CUI Global, Inc., a platform company dedicated to the acquisition, development, and commercialization of new, innovative products, today reported their unaudited financial results for the second quarter, ended June 30, 2014, including: (Comparisons to 2Q 2013) Quarterly revenue was up 6% to $19.2 million from $18.2 million; Gross Profit margin was 40%, as compared to 39%; Consolidated loss of $(66) thousand or $(0.00) per share versus $437 thousand profit or $0.02 per share; Quarterly adjusted EBITDA was $1.3 million or $0.06 a share, as compared to $1.8 million or $0.10 a share in Q2 2013; Year to date Adjusted EBITDA was $2.2 million or $0.10 a share, as compared to $1.8 million or $0.12 a share in 2013; Cash and cash equivalents were $15.2 million with an additional $12.0 million in short-term investments; Power and Electro-Mechanical segment unaudited backlog of $14.0 million as of June 30, 2014; and Gas segment unaudited backlog of $23.7 million as of June 30, 2014.
CUI Global’s President and CEO, William Clough commented, “We are pleased with our second quarter and year to date results, as we continue to build on our momentum from the first quarter. We saw increases in revenues in both segments and our backlog remains robust.”
“We have now signed up 33 new distributors in Europe and North America. In addition, we announced in early May the fact that National Grid had selected our IRIS technology for use in remotely controlling their entire grid. Since that announcement, we have continued discussions with GE and are now preparing a presentation of the IRIS technology for joint marketing and sales presentation with GE to such North American customers as Kinder-Morgan, Williams Pipeline, Spectra Energy and others,” Clough continued.
Clough explained, “We believe these distributor agreements and our cooperation with GE’s Intelligent Platform Group represent significant steps in our plan to develop a substantial distribution network for our ground breaking technology and, specifically, for sales targeting North American energy producers and transporters.”
“Sales of our GasPTi product remain steady, as we have now received orders for 21 units in 2014. In addition, we have now completed a four month field trial of six units by Snam Rete Gas. Those trials went very well, with all six units passing the testing. The VE technology remains a strong product for us and is now being considered by a number of large energy producers and transporters in North America and Europe for implementation on their pipelines, both as sampling systems and as thermowell replacements,” concluded Clough.
For the quarter ended June 30, 2014, CUI Global produced consolidated total revenues of $19.2 million and year to date consolidated total revenues of $36.1 million. Gross revenues for the second quarter grew 14% sequentially from first quarter revenues of $16.9 million and 6% year-over-year, when compared to $18.2 million in the second quarter of 2013.
The cost of revenue for the quarter ended June 30, 2014, was $11.5 million, versus $11.1 million for the same period in 2013. The increase when compared to the second quarter of 2013 is primarily the result of increased revenues associated with growth in the power and electro-mechanical segment. As a percentage of sales, the cost of revenue remained relatively consistent at 60% for Q2 2014 compared with 61% in Q2 2013 with the change associated with the product mix delivered during the period. Gross profit was $14.7 million year to date versus $10.9 million in 2013 and $7.7 million for the quarter ended June 30, 2014 versus $7.0 million during Q2 2013.
SG&A decreased 3% as a percentage of revenues for the second quarter sequentially from first quarter and increased 5% as a percentage of revenues as compared to the quarter ended 2013.
The company reported a net loss of $(66) thousand or $(0.00) per share (EPS) for the quarter ended June 30, 2014 as compared with a net profit of $437 thousand or $0.02 per share in the prior year period. The net loss, during the quarter ended June 30, 2014 as compared to the prior year period is primarily the result of consistent increases for selling, general and administrative expenses related to the increased revenues and selling and marketing efforts associated with introducing new technologies and Orbital to the global marketplace.
The earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter were $868 thousand or $0.04 EBITDA per share. Adjusted EBITDA for the second quarter 2014 was $1.3 million or $0.06 per share.
Operating activities generated positive cash flow of $49 thousand during the six months ended June 30, 2014, versus positive cash flow from operations of $603 thousand for the same period in 2013. The change in cash provided by operations is primarily related to the changes in the operating assets associated primarily with increased revenues during the period as well as the net income generated by operating activities exclusive of non-cash expenses during the year to date period.
In addition, as an operating unit, the power and electro-mechanical segment (CUI, Inc. and CUI Japan) posted revenues of $13.6 million for the quarter, which represented a $985 thousand (8%) increase as compared to the same period in 2013. The gas segment posted revenues of $5.6 million in the second quarter. The power and electro-mechanical segment unaudited order back log was $14.0 million and the gas segment unaudited order back log was $23.7 million as of June 30, 2014.