CUI Global Reports Unaudited Consolidated (Third Quarter 2013) Revenue of $17,213,757 PR Newswire TUALATIN, Ore., Nov. 13, 2013 TUALATIN, Ore., Nov. 13, 2013 /PRNewswire/ --CUI Global, Inc. (NASDAQ: CUI), a platform company dedicated to the acquisition, development, and commercialization of new, innovative products and technologies, today reported unaudited results for the third quarter ended September 30, 2013. (Logo: http://photos.prnewswire.com/prnh/20120320/FL72629LOGO) For the nine months ended September 30, 2013, CUI Global produced consolidated total revenues of $45,424,208. The numbers demonstrate that year-to-date ("YTD") gross revenues grew 55% year-over-year, when compared to the nine months ended September 30, 2012 ($29,193,827), before the acquisition of Orbital-UK and associated accretive revenues. The company had $18,716,542 of cash and cash equivalents and $10,882,682 of short term investments as of September 30, 2013 – these figures represent a quarter-over-quarter increase of $1,493,675 from Second Quarter 2013 ($28,105,549) and an increase of more than $26,000,000 since December 31, 2012 ($3,039,840). Most significantly, an examination of cash flows from operating activities demonstrates that YTD the company has generated $2,370,673 of cash flows from operating activities in 2013 as compared to $1,098,022 of cash flows used in operating activities for the same period last year, an improvement of $3,468,695. The earnings before interest, taxes, depreciation and amortization (EBITDA) per share for the Third Quarter ended September 30, 2013 were $0.07 and, for the YTD, an EBITDA per share of $0.17. This compares to an EBITDA per share loss of $0.12 for the same period last year. The company earned a pre-adjusted net profit of $0.01 EPS on net income of $214,315 for the quarter ended September 30, 2013. In addition, the selling, general and administrative expenses decreased as a percentage of revenues to 29.16% and 31.37%, respectively, for the three and nine months ended September 30, 2013 as compared with 34.92% and 39.05% in the prior year comparative periods. These improvements are the result of continued efficiencies gained throughout the company in generating revenue growth while tempering selling, general and administrative expenses. "This is the second consolidated reporting period following our acquisition of Orbital-UK and the results continue to be quite compelling," explained William Clough, CUI Global's president & CEO. "The sequential YTD growth in revenue; the dramatic year-over-year increase in cash flow; and our turn to both quarter and YTD profitability all demonstrate the tangible results of this immediately accretive acquisition. These results also validate and evidence our continuing efforts, now through CUI, Inc., CUI Japan and Orbital-UK, to increase our penetration into both the electronics and natural gas markets." "The acquisition of Orbital-UK and its recognized expertise in the natural gas industry, along with its team of professional engineers continues to enhance the penetration into the market of our GasPT Technology; the recently acquired VE-Probe Technology; and our proprietary IRIS remote telemetry system – All-in-all, these continue to be very exciting times for our company," Clough concluded. The Company will conduct a conference call and web cast to review the results on Thursday, November 14, 2013 at 9:00 a.m. ET. CUI Global, Inc. Third Quarter Results Conference Call Thursday, November 14, 2013 at 9:00 a.m. Eastern Dial in number: (888) 734-0328; Conference ID: 99326648 A simultaneous webcast will also be available via: http://www.media-server.com/m/p/ukhewk8q To access the replay of the call dial (855) 859-2056 and provide the same Conference ID. Condensed Consolidated Balance Sheets September 30, December 31, 2013 2012 (unaudited) Assets: Current Assets: Cash and cash equivalents $ $ 18,716,542 3,039,840 Short term investments held to maturity 10,882,682 - Trade accounts receivable, net of allowance of $230,000 and $130,000, 8,995,279 4,965,926 respectively Inventories, net of allowance of $624,110 6,118,945 4,843,905 and $250,000, respectively Costs in excess of billings 368,446 - Prepaid expenses and other 740,327 378,885 Total current assets 45,822,221 13,228,556 Property and equipment, net 3,032,086 1,016,219 Other assets: Investment - equity method 262,456 258,244 Other Intangible assets, net 24,031,876 8,618,524 Deposits and other 21,986 11,360 Notes receivable, net 470,604 501,422 Debt offering costs, net - 42,778 Goodwill, net 18,413,545 13,046,358 Total other assets 43,200,467 22,478,686 Total assets $ $ 92,054,774 36,723,461 Liabilities and stockholders' equity: Current liabilities: Accounts payable $ $ 4,463,176 2,496,881 Line of credit - 459,448 Leases payable, current 99,056 - Accrued expenses 2,117,339 1,140,743 Accrued taxes payable 570,699 2,096 Accrued compensation 463,720 186,636 Billings in excess of costs 6,695,121 - Unearned revenue 708,819 371,541 Total current liabilities 15,117,930 4,657,345 Leases payable, net of current portion 66,649 - Long term note payable, related party 5,303,683 7,303,683 Total long term liabilities 5,370,332 7,303,683 Total liabilities 20,488,262 11,961,028 Commitments and contingencies Stockholders' equity: Common stock, par value $0.001; 325,000,000 shares authorized; 20,564,163 shares issued and outstanding at 20,564 10,883 September 30, 2013 and 10,883,280 shares issued and outstanding at