CUI Global Inc (NASDAQ:CUI) spent 2019 laying the groundwork to become a diversified energy infrastructure company, boosted by the acquisition of renewable energy engineering firm Reach Construction Group.
The Houston-based company posted its quarterly and full year results on Monday that saw it increase margins and strengthen revenue.
The firm reported total fourth quarter 2019 revenue of $5.7 million and full-year 2019 revenue of $23.5 million, compared to $7.4 million and $20.3 million during the same year-ago periods.
Quarterly gross profit came in at $1.5 million compared to a loss of $0.5 million a year ago.
At the end of December 2019, CUI’s Energy segment was carrying a backlog of $9.6 million.
"In 2019, our Energy segment continued to take advantage of operators increasing capital investment in energy services infrastructure," said Jim O'Neil, CEO of CUI Global.
"At the same time, we laid the groundwork for our plan to become a diversified energy infrastructure services company. This included the sale of our electromechanical components business of our legacy Power and Electromechanical segment for a total consideration of $15 million.
“Following this, we sold the majority of our remaining Power business to Bel Fuse for $32 million in gross proceeds, which continued our transformation and strengthened our balance sheet. More recently, we announced another major milestone with the accretive, platform acquisition of Reach Construction Group.”
Reach's utility-scale solar energy expertise and established relationships with solar developers and panel manufacturers boosts its energy infrastructure services focused operations, O’Neil told shareholders. The deal extends CUI’s energy services business into the rapidly growing areas of alternative and renewable energy as well as expanding its engineering and construction capabilities.
Going forward, we will continue to grow our existing energy business and use our strong balance sheet to pursue attractive acquisition opportunities,” O’Neil said.
“By executing on this targeted acquisition strategy, focused on innovative companies in complementary industries, we will develop a diversified platform for growth and create long-term value for our shareholders."
CUI ended the year with $23.4 million in cash.
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