Greetings and welcome to the RF Industries’ Fourth Quarter and Fiscal 2014 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Robert Jacobs, Investor Relations for RF Industries. Thank you, Mr. Jacobs. You may now begin.

Thank you, Manny. And good morning and I guess good afternoon to some of you on this call. Thank you very much for joining us for RF Industries’ fourth quarter and fiscal 2014 results. After I review the Safe Harbor statements, I will turn the call over to Howard Hill, our Chief Operating Officer; and Johnny Walker, the Company’s President and new Chief Executive Officer who will provide an overview of the quarter and the year. Mark Turfler, RFI’s Chief Financial Officer will then review the financial results in some detail after which we will open up the call for your questions. Please note that except for the historical statements, the statements that we made in our press release and in this conference call, constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. When used, the words anticipates, beliefs, expects, intends, future and other similar expressions, identify forward-looking statements. These forward-looking statements reflect management’s current views with respect to future events and financial performance and are subject to risks and uncertainties and actual results may differ materially from the outcomes contained in any forward-looking statements. Factors that could cause these forward-looking statements to differ from actual results include delays in development, marketing or sales of new products and other risks and uncertainties discussed in the Company’s periodic reports on Form 10-K and 10-Q and our other filings with the Securities and Exchange Commission. RF Industries undertakes no obligation to update or revise any forward-looking statements. I’d like to turn the call over to Howard now. Howard?

Thank you, Robert. First of all, I’d like to apologize for my voice. We seem to have a throat bug around here. And I’ll try to be as clear as possible. Welcome to RFI’s fourth quarter and fiscal 2014 results conference call. Our press release went out earlier this morning and some of my comments will deal with issues discussed in that release. The 2014 fourth quarter sales of $6 million were $2.4 million lower when compared to sales of $8.4 million for the same quarter last year. Net income was $325,000 or $0.04 per diluted share as compared to $25,000 or $0.00 per diluted share in the same period last year. The net income for the fourth quarter of 2013 reflects a $695,000 loss from discontinued operations primarily due to sales of our RadioMobile and RF Neulink divisions. Fourth quarter’s 2014 sales were primarily affected by $2 million decline in sales of Cables Unlimited. However, fourth quarter 2014 Cables Unlimited increased $386,000 compared to the recent third quarter. Net sales for the fiscal year-end October 31, 2014 were $23.1 million compared to sales of $36.3 million of fiscal year 2013. Net income was $1.4 million or $0.16 per diluted share as compared to $3.6 million or $0.43 per diluted share for the same period last year. Net income of 2013 reflected again by $1.1 million loss for discontinued operation of sales of RadioMobile and RF Neulink divisions. Fiscal 2014 results declined primarily due to a combination of a large one-time project due to deliver a single line of new cabling products and address the needs of certain telecommunication companies, coupled with the industry-wide decline in demands for RF connectors and cabling products. We introduced products - we are introducing products that have acquired Comnet to complement business of Cables Unlimited, to expand our market presence in fiber optic cabling and complementary data center products. Our cash position remains strong and we are confident that the company’s short and long-term profitability and ability to provide growth and reward our investors. With us for his first in many RF Industries’ earnings calls is our President and new Chief Executive Officer, Johnny Carl Walker, who joined the company last October. I had personally worked with Johnny three years and we have already - he has already proven an excellent fit for RF Industries. I will be continuing as the Chief Operating Officer as part of our successor plan. I think in addition to Johnny’s 15 years’ experience in the wire industry, his background in manufacturing, merger and acquisition and accounting experience will help support our growth strategy or our growth from years to come. I would like to introduce and turn over the call to Mr. Johnny Walker, President and CEO of our company. Johnny?

