Wireless Telecom Group, Inc. (NYSE:WTT)

WEB NEWS

Thursday, November 8, 2018

Research

Wireless Telecom Group, Inc. (AMEX:WTT)  ($1.87, $39.3M market cap) , a company that designs, develops, manufactures, and markets radio frequency (RF) and microwave based products announced Q3 2018 results:

  • Sales $14.0 million vs $12.5 million in the prior year
  • EPS of $0.03 vs $0.03 in the prior year

“We expect to operate our business with the goal of driving meaningful growth over the next several years, improving both our revenue scale and profitability metrics. We intend to accomplish this through agile investments in new products and markets, aggressive go-to-market and sales strategies that expand our customer base, a disciplined merger and acquisition process, and continuous lean improvements to drive operating leverage. We are enthusiastic about our sales funnel and some large opportunities currently in the bidding and quoting stage. We expect to finish fiscal year 2018 with more than $52 million of revenue, or 13% revenue growth year over year, which would represent our second consecutive year of double digit growth and a return to profitability.”

You can see our past coverage on WTT here.


Tuesday, February 13, 2018

Research

Wireless Telecom Group (NYSE AMEX:WTT) ($2.11; $48.0M market cap) designs and manufactures radio frequency (RF) and microwave-based products for wireless and advanced communications industries in the Americas, the Asia Pacific, Europe, the Middle East, and Africa.  WTT announced that it is has been selected by Lockheed Martin (LMT) to supply integrated software and hardware for an innovative satellite communications (satcom) project.

Joseph Baldasano, LM Fellow and Satcom Project Chief Engineer at Lockheed Martin, said: "CommAgility has been able to deliver a valuable combination of LTE expertise and support, together with excellent hardware and software products, that makes them a key component of our satcom project."

We maintain a small long position in WTT and also added it to our pre-earnings watchlist in late January.


Thursday, August 10, 2017

Research

WTT ($1.40) announced Q2 2017 results:

  • $11.9 million vs $7.6 million in the prior year

  • Non-GAAP EPS of $0.01 vs $0.00

Quotes from management:

“We accomplished a number of important operational objectives in the quarter and we are very pleased with reporting our best quarter of non-GAAP EBITDA since the third quarter of 2014. We completed a management team restructuring which created a new role of Chief Technology Officer and eliminated the role of Chief Operating Officer. We undertook a review of our corporate strategy, sharpened our end-market solution alignment and accelerated our strategic product roadmap direction towards the growth in small cell deployment in our Network Solutions segment and broader solution ranges in our Test & Measurement segment. Coupled with our focus on inventory management during the quarter which included an implementation of our lean manufacturing program and a detailed bottoms up review of our inventory net realizable value, we recorded an impairment charge to inventory. This represents another step in our ongoing commitment to a culture of lean operations, continuous improvements and profitable growth.”

On February 22, 2017 we stated we initiated a long position in WTT as it was trading near book value and had just announced a possible transformational acquisition.  We continue to hold as management executes its restructuring efforts.  It seems the top line is beginning to grow, it is unclear still at what level of profitability the Company can reach.  


Wednesday, February 22, 2017

Research

Initiated Long Position In WTT

With this stock trading near book value, its recent possible transformational acquisition possibly improving its growth opportunities we have decided to initiate a long position.


Tuesday, February 21, 2017

Research

WTT ($1.72) announced it has acquired CommAgility, a privately-held developer of embedded signal processing and RF modules, LTE PHY/stack software for 4G/5G mobile networks and related applications.  Acquisition is expected to be immediately accretive earnings.  Management stated:

“The transaction with CommAgility is directly aligned with our strategy to add transformational growth opportunities to the Company and enhance our scale,” said Tim Whelan, Wireless Telecom’s CEO. “The combination creates a powerful expansion of the value proposition of our solution set by adding software centric solutions and a combined hardware and software skill set which enhances our product design capability to address large market opportunities. CommAgility also brings world-class engineering talent focused on LTE wireless communications that will allow us to accelerate our innovation to networking trends driven by 5G deployment and IoT development.”

