Q3 2020 One Stop Systems Inc Earnings Call
Ladies and gentlemen, you currently on hold for a one stop systems third quarter 2020 conference call. At this time, we are somewhat in todays, but instead, we plan to be underway. Shortly we appreciate your patience and please remain on the line.
[music].
Ladies and gentlemen, good afternoon, and thank you for joining us today to discuss one stop systems financial.
Well for the third quarter ended September Thirtyth 2020.
With us today are the company's President and Chief Executive Officer, David Ron and Chief Financial Officer, John Morrison.
Also joining today is the company's chief sales and marketing officer, Jim Heistand.
Following their remarks, we will open the call.
Your questions.
Before we conclude today's call I will provide some important cautions regarding the forward looking statements made by management during this call.
I would also like to remind everyone that today's call will be recorded and will be made available for replay via the instructions in today's press release in the investors section of the company's website.
Now I would like to turn the call over to <unk>, President and CEO David Ross.
Thank you Abby.
Good afternoon, everyone.
Great. Thank you joined US today I Trust, you and the families are staying safe healthy and virtual productive.
Before addressing solids.
Children operating progress we made during the third quarter I would like to acknowledge our teams continued to affect a response to the coldest pandemic.
The safety of the health of our employees can choose to be a top priority.
Our implementation of recommended CDC guidelines, that's kept our teams healthy and products have shipped without.
Disruption.
Yeah, Derek has impacted several of our key customers and suppliers limiting our topline revenue growth over the past two quarters.
How's It Q3, EBITDA went up by 9.9 million and lost or delayed revenue compared to our internal annual plan.
Attributed to coated related matters.
More than half of the shortfall was from our largest customer in the media and entertainment space.
Despite lower revenues are dedicated team produces better bottom line results for the quarter versus a year ago. They may.
Great strides to cut expenses improve efficiency and strengthen one stop systems in the short term and more importantly for the future.
As John will outline shortly our operating margin EBITDA net income all improved over the same quarter last year.
Im proud how the employees executed the expense reduction plan implemented in April and layered in new customers. During this period.
These efforts resulted in reducing our operating expenses by over 1.2 million year to date, and we remain on track and committed to our target two point.
$5 million to $3 million and cost reductions on an annual basis.
We exceeded our minimum guidance of 11.8 million that we provided our last earnings call coming in at $13 million for the third quarter, while also producing strong gross margins of 38%.
Before I provide additional color and our outlook for the remainder of the year I'd like to turn the call over to our CFO, John Morrison, who will take us through the financial details for the quarter.
Following John.
We'll be Jim Eisen, our chief sales and marketing officer, who will share some information.
And our exciting new products and discuss customer activity.
John.
Thank you David and good afternoon, everyone I'm glad you could join us today.
Earlier today, we issued a press release with our results for the third quarter and nine months ended September through.
2020.
Releases available in the Investor Relations section of our website at one stop systems Dot com.
Our statement of operations shows that our revenue in the third quarter was $13 million up 12%.
On the $11.6 million in the previous quarter, and lower by 13% compared to $14.9 million in the third quarter of last year.
The sequential improvement in Q3, EPS compared to our previous quarter was due to increased sales into the military.
As expected for the second half.
As we highlighted in our Q2 earnings report much of the decrease in revenue as compared to a year ago quarter was attributable to a key customers media and entertainment business being down by approximately 1.8.
Three in dollars as a result of the coal that 19 pandemic.
This industry is expected to be impacted well into 2021.
Revenue for the nine months ended September 32020 was $38 million a decrease of five first.
No I meant as compared to $39.9 million in the same year ago period.
The decrease was due to a reduction in revenue of $3.8 million in our media and entertainment mentioned business mentioned before as well as a reduction of one.
Personally at $9 million from historic military contractors and other reductions due to covance impact due to covance impacted customers.
These reductions were primarily offset by year over year growth of new business from.
Customers.
And PC I Express Gen four test equipment suppliers that new revenue totaled $5.9 million.
In terms of the revenue breakdown between our operating units.
In Q3, our core Lss business contributed 9 million.
As compared to $9.7 million in the same year ago period.
Our European subsidiary Brashear with with several customers, they're also being affected by it the pandemic contributed $4 million in the third quarter. This compares to the five.
Point $2 million in the same year ago period.
For the nine months.
For the first nine months of the year, our core Lss business contributed 24.7 million of revenue as compared to the $26.2 million of revenue in the.
Same period last year.
Greg here, they contributed $13.2 million of revenue in the first nine months as compared to 13.7 of revenue in the same period last year.
