RF Industries, Ltd.

Greetings. Welcome to the RF Industries first quarter fiscal 2026 financial results conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. Now, I would like to turn the call over to our host, Donnie Case, Investor Relations. Please go ahead.

Thank you, Tom, and good afternoon, everyone, and welcome to RF Industries' first quarter fiscal 2026 earnings conference call. With me today are RFI's Chief Executive Officer, Rob Dawson, President and COO, Ray Babisi, and CFO, Peter Yin. We issued our press release after market today, and that release is available on our website at RFIndustries.com. I want to remind everyone that during today's call, management will be making forward-looking statements that involve risk and uncertainties. Please note that information on this call today may constitute forward-looking statements under the securities exchange laws. 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 risk and uncertainties. Actual results may differ materially from the outcomes contained in any forward-looking statements. Factors that could cause these forward-looking statements to differ from actual results include the risk and uncertainties discussed in the company's reports on Form 10-K and 10-Q and other filings with the SEC. RF Industries undertakes no obligation to update or revise any forward-looking statements. Additionally, throughout the call, we will be discussing certain non-GAAP financial measures. Today's earnings release and related current report on Form 8K describe the differences between our GAAP and non-GAAP reporting. With that, I'll turn the conference over to Rob Dawson, Chief Executive Officer. Go ahead, Rob.

Thank you, Donnie. Good afternoon, everyone. Welcome to our first quarter fiscal 2026 conference call. I'll lead off with highlights from the quarter. Ray will provide a progress report on sales and operations, and Peter will cover our financial results before we open the call to your questions. I'm pleased to report that we're off to a great start in fiscal 2026. Net sales were $19 million in the quarter. This was just shy of our record first quarter last year in absolute numbers, but for totally different reasons. Last year in fiscal Q1, we had a large project that created a welcome anomaly and produced increased sales in what is historically a seasonally softer period. Net sales for Q1 this year, however, reflected a far greater diversity of products, customers, and end markets, which I believe will set the stage for upcoming quarters. That said, for me, the big takeaway for this quarter was the meaningful expansion in profitability. Compared to the first quarter last year with similar net sales, gross profit margin improved 250 basis points to 32.3%, operating income tripled to $177,000, And adjusted EBITDA decreased, sorry, adjusted EBITDA increased, wouldn't be positive if I said decreased, increased, EBITDA increased 22% to nearly $1.1 million. To our long-term shareholders, thank you for your patience and confidence that we would deliver on what we promised, a more diversified sales base and increased profits from our significant operating leverage. What's exciting to me is that our entire team is feeling the momentum. And in our business, momentum doesn't just happen. It's earned when strategy and execution move together in lockstep. Over the past few years, we've worked hard to reach this inflection point where we have a clear line of sight to scale both our business and profitability. As you saw in our earnings press release, I'd also like to note that that momentum has produced a huge increase in our backlog, which currently stands at $18.6 million. That's an increase of over $6 million since we last reported earnings in mid-January when the backlog was $12.4 million. Now I'll share specifics on why our business model and strategy are working and why we believe it's sustainable. First, we've worked our way up the food chain with the largest communications companies in the country. We're no longer just a vendor, but a solutions provider with a portfolio of technology forward products and solutions that address many applications within telecom. This expanded access and our high-value product portfolio led to new opportunities that in some cases fall squarely into the operating budgets versus the capex spend. This makes us far less reliant on the cyclical Tier 1 wireless capital spending and aligns RFI to participate more consistently in the year-round maintenance and replacement schedule that's critical to maintaining network quality and integrity. Next, our state-of-the-art systems like direct air cooling and small cell are gaining traction. Our DAC systems are especially adaptable to many applications in new end markets. Equipment at the edges of networks requires temperature control to operate efficiently, and our DAC's ability to lower energy costs by up to 75% while being rugged and easy to maintain delivers a compelling customer proposition. We're serving an impressive and growing customer list here. These solutions have opened doors to many new customers and markets. We're now reinforcing our presence in new verticals, such as wireline, cable, and edge data centers. We believe that we've identified a significant unmet need at the edge of the network, close to where data is generated and consumed. While most know that hyperscale data centers require massive pooling systems, we believe that the small buildings, cabinets, and enclosures at the edges of networks are just as important, and our DAC systems provide a powerful and cost-efficient solution. Additionally, our custom cabling solutions team is engineering, producing, and delivering high-quality, mission-critical solutions to customers across several markets, including industrial, communications, and aerospace, where we continue to win repeat orders from a leader in this market. The strong performance and commitment to innovation and quality from our team continues to add to our credibility and reputation. We refined our go-to-market strategy to specifically target new markets for RFI. Our sales team is doing a terrific job of developing relationships in our target markets and have opened doors and elevated our opportunity set. Our customer roster is amazing. It includes a host of well-known names. For competitive reasons, we generally don't name customers, but our client list certainly makes the team proud. Ray will talk more about our go-to-market progress and operations in his remarks shortly. Structurally, our company is in great shape. Our team has done an outstanding job in diversifying our supply chain with redundant manufacturing sources, both international and domestic, that feed into our U.S. production operations. This allows us to flex up for more demand without incurring any material increase in overhead or capex. This capital light approach has been a big factor in increasing our operating leverage. Financially, RFI is also in good shape. We significantly improved our free cash flow over the past several quarters, reflecting our operational execution, margin expansion, and tighter capital discipline. Last year, we renegotiated our revolving credit facility with improved terms, which should drive significant annual savings. All of this has allowed us to greatly reduce our net debt. While fiscal 25 was a breakout year for RFI, our team is even more excited about 2026. We feel confident that we can execute against our strategic priorities and similar to the trajectory in 2025 and supported by the large increase in our backlog. With what we know today, we expect revenue growth to accelerate in the back half of the year. Finally, I want to thank the RFI team that continues to execute and deliver great results. Thank you to our customers for allowing us to partner with you and to our shareholders for your support. With that, I'll turn the call over to Ray.