TUALATIN, Ore., Aug. 9, 2019 /PRNewswire/ -- CUI Global, Inc.
(NASDAQ: CUI), (the "Company") today reported
modified unaudited financial results for the three months and
six months ended June 30, 2019.
Note: CUI Global has filed a Form 12b-25 with the
Securities and Exchange Commission for an automatic five-day
extension to file its Quarterly Report on Form 10-Q for the quarter
ended June 30, 2019. The
Company requires additional time to resolve non-cash potential
adjustments related to the valuation of its equity method
investment in Virtual Power Systems, Inc. As a result, the Company
is presenting the financial performance summaries for the second
quarter and first half of 2019 shown below, revenue, gross profit,
loss from operations and cash and cash equivalents but not
consolidated net loss, loss per diluted share and Adjusted
EBITDA. In addition, the Company is not providing
consolidated financial statements for the second quarter and first
half of 2019 in this press release.
Second Quarter 2019 Unaudited Financial Performance
Summary: (comparisons to prior year period)
- Total revenues were $22.8 million
compared to $23.1 million;
- Gross profit was $7.3 million
compared to $7.6 million;
- Gross margin was 32.2% compared to 33.0%;
- Loss from operations was $2.5
million compared to an operating loss of $4.2 million;
- Cash and cash equivalents were $2.6
million and restricted cash was $0.5
million at June 30, 2019;
- Power and Electromechanical (P&EM) segment unaudited
backlog was $19.2 million at
June 30, 2019 as compared to
$21.8 million at December 31, 2018; and
- Energy segment backlog was $11.8
million at June 30, 2019 as
compared to $15.7 million at
December 31, 2018.
First Half 2019 Unaudited Financial Performance
Summary: (comparisons to prior year period)
- Revenue was $45.8 million
compared to $45.1 million;
- Gross profit was $15.1 million
compared to $14.2 million;
- Gross margin was 32.9% compared to 31.5%;
- Loss from operations was $5.5
million compared to an operating loss of $7.9 million.
Financial Accounting Standard Board Accounting Standard
Update 2016-02
Effective January 1, 2019, the
Company adopted Financial Accounting Standard Board Accounting
Standard Update 2016-02, Leases (Topic 842), which requires lessee
recognition of lease assets and lease liabilities on the balance
sheet, at the beginning of fiscal 2019. As of June 30,
2019, $7.2 million was included
with non-current assets, $1.0
million with current liabilities and $6.4
million with non-current liabilities, on the condensed
consolidated balance sheets as a result of the new lease
standard.
"For the second quarter, we narrowed our consolidated net loss
substantially year-over-year and also on a sequential basis due to
significant revenue gains in our Energy segment together with
certain expense reductions," stated William
Clough, president and CEO of CUI Global. "We continue to see
strong demand for our engineering and integration services in
North America that is being driven
by oil and gas customers in the Permian Basin and South Texas processing facilities. Power &
Electromechanical segment revenue was lower year-over-year due to
lower sales to distribution customers who are holding higher than
normal inventory levels."
Continued Mr. Clough, "We continued to execute our strategy to
utilize CUI Global as the public company platform through which to
aggregate energy infrastructure companies into a new marketplace
entrant that can effectively compete in the growing North American
energy services industry. We have culled our proposed list of
target companies announced on May 15
to one and are close to entering into a purchase and sale agreement
("PSA") with a new acquisition candidate that is expected to be far
less dilutive and generally more favorable for CUI Global than the
proposed May 15 transaction. With the
signing of that PSA, Jim O'Neil will
join CUI Global as its CEO. We remain steadfast in our belief
that our strategy, led by Jim and addressing a large and
growing market, offers our shareholders a compelling path to higher
value."
Company Conditions
Based on recent actions taken by the Company to align its
structure to expected revenue, management's current business
forecast, quarter-end cash balances, the new line of credit with
Bank of America, and additional measures available to generate
cash, the Company believes that it will have sufficient cash flows
to meet its obligations for the next 12 months. However, the
Company's ability to meet its obligations is dependent on its
ability to execute on its plans, of which success cannot be
assured.
Conference Call
Management will host a conference call today, August 9, 2019 at 8:30
a.m. ET to discuss these results as well as recent corporate
developments. After management's opening remarks, there will be a
question and answer period. To access the call, please dial (888)
734-0328 and provide conference ID 8369167. For international
callers, please dial (678) 894-3054. The live webcast of the
conference call and accompanying slide presentation can be accessed
through the 'Events & Presentations' page of the CUI Global
Investor Relations website (www.cuiglobal.com).
For those unable to attend the live call, a telephonic replay
will be available until August 25,
2019. To access the replay of the call dial (855) 859-2056
or (404) 537-3406 and provide conference ID 8369167. An archived
copy of the webcast and slide presentation will also be available
on the 'Events & Presentations' page of the CUI Global Investor
Relations website.
About CUI Global, Inc.
Delivering Innovative Technologies for an Interconnected
World . . . . .
CUI Global, Inc. is a publicly traded company dedicated to
maximizing shareholder value through the acquisition and
development of innovative companies, products and technologies.
From Orbital Gas Systems' advanced GasPT® platform targeting the
energy sector, to CUI Inc.'s advanced power platform serving the
networking and telecom space, CUI Global and its subsidiaries have
built a diversified portfolio of industry leading technologies that
touch many markets. As a publicly traded company, shareholders can
participate in the opportunities, revenues, and profits generated
by the products, technologies, and market channels of CUI Global
and its subsidiaries. But most important, a commitment to conduct
business with a high level of integrity, respect, and philanthropic
dedication allows the organization to make a difference in the
lives of their customers, employees, investors and global
community.
For more information please
visit: http://www.cuiglobal.com
Important Cautions Regarding Forward Looking
Statements
This document 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.
Such statements are subject to risks and uncertainties that could
cause actual results to vary materially from those projected in the
forward-looking statements. The Company may experience significant
fluctuations in future operating results due to a number of
economic, competitive, and other factors, including, among other
things, our reliance on third-party manufacturers and suppliers,
government agency budgetary and political constraints, new or
increased competition, changes in market demand, and the
performance or reliability of our products. These factors and
others could cause operating results to vary significantly from
those in prior periods, and those projected in forward-looking
statements. Additional information with respect to these and other
factors, which could materially affect the Company and its
operations, are included in certain forms the Company has filed
with the Securities and Exchange Commission.
External IR Counsel:
LHA Investor Relations
Sanjay M. Hurry
212-838-3777
cuiglobal@lhai.com
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SOURCE CUI Global, Inc.