3nd Quarter 2014 Earnings Call Presented by November 11, 2014 NASDAQ:CUI Daniel Ford William Clough President & CEO CFO SEC Disclaimer 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. 2 Third Quarter 2014 Summary For the 3 months ended September 30 2014 • • • • • 3 2013 % Change For the 9 months ended September 30 2014 2013 % Change Revenue $21.4M $17.2M + 24% $57.5M $45.4M +27% Gross Profit $8.0M $6.5 +23% $22.7M $17.5M +30% Gross Profit % 37% 38% (1%) 40% 38% +2% SG&A (% of sales) 32% 29% +3% 34% 31% +3% Consolidated Net Income (loss) $(349K) $737K (147%) $(903K) $712K (227%) Adjusted Net Income $1.4M $1.6M (13%) $3.0M $2.6M +15% Revenue was up 24% to $21.4 million from $17.2 million for the quarter ended September 30, 2014. Revenue was up 27% to $57.5 million from $45.4 million for the nine months ended September 30, 2014. Gross Profit margin was 37%, as compared to 38% in Q3 2013 and 40% vs. 38% for the nine months ended September 30, 2014 Power and Electro-Mechanical segment unaudited backlog of $12.4 million as of September 30, 2014 Gas segment unaudited backlog of $18.8 million as of September 30, 2014 EBITDA Comparison $5,000,000 • EBITDA for the 9 months ended September 30, 2014 was $2.4 million or $0.12 per share versus $2.9 million or $0.17 per share for the same period in 2013. $4,500,000 $4.0M $4,000,000 $3.4M $3,500,000 $3,000,000 $2.9M $2.4M $2,500,000 $2,000,000 • 4 Adjusted EBITDA for the 9 months ended September 30, 2014 was $4.0 million or $0.19 per share versus $3.4 million or $0.20 per share. $1,500,000 $1,000,000 $500,000 $0 EBITDA Adj. EBITDA 9 Months Ended 9/30/13 EBITDA Adj. EBITDA 9 Months Ended 9/30/14 Q3 2014 Financial Overview • Quarterly gross profit was 37% or $8.0 million as compared to 38% or $6.5 million the third quarter of 2013; Year to date gross profit was 40% or $22.7 million as compared to 38% or $17.5 million the same period of 2013 – Power and electro-mechanical segment generated a gross profit margin of 40% for the quarter and year to date periods – Gas segment generated a 34% gross profit margin for the quarter and 39% year to date 5 • SG&A increased as a percentage of revenues from 29% in Q3 2013 to 32% in Q3 2014 and from 31% to 34% for the year to date period • Operating activities generated positive cash flow of $1.2 million during the nine months ended September 30, 2014, versus positive cash flow from operations of $2.4 million for the comparable period in 2013 • Quarterly consolidated Net loss of $(349) thousand or $(0.02) per share for the quarter versus net income of $737 thousand or $0.04 per share in Q3 2013; Year to date consolidated net loss of $(903) thousand versus net income of $712 thousand in 2013 • Cash and cash equivalents were $17.1 million and short-term investments were $10.4 million • 20,742,481 common shares outstanding at September 30, 2014 GasPT® Sales Q3 2014 • 26 installed in 2014 • Orders received for 27 additional units • Additional 20 units out to bid • Making progress with larger GasPT opportunities • Positive, ongoing discussions with Snam Rete; Dominion Compression; Energy Transfer Partners; and others • Larger projects continue to move forward in a positive manner – likely slated for 2015 delivery Energy Transfer Partners Chevron PRCI BG 6 Italy – Snam Rete Gas Spain – Enagas and Repsol UK – National Grid Turkey – IGDAS and Botas Poland – GazSystem and PGNiG VE Technology® Sales Q3 2014 Total Units Sold Through Q3: • VE probe total: 191 units • VE sampling systems: 51 • VE thermowells: 140 140 120 100 80 60 40 20 0 VE Probe Total VE Thermowells VE Sampling Systems Only technology capable of providing the real-time data needed to properly operate these engines. 7 William J. Clough, Esq President & CEO [email protected] VOX: 503-612-2307 FAX: 503-612-2385 MOB: 925-989-6651 Daniel N. Ford CFO [email protected] VOX: 503-612-2319 FAX: 503-612-2385 MOB: 503-504-1137 9 NASDAQ:CUI cuiglobal.com
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