“We are excited and believe that Wireless Telecom is the ideal partner to accelerate our growth initiatives to build upon our successful 10-year history,” said Edward Young, Managing Director and co-founder of CommAgility. “We share many of the same values including our dedication to innovation and commitment to customer excellence. We both have deep technical skills and incredible industry talent which together, strengthen our market leadership and create value for our customers, employees and shareholders.”

“CommAgility is expected to add approximately $10m USD of annual revenue to the combined business; on a pro-forma basis, the combined businesses generated revenue and Adjusted EBITDA (1) of $39.9 million and $2.1 million respectively for the twelve months ending September 30, 2016.”

On December 1, 2016 we highlighted WTT as a telecom company that may benefit from the infrastructure buildout of distributed antenna systems (DAS).  You can see our brief Dec. 1 note here, and we are still trying to reach out to management.

Do you know how much debt CommAgilty has that will be carried over to WTT?Here is their presentation, and I got confused about the acquisition multiple.Page 7 says: "Attractive purchase multiple valuations of 8.8x (UK GAAP Adjusted EBITDA)"Page 12 says: "Attractive purchase multiples (4.5x-6.2x 2018... (more)

Tuesday, January 3, 2017

Research

WTT ($1.91) - Shares of WTT have been strong recently, hitting a new high on December 29, 2016 of $1.98.  In our December 1, 2016 research note we stated that WTT was back on our radar due to the infrastructure buildout of DAS) distributed antenna systems that many telecoms are embarking on.   See our note here.  Another interesting angle in the WTT story is that Horton Capital Management, who we have been highlighting as part of the REPR story, is also a stakeholder in WTT.  Horton Capital’s filing denote a more activist role in REPR (13D filer), however, we still believe it is worthwhile to track the 13G activity.  


Thursday, August 14, 2014

Comments & Business Outlook

Second Quarter 2014 Financial Results:

  • Revenue was 10.4 million, an increase of 19.5% from 8.7 million in the same quarter last year.
  • Adjusted EPS is $0.04 vs $0.05 in prior year.

Paul Genova, CEO of Wireless Telecom Group, Inc. commented, “We continue to experience strong order flow in our Network Solutions segment and are encouraged by our Test and Measurement customers’ recent order flow in our new USB peak power meter. We remain committed to our ongoing investment in products for the DAS and LTE marketplace which we believe will benefit the Company through increased revenue, earnings and improved cash flow.”

Genova continued, “In April, we repurchased 4.8M shares from our largest shareholder for $2.00 per share. We believe the stock repurchase represents an attractive use of our capital and reflects our commitment to the enhancement of long-term shareholder value.”

Genova continued, “We look forward to continued improvement in our operating activities and cash flows as we execute our strategic plan and pursue opportunities that will increase shareholder value.”


Friday, April 11, 2014

Notable Share Transactions

PARSIPPANY, N.J.--(BUSINESS WIRE)--Wireless Telecom Group, Inc. (NYSE MKT:WTT) announced today that the Company has repurchased 4,815,110 shares of its common stock, representing approximately 20% of its total shares outstanding (prior to the repurchase), from its largest shareholder, Investcorp Technology Ventures L.P. and its affiliates (“Investcorp”), for an aggregate purchase price of approximately $9.6 million, or $2.00 per share. The repurchased shares will be returned to the Company’s treasury.

Separately, Horton Capital Partners Fund, L.P. and related entities have acquired 1,657,556 shares representing approximately 8.6% of the total shares outstanding (after the repurchase of shares returned to the treasury), of common stock of the Company held by Investcorp. As a result of the Company’s repurchase and such additional transactions, Investcorp no longer holds any securities of the Company.

“We are excited to have completed the transaction and look forward to the growth opportunities ahead. We believe the stock repurchase represents an attractive use of our capital and reflects our commitment to the enhancement of long-term shareholder value,” stated Paul Genova, Chief Executive Officer of Wireless Telecom Group, Inc.

The Company funded the transaction from available cash.

