CUI GLOBAL INC.
CUI GLOBAL INC.
0.810 USD (-1.82%)
15 min delay - NASDAQ Stocks
Open: 0.810
Change: -0.015
Volume: 300
Low: 0.810
High: 0.810
High / Low range: 0
Type: Stocks
Ticker: CUI
ISIN:

CUI Global Reports Unaudited First Quarter 2019 Financial Results

  • 9
CUI Global Reports Unaudited First Quarter 2019 Financial Results
- Separately Company Announces Transformative Transaction -
- Management to Host Conference Call at 4:30 p.m. ET Today -

PR Newswire

TUALATIN, Ore., May 15, 2019 /PRNewswire/ -- CUI Global, Inc. (NASDAQ: CUI), (the "Company") today reported its unaudited financial results for the three months ended March 31, 2019.

CUI Global, Inc. Logo. (PRNewsFoto/CUI Global, Inc.) (PRNewsFoto/)

First Quarter 2019 Financial Performance Summary: (comparisons to prior year period)

  • Total revenues were $23.0 million compared to $22.0 million;
  • Gross profit was $7.7 million compared to $6.6 million;
  • Gross margin was 33.6% compared to 29.9%;
  • Consolidated net loss was $(3.0) million compared to $(3.3) million;
  • Loss per basic share was $(0.11) compared to $(0.11) per basic share;
  • Adjusted EBITDA was $(2.0) million compared to $(2.7) million;
  • Cash and cash equivalents were $0.8 million and restricted cash was $0.5 million at March 31, 2019;
  • Power and Electromechanical (P&EM) segment unaudited backlog was $19.6 million at March 31, 2019, compared to $21.8 million at December 31, 2018; and,
  • Energy segment unaudited backlog was $13.4 million at March 31, 2019, compared to $15.7 million at December 31, 2018.

"Our first quarter results reflect continued strength in our P&EM segment and the fruits of business development initiatives in our Energy segment focused on the buildout of energy services infrastructure in the U.S.," said William J. Clough, president and CEO of CUI Global. "In our Power & Electromechanical segment, the continuation of strong order patterns drove higher direct sales and gross margin. We also acquired a 21.4% ownership share of Virtual Power Systems (VPS) to capitalize on the growing software-defined platform opportunity in data centers areas beyond power utilization.

"In our Energy segment, we are seeing demand for engineering and integration services in North America as operators and engineering, procurement, and construction companies undertake infrastructure buildouts to support the U.S.' position as the top, global exporter of oil and natural gas. Our new, larger facility in Houston, a growing reputation for technical and operational excellence, and our inclusion on more vendor-approved lists has expanded our funnel of new award opportunities. In the U.K. we are sustaining our push into the biomethane market that was catalyzed last year by the RHI incentive scheme while also aggressively pursuing pre-sales opportunities ahead of CAPEX spend by in-country gas network operators. Subsequent to the close of the quarter, we received our first orders for GasPT from SAMSON AG to be used for previously untapped industrial applications, and are encouraged by our joint continued business development activities."

Concluded, Mr. Clough, "Looking ahead, multiple avenues for Energy segment revenue developed over the past two years, together with continued strong performance from our P&EM segment, keep us on a path to long-term growth. We have the technology and business development foundation to pursue our growth goals and ensure our long-term success."

Financial Accounting Standard Board Accounting Standard Update 2016-02

Effective January 1, 2019, the Company adopted Financial Accounting Standard Board Accounting Standard Update 2016-02, Leases (Topic 842), which requires lessee recognition of lease assets and lease liabilities on the balance sheet, at the beginning of fiscal 2019.  As of March 31, 2019, $7.4 million was included with non-current assets, $1.0 million with current liabilities and $6.6 million with non-current liabilities, on the condensed consolidated balance sheets as a result of the new lease standard. Additionally, the Company recorded a $2.9 million adjustment to accumulated deficit to recognize the deferred gain that was originally recorded as part of the December 2018 sale/leaseback of the Tualatin headquarters.

Conference Call

Management will host a conference call today, May 15, 2019 at 4:30 p.m. ET to discuss these results as well as recent corporate developments. After management's opening remarks, there will be a question and answer period. To access the call, please dial (888) 734-0328 and provide conference ID 9779396. For international callers, please dial (678) 894-3054. The live webcast of the conference call and accompanying slide presentation can be accessed through the 'Events & Presentations' page of the CUI Global Investor Relations website (www.cuiglobal.com).

For those unable to attend the live call, a telephonic replay will be available until May 31, 2019. To access the replay of the call dial (855) 859-2056 or (404) 537-3406 and provide conference ID 9779396. An archived copy of the webcast and slide presentation will also be available on the 'Events & Presentations' page of the CUI Global Investor Relations website.

About CUI Global, Inc.

Delivering Innovative Technologies for an Interconnected World . . . . .