December 31, 2012 Additional paid-in capital 146,484,223 100,947,708 Accumulated deficit (76,124,821) (76,171,822) Accumulated other comprehensive income 1,186,546 (24,336) (loss) Total stockholders' equity 71,566,512 24,762,433 Total liabilities and stockholders' $ $ equity 92,054,774 36,723,461 See notes to unaudited condensed consolidated financial statements in the filed 10-Q Condensed Consolidated Statements of Operations (unaudited) For the three months ended For the nine months ended September 30, September 30, 2013 2012 2013 2012 Revenues: Product Sales $ 17,204,407 $ 10,697,471 $ $ 45,395,252 29,157,410 Revenue from freight 9,350 14,835 28,956 36,417 Total revenue 17,213,757 10,712,306 45,424,208 29,193,827 Cost of revenues 10,614,380 6,778,965 27,747,351 18,174,099 Gross profit 6,599,377 3,933,341 17,676,857 11,019,728 Operating expenses Selling, general and 5,019,853 3,740,318 14,247,723 11,400,909 administrative Depreciation and 1,008,046 224,920 2,202,448 521,769 amortization Research and 187,866 204,343 631,331 558,833 development Bad debt (10,000) 32,979 32,470 32,979 Impairment of intangible, trademark - - - 278,428 and trade name V-Infinity Total operating 6,205,765 4,202,560 17,113,972 12,792,918 expenses Income (loss) from 393,612 (269,219) 562,885 (1,773,190) operations Other income (expense) Other income 55,137 8,580 172,432 43,461 Other expense (3,302) (13,189) (13,208) (16,885) Earnings (loss) from 8,338 (3,318) 4,212 36,473 equity investment Amortization of investment premiums (9,526) - (9,526) - and discounts Amortization of debt (6,111) (18,333) (42,777) (55,000) offering costs Interest expense (107,501) (158,981) (308,954) (460,510) Total other income (62,965) (185,241) (197,821) (452,461) (expense), net Income (loss) before 330,647 (454,460) 365,064 (2,225,651) taxes Provision for taxes 116,332 8,539 318,063 23,995 Consolidated Net $ $ $ $ Income (loss) 214,315 (462,999) 47,001 (2,249,646) Basic income (loss) $ $ $ $ per common share 0.01 (0.04) 0.00 (0.23) Diluted income (loss) $ $ $ $ per common share 0.01 (0.04) 0.00 (0.23) Basic weighted average common shares 20,564,163 10,819,681 16,796,310 9,940,168 outstanding Diluted weighted average common and 20,574,784 10,819,681 16,805,972 9,940,168 common equivalents shares outstanding See notes to unaudited condensed consolidated financial statements in the filed 10-Q Condensed Consolidated Statements of Cash Flows (unaudited) For the nine months ended September 30, 2013 2012 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ $ 47,001 (2,249,646) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Stock, options and notes issued for 410,916 948,370 compensation and services Non-cash interest expense, including 42,777 55,000 amortization of debt offering costs Earnings from Equity Investment (4,212) (36,473) Bad debt expense 32,470 32,979 Allowance for ship and debit returns 90,000 - Amortization of intangibles 1,676,731 83,651 Impairment of intangible, trademark - 278,428 and trade name V-Infinity Inventory reserve 23,792 60,000 Depreciation 525,717 438,118 (Increase) decrease in assets: Trade accounts receivable 1,761,055 (498,936) Inventory (855,296) (1,512,671) Costs in excess of billings (1,089) - Prepaid expenses and other current (340,871) 293,282 assets Deposits and other assets (10,626) 17,801 Increase (decrease) in liabilities: Accounts payable 338,560 402,216 Accrued expenses (1,736,576) 275,608 Accrued compensation (4,511) 2,726 Accrued taxes payable (553,303) - Unearned revenue 289,841 311,525 Billings in excess of costs 638,297 - NET CASH PROVIDED BY (USED IN) 2,370,673 (1,098,022) OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES: Cash paid upon acquisition, net of (17,709,507) - cash received Investment in other intangible (405,900) (39,940) assets, net Purchase of short term investments (10,882,682) - held to maturity Proceeds from Notes receivable 27,273 22,096 Purchase of property and equipment (836,892) (559,713) NET CASH (USED IN) INVESTING (29,807,708) (577,557) ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from (payments to) demand notes payable, net of debt offering (459,448) (1,528,900) costs Proceeds from (payments to) leases (39,051) - payable Payments on notes and loans payable - (4,000,000) Payments on notes payable, related (2,000,000) (3,000,000) party Payments on convertible note payable, - (35,000) related party Proceeds from sales of common stock, and exercise of warrants and options, 45,135,280 13,532,285 net of offering costs NET CASH PROVIDED BY FINANCING 42,636,781 4,968,385 ACTIVITIES EFFECT OF EXCHANGE RATE CHANGES ON 476,956 (18,494) CASH Cash and cash equivalents at 3,039,840 176,775 beginning of year Cash and cash equivalents at end of 18,716,542 3,451,087 period NET INCREASE IN CASH AND CASH $ $ EQUIVALENTS 15,676,702 3,274,312 See notes to unaudited condensed consolidated financial statements in the filed 10-Q About CUI Global, Inc. Delivering Innovative Technologies for an Interconnected World . . . . . CUI Global, Inc. is a publicly traded company dedicated to maximizing shareholder value through the acquisition and development of innovative companies, products and technologies. From 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 and its subsidiaries have built a diversified portfolio of industry leading technologies that touch many markets. As a publicly traded company, shareholders are able to participate in the opportunities, revenues, and profits