We are no longer reporting cdti as a scandal.
Pro business unit as we completed the integration of cdti into our core Lss operations as of July one 2020. This.
This was part of our reorganization and cost reduction program that we implemented earlier this year.
Now turning.
We will gross profit.
During the third quarter, we have strong gross margins of 37.8% yielding that smaller.
Being a smaller gross profit as compared to the prior year on reduced revenues of $1.9 million.
Our gross profit was 4.9.
$10 million compared to $5 million on 33.7% gross margin in the same year ago quarter.
Gross margin for our core FSS business increased to 44.6% in the third quarter from 39% in the same year.
And go quarter.
This improvement of 5.6 percentage points was attributable to higher margin military sales compliant combined with a decrease of the lower margin media and entertainment business.
Our brasher units gross margin decreased.
The 22.5% in the third quarter as compared to 23.7 in the same year ago period on reduced sales.
For the first nine months of 2020 gross profit totaled $11.6 million or 30.6.
Sen of revenue this.
This compares to $12.9 million or 32.2% of revenue in the same year ago period.
Gross margin for our core Lss business was 35.7% in the first nine months of the of 2020.
As compared to 37.2 in the same year ago period.
Revenue is gross margin decreased to 21.1% in the first nine months compared to 22.8% in the nine months of last year.
Our overall operating expenses decreased 15% to $3.9 million from $4.6 million in the third quarter of 2019.
The decrease was primarily due to the cost reduction initiatives that we began in April where our workforce was reduced.
And new cost containment efforts were implemented.
Overall, our operating expenses as a percentage of revenue improved slightly to 30.2% in the third quarter compared to 30.9% in the same year ago quarter on lower revenue.
This improved expense levels does reflect the 2.5 million to $3 million in annual savings, we expect to realize from our expense reduction program.
For the nine months ended September 32020, our total operating expenses decreased nine.
10% to 12.6 million as compared to $15.8 million in the same period last year.
The decrease is primarily attributable to the reorganization and expense reduction program executed by the team along with the non re occurring.
The goodwill impairment charge of 1.1 point $7 million in the prior year.
Operating expenses as a percentage of revenue for the nine months period improved to 33.1 versus 38.7 in the prior year period this changed at.
And again reflects the success of our expense reduction program and improved efficiencies.
On a pro forma basis.
After adjusting for last year's goodwill impairment charge of $1.7 million, our operating expenses in the first nine months of two.
2020 decreased 8.6% or $1.2 million to 12.3 million as compared to a year ago.
Despite lower revenue income from operations was $979000 an improvement of 560000.
Compared to the same year ago quarter.
For the first nine months of 2020.
Our loss from operations was $938000 compared to $2.6 million or loss in the prior year.
After adjusting for the.
Prior year's goodwill impairment charge on a pro forma basis, the operating loss in the first quarter first nine months of 2020 was 938 938000 as compared to $896000 in the prior year.
Not net income on a GAAP basis totaled $858000 or five cents per share in Q3 2020.
This compares to an income of 545000 or three cents per share in the same year ago period.
For the first nine months.
Net loss on a GAAP basis improved to 250000.
Our loss of two cents per share.
Compared to a loss of $2 million or 13 cents per share in the first nine months of last year.
On a pro forma basis, after giving effect for an adjustment.
Cements for goodwill impairment charge in the prior year GAAP income was relatively flat to the prior year, even on look on lower revenues.
On a non-GAAP basis, net income totaled $1.2 million or seven cents per diluted share in Q3 2000.
20, as compared to $900000 or five cents per diluted share in the same year ago period.
For the nine months of 2020.
Non-GAAP net income totaled 773000 or five cents per share as compared to our non-GAAP net income.
Of $1 million or six cents per diluted share in the nine months of 2019.
Adjusted EBITDA, which is another non-GAAP metric was up to 1.6 million in Q3 as compared to $1 million in the same year ago quarter.
For the nine months of 2020, adjusted EBITDA was $682000 compared to $881000 in the same year ago period.
Now, let's take a look let's turn over to our balance sheet.
Cash and cash equivalents totaled 5.5.
On September 32020, as compared to $4.7 million.
As of June 32020.
Our cash position as of today is approximately $5.4 million.
We believe our cash position and available funds provides.
Let us with sufficient liquidity to meet our cash requirements for current operations.
This completes our financial review for the quarter and for the nine months.
First nine months of the year.
I now would like to turn the call over to Jim.
Thank you John and good afternoon.
Hi, everyone.
In the third quarter of 2020, we continued to see positive results from our efforts to diversify our customer base and our opportunity pipeline has continued to grow.