CUI Global, Inc. is a publicly traded company dedicated to maximizing shareholder value through the acquisition and development of innovative companies, products and technologies. From Orbital Gas Systems' advanced GasPT2 platform targeting the energy sector, to CUI Inc.'s digital power platform serving the networking and telecom space, CUI Global and its subsidiaries have built a diversified portfolio of industry leading technologies that touch many markets. As a publicly traded company, shareholders are able to participate in the opportunities, revenues, and profits generated by the products, technologies, and market channels of CUI Global and its subsidiaries. But most importantly, a commitment to conduct business with a high level of integrity, respect, and philanthropic dedication allows the organization to make a difference in the lives of their customers, employees, investors and global community.

For more information please visit www.cuiglobal.com.

Important Cautions Regarding Forward Looking Statements

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are subject to risks and uncertainties that could cause actual results to vary materially from those projected in the forward-looking statements. The Company may experience significant fluctuations in future operating results due to a number of economic, competitive, and other factors, including, among other things, our reliance on third-party manufacturers and suppliers, government agency budgetary and political constraints, new or increased competition, changes in market demand, and the performance or reliability of our products. These factors and others could cause operating results to vary significantly from those in prior periods, and those projected in forward-looking statements. Additional information with respect to these and other factors, which could materially affect the Company and its operations, are included in certain forms the Company has filed with the Securities and Exchange Commission.

Media Contact:

External IR Counsel:

CUI Global, Inc.

LHA Investor Relations

Jeff Schnabel

Sanjay M. Hurry

Main: 503-612-2300

212-838-3777

press@cuiglobal.com

cuiglobal@lhai.com

- Financial Tables to Follow -

CUI Global, Inc.

Condensed Consolidated Balance Sheets



March 31,


December 31,

(in thousands, except share and per share amounts)

2019


2018


(unaudited)



Assets:




Current Assets:




Cash and cash equivalents

$

793



$

3,979


Trade accounts receivable, net of allowance of $273




and $167, respectively

13,270



14,416


Inventories, net of allowance of $2,652 and $2,495, respectively

11,342



13,042


Contract assets

2,618



1,744


Note receivable, current portion

309



318


Prepaid expenses and other current assets

1,867



1,982


Total current assets

30,199



35,481






Property and equipment, less accumulated depreciation of




$4,130 and $4,234, respectively

5,201



5,973


Right of use assets - operating leases

7,422




Goodwill

13,089



13,089


Other intangible assets, less accumulated amortization of $13,789




and $13,190, respectively

13,476



13,861


Restricted cash

523



523


Convertible notes receivable



655


Investment - equity method

5,278




Deposits and other assets

573



585


Total assets

$

75,761



$

70,167






Liabilities and Stockholders' Equity:




Current Liabilities:




Accounts payable

$

6,192



$

6,480


Operating lease obligations - current portion

975




Short-term overdraft facility



1,344


Line of credit



979


Accrued expenses

5,590



4,851


Contract liabilities

2,453



2,226


Refund liabilities

2,594



2,417


Deferred gain on leaseback, current portion



289


Total current liabilities

17,804



18,586






Overdraft facility

965




Line of credit

1,460




Long term note payable, related party

5,304



5,304


Operating lease obligations, less current portion

6,589




Deferred tax liabilities

1,922



1,922


Deferred gain on leaseback, less current portion



2,599


Other long-term liabilities

162



218


Total liabilities

34,206



28,629






Commitments and contingencies








Stockholders' Equity:




Preferred stock, par value $0.001; 10,000,000 shares authorized;




no shares issued at March 31, 2019 or December 31, 2018




Common stock, par value $0.001; 325,000,000 shares




authorized; 28,581,953 shares issued and outstanding at




March 31, 2019 and 28,552,886 shares issued and




outstanding at December 31, 2018

29



29


Additional paid-in capital

169,938



169,898


Accumulated deficit

(124,108)



(123,993)


Accumulated other comprehensive loss

(4,304)



(4,396)


Total stockholders' equity

41,555



41,538


Total liabilities and stockholders' equity

$

75,761



$

70,167



 

CUI Global, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)


(In thousands, except per share
amounts)

For the three months ended March 31,


2019


2018





Total revenues

$

23,009



$

21,966






Cost of revenues

15,282



15,389






Gross profit

7,727



6,577






Operating expenses:




Selling, general and administrative

9,587



9,201


Depreciation and amortization

522



529


Research and development

604



620


Provision for bad debt

106



6


Other operating income

(2)








Total operating expenses

10,817



10,356






Loss from operations

(3,090)



(3,779)






Other income (expense), net

219



330


Interest expense

(85)



(114)






Loss before taxes

(2,956)



(3,563)






Income tax expense (benefit)

47



(302)






Net loss

$

(3,003)



$

(3,261)






Basic and diluted weighted average




common shares outstanding

28,583,600



28,488,032






Basic and diluted loss per
common share

$

(0.11)



$

(0.11)


 

CUI Global, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


(in thousands)

For the three months ended March 31,


2019


2018

CASH FLOWS FROM OPERATING ACTIVITIES:




