R F INDUSTRIES LTD Q4 FY2024 earnings call

• Fourth quarter performance showed improving trends with net sales growth, increased gross margin, and first operating profit in several quarters.
• Shipped significant hybrid fiber from backlog, leading to a fresher backlog with diverse product mix.
• Rebooted sales team with experienced talent to target key markets and products.
• Focus on sales growth, profit improvement, aiming for at least 10% adjusted EBITDA margin. Streamlined operations and reduced expenses.
• Strengthened product offering with small cells, distributed antenna systems, industrial connectivity, and DAC thermal cooling.
• Opportunity in Tier 1 wireless carrier ecosystem due to pent-up demand for 4G/5G and network densification.
• Explored new market segments like stadiums/venues, with revitalized market expected to be $42 billion by 2029.

Fourth quarter net sales were $18.5 million, up 16% from $15.9 million in Q4 2023 and 10% sequentially from $16.8 million in Q3 2024. Gross profit margin for Q4 increased to 31.3%. Full year sales were $64.9 million, down 10% from $72.2 million in fiscal 2023. Adjusted EBITDA for Q4 was $908,000, and non-GAAP earnings per share were $0.04. Debt was paid down to just above $8 million, a significant improvement from $14.1 million at the end of fiscal 2023. A large amount of hybrid fiber from the backlog was shipped in Q4, helping clear older inventory.

• Fiscal 2025 first quarter expected to be roughly in line with Q4 2024 revenue ($18.5 million), a significant increase from $13.5 million in Q1 2024.
• Top line expected better than 2024; focus on profitability and sales growth.
• Expectations of continued sales growth and profit improvement with operating leverage.

• Increasing costs outside control such as wage pressures and escalating insurance expenses.
• Backlog can vary wildly and may not always be a reliable indicator of short-term sales.

Q: What was the main contributor to the revitalized top line and what's driving Q1 outlook?

A: In Q4, a significant amount of hybrid fiber from backlog shipped. For Q1, it's a product mix shift with better bookings and a stronger backlog.

Q: Status of facility rationalization?

A: Heavy lifting done, but some tweaks for load balancing and potential savings.

Q: Update on DAC orders?

A: Had success with multiple customers, regional and market growth, with OpEx spend allocation.

Q: Details on sales force change?

A: Added experienced people with existing relationships, targeted approach, and people attracted due to company reputation.