RF Industries : RFIL 2021 Annual Report

2021

Annual Report

Cable Assembly

July 26, 2022

Fellow Shareholders:

When concluding my internal messages or external posts, I frequently use phrases like "we're just getting started" or "this is only the beginning." I gravitate to these comments based on my general feeling that we are truly going through a reinvention of the Company. Every new customer win, or quarterly earnings release, or new fiscal year is a great time to celebrate what we've accomplished over the last few years, but more importantly, to also recognize that all of that great work has laid the foundation for success ahead. We continue to build a stronger and more stable platform from which to jump to our next phase of growth.

Fiscal year 2021 was a year of recovery after a challenging fiscal 2020 where we saw both inconsistent market demand and supply chain which made for a tough operating environment due to the global health crisis. We proved that we had built a solid run-rate of base business that sustained us through a period of little to no projects and through it all we stayed focused on stability for our team, servicing our customers, and successfully executing on our long-term strategic growth plan. What resulted was another year of record revenue for the Company. That platform for growth that we have built was key to our success in fiscal 2021, as through each quarter we showed improvement as the general market recovered and some projects began to return. Sequentially, quarter by quarter, sales were $10.0 million, $11.1 million, $15.2 million, and we ended the year strong with fourth quarter sales of $21.1 million.

For the fiscal 2021 full year, sales were up 33% over the prior fiscal year to $57.4 million, and we generated net income of $6.2 million, non- GAAP net income of $7.1 million and adjusted EBITDA of $2.7 million, all up solidly year over year.

We saw strong growth in all of our markets and channels for the year, reflecting a healthy recovery in our entire business. We were pleased to be getting back to the growth we laid out in our long-term plan. While we had to pause briefly in fiscal 2020 and early in fiscal 2021 under the operational challenges we encountered around the COVID pandemic, we got back to it and felt good about our solid performance to finish the year. We expect more growth in fiscal 2022 as we execute our plan to scale our business both organically and through M&A.

We continued to see signs of recovery in all markets as the year went on, and especially in the spending from the wireless carrier ecosystem. As the year ended, we announced several multi-million-dollar orders for our Optiflex hybrid fiber solution from a new Tier-1 wireless carrier customer. These orders helped to bring our backlog to $33.3 million at the end of our fiscal year on October 31st. Optiflex continues to be a big driver of our significant growth in project wins to layer on top of the steady growth of our core business.

During fiscal 2021, we invested, increased, enhanced, added, and integrated. In particular, we:

• Invested even further in our already strong go-to-market capabilities;
• Increased and significantly broadened our relationships in the carrier ecosystem including wireless carriers, OEMs, neutral hosts, tower companies, and integrators;
• Enhanced our distribution focus, which helped us through some challenging quarters in fiscal 2020 and enabled us to show solid growth in fiscal 2021;
• Added to our already strong product offering; and
• Integrated more of the key functions and processes within our overall organization.

All of this points to the continued execution by the team on our long-term organic and inorganic growth plan. Going forward, we remain squarely focused on delivering shareholder value and, as we have consistently said, consolidation makes sense in our industry. Like any responsible company, we are always looking at value-enhancing acquisition opportunities and we believe that we can be a driver of some key consolidation in our markets.

As we began fiscal 2022, we announced and then closed on our acquisition of Microlab. Microlab designs and manufactures high-performance RF and microwave products enabling signal distribution and deployment of in-building Distributed Antenna Systems (DAS), wireless base stations and small cell networks. Their products are known worldwide for their superior quality and performance and are considered the gold standard in RF and microwave distribution systems.

This acquisition is in line with our strategic plan that we've been working on to drive revenue growth both organically and through the acquisition of good quality companies with passive components that give us access to new products that we can sell through our growing distribution channel. With our focus on the significant growth opportunities we expect to see in servicing the small cell and DAS markets, we believe Microlab's products will provide additional scale and opportunity for further revenue and profitability growth.

In fiscal 2022 we remain focused on successfully executing on our long-term growth plan to not only grow through acquisitions, but also organically. As a result of the investments we have made in our go-to-market capabilities, we are now actively engaged with every top tier

1

company in the carrier ecosystem. Ahead of us we have the promise of 5G and the related CapEx spend that should benefit us. And our large backlog gave us a nice tailwind as we started the new fiscal year.

Fiscal 2021 was a solid return to the growth that we believe we are earning in the market with our hard work. Looking ahead, we are pleased with the continued increases in our organic business, and the significant opportunities we are seeing from the Microlab acquisition for additional scale, overall margin and profitability improvement, and further revenue growth. We are excited about the possibilities in front of us and we appreciate the partnerships with our customers, distributors and suppliers, the hard work of our employees, and the support of our shareholders.

We're still just getting started.

Sincerely,

Robert Dawson, President and CEO

2

Abridged and Edited Copy of Annual Report

Form 10-K

Annual Report Under Section 13 or 15(d) of

The Securities Exchange Act of 1934

For the fiscal year ended October 31, 2021

Commission File Number 0-13301

RF INDUSTRIES, LTD.

7610 Miramar Road, Bldg. 6000, San Diego, California 92126-4202

[phone]

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant's most recently completed second fiscal quarter was approximately $59.9 million.

On January 4, 2022, the Registrant had 10,058,571 outstanding shares of Common Stock, $.01 par value.

Forward-Looking Statements:

Certain statements in this Annual Report on Form 10-K (this "Annual Report"), and other oral and written statements made by the Company from time to time are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including those that discuss strategies, goals, outlook or other non-historical matters, or projected revenues, income, returns or other financial measures. In some cases forward-looking statements can be identified by terminology such as "may," "will," "should," "except," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms or other comparable terminology. These forward-looking statements are subject to numerous risks and uncertainties that may cause actual results to differ materially from those contained in such statements. Among the most important of these risks and uncertainties are the ability of the Company to continue to source its raw materials and products from its suppliers and manufacturers, particularly those in Asia, the market demand for its products, which market demand is dependent to a large part on the state of the telecommunications industry, the effect of future business acquisitions and dispositions, including the pending acquisition of Microlab/FXR LLC, the incurrence of impairment charges, and competition.

Important factors which may cause actual results to differ materially from the forward-looking statements are described in the Section entitled "Risk Factors" in this Form 10-K, and other risks identified from time to time in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

3