Net loss

$

(3,003)



$

(3,261)


Adjustments to reconcile net loss to net cash used in




operating activities:




Depreciation

277



264


Amortization of intangibles

468



466


Stock issued and stock to be issued for compensation, royalties and services

51



66


Unrealized gain on derivative liability



(84)


Provision for bad debt expense and returns allowances

106



6


Deferred income taxes



(250)


Inventory reserve

113



58


Non-cash unrealized foreign currency gains

(218)



(295)


Gain on disposal of assets

(2)








(Increase) decrease in operating assets:




Trade accounts receivable

1,130



(1,040)


Inventories

82



910


Contract assets

(841)



625


Prepaid expenses, deposits and other assets

122



(137)


Right of use assets - operating leases

283




Increase (decrease) in operating liabilities:




Accounts payable

(279)



(694)


Operating lease obligations

(264)




Accrued expenses

(1,143)



(308)


Refund liabilities

177



386


Contract liabilities

220



385


NET CASH USED IN OPERATING ACTIVITIES

(2,721)



(2,903)






CASH FLOWS FROM INVESTING ACTIVITIES:




Purchases of property and equipment

(69)



(154)


Proceeds from sale of property and equipment

2




Investments in other intangible assets

(148)



(239)


Investment in investment - equity method

(345)




NET CASH USED IN INVESTING ACTIVITIES

(560)



(393)






CASH FLOWS FROM FINANCING ACTIVITIES:




Proceeds from overdraft facility

5,272



4,982


Payments on overdraft facility

(5,681)



(4,155)


Proceeds from line of credit

7,916



1,166


Payments on line of credit

(7,436)



(1,166)


Payments on financing lease obligations

(1)



(1)


Payments on mortgage note payable



(24)


Payments on contingent consideration



(45)


NET CASH PROVIDED BY FINANCING ACTIVITIES

70



757






Effect of exchange rate changes on cash

25



53


Net decrease in cash, cash equivalents and restricted cash

(3,186)



(2,486)


Cash, cash equivalents and restricted cash at beginning of period

4,502



12,646


CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF
PERIOD

$

1,316



$

10,160


Reconciliation of Non-GAAP Financial Measures

EBITDA, Adjusted EBITDA and Adjusted Net Income (loss) are non-GAAP financial measures and are reconciled in the table below. These non-GAAP financial measures do not represent funds available for management's discretionary use and is not intended to represent cash flow from operations. EBITDA, Adjusted EBITDA and Adjusted Net Income (loss) should not be construed as a substitute for net loss or as a better measure of liquidity than cash flow from operating activities, which is determined in accordance with United States generally accepted accounting principles ("GAAP"). EBITDA, Adjusted EBITDA and Adjusted Net Income (loss) exclude components that are significant in understanding and assessing the company's results of operations and cash flows. In addition, EBITDA, Adjusted EBITDA and Adjusted Net Income (loss) are not terms defined by GAAP and as a result our measure of EBITDA, Adjusted EBITDA and Adjusted Net Income (loss) might not be comparable to similarly titled measures used by other companies. However, EBITDA, Adjusted EBITDA and Adjusted Net Income (loss) are used by management to evaluate, assess and benchmark the company's operational results and the company believes EBITDA, Adjusted EBITDA, and Adjusted Net Income (loss) are relevant and useful information which are often reported and widely used by analysts, investors and other interested parties in the Company's industry. Accordingly, the Company is disclosing this information to permit a more comprehensive analysis of its operating performance, to provide an additional measure of performance and liquidity and to provide additional information with respect to the Company's ability to meet future debt service, capital expenditure and working capital requirements. Adjusted Net Income (loss) eliminates the amortization expenses associated with intangible assets acquired with Orbital Gas Systems Limited and CUI-Canada, as well as non-cash expenses associated with stock and stock options for compensation, royalties and services during the period and impairment of goodwill and intangible assets.


(in thousands)







For the Three Months Ended



March 31,



2019


2018

EBITDA:





Net loss


$

(3,003)



$

(3,261)


Plus:  Interest expense


85



114


Plus:  (Benefit) provision for taxes


47



(302)


Plus:  Depreciation and amortization


745



730


EBITDA


$

(2,126)



$

(2,719)












Adjusted EBITDA:





Plus: Provision for bad debt


106



6


Plus:  Unrealized gain on derivative




(84)


Plus:  Stock and options issued and stock to be issued for
compensation, royalties and services


51



66


Adjusted EBITDA


$

(1,969)



$

(2,731)







Adjusted net loss:





Net loss


$

(3,003)



$

(3,261)


Plus:  Amortization expense of Orbital and CUI -
    Canada acquisition intangibles


300



325


Plus:  Stock and options issued and stock to be issued for
compensation, royalties and services


51



66


Adjusted net loss


$

(2,652)



$

(2,870)







 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/cui-global-reports-unaudited-first-quarter-2019-financial-results-300850014.html

SOURCE CUI Global, Inc.

PR Newswire