Thank you, Howard. I’m also a little stuffed up here but I’ll try to speak as succinctly as I can. First let me just say that I’m very enthusiastic about being with RF Industries. They have had a strong profitable position over the years, over a long line of years. And from the other side of the table where I was a customer, they have a reputation for being an asset, providing excellent service and quality and on-time delivery. And as a supplier in a much larger company, they were always right at the top quadrant of our suppliers. So I’m happy to be here. We have had a strong profitable position in connectors, cable assemblies and medical cabling products which will serve the company well as we develop new products, expand our presence in the fiber market which I believe is critical because fiber is the future of coaction [ph]. Cable is definitely on the decline and fiber has so many applications including distributed antenna systems, your dad’s projects, and even more importantly, using fiber at the top of the tower to the radio heads. So our capabilities in that area to develop hybrid products I think is distinctly managed with - to develop new products and to - we expand our presence in the fiber optic and data center markets and make selective acquisitions. Our January 20th acquisition, a New Jersey-based Comnet supplier, expands our fiber cable optic cabling capabilities and customer base that includes large national manufacturers and distributors of telecommunications products. Comnet, like Cables Unlimited, is a Corning Cable Systems CAH Connections Gold Program member in that which there are only a limited group of companies in the United States that are permitted to manufacture fiber optic cables and leased back by Corning’s extended warning. I…

Thank you, Johnny. I would like to speak to a little bit of Q4 results and how we did there. Also speak a little bit to the results by division and segment. And then also talk about the full-year results as well by division and segment a little bit. For the fourth quarter, 2014 sales of $6 million declined $2.4 million or 29%, $8.4 million in the same quarter of fiscal 2013. The decrease is primarily due to a $2 million decline in sales at the Cables Unlimited segment combined with modestly lower sales at the RF Connector and Cable Assembly and the Medical Cabling and Interconnector segments. The decreased sales at Cables Unlimited was due to the reasons as explained by Howard earlier in this call. The decline [ph] for the 2014 sales contributed to the lower consolidated gross profit of $2.6 million compared to $3.4 million in Q4 of 2013. However, the company’s overall gross margin improved to 44% from 41% in the quarter, primarily due to improved gross margins at the RF Connector and Cable Assembly segment. Overall operating expenses for the fourth quarter of 2014 declined by $200,000 to $2.1 million compared to $2.3 million in the same period last year, primarily as a result of lower compensation expenses due to reduced headcount. Operating income for the fourth quarter of fiscal 2014 was $536,000 compared to operating income of $1.1 million with a comparable quarter last year. The decline in operating income is primarily attributable to lower sales at the Cables Unlimited segment. Our fourth quarter tax provision was $289,000 for an effective tax rate of 53% compared to $406,000, an effective tax rate of 36% in the same quarter last year. The lower effective tax rate in the fiscal 2013 period is attributable to the…

Yes, I’ll just make a few comments about the perspective - my perspective in the markets for RF as making acquisitions, any products, Cables Unlimited and the integration of Comnet. That’s whole mouthful out there, I’ll tell you. In general, CapEx, since we were all in one way a tag, tag is the [ph] telecommunications industry and also the tier 1 carriers, they’re projecting CapEx, down slightly for 2015. We’re feeling that kind of across the board in our cables and connectors business, that our business is off [ph] slightly which would reflect that the primary source of that business is distributors and we have things, some modest decline in that. And I did some - a little follow-up while talking to several large OEMs who are heavily involved in the telecommunications, wireless infrastructure bill and then vast projects that I’ve had relationships in the past. They tell me, it is just almost dead right now that nobody is really spending any money. Everybody is kind of waiting for things to open up. And I think we’re experiencing some of that in our numbers. We did lose one large customer in our medical division which decided to go to China to get some of their products. But I think that is an opportunity for us to expand our business at a unique market. It’s not tied necessarily to distribution. And the addition of adding new products and that’s the roadmap for DAS and Low PIM products as well as the integration of Cables Unlimited and Comnet and getting synergies out of that are fairly - not fairly, they’re not priorities for us in this year. We still remain focused on the development and provision of connectivity solutions, communications and wireless applications. But as I said, their acquisition of Comnet is a significant step in expanding the customer presence in data center and telecom and wireless markets, which [indiscernible] that are a fad to distribution. I think these markets are future growth markets. We’re well capitalized to expand on those and provide the - in the development products to provide our core customers, which would be the DAS product and Low PIM products, the distribution. So we have a strong balance sheet. I think we have a strong balance sheet. We have a great opportunity to execute on these strategic initiatives. It should be a various [ph] market out there in terms if you’re looking for a strategic acquisition. With the way the market is, we should be who - we should be focusing on those companies that would, for lack of a better word, represent good opportunities for us and that we could buy our own at a fair price. So [indiscernible] our employees and shareholders for their support. And I’ll just open the floor to questions. Operator, we’re ready to take the first question.

