Exhibit 99.1

 

Wireless Telecom Group INC.

 

25 Eastmans Road, Parsippany, NJ 07054

Tel. (973) 386-9696 Fax (973) 402-4042

 

WIRELESS TELECOM GROUP ANNOUNCES

SECOND QUARTER 2021 FINANCIAL RESULTS

 

NEWS RELEASE

 

Highlights for the quarter ended June 30, 2021:

 

●	Net revenues of $12.0 million, an increase of 8.2% from the same period last year, and up 6.2% from the 2021 first quarter
●	Gross profit of $6.1 million, gross profit margin of 51.0%, representing the fifth straight quarter of consolidated gross profit margin greater than 50%
●	Operating income of $165,000, compared to an operating loss of $59,000 in the same period last year
●	Net income of $1.5 million which includes gain on extinguishment of PPP loan of $2.0 million, compared to a net loss of $668,000 in the same period last year
●	Non-GAAP adjusted EBITDA of $864,000, compared to a non-GAAP adjusted EBITDA of $794,000 in the same period last year
●	New customer orders of $14.5 million, a book-to-bill ratio of 1.21
●	Backlog of $12.5 million, an increase of $6.3 million compared to June 30, 2020, the highest backlog in over 4 years

 

August 11, 2021

 

Parsippany, New Jersey – Wireless Telecom Group, Inc. (NYSE American: WTT) (the “Company”) today announced results for the three months ended June 30, 2021.

 

Tim Whelan, CEO of Wireless Telecom Group, Inc. stated, “Strong second quarter operating and financial performance is encouraging, which reflects the benefits of our long-term strategic plan and improving end-market demand. We ended the second quarter with record quarterly new bookings, as we experience strong orders across all our product groups. This was our fifth straight positive book-to-bill outcome and helped drive an increase in our second quarter backlog to $12.5 million, which is the highest quarterly backlog in the last several years.”

 

Mr. Whelan continued, “During the quarter, we continued our streak of new 5G software customers, with two new customers for our Radio, Baseband and Software solutions. In fact, over the past 5 quarters, we have added 10 new customers demonstrating increasing demand for our leading LTE/5G software and service solutions. We also realized our highest quarter of bookings in Test & Measurement with strength across all our brands. Within RF components, we realized a second quarter of higher sequential bookings and a return to over $5.0 million of quarterly bookings for our Microlab products, driven, in part, by larger project order flow. In addition, we are pleased with the forgiveness of our PPP loan, and we feel more confident about the health of the business and our ability to achieve our strategic goals of double-digit organic sales growth, gross margins above 50% and improving operating margins in 2021.”

 

 

Second Quarter 2021 Operating Results:

 

●	Net revenues of $12.0 million, an increase of $915,000, or 8.2% over the prior year period primarily due to increased sales of our digital signal processing cards at our Radio, Baseband and Software (“RBS”) product group, and higher Test & Measurement (“T&M”) revenues, partially offset by lower revenue at our RF Components (“RFC”) product group.
●	Gross profit of $6.1 million, an increase of $466,000, or 8.2% over the prior year period due to higher revenues at T&M and RBS, partially offset by lower revenues at RFC. Gross profit margin was stable with the prior year at 51.0%.
●	Backlog of $12.5 million, an increase of $2.5 million, or 25%, compared to March 31, 2021, and an increase of $6.3 million, or 100% year-over-year.
●	As a percent of revenue, total operating expenses were 49.6%, compared to 51.6% for the same period last year. Operating expenses of $6.0 million, an increase of $242,000, or 4.2% from the prior year period primarily due to an increase in headcount related expenses.
●	GAAP net income of $1.5 million compared to a net loss of $668,000 in the prior year period due primarily to the recognition of a gain on extinguishment of debt related to the forgiveness of the PPP loan in the current year as well as improved operating income.
●	Non-GAAP adjusted EBITDA of $864,000 compared to $794,000 in the prior year due primarily to higher revenues and gross profit. Non-GAAP adjusted EBITDA is a metric the Company uses to measure our core operations. A reconciliation of non-GAAP adjusted EBITDA to GAAP net income is provided later in this press release.

