PARSIPPANY, N.J.--(BUSINESS WIRE)--Wireless Telecom Group, Inc. (NYSE American: WTT) announced today results for the third quarter ended September 30, 2019.
Tim Whelan, CEO of Wireless Telecom Group, Inc., commented, “Our third quarter performance reflects challenges related to key customers currently experiencing project timing differences from those we anticipated for the second half of the year. Delays in orders for a few large Network Solutions projects, a delay in receipt of Test & Measurement purchase orders under existing government awards, and unexpected lower sales by Embedded Solutions to one of our largest customers combined to reduce top line revenues in the quarter as compared to the year ago period.”
Whelan continued, “We have been focused on strategic account expansion and development partnerships and made some very good progress with these initiatives during the quarter. We have qualified a number of new, large 5G opportunities in connection with our Release 15 compliant stack software for 5G solutions, which we announced to the market on October 31st. These large 5G opportunities include solutions that we expect will include higher margin software sales in our Embedded Solutions segment. We expect contract decisions on these opportunities in 2020. Though we have made meaningful progress qualifying strategic sales pursuits, the expected revenue ramp from new initiatives is not fast enough to offset the delays and pushes in other project timing this late in 2019.”
Signing of Definitive Agreement to acquire Holzworth Instrumentation Inc.
In a separate release this morning, the Company announced the execution of a Definitive Agreement to acquire Holzworth Instrumentation Inc., a Boulder, Colorado based provider of specialty phase noise analyzers and signal generators. Holzworth instruments are used by government labs, the semiconductor industry, and network equipment providers, among others, in research and automated test environments. The Company expects to close this acquisition in the months ahead.
Whelan commented “Acquisitions are an important part of our long-term growth strategy, and we see strong potential in the future pipeline. Holzworth is a perfect addition to our specialty noise generation and high-performance RF measurement solutions. The Holzworth acquisition is aligned with our focus on the growth of test and measurement solutions which will enable the future of wireless technology in radar, satellite communications, and 5G.”
Financial Results
For the quarter ended September 30, 2019, the Company reported consolidated net revenues of $10,812,000, compared to $14,019,000 for the same period in 2018. Network Solutions revenue decreased 14.1% compared to the prior year on fewer large projects, Embedded Solutions revenue decreased 38.8% on lower software and service revenues and lower sales of digital signal processing hardware to one of our largest customers, and Test & Measurement revenue decreased 18.7% on lower government shipments compared to the same quarter last year.
Consolidated gross profit in the third quarter was $4,825,000, or 44.6% of revenue, compared to $6,464,000 or 46.1% of revenue, for the same period in 2018. The slight decrease was primarily due to a decrease in Network Solutions gross profit due to volumes and a competitive pricing environment, which was only partially offset by favorable product mix and cost reduction initiatives in Test & Measurement.
The Company also reported a slight reduction in consolidated operating expenses, decreasing from $5,545,000 in the third quarter of 2018 to $5,503,000 in the current period in 2019. The decrease was primarily related to lower general and administrative costs offset by higher expenses in research and development in the area of 5G roadmap development.
Net loss for the quarter ended September 30, 2019 was $461,000, compared to net income of $558,000 for the same period in 2018.
Non-GAAP Adjusted EBITDA for the quarter ended September 30, 2019 was $97,000, compared to $1,755,000 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 were $10,974,000 compared to $11,274,000 in the same quarter last year. The Company’s consolidated backlog of firm orders to be shipped in the next twelve months was $7,596,000 at September 30, 2019, compared to the September 30, 2018 backlog of $6,122,000.
Outlook
The Company expects revenue of $49 to $50 million for the full year 2019, excluding the impact of acquisitions, and remains committed to executing against its organic and acquisition growth strategy to accomplish $100 million of revenue in 2023.
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.