During the quarter, we closed four additional major opportunities, including industrial medical and two new military programs and edge computing.
Which brings program wins to a total of 13, so far this year. Despite dependent by comparison, we had 14 with this time last year.
As a reminder, we define program wins as those expected to yield $1 million or more of revenue within four years.
So have quantified the import.
Lawrence of these new program wins are wins in 2019 are expected to contribute more than $12 million in revenue for 2020.
On the new product front, we introduced before you pro expanding our Gen four product line.
Before you pro enables high performance edge computing through GPU acceleration and envious.
New storage.
The initial customer interest includes industry leaders and instrumentation measurement factory automation automotive military and other edge markets.
[music] for shipments of before you pro include the world's largest composable high performance computer being delivered to the US army by one of our customers.
Being an exciting milestone for Q4 includes our first shipment of what we code named monarch, which is our first datacenter in the sky deployment.
This high performance GPU accelerated server enables real time AI for threat detection in the harsh environment of a military aircraft.
Assuming success this innovative product will lead to new wide.
Spread military applications.
On the marketing front, we have hosted three high quality virtual events, focusing on our AI on the fly and datacenter in the skies solutions.
These events, including demonstrations of our PCI Express Gen four expansion systems that incorporate Nvidia eight one.
Through Gpus and unique form factors.
Resistant deliver up to an astonishing 20 times.
Volumes compared to previous generations.
Despite the global challenges created by the pandemic, we remain focused on driving sales and improving our marketing efforts.
We believe that maintaining this focus will contain.
Revenue to drive future growth and opportunity for Lss.
Now with that I'd like to turn the call back over to Dave.
Thank you John and Jim the.
The large component to the stronger margins. This quarter was a higher percentage of sales into the military vertical as compared to the past two quarters.
Although a.
Good portion of these sales will with programs, we've talked about such as the storage products, including data stored chewed through your shoes adoption of our products continue to expand to include accelerators and servers.
We expect strong growth in mill in the military vertical over the coming years based on these and Jay.
Commitments in the value proposition, we offer in this space.
We've also been working on a multi year strategic plan to enhance our future product roadmap and vision.
Leveraging the strong talents are key or assess employees, we have formed from internal Tiger team.
Empowered.
Hey, drew has been analyzing the market as well as where we create the highest value greatest customer coal and best margins.
Our objective is to enhance our current strengths and leverage them to create higher value products for specific target verticals.
From these efforts.
Groups over the past several weeks, we've started the share preliminary new product concepts with several customers and channel partners under NDA.
We are pleased with the initial constructive feedback which is valuable in helping us redefine our strategy.
We will continue to engage.
Each with current and potential target customers to solidify our plans.
While there are many different opportunities in the fast growing edge computing space. We are focused on the most challenging environments.
The most promising opportunities for Lss currently reside in the military and various types of.
Trans portable applications.
These verticals demand the highest performance delivered in harsh environment environment and in the smallest space, while resolving cooling and power challenges.
Our value proposition is performance without compromise.
We are committed to bringing next generation products and market for specific verticals, where we can create and maintain our leadership position.
I am pleased this is underway and I look forward to sharing more over time.
As we look forward to the final quarter of 2020, we are on target to generate revs.
Revenue of approximately $13 million.
While the past quarter continue to be challenging floral fs and many of our customers and many of our customers. We've made significant progress in multiple areas that positioned us for street to strengthen performance ahead.
This includes diversity.
Fine our customer base, new product development, greater efficiency, lower operating expenses improved profitability and a healthier balance sheet.
Now I'd like to open up the call to your questions.
[music].
Thank you.
If you would like to ask.
Question. Please signal by pressing star one on your telephone keypad if.
If you are using a speaker phone. Please make sure your mute function is turned off to like your signal to reach our equipment.
Again, it is star one if you would like to ask a question.
And we will take our first question from Ruben Roy with benchmark.
Thank you Hi, David.
I wanted to start with a near term question and then ask a longer term question I think Jim but for you. David you had mentioned sort of the $9.9 million lost or delayed.
Most of our half of which I guess in more than half of which.
From your media customer a lot of your largest customer is there some initial thoughts on.
What portion of that.
It's cancelled and not coming back versus perhaps you have a portion we might see in terms of delayed revenue whatever our situation with the pad.
With that group.
Yes so.
First of all I want to clarify something the 9.9 million is us going and looking at our annual plan that we put together, which showed significant growth for the year.
So that's what we expected because we wanted to understand better.
Cobot really impact us or is it some.
And what's going on and what we saw we calculate 9.9.