 

Cash Flow and Balance Sheet:

 

●	Cash provided by operations of $394,000 compared to cash used by operations of $616,000 in the prior year period, due primarily to an increase in operating income as compared to the prior year.
●	Net debt of $3.6 million as of June 30, 2021 compared to $5.4 million as of December 31, 2020.
●	No outstanding borrowings under the asset-based revolver and availability of $7.6 million after giving effect to borrowing base calculations as of June 30, 2021.

 

Conference Call

 

Wireless Telecom Group Inc. will host a conference call on August 11, 2021, at 8:30 a.m. EDT in which management will discuss second quarter 2021 results and related matters. To participate in the conference call, dial 800-346-7359 or 973-528-0008. The conference identification number is 248319. The call will also be webcast over the internet at the following URL:

https://www.webcaster4.com/Webcast/Page/1690/42411

 

A replay will be made available on the Wireless Telecom website following the conference call.

 

Contacts:

 

Mike Kandell 973-386-9696

 

SM Berger and Company 216-464-6400

 

 

Use of Non-GAAP Financial Measures and Key Performance Indicators

 

The Company reports its financial results in accordance with generally accepted accounting principles (“GAAP”). Management believes, however, that certain non-GAAP financial measures used in managing the Company’s business may provide users of this financial information with additional meaningful comparisons between current results and prior reported results. Certain of the information set forth herein and certain of the information presented by the Company from time to time may constitute non-GAAP financial measures within the meaning of Regulation G adopted by the Securities and Exchange Commission. We have presented herein a reconciliation of these measures to the most directly comparable GAAP financial measure. The non-GAAP measures presented herein may not be comparable to similarly titled measures presented by other companies. The foregoing measures do not serve as a substitute and should not be construed as a substitute for GAAP performance but provide supplemental information concerning our performance that our investors and we find useful.

 

The Company defines EBITDA as its net earnings before interest, taxes, depreciation, and amortization. “Adjusted EBITDA” is EBITDA excluding our stock compensation expense, restructuring charges, acquisition expenses, integration expenses, unrealized and realized foreign exchange gains and losses, purchase accounting adjustments, non-recurring legal fees associated with the Harris arbitration, goodwill impairment charges, loss on change in fair value of contingent consideration and other non-recurring costs. A reconciliation of net income/(loss) to non-GAAP adjusted EBITDA is included as an attachment to this press release.

 

The Company defines adjusted EBITDA margin as adjusted EBITDA divided by revenue. The Company does not provide a forward-looking reconciliation of expected adjusted EBITDA margin because the amount and significance of special items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts. These special items could be meaningful.

 

Book-to-bill ratio is the ratio of orders received to units shipped and billed for a specified period. The Company excludes billable freight from the calculation of units shipped in determining the book-to-bill ratio.

 

GAAP operating expenses (“GAAP opex”) includes research and development expenses, sales and marketing expenses, general and administrative expenses, non-cash goodwill impairment charges and loss on change in fair value of contingent consideration. The Company defines non-GAAP operating expenses (“Non-GAAP opex”) as GAAP opex excluding stock compensation expense, restructuring charges, acquisition expenses, integration expenses, depreciation and amortization expense, non-recurring legal fees associated with the Harris arbitration, non-cash goodwill impairment charges, loss on change in fair value of contingent consideration and other non-recurring costs and expenses.

 

The Company views adjusted EBITDA, adjusted EBITDA margin and non-GAAP opex as important indicators of performance, consistent with the manner in which management measures and forecasts the Company’s performance. We believe adjusted EBITDA is an important performance metric because it facilitates the analysis of our results, exclusive of certain non-cash and non-recurring items, including items which do not directly correlate to our business operations.

 

The Company believes that adjusted EBITDA and non GAAP opex metrics provide qualitative insight into our current performance; we use these measures to evaluate our results, the performance of our management team and our management’s entitlement to incentive compensation; and we believe that making this information available to investors enables them to view our performance the way that we view our performance and thereby gain a meaningful understanding of our core operating results, in general, and from period to period.

 

The Company believes the book-to-bill ratio is a key performance indicator used in measuring supply and demand in the industries in which we operate as well as measuring how quickly the Company fulfills the demand for its products.

