RF Industries, Ltd. (NASDAQ:RFIL) Q3 2019 Earnings Conference Call Transcript

Sep 12, 2019 • 04:30 pm ET

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RF Industries, Ltd. (NASDAQ:RFIL) Q3 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

[Operator Instructions] And our first question today comes from Josh Nichols with FBR. Please go ahead, sir.

Analyst
Josh Nichols

Yeah. Thanks for taking my question. I want to ask looks like as far as how much of the Custom Cabling business, is that really direct to carriers at this point for the quarter?

Executive
Robert Dawson

Yes. We don't really break it down that way. But it's a pretty meaningful amount. And if you look at our growth over the last year in that segment other than you've got an acquisition thrown in there, but the majority of our growth last year and it kind of continues quarter-to-quarter now has come out of that, that direct business or it's going to that same handful of customers, even if it did directly, we sort of we had it going both directly and indirectly, but it ends up in the same place to allow for the build.

Analyst
Josh Nichols

And is that business subject to all the like any of these long-term contracts or purchase orders, or is it just very quick term business with the formalized longer term agreements in place?

Executive
Robert Dawson

Yeah. So we have master service agreements in place with all the key customers in that space. And in that process, we've been through kind of the traditional bidding that goes on in order to win and then retain that business. So we have long-term relationships in place. We -- the way that, that's handled though is we take purchase orders spread out over the course of time, when needed. We work closely with the various carriers and integrators to understand their needs and try to project as best possible but as my comments kind of pointed out, it's starts and stops and kind of a holding fashion isn't necessarily consistent, but we're communicating directly with them daily and weekly to talk through those projections. So it's a long-term agreement that they draw against when needed.

Analyst
Josh Nichols

All right. And could you dive into a little bit about some of these key customers like which carriers you have these MSAs with specifically?

Executive
Robert Dawson

Yeah. So we don't actually disclose that and that's a long standing approach that we've had, but it's the same customer we've been working with for a few years now. And then various folks within their services ecosystem that we do business with as well. But we've been asked to keep that to ourselves, let's say. So we don't disclose it that way. There's only so many potential customers out there though I recognize that.

Analyst
Josh Nichols

And then, I guess what's really the differentiator between you and some of the other competitors both large and small that enable you to win some of this cell tower cabling business specifically?

Executive
Robert Dawson

Yeah. So I think there's a couple of things I mean, our engineering capabilities are really good especially on the hybrid fiber, power and fiber in one, in one cable, those designs are really great quality and the team has done a good job of putting those together and