The energy specialist CUI Global Inc (NASDAQ:CUI) saw its revenue climb for the fourth quarter and last year thanks to strength across its product lines and increased sales of its gas technology systems in North America and Western Europe.
From its subsidiary Orbital Gas Systems' advanced GasPT2 platform targeting the energy sector, to CUI Inc.'s digital power platform serving the networking and telecom space, CUI Global has built a diverse portfolio of technologies.
In the fourth quarter, CUI’s revenue came to $27 million, climbing from $21.1 million in the year-ago quarter. Its revenue for the 2018 year also rose to $96.8 million compared to $83.3 million in 2017.
In a statement, CEO William Clough noted a number of key advances, including a strong backlog and a new, larger facility for CUI’s Energy business in Houston, Texas as well as buoyant sales of its gas technology systems in North America and Western Europe.
CEO outlines key achievements
“We delivered record revenues and are reporting very strong consolidated backlog exiting 2018 while executing on initiatives across our two business segments to sustain our growth trajectory,” said Clough. “In our Energy business, our new, larger facility in Houston and the passage of a biomethane feed-in tariff in the UK resulted in segment revenue up 8%. We progressed opportunities in North American and Western Europe for direct sales of our gas technology solutions and globally through our new distribution channel with SAMSON.”
Also on the list of fourth-quarter milestones was the company’s wholly-owned energy division Orbital Gas Systems securing purchase orders for integration projects totaling $3.3 million from a single customer.
The company also reported net proceeds of $4.2 million from the sale and leaseback of its corporate headquarters in Tualatin, Oregon.
In other news, CUI Inc and CUI Canada recently secured a binding commitment from Bank of America Merrill Lynch on a revolving line of credit of up to $10 million, which replaces its existing US-based revolver facility and UK-based overdraft facility with more favorable terms. The company expects this loan to be closed by April 30.
“In 2019, we moved to secure additional non-dilutive capital with a $10 million line of credit with Bank of America Merrill Lynch that ensures we can continue to execute on our growth strategy without losing a step,” noted Clough.
Lastly, CUI also secured a roughly 20% equity investment in Virtual Power Systems (VPS). The Milpitas, California-based VPS enables energy to be reallocated on-demand to data center racks, nodes, workloads or circuits using AI and machine learning to predict and respond to changes in power capacity and demand.
In the fourth quarter, CUI’s gross profit came to $6.4 million compared to $6.5 million in the corresponding period in 2017 while its loss amounted to $7.8 million or $0.27 per share, up from a loss of $5.3 million or $0.20 per share in the year-ago quarter.
Outlook in focus
Looking ahead, Clough is focusing on opportunities in the energy sector and the strength of the company’s power and electromechanical segment.
The company boasts two flagship energy products. The first is its GasPT platform, which has a revolutionary method of almost instantly and accurately determining the quality of natural gas.
The company’s second leading product is its VE technology, which employs specialized sampling probes to take smaller, more consistent and cleaner gas samples.
“As the evolution of the global energy mix towards less carbon-intensive sources gains pace, we have positioned our gas technology solutions to take advantage of the shift towards natural gas and renewable natural gases (RNG), such as biomethane,” Clough concludes. “The regulatory environment is also becoming increasingly favorable as energy authorities globally advance pipeline reform that include RNGs. Against this backdrop we remain focused on driving further adoption of our gas technology solutions.”
CUI Global shares slipped 4.9% to hit $1.35 in after-hours trade on Monday.
Contact Ellen Kelleher at [email protected]