Certainly. [Operator Instructions] Our first question is from Joe Gons [ph] of William Smith [ph]. Please go ahead.

Good morning, guys.

Good morning, Joe.

Okay, just - first off, just congratulations, Johnny, on the new position the whole team on Comnet deal, and another year of profitability. Johnny, I kind of want to follow up on your vision here because historically, RF has just put together a tremendous long-term record of generating profits. But that hasn’t reflected except for one brief period of time into returns per shareholders in terms of capital appreciation in the stock. And so I wanted to try and get a little more detail from you as to kind of your vision. You mentioned the fiber market. Maybe you could give us some more info or detail on what you see in the fiber market in terms of the market size, growth, timing, that would help us understand, okay, how are we going to leverage this long-term history of profits into improved share pricing?

Well, let me address that in two ways. And I think it’s the distinction that we should all understand. The Cables Unlimited and Comnet acquisitions, these companies are project-driven. And that’s wonderful and sometimes it’s not so great. And we saw that when Comnet - I mean Cables Unlimited generated enough operating income, almost paid for what we paid for it in 2013, but when the project came to an end, the [indiscernible] I mean it just stopped. And we don’t have any control over that. The best way to handle that is you have to have a pipeline of projects in the pipeline because they have a long sale cycle. So I think in terms of fiber, to answer your question, I think fiber is the future. I think you’re going to see [indiscernible] in my opinion, you’re going to see a diminished use of coaxial [ph] cable. The DAS market uses a ton of fiber. And that’s why we’re focusing on that. So DAS market is a huge market. I’m sure everybody on the call knows that that for the enterprise segment or for large venue projects like football stadiums or whatever, the [indiscernible] does very large projects. And when you get them, they’re a lot of money but you have to have a continuous pipeline. And one of our strategies to make sure we have a hand on that pipeline is to enhance our CRM system as to where we can see and look at what the pipeline to see how it’s progressing and measure that. I think that’s certainly the future growth there is that - I’m not dismissing the one full opportunity we have distributors in any way. I’m just going to emphasize that there is great opportunity in cable assembly houses and it’s up to us to capitalize on them. The individuals that run those that we bought are I think high quality - very high quality individuals. And I have a regular confidence in their ability to put those companies not together, but to deliver synergies that will go to the bottom line. And we’re also in the process of adding sales people to the Cables Unlimited and which will spill over to the Comnet. Howard, do you have something to add to that?

Oh, basically, the - just for the shareholders, we add the constant buyback programs too and suspect [ph] which sometimes works and sometimes doesn’t. I mean it’s one of those things that is sort of gamble in this way. And we are decreasing in the shares and then they have the denominator of course for earnings per share. We had a nice two for one split. We’ve had some other extra dividends through the years. For many years now, we have been paying dividends. And so having dividend advantage is shabby. It’s really good. We just get under the radar in some cases. I think we get overshadowed by the big boys in of course, the superstar Apple and so forth. So it’s a tough road. But we’re growing. And we’re very confident we’ll continue growing. The merger and acquisition area is good. We have the cash. We have the stock. It’s a good combination to buy companies.

Right. And speaking of the acquisition area, and maybe you can give us a little bit more detail on the Comnet. You said that for the 12 months ended October, you did $9.6 million of revenue. How does that compare historically? Are there any one time OptiFlex-type projects that were included in that revenue number? On a margin basis, how did their margins look in terms - compared to RFI’s typical margins? And I noticed in there, there was a two-year earn out from Mr. Portera. And I just wondered if you can give us what are the milestones that he has to reach in order to earn or receive his earn out?