That issue as Larry said over half was.
Related to our largest customer.
And then after that where you really look at is the military part of it was really a delay.
And it's showing up basically in fourth quarter for the most.
Most parts. So we havent really lost anything in the military portion of the business for the year.
Which is good news what we've seen is a logistical delays on their part where they just have a hard time get together and moving forward on programs. Then the next biggest component of basically of that 9.9 is the commercial air.
Some brass segment basically where the CVI played if you think about the airline industry today and how that's been impacted what we see on that front is that although they slowed down activity for entertainment systems and to a degree high speed networking on a plane, which were involved with what is continuing to.
AERCO forward is safety measures on these aircraft to get to a point, where we feel is for the most part assuming a vaccine or time takes care of this thing. We think most of these opportunities come back these aren't accounts that have disappeared.
The need hasn't gone away and so we're optimists.
Stick once this thing turns around we'll get the benefit of that coming back plus the new customers and the expansion in the military.
Right. Okay. That's very helpful. Thanks, David and then for Jim It's as David mentioned you guys are working on diversifying your your customer base the programs that you're involved in it.
Petraeus, it's good to see the industrial and medical wins.
During the quarter, how did those types of end market applications compare in terms of ramps to revenue I know the 1 million plus number that you guys gave us in terms of these major design wins that you talked about.
About.
Relates to kind of a four year outlook on that revenue line, but.
I think military I've understood military as being maybe a little bit slower moving in some cases is that true or am I off base on that I'm, just trying to get to that.
Try to figure out if some of these newer designs or maybe.
Faster to ramp into.
Moving to actual revenue production.
Yeah.
Good question, because the commercial market tends to be a six to 12 month, when we have a long term program.
Sales cycle from the time, we get the initial orders to the time.
Start shipping production.
Similarly, with the government.
12 to 18 months and those cases.
So from the time, we announce a wins or the time it produces significant revenue.
Is in that 12 to 18 month range.
From some I wouldn't mind, adding to that though peers I want to.
Folk I want to point out what Jim commented on and that is that the wins last year, which I think we had 16 of them or so 10 of them showed up already in revenue in 2020 for about $12 million.
And some of the.
Im wins and 20 is already part of the revenue and 20 and them together really help 2021 part of this is the fact that although we talk about these long periods of time Jim's pretty conservative on what he calls a new win.
So when is basically if it's a custom product there is a financial commitment.
The witness, meaning they've already paid some in our read and as a program behind it if it's a commercial customer it's more we've seen initial production orders and we have those on hand, so it's a pretty conservative definition of win.
Right. Okay. Thanks for that David actually if I could just sneak one one other one and just around your commentary.
And then on the sort of the evolving strategy of customer engagements and that type of thing how do you marry that up with some of them maybe John can comment on with some of the operating expense reductions that you guys have been successfully working on I'm just trying to understand you know what this means when you're.
Talking about going out and trying to discuss with customers sort of your product roadmap and how to better address some of these new markets and customers in relation to a lower overall spend from an operational perspective.
Yes, so we've looked at that and the type of products that we're talking about.
Would be products of its assuming removed for the current ones or revision of them.
So we moved forward with them and they like the Q1 timeframe. The revenue from it we wouldn't see till the 22 23 timeframe just takes that kind of time to develop and get them in the end of the customer hands and all of that as far as the resource.
Versus we're watching that very closely but based on our understanding what we would need to do and get them to market because its heavy leverage on skills, we already have.
We don't have to ramp up the group's significantly and you know, we're hoping that we get some additional growth next year that would help us make sense.
Some strategic hires in the process and let me just comment on that after we did the expense reduction we're not we're not saving our way to profitability rough saving our way to something we did a lot of changes needed to do and we've made some hires but were very strategic we get together as a team and we said what is going to produce the highest return.
An example, we've hired a couple of engineers, where we got together and said we'd be at the highest return on a couple of more engineers.
Excellent. Thanks, that's very helpful. Thanks, David and good work.
Tim we came in a tough environment. Thank you.
Thank you.
Yes.
Earn under it is star one if you would like to ask a question.
And we will take our next question from Joe Gomes with noble capital.
Good afternoon.
I'm sorry.
On a on a nice quarter and some challenging times.
Hi, there I just wanted to touch a little bit here on your largest client are you.
You mentioned that you think this could be pushed out somewhere into 2021 before you see.
A real real rebound there.
[noise].
Obviously, we had the big receivable there what is is do we to that.
Word stretching out the timeframe you getting paid back also you know any any additional detail or color you can have on.
Is this guy see any type of sequential improvement at all anymore.
