior year period to 57.3% in the first quarter 2022 due to lower software revenue contribution at RBS.
- Operating expenses increased 11.7% or $607,000 from the prior year period due primarily to higher non-cash stock compensation expense of $215,000 and expenses associated with the Microlab divestiture of $530,000.
- GAAP loss from continuing operations of $(1.5) million compared to loss of $(475,000) in the prior year. The higher loss is due primarily to lower gross profit of $499,000 and loss on extinguishment of debt of $792,000 recognized in the quarter partially offset by lower interest expense of $120,000 and a higher tax benefit of $706,000.
- Non-GAAP adjusted net loss from continuing operations of $(117,000) compared to a loss of $(130,000) in the prior year period. Non-GAAP adjusted net loss from continuing operations is a metric the Company uses to measure our core operations. A reconciliation of net loss from continuing operations to Non-GAAP adjusted net loss from continuing operations is provided later in this press release.
- Non-GAAP Adjusted EBITDA of $(70,000) compared to $357,000 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 income is provided later in this press release.
- Income from discontinued operations of $11.7 million net of tax provision of $4.9 million. Includes gain on sale of $16.4 million.
Cash Flow and Balance Sheet
- Received $22.8 million in proceeds from the sale of Microlab, net of escrows and transaction expenses.
- Repaid and terminated both the Muzinich term loan and the Bank of America credit facility totaling $4.7 million and added approximately $18.0 million net cash proceeds to the balance sheet.
- Cash balance of $19.1 million as of March 31, 2022.
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