Wireless Telecom Group, Inc. has received and accepted the resignations of Glenn Luk and Anand Radhakrishnan as directors of the Company, effective April 9, 2014. Mr. Luk, an advisor to Investcorp Technology Partners, served as a director of the Company since May 2010. Mr. Radhakrishnan, a principal at Investcorp Technology Partners, served as a director of the Company since September 2011. The Board of Directors wishes to thank Messrs. Luk and Radhakrishnan for their services.

Alan Bazaar has been elected to serve as the Chairman of the Board of the Company until the 2014 Annual Meeting of Stockholders. Mr. Bazaar, a Partner and Chief Executive Officer of Hollow Brook Wealth Management LLC, has served on the Board of Directors of the Company since June 2013. Mr. Bazaar also serves as the Chairman of the Company’s Nominating and Corporate Governance Committee, which will lead the Board’s search for new directors.


Monday, March 31, 2014

Comments & Business Outlook

Fourth Quarter 2013 Results

  • For the quarter ended December 31, 2013, the Company reported net sales of $9,532,000, compared to $8,216,000 for the same period in 2012, an increase of 16.0%.
  • The company reported EPS of $0.05 compared to $0.04 for the same quarter 2012.

Paul Genova, CEO of Wireless Telecom Group, Inc., commented, “We continue to achieve strong revenue and income growth in the Network Solutions segment. Revenues increased by 54%, driven by our strong position in the North American DAS market and we continued to gain traction globally. Segment income increased by 59% to $5.6M. The primary driver of our growth is the implementation of LTE and DAS to satisfy increasing users’ demand for bandwidth that outpaces existing supply. We believe our Network Solutions segment is well-positioned to continue to take advantage of this market growth.”

“Our Test and Measurement segment showed softness in 2013 in large part due to the US Government sequester, which had a negative effect on order flow during the year. However, we are encouraged by the recent large order of $1.1M received from the FAA, which will be fulfilled in 2014, coupled with the release of our new Boonton USB Peak Power Meter product in the first quarter of 2014.”

Genova continued, “In 2013, we increased our cash position to $16.6M driven by strong operating performance and the sale of a long-term real estate holding. Operations for the year ended December 2013 were impacted slightly by reduced gross margins primarily due to revenue softness in our Test and Measurement segment, non-cash charges related to our stock compensation plans and professional fees related to our strategic business review. In order to supplement the GAAP operating results, we have included within this release certain non-GAAP financial measures to enhance the evaluation of our operating results in 2013. We look forward to ongoing improvements in our operations and cash flows as we continue to execute our strategic plan and pursue opportunities that will increase shareholder value.”


Friday, November 22, 2013

Comments & Business Outlook

Third Quarter 2013 Results

  • For the quarter ended September 30, 2013, the Company reported net sales of $8,791,000, compared to $7,385,000 for the same period in 2012, an increase of 19.0%.
  • The company reported EPS of $0.04, compared to $0.03 for the same quarter 2012.

Paul Genova CEO of Wireless Telecom Group, Inc. commented “Gains generated by strong revenue and profit growth in our Network Solutions segment were offset by softness in our Test and Measurement segment. Revenue in our Network Solutions segment for the nine months of 2013 increased 66% to $16,020,000 compared to the prior year period, while segment income increased 90% to $4,095,000 compared to the prior year period.”

Stated Genova “We believe that the product and channel investments we made in Network Solutions have been critical in driving the strong growth thus far this year. Our Test and Measurement segment experienced soft order flow during the first three quarters of 2013; however, recent order activity has been very encouraging, including a $1.1M contract award received in early August from the FAA.”

Genova continued “Operating income for the periods ended 2013 were impacted by lower revenue in our Test and Measurement segment reducing gross margins, professional fees related to our pursuit of strategic opportunities and non-cash charges related to our stock compensation plans. However, our cash position improved to $14,200,000 and we plan to continue executing our strategic plan building upon current order momentum driving towards a strong finish to 2013 with expected improvement in revenue, earnings and cash flow.”


