RF Industries Ltd has declared profitable results in its fiscal second quarter ending April 30, 2017. The second quarter fiscal 2017 sales of the company reached $7.6 million compared to $7.7 million from last year. The net income recorded was $78,000, or $0.01 per diluted share, compared to a net loss of $113,000, or $0.01 per share, in the same quarter last year.
While the Custom Cabling and Manufacturing segment (Custom Cabling) of the company posted a loss for the second quarter of fiscal 2017, primarily due to an 11% sales decline of $5.0 million compared to $5.6 million in the same quarter last year, the RF Connector and Cable Assembly segment (RF Connector) returned to profitability, as sales increased from 25.4% to $2.6 million compared to $2.1 million in the same quarter last year.
The Gross profit for the second quarter of fiscal 2017 was $2.0 million (25.6%) of sales, compared to gross profit of $2.4 million (30.4%) of sales in the same quarter last year. Overall gross profit was primarily affected by a lower margin product mix at RF Connector and lower sales at Custom Cabling.
The Second quarter fiscal 2017 operating expenses were $1.9 million (24.7% of sales), down from $2.4 million (31.4% of sales), in the same quarter last year, led by a decline of $567,000 (25.2%), in general and administrative expenses to $1.7 million from $2.3 million in the same quarter last year. According to RF Industries, this was one of the primary reasons of the profitable growth.
For the first half of fiscal 2017, RF Industries recorded sales of $14.3 million compared to sales of $14.5 million for last year. The net loss suffered being $115,000, or $0.01 per share, compared to a net loss of $467,000, or $0.05 per share last year. RF Connector returned to profitability in the first half of fiscal 2017 with a sales gain of 27.4% to $5.2 million compared to sales of $4.0 million in the same period last year. The Custom Cabling sales for the first six months of fiscal 2017 declined 13.0% to $9.1 million from $10.5 million from last year, resulting in an operating loss for the first half of fiscal 2017, compared to an operating profit in the same period last year.
The company believes that the strong sales gains at RF Connector are benefiting from increased demand in the Distributed Antenna Systems market. Additionally, their general and administrative expenses too have been reduced by over $1.0 million, or 21.5%, in the first half of fiscal 2017, compared to last year. Although continuing weakness in the wireless telecom industry has impacted sales at RF Connector and Custom Cabling, the company is optimistic that sales will pick up for the remainder of fiscal 2017.
While the company’s gross profit declined in 2017 due to a lower margin product mix at RF Connector and lower sales at Custom Cabling, it successfully reduced its operating expenses with $919,000 for the first half of fiscal 2017, led by a 21.5% reduction in general and administrative expenses to $3.7 million, or 25.8% of sales as compared to $4.7 million, or 32.3% of sales, in the same period last year.
The operating loss of the company in the first half of fiscal 2017 narrowed by $356,000, to $293,000 which stood at $649,000 in the same period last year. The reduction in the loss was primarily driven by a $747,000 improvement in pretax profit at RF Connector.