 

 

Forward-Looking Statements

 

This press release 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. In some cases, such forward-looking statements may be identified by terms such as believe, expect, seek, may, will, intend, project, anticipate, plan, estimate, guidance, or similar words. Forward-looking statements include, among others, our ability to achieve our strategic goals of double-digit organic sales growth, gross margins above 50% and improving operating margins in 2021. Investors are cautioned that such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results, including but not limited to, the impact that the evolving COVID-19 pandemic may have on our business, our supply chain, freight costs and the economy in the future, our dependency on capital spending on data and communication networks by our customers and end users, our dependency on the deployment of 4G LTE and 5G NR private networks and related services to grow our business, the impact of the loss of any significant customers, the ability of our management to successfully implement our business plan and strategy, our ability to raise additional capital to fund our operations given our degree of leverage, product demand and development of competitive technologies in our market sector, the impact of competitive products and pricing, our abilities to protect our intellectual property rights, our ability to manage risks related to our information technology and cyber security, among others. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. These risks and uncertainties are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020. The Company’s forward-looking statements speak only as of the date of this release. The Company undertakes no obligation to publicly update or review any forward-looking statements whether as a result of new information, future developments or otherwise, as except as required by law.

 

About Wireless Telecom Group, Inc.

 

Wireless Telecom Group, Inc., comprised of Boonton, CommAgility, Holzworth, Microlab and Noisecom, is a global designer and manufacturer of advanced RF and microwave components, modules, systems, and instruments. Serving the wireless, telecommunication, satellite, military, aerospace, semiconductor and medical industries, Wireless Telecom Group products enable innovation across a wide range of traditional and emerging wireless technologies. With a unique set of high-performance products including peak power meters, signal generators, phase noise analyzers, signal processing modules, LTE PHY/stack software, power splitters and combiners, GPS repeaters, public safety components, noise sources, and programmable noise generators, Wireless Telecom Group enables the development, testing, and deployment of wireless technologies around the globe. Wireless Telecom Group is headquartered in Parsippany, New Jersey, in the New York City metropolitan area, and maintains a global network of Sales and Service offices for excellent product service and support. Wireless Telecom Group’s website address is http://www.wirelesstelecomgroup.com.

 

 

Wireless Telecom Group_INC.

 

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)

 (UNAUDITED)

(In thousands, except per share amounts)

 

		For the Three Months Ended								For the Six Months Ended
		June 30								June 30
			2021				2020				2021				2020
Net revenues		$	12,023			$	11,108			$	23,344			$	20,536
Cost of revenues			5,889				5,440				11,265				10,441
Gross profit			6,134				5,668				12,079				10,095
Operating expenses
Research and development			1,464				1,675				2,846				3,254
Sales and marketing			1,699				1,661				3,412				3,379
General and administrative			2,806				2,391				5,668				4,878
Total operating expenses			5,969				5,727				11,926				11,511
Operating income/(loss)			165				(59	)			153				(1,416	)
Extinguishment of PPP loan			2,045				-				2,045				-
Other income/(expense)			(15	)			56				8				295
Interest expense			(285	)			(246	)			(582	)			(471	)
Income/(Loss) before taxes			1,910				(249	)			1,624				(1,592	)
Tax provision/(benefit)			373				419				321				225
Net income/(loss)		$	1,537			$	(668	)		$	1,303			$	(1,817	)
Other comprehensive income/(loss):
Foreign currency translation adjustments			12				(35	)			87				(971	)
Comprehensive income/(loss)		$	1,549			$	(703	)		$	1,390			$	(2,788	)
Income/(Loss) per share:
Basic		$	0.07			$	(0.03	)		$	0.06			$	(0.08	)
Diluted		$	0.06			$	(0.03	)		$	0.05			$	(0.08	)
Weighted average shares outstanding:
Basic			21,763				21,707				21,728				21,626
Diluted			24,343				21,707				24,063				21,626

 

 

CONSOLIDATED BALANCE SHEET

(In thousands, except number of shares and par value)

 

 

