Good day, everyone, and welcome to the RF Industries Fourth Quarter and Fiscal 2018 Financial Results Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this call is being recorded today, Thursday, December 20, 2018. At this time, I would like to turn the call over to Mr. Todd Kehrli of MKR Group. Please go ahead.

Thank you, operator. Good afternoon, and welcome to RF Industries fourth quarter and full-year fiscal 2018 financial results conference call. With me on today’s call are RF Industries’ President and CEO, Rob Dawson; and Chief Financial Officer, Mark Turfler. Before I turn the call over to Rob and Mark, I’d like to cover a few quick items. This afternoon, RF Industries issued a press release announcing its fourth quarter and full-year fiscal 2018 financial results. That release is available on the company’s website at rfindustries.com. This call is being broadcast live over the Internet for all interested parties and the webcast will be archived on the Investor Relations page of the company’s website. I’d like to remind everyone that on today’s call, management will make forward-looking statements that involve risks and uncertainties. Please note that except for the historical statements, statements on this call today may constitute forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934. When used, the words anticipates, beliefs, expects, intend, 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 products and other risks and uncertainties discussed in the company’s periodic reports on Form 10-K and 10-Q and other filings with the Securities and Exchange Commission. RF Industries undertakes no obligation to update or revise any forward-looking statements. I’ll now turn the call over to Rob Dawson, President and Chief Executive Officer. Rob?

Thank you, Todd. Good afternoon, everyone. Welcome to our fiscal 2018 fourth quarter and year-end earnings conference call. We’re pleased to report record annual sales and a return to profitable growth in fiscal 2018, reflecting the significant progress we are making with the transformation of our business. As part of this effort, we divested our Comnet division at the end of the fourth quarter, which will increase our profitability going forward and is in line with our goal of unified sales strategy. More on that to come, but first, let’s review our financial highlights. Net sales for the fourth quarter grew 34% with Comnet and 41% without Comnet, and for the fiscal year, net sales reached a record $58.5 million with Comnet, an increase of 89% year-over-year and we’re up 118% to $50 million, when you exclude the Comnet. Our offering of high-quality products, flexibility in design, and fast turnaround time is resonating in the market. And with our focus on streamlining operations and sales execution, we’re clearly doing a better job of selling our products. Our positive financial results include an increase in gross margins for the year from 30% to 34%, and we generated $6 million in income from continuing operations or $0.63 per diluted share for fiscal 2018. This is up significantly from $170,000, or $0.02 per diluted share last year. We also generated $10.3 million in cash during the year, further strengthening our balance sheet. And lastly, we ended the year with a backlog of $11 million, up from $8 million at the end of the prior quarter. Mark will provide more details on the financials shortly. But needless to say, I’m very proud of these positive results and the tremendous efforts of everyone at the company behind our improved execution. I also want to thank…

Thank you, Rob, and good afternoon, everyone. Fourth quarter net sales of $9.9 million, our third highest sales quarter ever, increased $2.9 million, or 41% year-over-year. These results exclude our Comnet Telecom Supply subsidiary that was sold on October 31, 2018, the very last day of our fiscal year. Including Comnet sales, net sales in the fourth quarter were $12 million, an increase of 34% over the prior year quarter. The majority of the increase was from our Custom Cabling segment due to an increase in demand for its fiber optics cable used primarily in the build out of wireless carrier 4G and 5G network deployment. Increased sales at the Custom Cabling segment, largely contributed to a 34% increase in gross profit for the fourth quarter to $3 million. Fourth quarter gross margins were 30%, making this the fifth straight quarter with gross margins of at least 30%. Selling and general expenses were $1.6 million, a decrease of $81,000 from the prior year fourth quarter. Selling and general expenses as a percentage of sales declined to 16% of sales, compared to 24% of sales in the fourth quarter last year, reflecting the company’s increased operational efficiencies. Income from continuing operations in the fourth quarter increased to $917,000, or $0.09 per diluted share, compared to $229,000, or $0.03 per diluted share in the fourth quarter last year. Income from continuing operations as a percentage of sales was 9%, compared to 3% in the fourth quarter of last year. In the fourth quarter, the loss from discontinued operations, net of tax was $457,000, compared to income, net of tax of $77,000 in the fourth quarter last year. Net income for the fourth quarter, which takes into consideration a loss from the sale of Comnet, increased 50% to $460,000, or $0.05 per diluted…

Thanks, Mark. As we’ve discussed fiscal 2018 was the best year in company history, with record sales growth, increasing gross margins, strong cash flow and a record income from our continuing operations. We also declared our 34th consecutive quarterly dividend. In fiscal 2019, the goal will be to build on these record results by leveraging our strong customer relationships and channel partnerships to further expand our footprint in the marketplace. And to do so in a profitable manner, as we work on our three-year plan to grow to $100 million in sales. We appreciate the partnerships with our customers, distributors and suppliers, the hard work of our employees and the support of our shareholders. With that, I would like to open the floor to questions. Vicki, we’re ready to take our first question.

Thank you. [Operator Instructions] And we’ll go to our first question from Orin Hirschman with AIGH Investment Partners.

Hi, how are you?

Good, Orin. How are you?

