PARSIPPANY, N.J.--(BUSINESS WIRE)--Wireless Telecom Group, Inc. (NYSE American: WTT) announced today results for the second quarter ended June 30, 2019.
Tim Whelan, CEO of Wireless Telecom Group, Inc., commented, “Our second quarter financial results met our expectations resulting in improved operating income and net income over last year. We are excited about our new product introductions, customer wins, and partner collaborations across all segments of our business this year, further enhancing our positioning to benefit from growth in defense spending, network densification and 5G testing and deployment.”
Whelan continued, “We remain optimistic about the topline momentum for the remainder of 2019 and are confident that specific projects in our sales funnel will be drivers of second half performance. Beyond 2019, our funnel of large opportunities, strategic partnerships, and market tailwinds strengthen our conviction in our 2023 targets.”
For the quarter ended June 30, 2019, the Company reported consolidated net revenues of $13,508,000, compared to $13,414,000 for the same period in 2018, an increase of 0.7%. Network Solutions revenue was flat compared to the prior year. Embedded Solutions revenue increased 11.7% on higher sales of digital signal processing hardware, somewhat offset by a decrease of 9.7% in Test and Measurement revenue on lower government shipments compared to the same quarter last year. The Company expects government shipments to increase in the second half of the year.
Consolidated gross profit in the second quarter was $6,133,000, or 45.4% of revenue, compared to $6,170,000 or 46.0% of revenue, for the same period in 2018. The slight decrease was primarily due to a decrease in high margin software and service revenue in Embedded Solutions, partially offset by favorable product mix and cost reduction initiatives in Test and Measurement.
The Company also reported a $150,000 reduction in consolidated operating expenses from $6,137,000 in the second quarter of 2018 to $5,987,000 in the same period in 2019. The decrease was primarily related to lower G&A costs and contingent consideration associated with the CommAgility transaction, offset by higher headcount deployment in research and development in the area of 5G roadmap development.
Net income for the quarter ended June 30, 2019 was $156,000, compared to a net loss of $180,000 for the same period in 2018.
Non-GAAP Adjusted EBITDA for the quarter ended June 30, 2019 was $1,127,000, compared to $1,076,000 for the same period in 2018. The Company’s explanation of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to net income (loss) are set out below in this press release.
New customer orders for the quarter increased 10% to $13,084,000 compared to $11,871,000 in the same quarter last year. The Company’s consolidated backlog of firm orders to be shipped in the next twelve months was $7,215,000 at June 30, 2019, compared to the June 30, 2018 backlog of $8,800,000.
Outlook
The Company continues to expect full year 2019 revenue growth in the low to mid-single digits, comparable gross margins to 2018, and improved operating profitability.
Beyond 2019, the Company reaffirms its expectation to grow revenues organically between 10% and 12% over the next four years based on the long term trends of network densification and 5G deployment, private LTE network expansion and increased military spend. The Company also expects strong organic growth to be driven by multiple internal initiatives including the continuation of new product introductions, channel expansion, and operational excellence. The Company’s 2023 targets include annual revenues of $100 million, inclusive of strategic acquisitions, gross profit margins between 47% and 49%, and Adjusted EBITDA margins of approximately 15%. The Company defines Adjusted EBITDA margins as Adjusted EBITDA divided by revenue (see use of Non-GAAP Financial Measures below).
About Wireless Telecom Group, Inc.
Wireless Telecom Group, Inc., comprised of Boonton Electronics, CommAgility, Microlab and Noisecom, is a global designer and manufacturer of advanced radio frequency and microwave components, modules, systems and instruments. Serving the wireless, telecommunication, satellite, military, aerospace, semiconductor and medical industries, Wireless Telecom Group products enable innovation across a wide range of traditional and emerging wireless technologies. With a unique set of high-performance products including peak power meters, signal analyzers, signal processing modules, LTE PHY and stack software, power splitters and combiners, GPS repeaters, public safety monitors, noise sources, and programmable noise generators, Wireless Telecom Group supports the development, testing, and deployment of wireless technologies around the globe. Wireless Telecom Group is headquartered in Parsippany, New Jersey, in the New York City metropolitan area, and maintains a global network of Sales and Service offices for excellent product service and support. Wireless Telecom Group’s website address is http://www.wirelesstelecomgroup.com.