		(Unaudited)
		June 30 2021				December 31 2020
CURRENT ASSETS
Cash & cash equivalents		$	4,213			$	4,910
Accounts receivable - net of reserves of $214 and $143, respectively			6,532				5,520
Inventories - net of reserves of $1,216 and $1,129 respectively			9,365				8,796
Prepaid expenses and other current assets			2,152				2,172
TOTAL CURRENT ASSETS			22,262				21,398
PROPERTY PLANT AND EQUIPMENT - NET			1,731				1,824
OTHER ASSETS
Goodwill			11,564				11,512
Acquired intangible assets, net			4,602				5,242
Deferred income taxes			5,455				5,701
Right of use assets			1,417				1,680
Other assets			509				561
TOTAL OTHER ASSETS			23,547				24,696
TOTAL ASSETS		$	47,540			$	47,918
CURRENT LIABILITIES
Short term debt		$	84			$	512
Accounts payable			2,094				1,546
Short term leases			559				534
Accrued expenses and other current liabilities			6,705				7,997
Deferred revenue			598				924
TOTAL CURRENT LIABILITIES			10,040				11,513
LONG TERM LIABILITIES
Long term debt			6,925				8,895
Long term leases			914				1,200
Other long-term liabilities			1,778				82
Deferred tax liability			455				377
TOTAL LONG-TERM LIABILITIES			10,072				10,554
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Preferred stock, $.01 par value, 2,000,000 shares authorized, none issued			-				-
Common stock, $.01 par value, 75,000,000 shares authorized 35,112,421 and 34,888,904 shares issued, 21,883,235 and 21,669,361 shares outstanding			351				349
Additional paid in capital			50,364				50,163
Retained earnings			358				(946	)
Treasury stock at cost, 13,229,186 and 13,219,543 shares			(24,573	)			(24,556	)
Accumulated other comprehensive income			928				841
TOTAL SHAREHOLDERS’ EQUITY			27,428				25,851
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	47,540			$	47,918

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 (UNAUDITED)

(In thousands)

 

		For the Six Months
		Ended June 30
		2021				2020
CASH FLOWS PROVIDED/(USED) BY OPERATING ACTIVITIES
Net Income/(Loss)		$	1,303			$	(1,817	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization			1,065				1,049
Extinguishment of PPP loan			(2,045	)			-
Amortization of debt issuance fees			150				137
Share-based compensation expense			203				210
Deferred rent			(15	)			(14	)
Deferred income taxes			320				695
Provision for doubtful accounts			71				2
Inventory reserves			85				90
Changes in assets and liabilities, net of acquisition:
Accounts receivable			(1,079	)			(1,351	)
Inventories			(645	)			(260	)
Prepaid expenses and other assets			319				(110	)
Accounts payable			585				16
Accrued expenses and other liabilities			77				737
Net cash provided/(used) by operating activities			394				(616	)
CASH FLOWS PROVIDED/(USED) BY INVESTING ACTIVITIES
Capital expenditures			(313	)			(100	)
Acquisition of business, net of cash acquired			(200	)			(7,189	)
Net cash provided/(used) by investing activities			(513	)			(7,289	)
CASH FLOWS PROVIDED/(USED) BY FINANCING ACTIVITIES
Revolver borrowings			-				16,856
Revolver repayments			-				(18,840	)
Term loan borrowings			-				8,400
Term loan repayments			(470	)			(384	)
Debt issuance fees			-				(1,261	)
PPP loan							2,045
Payment of contingent consideration			(105	)			-
Shares withheld for employee taxes			(17	)			(26	)
Net cash provided/(used) by financing activities			(592	)			6,790
Effect of Exchange Rate Changes on Cash and Cash Equivalents			14				(236	)
NET DECREASE IN CASH AND CASH EQUIVALENTS			(697	)			(1,351	)
Cash and Cash Equivalents, at Beginning of Period			4,910				4,245
CASH AND CASH EQUIVALENTS, AT END OF PERIOD		$	4,213			$	2,894
SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest		$	204			$	347
Cash paid during the period for income taxes		$	110			$	40

 

 

NET REVENUE AND GROSS PROFIT BY PRODUCT GROUP

(In thousands, unaudited)

 

