For the quarter ended March 31, 2014, CUI Global, Inc. produced consolidated total revenues of $16.9 million. Gross revenues for the first quarter grew 11% sequentially from fourth quarter revenues of $15.2 million and 68% year-over-year, when compared to $10.1 million in the first quarter of 2013. SG&A decreased as a percentage of revenues from 39% in Q1 2013 to 37% in Q1 2014. Gross profit was for the quarter was $7.0 million, a 77% increase from the $3.9 million in first quarter 2013.
CUI Global's president & CEO, William Clough commented, "We are pleased to be off to a good start in 2014 as we have been able to build on the momentum created towards the end of 2013. We saw significant increases in revenues in both segments and our backlog remains robust."
"Our distribution agreements with Ives Equipment Corporation and Benchmark Instrumentation & Analytical Services represent significant steps in our plan to develop a substantial distribution network for our ground breaking technology, while our agreement with Yokogawa United Kingdom Ltd., is another example of the value (in both credibility and revenue) of the Orbital acquisition," Clough continued.
Clough explained, "Additionally, we were pleased to hear that National Grid had recognized our VE® Technology as the preferred option for British Natural Gas Pipelines, and plan to recommend the technology to the European Union and Britain as best practice. We were especially pleased to announce the adoption of our IRIS-RTU units by National Grid in a joint press release between ourselves and GE Intelligent Platforms Group – A release that was included on GE's proprietary website and publicized through GE's social networks.
The cost of revenue for the quarter ended March 31, 2014 was $9.9 million, versus $6.1 million for the same period in 2013. The increase when compared to the first quarter of 2013 is primarily the result of increased revenues associated with the addition of Orbital Gas Systems in Q2 2013 and approximately $1.2 million of revenue growth in the power and electro-mechanical segment during the first quarter of 2014. As a percentage of sales, the cost of revenue remained relatively consistent at 59% for Q1 2014 compared with 61% in Q1 2013 with the change associated with the product mix delivered during the period.
The company reported a net loss of $(487,918) or $(0.02) per share (EPS) for the quarter ended March 31, 2014. In the prior year period, the Company reported a net loss of $(462,092) or $(0.04) per share. The net loss, during the quarter ended March 31, 2014 as compared to the prior year period is primarily the result of $785 thousand of amortization expense associated with the intangibles from the Orbital Gas Systems Limited acquisition and consistent increases in operating expenses offset by increased revenues. Adjusted net income for the first quarter of 2014 was $521,676 or $0.03 per share as compared with an adjusted loss of $(374,303) or $(0.03) per share in the prior year comparable quarter.
The earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter were $728 thousand or $0.04 EBITDA per share. Adjusted EBITDA for the first quarter 2014 was $900 thousand or $0.04 per share.
Operating activities generated negative cash flow of $103 thousand during the quarter ended March 31, 2014, versus positive cash flow from operations of $63 thousand for the same period in 2013. The change in cash provided by operations is related to the changes in the operating assets and liabilities balances associated with increases revenues during the quarter as well as the net loss during the quarter.
In addition, as an operating unit, the power and electro-mechanical segment (CUI, Inc. and CUI Japan) posted YTD revenues of $10.8 million, which represented a $1.2 million (12%) increase as compared to the same period in 2013. The sales order back log at March 31, 2014 was a consolidated $37.9 million. The company had $15.2 million of cash and cash equivalents as of March 31, 2014, a decrease of $1.34 million since December 31, 2013. The Company had an additional $11.7 million in short-term investments, an increase of $0.86 million since December 31, 2013.
"We also introduced a new family of digital point of load dc-dc modules that set performance benchmarks in efficiency, power density, and transient response to address the rapidly-rising power challenges in distributed power architectures. We believe these products will be a key driver in our future revenue growth. I believe our positive results are a testament to the entire CUI Global team. Today, the company has some of the 'best-in-class' engineering solutions being delivered to a broad customer base in the natural gas, energy, utility, power generation, emissions, manufacturing, networking and automotive industries and we are optimistic about the future. Each of the announcements we made in the first quarter represents another major stride for CUI Global as we continue to put the pillars for success in place. We are at the forefront of an abundant opportunity as a Company, and we look forward to carrying forward our focus and determination throughout the remainder of 2014 and beyond," concluded Clough.