Number one, we don’t - I don’t have the numbers handy. And they might not be willing [ph] to disclose that, but without knowing the exact numbers on the - his earn out, it was part of the contract. But one of the things on Comnet, that was one of our first things we checked, do we have - because we have an OptiFlex-type project, not because project is - there was a lot of gun try on that one. I mean we were totally blind sighted. Our customer, we dealt with was blind sighted. And we were rolling. I mean it was just unbelievable the way it was coming in. And tremendous demand, if you remember last year, ’13, was a rough winter. It’s almost as bad as the snowy with [indiscernible] just a couple of days ago. And that rough winter was part of that blind sighting. Fiber optic cannot be worked on during cold weather. It’s glass, it cracks, it breaks. So you plan on it, but then you never know what mother nature could throw [ph]. These are not excuses. This is basically what - basis in the manufacturing world. But we’re strong, we’re very strong cash-wise, put money in the bank like you said, for 20, 21 years actually. And this company - when it was taken over in 1994 and reorganized, it was $0.03 a share [indiscernible]. And its sales were $800,000. So yes, we’ve come a long way, but we should - we definitely are growing to be bigger and bigger each day.

Okay. On the margins?

They’re large. The OptiFlex is very competitive, the [type 1] OptiFlex. Excuse me, the fiber optic is a competitive product, controlled by the manufacturers. We do not manufacture the glass fiber itself. That’s Corning. Corning is the largest in the world. You couldn’t ask for a better partner. And being a Gold House is also an asset. And now, we’re two Gold Houses. Comnet and Cables Unlimited is also a Gold House so we’ve got two Gold Houses. That makes us, I think, the second largest Gold House in the country. So we’re very good - I think, second or third, excuse me. And that makes us a very good position into Corning.

Joe, I don’t have it in front of me, but I will tell you that they have - all their margins are - all their margins are as good. Their operating expense ratio is very good which allows them to have a contribution margin that is more than acceptable, if that’s - if you’ll accept that as an answer.

That will do for now. Thanks, guys.

Thank you, Joe.

Thank you. The next question is from Wyatt Carr of Monarch Bay Securities. Please go ahead.

Thank you. And, Howard, sorry you’re not feeling too well today. And Johnny, welcome aboard. Robert Jacobs, I’m glad to see you’re back. And Mark, I had a couple of questions for you. You said that cash - you spent - I believe it was, what was it, $3.3 million on the acquisition.

Yes.

The cash portion. So if I’m correct, your ending cash balance should be around $11.4 million after the acquisition?

In that neighborhood if you also need to take into consideration that we just [ph] - okay quarterly cash inventory, approximately $600,000 -

Right.

But having said that, it’s probably [ph] accounting for $600,000 which we’re going to generate a number on top of that. I would say we’re probably more in the mid - between $10 million and $11 million.

Okay, good enough. You also had a share repurchase authorization that you’ve bought 220,828 shares for $104,000. That leaves on my count 477,000 at the current price would be roughly 2.2 million. Is that also - is that repurchase still authorized?

Yes, it’s still [indiscernible].

Okay. My question is this, with the cash around $10 million, you’ve got - and of course, you don’t have to exercise the repurchase, but you’re looking at potentially $200 million plus on a repurchase, you’re looking at $2.3 million if you continue the current dividend. That’s half your cash. It’s not assuming that the - your cash flow at the accretive and after that, but also you had a line of credit. Do you still have that access to the line of credit?

Yes, it’s $5 million.

$5 million. Okay, great. And -

[Indiscernible] as we start buying [ph] priority [indiscernible]. We probably can’t disclose every single one of those priorities right now but I believe we have the objectives going. We have the regime [ph] and the background of Johnny Walker and so forth. So I think we’ll end up with [indiscernible] the priorities we’re having. We look forward to 2015.

Got you. The other thing is you had a - CUI lost a major customer and that’s probably accounted for a good portion of the decline in revenues.

Excuse me, not the customer. We just lost the [indiscernible] buying that type of product.

Okay. Is Comnet in the same space? In other words, do they sell - are they retrofitting fiber optics to towers or are they more in the data centers and is there a completely different market that Comnet addresses?

They’re more in the - much as towers as Cables Unlimited. They have a unique - it was a hybrid, a hybrid with functions with the fiber optic. Even had towers running next to the fiber optic in the hybrid like an octopus, pretty large in diameter, it was 1,000 feet long. I mean it was $10,000 [indiscernible] but it was not very difficult to do and targeted data of markets of [indiscernible] and so forth. We saw in our [indiscernible] after niches and we saw the big boys out there going after the medium-sized and smaller towers. It’s easier to handle [indiscernible] it was and we could handle it. And our number one customer, which I won’t disclose their name, they pay just basically - they added one horse [ph] then it came in and that was it.