Good, thanks. Hi. Just one quick financial question. Just in terms of the backlog, is the backlog after the Comnet disposition?

It is. Yes, the $11 million does not include Comnet. It would have been a little higher if we included Comnet in that number.

And the same thing with the bookings?

Correct. The booking number was without Comnet.

So, if you were to look at where the increased bookings is coming from and what we do highlight as verticals? And then as a second question, can you kind of highlight where you think what we’re up to in terms of 4G additions, 4G densification, versus coming of 5G?

Sure. Yes, the verticals that I think impacted our bookings in the quarter and then we’re carrying forward with us. You’ve got the Wireless segment, the Wireless Carrier segment that we continue to see some strength, and that relates to your second question, so I’ll come back to that kind of on the 4G versus 5G piece in a sec. So, we’re seeing that kind of the core wireless carrier space continues to be strong for us. We also see nice continued growth in our historical core business, cables and connectors, in DAS and small cell kinds of applications. And then in the Industrial segments, things like the Honolulu rail project certainly help us in that. That’s a piece of business we’ve done for a long time, but we’ve become the only source versus sharing that business with someone else, and so that’s a nice long-term piece of business. So, I think the biggest number you’ve seen there is still related to the wireless carrier space, but we’re seeing good core growth in really all of our our main market segments. Your second question there, Orin, around 4G versus 5G, we’ve definitely seen a shift to where we’re getting purchase orders for 5G products. We saw some of that. We talked about that last quarter. We’re seeing that continue the style of cables that’s being ordered. From a macro site perspective, we’re seeing orders around 5G. On the densification side of whether it’s 4G or 5G, I think that’s picked up as well and that’s more DAS and small cell specific cable type in the DAS world that’s tested in a certain way, low noise thresholds. Those cables have picked up again aggressively, so that’s been going on for a while, but we’ve seen some nice uptake in those sales that are part of the results that we’re looking at here.

Obviously, it is a nice [ph] bookings quarter, any thoughts on when the wheel growth begins to start over the 5G? I know you’re finally starting to see a trickle in nuance. My question is, how did you know it’s 5G versus 4G? When do you really think you can gain theme or how do you think you can gain theme if you have any insights?

Yes. So, we’re in an interesting position, because I think we’re, in some cases, we’re early in the cycle where people are putting tables up or at least not getting cables ready to take out to the macro sites. On the other hand, we’re getting a little piece of this action. So in talking to the carriers and in talking to other suppliers in similar markets, it feels like we’re all kind of looking at next year or you get into the middle of the end of next year, the spend should pick up. We need some radios in the market that can truly pull off the 5G capabilities, then I think we’re all kind of looking at 2019 as a year where we should see some significant growth. But it’s also been an interesting kind of a whole thing starting and stopping spend on this, where it’s aggressive speed and then slowdown and then aggressive speed and then slowdown. So it’s hard to pinpoint exactly, but I think I do expect calendar 2019 to have some significant spend to get going in the 5G world.

And finally, you had chipped that big order. I mean, the question whether that was actually being used and put into the field , do you feel that, that it fully deployed at this point and there’s no fact how [ph]?

When you say big order, you’re talking about kind of the large orders we received late last year or early 2018 that’s what you’re talking about?

Yes, we feel those will work their way through.

Yes. So I think they’re – I don’t know that they’re fully deployed. There does seem to be a constraint in getting tower companies or people that climb towers and do this tower integration, finding resources to get that done. I heard from multiple folks that that’s a constrained labor market finding the good ones to do that work. But I think we’ve got our materials as far as we know, positioned out in markets, ready to go if they’re not already being deployed. So we do think that that’s out there on location. I don’t know if that’s fully printed through there or I guess fully flowed through the deployment yet.

Okay. And just one follow-up on that and then I’ll let other people ask. But if that’s not fully deployed, how the bookings are strong or it’s different 5G versus that was 4G densification versus DAS?

Yes. I think, the bookings are strong, because we’re seeing some early stages of 5G, which would be incremental to what was put out there in place, a different style of cable for a different style of radio. So I think those two things have a little bit of a layering effect on them. I also think we’re just doing a better job of getting into more piece of the business. We’re at the LD Micro Show, I think, one of the things that I talked about was total addressable market in all of these different spaces is in the tens of billions or hundreds of billions of dollars, and we just came off a record year, where we did north of $50 million. So as we spread out a little bit and get into some deeper conversations with people and find opportunities to do more, I think, in almost any instance there’s a chance for us to book more regardless of whether the spend is flowing aggressively or it’s slowing down, it will be affected by as just like anyone else. But I feel like at our size, we should be able to win some business in that addressable market.

Okay. Thanks so much.

Sure. Thanks, Orin.

[Operator Instructions] At this time, I hand the call back over to Mr. Dawson for closing remarks.

Thanks, Vicki. That was a 30-minute call. It’s our longest call yet, so we’re making progress. Thanks, everyone, for your interest and support of RF Industries. Mark and I look forward to reporting our fiscal 2019 first quarter results in March 2019. Thanks again for joining our call. Happy holidays to everyone, and have a great day.

That does conclude today’s conference. We thank you for your participation.