RF Industries, Ltd.

Good day, ladies and gentlemen, and welcome to the RF Industries fourth quarter and fiscal 2021 financial results conference call. All lines have been placed on the listen-only mode, and the floor will be open for your questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to Mr. Todd Kearley of MKR Investor Relations. Sir, the floor is yours.

Thank you, operator. Good morning and welcome to RF Industries' fourth quarter and fiscal 2021 financial results conference call. With me on today's call are RF Industries President and CEO Rob Dawson and Senior Vice President and Chief Financial Officer Peter Yin. Before I turn the call over to Rob and Peter, I'd like to cover a few quick items. This morning, RF Industries issued a press release announcing its fourth quarter and full year fiscal 2021 financial results. That release is available on the company's website at rfindustries.com. This call is being broadcast live over the internet for all interested parties, and the webcast will be archived on the investor relations page of the company's website. I want to remind everyone that during today's call, management will make forward-looking statements that involve risks and uncertainties. Please note that except for the historical statements, Statements on this call today may constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. When used, the words anticipate, believe, expect, intend, future, and other similar expressions identify forward-looking statements. These forward-looking statements reflect management's current views with respect to future events and financial performance, and are subject to risks and uncertainties and actual results may differ materially from outcomes contained in any forward-looking statements. Factors that could cause these forward-looking statements to differ from actual results include delays in development, marketing, or sales of products, and other lists and uncertainties discussed in the company's periodic reports on Form 10-K and 10-Q and other filings with the Securities Exchange Commission. RF Industries undertakes no obligation to update or revise any forward-looking statements. Additionally, throughout this call, we'll be discussing certain non-GAAP financial measures. Today's earnings release and the related current report on Form 8K describe the differences between our GAAP and non-GAAP reporting and present the reconciliation between the two for the periods reported in the release. With that, I'll now turn the call over to Rob Dawson, President and Chief Executive Officer. Rob?