		Three months ended June 30,
		Revenue								% of Revenue								Change
		2021				2020				2021				2020				Amount				Pct.
RF components		$	4,235			$	5,861				35.2	%			52.7	%		$	(1,626	)			-27.7	%
Test and measurement			5,521				4,472				45.9	%			40.3	%			1,049				23.5	%
Radio, baseband, software			2,267				775				18.9	%			7.0	%			1,492				192.5	%
Total net revenues		$	12,023			$	11,108				100.0	%			100.0	%		$	915				8.2	%

 

		Three months ended June 30,
		Gross Profit								Gross Profit %								Change
		2021				2020				2021				2020				Amount				Pct.
RF components		$	1,757			$	2,707				41.5	%			46.2	%		$	(950	)			-35.1	%
Test and measurement			3,269				2,365				59.2	%			52.9	%			904				38.2	%
Radio, baseband, software			1,108				596				48.9	%			76.9	%			512				85.9	%
Total gross profit		$	6,134			$	5,668				51.0	%			51.0	%		$	466				8.2	%

 

		Six months ended June 30,
		Revenue								% of Revenue								Change
		2021				2020				2021				2020				Amount				Pct.
RF components		$	7,372			$	10,137				31.6	%			49.4	%		$	(2,765	)			-27.3	%
Test and measurement			10,848				8,216				46.5	%			40.0	%			2,632				32.0	%
Radio, baseband, software			5,124				2,183				21.9	%			10.6	%			2,941				134.7	%
Total net revenues		$	23,344			$	20,536				100.0	%			100.0	%		$	2,808				13.7	%

 

		Six months ended June 30,
		Gross Profit								Gross Profit %								Change
		2021				2020				2021				2020				Amount				Pct.
RF components		$	2,848			$	4,649				38.6	%			45.9	%		$	(1,801	)			-38.7	%
Test and measurement			6,323				4,269				58.3	%			52.0	%			2,054				48.1	%
Radio, baseband, software			2,908				1,177				56.8	%			53.9	%			1,731				147.1	%
Total gross profit		$	12,079			$	10,095				51.7	%			49.2	%		$	1,984				19.7	%

 

 

RECONCILIATION OF NET INCOME TO NON-GAAP EBITDA AND NON-GAAP ADJUSTED EBITDA

(In thousands, unaudited)

 

 

		Three Months Ended								Six Months Ended
		June 30								June 30
		2021				2020				2021				2020
GAAP Net Income/(Loss), as reported		$	1,537			$	(668	)		$	1,303			$	(1,817	)
Tax Provision/(Benefit)			373				418				321				225
Depreciation and Amortization Expense			534				525				1,065				1,049
Interest Expense			285				246				582				471
Non-GAAP EBITDA			2,729				521				3,271				(72	)
Stock Compensation			89				128				203				210
Merger and Acquisition/Integration			72				37				72				228
Restructuring Costs			-				-				36				73
Inventory Impairment Recovery			-				(12	)			-				(13	)
US GAAP Purchase Accounting			-				114				-				290
FX (Gain)/Loss			19				4				(6	)			(235	)
PPP Loan Forgiveness			(2,045	)			-				(2,045	)			-
Non-Recurring Arbitration Legal Costs			-				2				4				3
Non-GAAP Adjusted EBITDA		$	864			$	794			$	1,535			$	484

 

RECONCILIATION OF OPEX TO NON-GAAP OPEX

(In thousands, unaudited)

 

		Three Months Ended								Six Months Ended
		June 30								June 30
		2021				2020				2021				2020
GAAP Opex		$	5,969			$	5,727			$	11,926			$	11,511
Stock Compensation			(89	)			(128	)			(203	)			(210	)
Merger and Acquisition/Integration			(72	)			(37	)			(72	)			(228	)
Restructuring Costs			-				-				(36	)			(73	)
US GAAP Purchase Accounting			-				-				-				(100	)
Depreciation & Amortization (ex. COGS)			(452	)			(432	)			(899	)			(877	)
Non-Recurring Arbitration Legal Costs			-				(2	)			(4	)			(3	)
Non-GAAP Opex		$	5,356			$	5,128			$	10,712			$	10,020