Wednesday, August 14, 2013

Research

Research Note Sent to Members on 4/15/2013

is a stock that provided the GeoTeam with stellar returns during the 1990’s; in fact, our investment in this company was one of our first home runs.  The company manufactures components that test the quality of products in the wireless infrastructure market.  Commercial customers generate 70% of the company’s sales, while the remaining 30% comes from government customers.

It has not been able to regain the glory that it experienced in the early to mid 90’s, however we have noticed that the company’s revenue performance has begun to gradually improve since the 3rd quarter of 2011.  During this period, the company has reported revenues of at least $7 million in 5 of the last 6 quarters, including sales of over $8 million in the 2012 4th quarter.  These levels of revenue have not been achieved since 2008, when the company reported revenue of $51 million while, coincidentally,  losing money.

WTT 2012 revenue came in around $30 million, as compared to $26.8 million, $24.6 million, and $22.8 million in 2011, 2010, and 2009, respectively.  The main reason for the decrease in revenue since 2008 arose from the closure of an underperforming division.

It is encouraging that the company has been able to report a profit on a lower revenue base, with EPS of:

  • $0.13 in 2012,
  • $0.10 in 2011, and
  • $0.04 in 2010.  

Overall it looks like the company is in a much leaner position than it has been in for many years.  Top-line growth is being driven by increased demand for WTT’s products as the installation/upgrade of the distributed antenna system (DAS) accelerates.  A DAS network can provide more coverage and is more efficient than a traditional antenna.  Since only 5% of the wireless market utilizes DAS, a good deal of growth opportunity for WTT could be in the cards.

Assuming WTT can continue to capitalize on its growth initiatives, we believe the stock can attain $3.25 (25 on trailing EPS).  We are eager for an opportunity to interview WTT management and will initiate a long position in WTT.


Comments & Business Outlook

Second Quarter 2013 Results

  • For the quarter ended June 30, 2013, the Company reported net sales of $8,705,000, compared to $7,092,000 for the same period in 2012, an increase of 22.7%.
  • The Company also reported net income of $1,058,000 or $0.04 per diluted share for the second quarter of 2013, compared to net income of $655,000, or $0.03 per diluted share, for the second quarter of 2012, an increase of 61.4%.

Paul Genova, CEO of Wireless Telecom Group, Inc. stated “We are excited by the continued growth in our Network Solutions business segment, resulting in improvements to both revenue and segment income. Revenue in our Network Solutions segment for the first half of 2013 increased 49% to $9,748,000 compared to the prior year period, while segment income for the first half of 2013 increased 48% to $2,312,000 compared to the prior year period. Although our Test and Measurement segment experienced soft order flow during the first half of 2013, recent order activity has been very encouraging, including a $1.1M contract award received in early August from the FAA.” 

Continued Genova, “We value our relationship with those government agencies critical to our success, including the FAA, and continue to be a proud supplier of test instruments in support of ongoing maintenance and development of state of the art communication systems.” 

Genova continued, “We will continue to execute our strategic plan and build upon current order momentum as we head into the second half of 2013.” 


Wednesday, May 15, 2013

Comments & Business Outlook

First Quarter 2013 Results

  • For the quarter ended March 31, 2013, the Company reported net sales of $6,797,000, compared to $6,902,000 for the same period in 2012, a decrease of 1.5%.
  • The Company also reported net income of $346,000 or $0.01 per diluted share for the first quarter of 2013, compared to net income of $656,000, or $0.03 per diluted share, for the first quarter of 2012, a decrease of 47.2%.

Paul Genova, CEO of Wireless Telecom Group, Inc., stated, “Despite experiencing softness in our Test and Measurement business segment during the first quarter, we continue to see growth in our Network Solutions business segment, particularly for products sold into distributed antenna systems. Revenue in our Network Solution segment increased by 14% compared to the same quarter of the prior year and order activity continues to be robust, as evidenced by strong order bookings during the period and an increased backlog.” 

Genova continued, “Net income for the quarter was affected by higher operating expenses due in part to ongoing investment in our Network Solutions business in anticipation of increased future revenue.” 

Continued Genova, “We will continue to execute our strategic plan and remain highly focused on improving overall results and maximizing shareholder value.”