So in 2013, that one customer was a very large percentage of revenues and then I think you’ve had two customers, both of them were sizeable percentages of your 2013 revenues. 2014, it looks like at least one of those distributors was - declined substantially.

Well, yes, we had -

Would that be this top one?

No, no. Our top one’s [indiscernible]. Oh, yes, it had a big decline mainly because of the [indiscernible] product.

Okay.

Yes. And they’ve got product [ph] behind ours that dropped also.

Right, okay.

It was one particular carrier and there was actually two carriers together on that and it was a specific project targeted. And like we said, up in those towers [ph] in a way we didn’t know was going to be short-lived that much.

Right, okay.

[Indiscernible].

Got you. The headcount, where were the reductions in headcount?

Basically across the board in the company, we decreased headcount in Cables Unlimited. We decreased the headcount in RF Connector, our second shift mainly. And Bioconnect, we’ve completely shut down the second shift. Our radio division, we put down a shortened work week. We did tricks like that. You don’t have to basically lay off, you can have a shorter work week. So we tightened our belt when we have to. We’ve always done. We take [ph] ourselves when we have to.

Got you. In spite of buying back some stock, your fully diluted share count has increased. I believe it’s up to 8.7 million shares and that was versus I think 8.5 million a year ago. Do you expect to get more aggressive on the buyback?

Obviously, if it goes down. It was one of the priorities that we reviewed in the board meeting.

Okay. And the fellow that was on the call earlier that asked the questions, Howard, can you and Johnny give us kind of what the corporate goals are as far as gross margins, what kind of revenue growth you would like to aim for, what SG&A as a percentage. I’m not asking for specific numbers to add, I’m just kind of asking for a framework to build a model on, what the company is looking for.

First of all, we carried around Neulink and RadioMobile for some time. RadioMobile we thought was going to be a niche for us in the public safety market. And we worked very - it was almost like a VEC [ph]. I mean we invested into it to build a beautiful software program and so forth. Today we get a commission from each one of their sales. Part of that we sold to the guys [ph] that manage the division. It’s just wrong time or wrong place. The public utilities - the cities are broke, the states are broke, the counties are broke, so you’re not going to get any [indiscernible] and they’re not going to buy anything. They just tightened up. So that was something that we got rid of. We’re going to definitely see better margins with them gone. We try to target a gross margin - what we’ve been consistently doing. You just have to look at - when you get a downturn, you live with it, you adjust to it. And we’re constantly right around the total gross margin of all the divisions right around a 50% number. And that’s not too shabby in the industry, as you well know.

Right.

And so we will continue to go at that. One of our goals is to continue that pattern. We know how to do it. But we make adjustments to continue doing it.

I’ll just add one thing. I keep going back to this - what’s going on in the marketplace. This is not - I’m not trying to give you an elusive answer. With the CapEx being stagnant and the tier 1 carriers living more from CapEx to OpEx to impose their systems, that has had an impact across the board with anybody. So when we talk about growth strategies, a big chunk of our business is tied to distribution which is tied to the contractor business which is tied to the tier 1, tier 2 and tier 3 carriers. So it’s really difficult from us to say I’m going to increase - we’re shooting for explicit increase until this thing stabilizes itself because we, as a company, are hamstrung a little bit because we certainly can’t compete with our distributors. That would be fatal.

I agree.

This, I believe, we’re marking [ph] and we are making moves to get out of it, as Johnny mentioned before. We don’t want to be totally dependent upon the tier 1 and tier 3. We had an investor call once and he says - yes, I understand, when AT&T says sit, you guys - when they say up, you sit up [ph]. And we really do. I mean, they’re the big boys, all of them. And Verizon, Excel, I mean you just name them down the line. They’re big giants out there with a lot of cash [ph].

Right.

And they got blindsided by the iPhone that they never knew how big that market has gotten. Look at them. Look what Apple reported, what was it, yesterday? Like, god.

Yes.