generated by the products, technologies, and market channels of CUI Global and its subsidiaries. But most importantly, a commitment to conduct business with a high level of integrity, respect, and philanthropic dedication allows the organization to make a difference in the lives of their customers, employees, investors and global community. For more information please visit www.cuiglobal.com About CUI Inc. CUI Inc. is a technology company dedicated to the development, commercialization, and distribution of new, innovative electro-mechanical products. Over the past 20 years, CUI has become a recognized name in electronic components worldwide in the areas of power, interconnect, motion control, and sound. CUI's solid customer commitment and honest corporate message are a hallmark in the industry. CUI is a wholly owned subsidiary of CUI Global, Inc. For more information, please visit www.cui.com. About Orbital Gas Systems Ltd. Orbital Gas Systems Ltd ("Orbital-UK") is the largest natural gas systems integrator in the United Kingdom. For over 25 years, Orbital-UK has developed its portfolio of products, services and resources to offer a diverse range of personalized gas engineering solutions to the gas utilities, power generation, emissions, manufacturing and automotive industries. Orbital-UK's internationally recognized expertise in the natural gas industry, including bringing together the patented VE-technologywith the ground-breaking GasPTi device, offers natural gas operators and users a comprehensive engineering array for the next generation of energy metering systems. Orbital-UK is a wholly owned subsidiary of CUI Global, Inc. For more information, please visit www.orbital-uk.com. Important Cautions Regarding Forward Looking Statements This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are subject to risks and uncertainties that could cause actual results to vary materially from those projected in the forward-looking statements. The company may experience significant fluctuations in future operating results due to a number of economic, competitive, and other factors, including, among other things, our reliance on third-party manufacturers and suppliers, government agency budgetary and political constraints, new or increased competition, changes in market demand, and the performance or reliability of our products. These factors and others could cause operating results to vary significantly from those in prior periods, and those projected in forward-looking statements. Additional information with respect to these and other factors, which could materially affect the company and its operations, are included in certain forms the company has filed with the Securities and Exchange Commission. Reconciliation of Non-GAAP Financial Measures EBITDA is a non-GAAP financial measure and is reconciled in the table below. EBITDA does not represent funds available for management's discretionary use and is not intended to represent cash flow from operations. EBITDA should not be construed as a substitute for net loss or as a better measure of liquidity than cash flow from operating activities, which is determined in accordance with United States generally accepted accounting principles ("GAAP"). EBITDA excludes components that are significant in understanding and assessing the company's results of operations and cash flows. In addition, EBITDA is not a term defined by GAAP and as a result our measure of EBITDA might not be comparable to similarly titled measures used by other companies. However, EBITDA is used by management to evaluate, assess and benchmark the company's operational results and the company believes EBITDA is relevant and useful information which is often reported and widely used by analysts, investors and other interested parties in the company's industry. Accordingly, the company is disclosing this information to permit a more comprehensive analysis of its operating performance, to provide an additional measure of performance and liquidity and to provide additional information with respect to the company's ability to meet future debt service, capital expenditure and working capital requirements. Unaudited For the nine months ended, For the nine months ended, September 30, September 30, September 30, September 30, 2013 2012 2013 2012 Net Income (loss) $ $ $ $ 214,315 (462,999) 47,001 (2,249,646) Plus: Interest expense - amortization of 6,111 18,333 42,777 55,000 debt offering costs Plus: 107,501 158,981 308,954 460,510 Interest expense Plus: Depreciation and 1,008,046 224,920 2,202,448 521,769 amortization Plus: Provision for 116,332 8,539 318,063 23,995 taxes EBITDA $ $ $ $ 1,452,305 (52,226) 2,919,243 (1,188,372) Basic EBITDA per $ $ $ $ common share 0.07 (0.00) 0.17 (0.12) Diluted EBITDA per $ $ $ $ common share 0.07 (0.00) 0.17 (0.12) Basic weighted average common 20,564,163 10,819,681 16,796,310 9,940,168 shares outstanding Diluted weighted average common and common 20,574,784 10,819,681 16,805,972 9,940,168 equivalents shares outstanding SOURCE CUI Global, Inc. Website: http://www.cuiglobal.com Contact: Company Contact: CUI Global, Inc., Media Contact: Maggie Lefor, Main: 503-612-2300, email@example.com, or Investor Relations: CUI Global, Inc., firstname.lastname@example.org, or Outside IR contact: Stonegate Securities, Casey Stegman, 214-987-4121
CUI Global Reports Unaudited Consolidated (Third Quarter 2013) Revenue of $17,213,757
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