CUI Reports Third Quarter 2015 Revenue Growth

CUI Global, Inc. today reported their unaudited financial results for the three and nine months ended September 30, 2015 as follows: Quarterly revenue increased 17% to $24.9 million versus $21.4 million. Year-to-date revenue increased 13% to $64.8 million from $57.5 million; Quarterly gross profit margin was 38%, compared to 37%, while year-to-date gross profit margin was 37% compared to 40%; Quarterly net loss of $(0.1) million or $(0.00) per share versus $(0.3) million or $(0.02) per share. Year-to-date net loss of $(4.6) million or $(0.22) per share versus $(0.9) million loss or $(0.04) per share.

Quarterly adjusted EBITDA was $1.0 million or $0.05 per share, compared to $1.8 million or $0.09 a share in Q3 2014. Year-to-date adjusted EBITDA was $(1.3) million or $(0.06) per share, compared to $4.0 million or $0.19 per share in 2014; Quarterly adjusted net income was $0.5 million or $0.02 per share, compared to $1.4 million or $0.07 per share in Q3 2014. Year-to-date adjusted net income (loss) was $(2.4) million or $(0.12) per share, compared to $3.0 million or $0.14 per share in 2014; and Cash and cash equivalents were $6.2 million with an additional $0.5 million in short-term investments.

CUI Global's president & CEO, William Clough commented, "We are very pleased with the progress across our business segments, and the combined results. Revenues increased 17% over the prior year comparable quarter and 9% versus the second quarter. In addition, earlier this month our UK energy subsidiary, Orbital Gas Systems Ltd., received and responded to the long-awaited RFQ for deployment of as many as 3,000 of our GasPT units from a large Italian natural gas transmission company. We received additional purchase orders from a large UK natural gas pipeline company for IRIS kiosks to be produced at our new 46,000 square foot manufacturing facility, which we formally opened in September."

"We are confident and excited about the opportunities ahead, building on a solid third quarter and the significant developments over the last year, including new partnerships, the CUI-Canada acquisition and the new Orbital Gas Systems, North America facility," continued Mr. Clough. "These, together with the strength in the business and demand for our products, place us in a strong position as we enter the last quarter of the year."

For the quarter ended September 30, 2015, CUI Global produced consolidated total revenues of $24.9 million and year-to-date total revenues of $64.8 million. Total revenues for the third quarter grew 9% sequentially from second quarter revenues of $23.0 million and 17% year-over-year, when compared to $21.4 million in the third quarter of 2014. For the third quarter, the power and electro-mechanical segment contributed revenues of $16.7 million and the gas segment contributed $8.2 million.

For the year-to-date period, the power and electro-mechanical segment contributed revenues of $44.0 million and the gas segment contributed $20.7 million. The revenue increase during the three and nine months ended is primarily the result of revenues generated on products acquired with the acquisition of CUI-Canada, revenues through Orbital Gas Systems, North America and sales through the distribution channel customers.

Gross profit was $9.4 million, or 38% for the quarter ended September 30, 2015 versus $8.0 million, or 37% in the same period of 2014 and $23.9 million, or 37% for the year-to-date period versus $22.7 million, or 40% during the prior year. During the three and nine months ended September 30, 2015, the power and electro-mechanical segment generated gross profit margins of 39% and 38%, respectively, while the gas segment generated gross profit margins of 35% for both periods.

The company reported a net loss of $(0.1) million or $(0.00) per share (EPS) for the quarter ended September 30, 2015 compared with a net loss of $(0.3) million or $(0.02) per share in the prior year period. For the nine months ended September 30, 2015, the company reported a net loss of $(4.6) million or $(0.22) per share compared with a loss of $(0.9) million or $(0.04) per share in the prior year period. The net loss for the three and nine months ended September 30, 2015 was primarily the result of increased selling, general and administrative expenses related to the opening of the Orbital Gas Systems, North America facility in January 2015 and the addition of CUI-Canada, Inc. in March 2015, as well as the ongoing amortization of intangible assets related to the Orbital Gas Systems Limited and CUI-Canada acquisitions.

The earnings before interest, taxes, depreciation and amortization (EBITDA) for the three and nine months ended September 30, 2015 were $0.6 million and $(2.3) million, respectively, or $0.03 and $(0.11) EBITDA per share, respectively. Adjusted EBITDA for the three and nine months ended September 30, 2015 was $1.0 million and $(1.3) million, respectively, or $0.05 and $(0.06) per share, respectively. The sales order backlog at September 30, 2015 was a consolidated $38.8 million. Of that, the power and electro-mechanical segment held a backlog of customer orders of approximately $23.5 million and the gas segment held a backlog of approximately $15.3 million.