And that saturated the market. What Manny, our marketing guy, had some data and he was talking about the DAS [ph] program. They put the DAS in the AT&T Stadium, the largest one in Dallas, Texas where the Cowboys play where they had the Cows ballgame. There was 2 terabytes of information being sent out of that stadium. There’s people taking pictures, people texting, people this. The carriers want to keep ahead of that. They lose calls. They don’t want to lose calls. So they’re working hard to increase that market. The problem is they all got different technologies. And so it’s a very complicated world out there as far as the wireless industry. But we prevail. We prevail through all this.

Got you. Mark, this is just a quick chain of questions. It’s my last one. On goodwill, you had about three - a little over $3 million as of the 10-K filing. Was there any goodwill added in the Comnet acquisition?

We’re in the - so the answer is yes. There will be some. We’re in the process of evaluating how much is goodwill, how much is going to be allocated to intangible assets that will be amortized. So we’re going through that process. But we will definitely have some goodwill and intangibles.

Okay. And those numbers will show up - I mean, this is - you’re in the January - the first fiscal quarter. So will those numbers all show up in the 10-Q for the first quarter?

Yes, absolutely. They’ll be in our March news release.

Okay, great.

Forty-five days after we close in January 31st.

Well, I hope you all get to feeling better. We’ve had it up here in Orange County. So we’re glad this moved south.

We were at our board meeting and both Johnny and I got it and I think Marvin Fink [indiscernible] too. So optimum factor again.

All right. Well, good luck and thanks a lot for taking my questions.

Nothing wrong with it [ph]. Good talking to you again, Wyatt.

Thank you. The next question is from Steve Cole [ph] of Mangrove [ph]. Please go ahead.

Good morning or it’s still [ph] evening here. I’m glad I’m 8,500 miles away, so I don’t need to worry about catching any of that stuff.

Thanks. Good morning, [indiscernible].

Congratulations, Johnny and, again, Howard. You’ve hardly said enough to encapsulate your performance over the years. I had a couple of questions. I wanted to come back to your comment for a minute. So if you look at the revenues you guys have broken out for October, can you give us two things? One is some idea on the profitability, number one. And number two, what type of pipeline are they working off for this year? And again, generally speaking, just how do these - we already know about Cables Unlimited and what happened there. But are these guys, do they have 20 jobs in there making up the backlog or can you give us some curve in terms of what that looks like? And then I’ve got a couple of follow-ups for Mark on that.

Part of the evaluation of higher income that was definitely concerns about a one-time shot project. And we looked at that very thoroughly. Like any company, they do have a large customer but was nowhere near the magnitude of OptiFlex, nowhere near. And so that’s some good news. As far as the future of it, there’s definitely - a part of his earn-out is a good incentive program for him to grow that company and working with us. He has nowhere near the capability of graphics and advertising and so forth like we have. And we plan on doing a lot more for him that way. So that’s out of the corporate end of the company. So he is very optimistic on his projections. I don’t have the numbers handy right now to say which one numbers they are and then we don’t usually disclose that with the forward-looking statement. But it’s a promising looking company. And he’s a promising looking guy to be part of our team. He did a presentation at the board meeting last year - last week, excuse me. Not year, last week. And he’s very impressive. He’s a good salesman. Darren Clark of CUI is a good engineer and salesman. They’re both - and they complement each other. And they knew each other for years. So this is a good mix this way. It isn’t that they’re both greenhorns getting together. They’ve got experience and they know each other; they competed against each other. And now you put them together, it’s a strong team.

So when you look - just turning the possibility to one side - and I know, I think, Johnny, you mentioned that it’s not fair just to look at gross margins because you got to look at the operating margin [ph] and you’ve done a good job there. But how does that business compare historically to CUI excluding the OptiFlex menu that they had last year? I mean are they a comparable margin business to what CUI has done historically? Are they a little bit better? How would the margin profile look when we look at those two?

