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RF Monolithics Reports Q3

DALLAS, Texas — RF Monolithics, Inc. (NASDAQ: RFMI) today reported sales of $8.3 million for its third quarter ended May 31, 2011, representing a 9.3% increase from $7.6 million in sales for the second quarter of the current year but a 4.9% decrease from $8.7 million in sales for the third quarter of FY 2010. For the first three quarters of fiscal 2011 sales were $24.4 million, compared to sales of $25.1 million for the first three quarters of the prior year.

The Company reported third quarter net income of $72,000 or $0.01 per share, compared to net income for the comparable prior year third quarter ended May 31, 2010 of $219,000 or $0.02 per share and net income for the second quarter of fiscal 2011 of $77,000 or $0.01 per share. Cumulative net income for the three quarters ended May 31, 2011 was $309,000 or $0.03 per share compared to $291,000 for the three quarters ended May 31, 2010 or $0.03 per share.

RFM President and CEO, Farlin A. Halsey said, “For the third quarter, we reported a recovery in sales from our historical seasonally low second quarter and maintained bottom line profitability, despite experiencing manufacturing production issues in our supply chain. We outsource most of our production, which includes complex products and processes and from time to time our supply chain partners experience production and material supply issues. In the quarter, we experienced delays in shipments for some Wireless Solutions products, which meaningfully contributed to our sales decrease from prior year third quarter levels. We have taken proactive measures and will continue to deploy resources to improve our supply chain and support our offshore manufacturers, as required. We have made significant progress in resolving the production issues, and we are now returning to normal production levels.

“Third quarter results illustrate the robust nature of our current business model, enabling us to generate profitability and substantial levels of adjusted EBITDA, despite lower sales than last year. Our operating expenses remained flat in comparison to last year while we continued our marketing and product development initiatives designed to generate future sales growth. Lower inventories and reduced reliance on bank credit under our revolving line of credit allowed us to reduce interest expense in comparison to last year. With some top line growth, we believe our business model will deliver a substantial increase in profitability.

“Our strategic focus remains on positioning the Company for strong top line growth. We recently announced the launch of three new product lines, including our WLS series of Wi-Fi® and Bluetooth® modules, a ZigBee Pro module and wireless sensor modem and gateway product platforms. Each of these is a broad product offering to large markets such as medical, industrial monitoring and smart home applications. The WLS series of products are the initial products to be released as a result of our collaboration with Murata Manufacturing Co., Ltd. and we recently announced the first order and production shipments of the WLS1271. Module revenue continues to be strong, reflecting our efforts to focus on the M2M business in the industrial space, and we have had some initial success with our timing products for GNSS (Global Navigation Satellite System) applications. We are expanding our worldwide sales channels with two of the top three global distributors.

“We remain optimistic about RFM’s prospects for future growth. With our existing breadth of products and planned new products, we are working to take advantage of M2M market opportunities and to grow sales,” Halsey said.

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