Mon, Mar 17, 8:10 PM (41 days ago)
**RF Industries, Ltd. (RFIL) Q1 2025 Financial Summary** **Company Overview:** RF Industries, Ltd. (RFIL) is a national manufacturer and marketer of interconnect products and systems, including high-performance components such as RF connectors, cables, and cooling systems. The company operates through two segments: RF Connector and Cable Assembly, and Custom Cabling Manufacturing and Assembly. **Financial Performance:** - **Revenue:** Net sales increased by 42.2% to $19.2 million for Q1 2025 compared to $13.5 million in Q1 2024. The Custom Cabling segment saw a significant increase of 123.4% in sales, driven by tier one carrier applications for direct air cooling. The RF Connector segment experienced a slight decrease in sales due to lower inventory levels at distributor customers and fewer carrier projects. - **Profit Margins:** Gross profit increased by $2.4 million to $5.7 million, with gross margins improving to 29.8% from 24.5% in the previous year. This improvement was attributed to higher sales and a favorable product mix. - **Operating Expenses:** Engineering expenses decreased by $0.1 million, while selling and general expenses increased by $0.4 million due to higher variable compensation related to commissions and bonuses. - **Net Loss:** The company reported a net loss of $0.2 million for Q1 2025, an improvement from a net loss of $1.4 million in Q1 2024. The diluted loss per share was $0.02, compared to $0.13 in the previous year. - **Cash Flow:** RFIL generated $0.6 million in cash from operating activities, primarily due to better inventory management and supply chain conditions. Capital expenditures were $27,000, and the company repaid $0.1 million on the revolving credit facility with EBC. **Financial Health and Liquidity:** - **Cash and Cash Equivalents:** As of January 31, 2025, RFIL had $1.3 million in cash and cash equivalents, up from $0.8 million in October 2024. - **Working Capital:** The company had working capital of $11.7 million and a current ratio of approximately 1.7:1. - **Backlog:** The backlog decreased to $15.2 million from $19.5 million due to the completion of a large tier one carrier project. - **Debt:** Outstanding borrowings under the EBC Credit Agreement were $8.1 million as of January 31, 2025. **Future Operations and Uncertainties:** - **Cost-Cutting Measures:** RFIL has implemented cost-cutting measures to reduce operating expenses and improve liquidity. The company plans to continue pursuing additional cost reduction measures and organic growth in revenue and profitability. - **Acquisitions and Expansions:** The company may undertake acquisitions to diversify its product offerings and customer base, which could require additional capital. - **Market Risks:** Changes in trade policies, tariffs, and import/export regulations could negatively impact the company's business performance and financial condition. - **Customer Concentration:** A significant portion of sales is dependent on a few key customers, particularly in the Custom Cabling segment. A reduction or cancellation of orders from these customers could significantly impact future revenues and profits. **Conclusion:** RFIL showed improved financial performance in Q1 2025, with increased revenue and reduced net loss. The company's focus on cost-cutting measures and strategic initiatives aims to enhance liquidity and drive future growth. However, uncertainties related to customer concentration, market risks, and potential acquisitions need to be carefully managed.