They’re not - they move - Comnet operates at a lower gross margin. I think they’re a little more competitive market with their customers. They compensate by running a very lean ship and being very productive. So as the bottom line, right, the contribution margin level, they’re - and I’m hesitant to say this, but I believe they’re close because I don’t have it in front of me. So at the contribution margin level, you’re achieving the same thing. I guess that just the market is far more competitive than some of the stuff that - some of the offerings that Cables Unlimited has. And I will repeat that that business is, generally speaking, I’ve come out of the project business inventory industry where almost - you had run rate business but you have project business. Our distributors are run rate business for the most part. These two companies are project-driven. And with that causes some bumps along the way. I mean you have - and you can see this with the Cables Unlimited. We had a wonderful opportunity. They generated enough income, almost to pay for themselves in the prior year of what we paid for on that client. And so they’re involved in - particularly, Comnet is involved more in a bidding process than CUI is. So that’s - any time you get in the competitive bidding, you’re going to see the margins lower. But that just means you have to operate more efficiently which Rob has done a good job of.

Okay.

Let me add besides that program that we’re targeting and that’s called the DAS program. It’s a worldwide program. And basically, DAS uses some special testing that’s called PIM testing. That’s InterModulation, all these fancy words, which is nothing more than static, I would say, that you hear on radios. But DAS is buildings and like I said, the AT&T Stadium, they put 100,000 people in one place. And all those people are texting and so forth, it jams cellulars [ph]. So the DAS program is the bunch of antennas with cables put around this whole stadium so they won’t lose any calls, won’t lose any text, won’t lose any pictures, nothing like that. So the plans of many buildings, new buildings, any building over four storeys high for some cities have to have a DAS system and so forth. They have a lobbyist [ph] work going on right now that - in the name of security, calling 911. If you don’t get a phone, you can’t call 911 and everything is going to this handheld [ph] world of cellular, more cellular. People are - I saw a thing that - a phone that we’re talking in right now is going to be obsolete. It’s going to have - everything is going to be wireless.

Yes.

So market’s there. It’s just how we move. And they’re trying to keep ahead of the flow.

Let me ask you one quick question just, Mark, on - I think Johnny mentioned earlier the deal would be accretive post one-time items for the first year. But if you look on a cash basis, it’s a bit significant, the accretive, right [ph]? Because I presume what you’re talking about is amortization in terms of getting a book contribution versus cash factors [ph]. Is that right or am I missing something?

I’m sorry. Let me turn the phone around here where I can hear that a little bit better. I’m sorry. What was -

I’m sorry, Johnny. What I was just getting at was I think I’m - when you mentioned the Comnet initially, I think you made a comment about it being accretive - after one-time items for the first year, you’re hopeful that it would be. I guess my question would be twofold there. One is, are we talking about the difference between book accounting versus on a cash basis, right, because from a cash basis, it should be material. I mean, obviously you’re not making anything on $3.3 million of cash. And presumably they’re doing something here on the bottom line. I’m presume they’re making something on their - whatever it is, 4 million. So even if you’re using simple math, you get to some accretion without doing much of anything. So I’m just trying to understand kind of how you guys are framing that and how accretive these things can be because obviously, you’re not buying it because it’s not going to make money. Obviously, we’re doing this because we’re going to make money. I’m just trying to get some better color on what we can expect or what we should expect.

Well, I think when - the comment that I made, I was referring more to an EBITDA calculation initially because one thing that these - they’ll take it in the - but you have - since we don’t know right now how much is going to be amortized - how much is going to be allocated in tangibles that will result in amortization and how much will be goodwill - and Marshall & Stevens is going to go through that evaluation here fairly quickly. Once we get that - once we get those numbers, we can start doing some projections but preliminary results, I’d ask Mark, look pretty good in terms of how they finished the year. I think we can safely say that.

I think we would not have done the deal unless we felt like it was going to be a positive cash flow, of course, to help contribute to the cost for continuance of our dividend program. But also, the bottom line is it’s going to be a contributor to our bottom line as well. So as Johnny is saying, we don’t have all the numbers but we feel very confident that it will be accretive. And as Johnny said earlier on this call, that we felt like this would be something that would be accomplished certainly later if not earlier this year.

Great. I’ll turn it back now. Thank you, guys, very much for taking the questions and I appreciate the time.

You were late again today.

Yes. Well, I’ve got to get up early in the morning, but we’re only about 1:08 here local time, so we’re holding together reasonably well.

All righty.

Okay. Gentlemen, we have no further questions in the queue at this time.

Thank you. Thank you, gentlemen. Looking forward for a successful year again.