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CUI Global shares surge in New York as backlogs point to stronger second half

The Power and Electromechanical (P&EM) business's unaudited backlog was $19.2mln as at end June
CUI Global shares surge in New York as backlogs point to stronger second half
The group is active in the areas of gas and power monitoring

Shares in CUI Global Inc (NASDAQ:CUI) surged on Wednesday as the group said it expects a stronger second half on the back of backlogs in both its power and energy subsidiaries that augur well for improved profitability.

Reporting second quarter numbers, the company said the-ongoing recovery in its Power and Electromechanical (P&EM) segment had offset flat revenues on the energy side.

The group's Orbital Gas Systems' advanced GasPT platform allows better gas analysis, while its CUI Global Inc segment is a specialist in digital power monitoring.

In the second quarter to end June revenues for  the group decreased 3% to $22.5mln, while the gross profit margin eased 37% compared to 40% in the same period last year.

The net loss was $1.6mln wider than the loss of $1.5mln last year.

But significantly, the Power and Electromechanical (P&EM) business's unaudited backlog was $19.2mln as at end June, while the energy segment backlog was $16.4mln.

"Investments made during the electronics industry downturn to broaden our customer base and increase distributions channels are today yielding dividends," said William Clough, chief executive of CUI Global, who added the firm was now on a path to sustained growth.

"Business momentum for our Energy products, especially for our GasPT, is building across a broader base of prospective customers and geographies," he added.

"In Europe, we submitted a bid for up to 1,000 GasPTs for biomethane-to-grid applications to ENGIE. We will soon initiate field trials for our odorizer product that is already eliciting interest from gas operators in continental Europe.

"In North America, we see traction in both our GasPT and VE sampling system products.

"In particular, we are closing in on an opportunity to establish GasPT as the standardized process control device for a Top-3 gas turbine manufacturer.

"We initiated field trials in Canada with a large energy delivery company for GasPT as a fiscal monitoring solution that is similar in scope to our project in Italy.

In the power and electromechanical segment, beta testing of the ICE Block units in the field is proceeding very well, he added.

Yesterday the firm said production of its ICE switch - aimed at unlocking capacity in data centres - had started.

The device is a power monitoring and switching system that connects to Virtual Power Systems' (VPS) ICE (Intelligent Control of Energy) Software to provide dynamic redundancy inside a data center.

Initial sales of the ICE Block and ICE Switch are expected to start this year.

Shares in CUI Global Inc added 17.19% to $3.75 in New York.

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