Thank you, Todd. Bright and early on the West Coast this morning. Good morning, everyone. Welcome to our fourth quarter and year-end earnings conference call. I'd like to start with a brief review of our fourth quarter and full year results and then discuss what we're seeing now in the market and what we expect going forward before turning the call over to Peter to give more commentary on the financials. Starting with the fourth quarter, we're pleased to report our third consecutive quarter of strong sequential and year-over-year revenue growth. Sales for the quarter came in at $21.1 million, a sequential increase of 38% over the third quarter and up 97% year-over-year. On the bottom line, we generated net income of just over $800,000, non-GAAP net income of $1.1 million, and adjusted EBITDA of $1.5 million, all of which were up significantly on a year-over-year basis. It's important to note that Q4 also included several one-time charges related to our seasonal year-end performance-based compensation, as well as one-time charges related to M&A activity. Peter will have more information on that in a few minutes. For the full year, sales were up 33% over the prior fiscal year to $57.4 million, and we generated net income of $6.2 million, non-GAAP net income of $7.1 million, and adjusted EBITDA of $2.7 million, all up solidly year over year. We saw strong growth in all of our markets and channels for both the quarter and the full fiscal year, reflecting a healthy recovery in our entire business. We're pleased to be getting back to the growth plan we laid out in our long-term plan a few years back. While we had to pause a bit this past fiscal year under the operational challenges we encountered around the COVID pandemic, we're back to it and feel good about the way we're performing. and we expect more growth as we execute our plan to scale our business both organically and through M&A. More on that in a moment. As I noted last call, we continue to see signs of recovery in all markets and especially in the spending from the wireless carrier ecosystem. Over the past couple of quarters, we announced several multimillion-dollar orders from a new Tier 1 wireless carrier customer. These orders helped to bring our backlog to $33.3 million at the end of our fiscal year on October 31st. These sizable orders for our OptiFlex hybrid fiber cable solution highlight the increasing demand for our product offerings as wireless carriers accelerate their network build-outs. While our margins were down in the quarter, this was largely driven by the concentrated Tier 1 business and the impact of the current state of the supply chain and material and shipping costs. This was not unexpected, given our hybrid fiber solution has been such a large piece of our sales. The good news is we feel like we're delivering very well in the business and have been able to drop a significant amount of this revenue to our bottom line. I really appreciate the execution of our team at Cables Unlimited in Long Island to perform so well in building and fulfilling these orders in a tough market. We love this business, and while margins move around, we saw in 2018 and 2019 that large opportunities like this can transform our customer relationships, open new doors, and drop a large amount of cash onto our balance sheet. That gives us increased flexibility to run the business and invest in opportunities both organically and through M&A activity. We feel like we're very effective at deploying our resources with a keen eye on providing solid value for our shareholders. We do expect that most of the supply chain and material cost issues should normalize over the next few quarters. And as always, we also continue to monitor our pricing policies and make changes where necessary to address the overall market conditions and the related cost fluctuations. As we look ahead, we see significant room to further increase our gross margins through large opportunities and through an improved product mix that hasn't yet fully materialized, including our higher margin small cell and DAC offerings. As I've noted before, the layering of project wins on top of our growing core business gives us confidence that our diverse product platform is a springboard for strong future revenue growth. With our complete product offering, we're now doing business with every one of the companies in the wireless tier one ecosystem, including many of the largest tower and neutral host companies. As I've noted before, our investments in our sales and business development organization are building positive momentum around new business. Looking at some of our product areas and market segments, Our core distribution business remains healthy and diverse and continues to grow. Our RF coaxial cable and connector products and our C Enterprises fast-turn fiber products together make up our primary offers sold through distribution. Both of these two major product areas showed meaningful growth over the prior fiscal year, and we expect to see steady growth in our new fiscal year as we continue to build our baseline of core revenue. Turning to our small cell and DAC thermal cooling offerings, These are huge opportunities that we expect will increase sales in the coming year. Our Shroff Tech business, where these products reside, had their best sales quarter of the year in Q4, and for the full year, we're up meaningfully in sales compared to the prior year. The pipeline continues to build, and we have a strong backlog of orders. We have product actively shipping to several small sale players, as well as ongoing discussions regarding future deployments with others. We've also started field trials with a few large customers, and some smaller projects are also moving forward. Additionally, we look forward to sharing some product roadmap announcements very soon. All of this is giving us increased confidence in the growth prospects of our small cell and DAC business in the new fiscal year. Now turning to M&A. We're excited to have entered into a definitive agreement last week to acquire Microlab, the radio frequency components business of Wireless Telecom Group. for an aggregate cash consideration of $24.25 million. Microlab designs and manufactures high-performance RF and microwave products, enabling signal distribution and deployment of in-building DAS, wireless-based stations, and small cell networks. Their products are known worldwide for their superior quality and performance and are considered the gold standard in RF and microwave distribution systems. For the 12-month period ended September 30th, 2021, They generated unaudited revenue of approximately $16 million and adjusted EBITDA of approximately $3.7 million. The transaction has been unanimously approved by the board of directors of both companies and is subject to various terms and conditions, including approval by wireless telecom groups shareholders. Wireless Telecom Group will file a proxy statement regarding the proposed transaction with the SEC, and the closing of the transaction is anticipated to occur in the first calendar quarter of 2022. This acquisition is in line with our strategic plan that we've been working toward to drive revenue growth both organically and through the acquisition of good quality companies with passive components that give us access to new products that we can sell through our growing distribution channel. With our focus on the significant growth opportunities we expect to see in servicing the small cell and DAS markets, we believe Microlabs products will provide additional scale and opportunity for further revenue growth. With what we know about their product lines, we believe they will also help us take our gross margins up, and we expect the deal to be accretive immediately. So to conclude, We remain focused on successfully executing on our long-term growth plan to not only grow organically, but also through acquisitions. We're actively engaged with every top-tier company in the carrier ecosystem as a result of the investments in our go-to-market capabilities. With our expanded and complete product offering, we continue to grow our baseline business and see significant growth opportunities in small cell and DAC that we expect will increase sales and positively impact our margins in the coming year. and our large backlog gives us a nice tailwind as we start our new fiscal year. So as we look ahead, the first quarter is typically our toughest quarter seasonally. We expect revenue to be down versus Q4, but certainly up significantly over last year's Q1. We expect core revenue to increase throughout the year and to generate year-over-year revenue growth in fiscal 2022 of at least 10%, which should put our total sales for fiscal 22 at something more than $63 million. This growth rate does not include any microlab revenue for the new fiscal year, and any additional hybrid fiber orders would also be upside to that number as well. With that, I'll now turn the call over to Peter for a review and discussion of the financial results for the quarter. Peter?