CUI Global (NASDAQ:CUI) has reported strong results for the full year (FY) 2018, with revenues of US$96.8mln versus our forecast of US$92.8mln. The FY order backlog stood at US$37.5mln versus US$32.8mln at the end of 2017.
The company reported an underlying loss (statutory LBITDA) of USS$14.0mln versus our forecast of a loss of US$8.1mln; however, this figure is after booking non-cash impairment charges of US$7.4mln, relating to delays in existing customer contracts in the Energy division, and other issues. On an adjusted EBITDA basis, the outcome of a loss of US$8.0mln was ahead of our forecast.
Also in the release, CUI announced that it has agreed to acquire a 20% stake in VPS, the key partner on the ICE programme for data-centre energy management, gaining representation on the board of VPS. We see this as a positive route to capitalise on the software-defined opportunity of ICE.
MTI Wireless Edge (LON:MWE) has reported results for the first quarter (Q1) of 2019, showing continued strong progress. Revenues increased by 16% year-on-year and operating profits 66%. We maintain our full-year (FY) 2019 forecasts, with FY revenue growth of 10% and earnings per share (EPS) growth 27.8%.
All comparisons are on a pro-forma basis to include a full year of MTI Computers revenue in the prior year.
At the time of the merger between MTI Wireless Edge and MTI Computers in August 2018, the company forecast strong demand across each of its business segments. These expectations have been borne out in Q1.
Water Solutions: Demand remains strong globally for smart irrigation systems. During the quarter, the business secured its largest ever order, a breakthrough order for irrigation control systems into the Chinese market.
Antennas: Demand drivers include 5G wireless infrastructure in the civil communications sector and increasing budgets among major military customers. The outlook remains positive.
Distribution & Professional Consulting Services: Revenue for the division grew very strongly in the quarter as previously announced projects matured into revenue generation. A new order for aerostat systems (now included in this segment) will deliver revenues in the coming quarters.
During the last week, the company has made two significant announcements:
The company came into being in its current form via the August 2018 merger of MTI Wireless Edge with MTI Computers, with Moni Borovitz playing a leading role in delivering the merger.
In this report, we present a reminder of the key dynamics of the merger. We note that since the merger, the share price has yet to stabilise and we believe that the buyback may be helpful in this regard.
CUI Global (NASDAQ: CUI) is a platform company focussing on the acquisition, development and commercialization of new, innovative technologies. The company operates through two divisions – Power & Electromechanical, and Energy.
The strategic focus for CUI Global is the Energy segment. We believe that this business is entering a phase of transformational growth. In this report we examine the growth potential for the Energy segment and some of the major projects which will deliver this growth.