Right.
It's about a disguise would be appreciated.
Yeah, Great question So first.
Let's jump right to the need of it because they are we have brought that down under 2 million. We were above 5.41 5.4 million or one time, that's the result of work.
Very closely by our VP of operations, John our CFO and Jim working closely with the customer and my engagements with their CEO they've been leading.
Meeting their obligations and paying down that debt.
Although this we haven't gone to zero risk, we continue to minimize that risk so thats on the one front.
On the second.
Does it really have two product lines.
The one product lines when we always talk about is the one that's impacted us.
We're definitely not going to see any activity of significance, we still see some but similar to this past quarter in the quarter before there's definitely no as you would expect no big rebound in the fourth quarter and that's reflected.
Prime number we just mentioned.
So those are large gathering events, our assumption where this is based on our assumption. Our assumption is that it's really mid year before large gatherings come back together and a worst case. It could be later next year frankly, if the vaccine doesn't work and things get really bad.
The second part of the product line is the virtual product line and I talked about that a little bit before.
We're starting to shift more of that product it's.
It's not anything that drives the number up significantly this year, but on this they're getting a lot of interest a lot of gauge with the customers and that's something that could help us in the first half of 2020.
And we just don't we don't we don't know how to size it yet, but it looks very attractive it's same kind of products, we ship to them and we will enjoy the business if they do well on that front.
Great Thanks for that.
Thank you switching gears.
In the military side.
But the big military client there and they are are they want on track to.
Reduce the typical revenue that they normally do.
And number two I'm, obviously, the federal government is operating under a continuing resolution.
That having any impact on you guys.
Is that bringing up any potential.
Monkey wrenches for fourth quarter sales.
Sales in the military.
Fourth quarter revenue in the military is going to be strong.
As a result, we'll have strong margins.
And the particular customer you're talking about as a customer that.
[music].
As we used to talk about them being this.
The storage unit, the DS here, which I kind of alluded to in my part of the script.
I would always talk about that what I like is the fact, that's really proliferated within that organization. So that we have.
Solid wins in multiple programs now and we're starting to see the prototype quantities and we'll start to see a kick in in 2021 of a number of those programs. So this year, we're doing fine with them. They are not hitting us hard I think were approximately flat or a little up overall in the military space.
For the.
The year and next year, we have an opportunity to grow it nicely.
Okay and one last one for me if I may so you talked about the virtual shows a little bit more webinars and just try to again to provide some more color on how how those are on our working with your customers.
What kind of impact are you seeing or do we think that this is.
They like to say that the new changing the business model going forward.
Even when we hopefully get rid of this current of virus our deal with the krona virus here in the near term.
Yeah. So.
Our virtual events have been a mixture of say virtual trade shows.
No we had used to show up in person and also webinars and with the Webinars weve been doing them with Nvidia and Marvell. So.
So the big companies that are.
Partners in this that we bring products together to the market for example, Nvidia does a lot of data center type.
Products and hardware now, but they didn't do before but they don't.
Work with the same type of edge applications that we do so they very much like us to take that product.
Ruggedized it put it at the edge for these design wins, so being having those virtual events along with Nvidia has created a large pool of the opposite.
Opportunities.
So weve been continuing to work with from the sales front.
It's been a challenge but everybody.
Like working.
Remotely now everybody's getting used to working remotely, including our customers. So the level of interaction I think even from the design win state standpoint has been very similar to what it was.
Last year, just things develop maybe.
A couple of months to a quarter slower than than normal.
No.
Especially when you're talking about military, but we keep the pipeline alive and the team's been doing a good job with that.
I just expand on this this is kind of how I look at it.
I would say you know our historic trade shows where we are in person and travel with customer it's more effective there's no way around that.
But then.
As we enter the day everybody needs a solution from somebody right. So there is a merchant or whatever and I think so it's really what companies decide okay. This is the new world and jumped on it quickly I'm very pleased with what Jim and his team did on this front and jumped on it right away. They are doing the best they can and come up with creative thing.
But these are doing demos are doing all these different things and I see other companies I think with attitude and attract somebody has a day, which is like I would just take this thing is going to be over soon and we're hoping on that and so we're doing the best we can and hopefully we're doing a better job than other people in our space.
Great. Thank you guys are taking the questions.
Thank you Joe I appreciate it.
As a reminder, it is star one if you would like to ask a question.
Okay.
And we will take our next question from Dave Flowers, who is a private investor.
Hi, Fellows nice job.
Stimulations on a lot of good news the margins, both gross and net lower expenses, new programs et cetera, that's all really good step.
The lower revenues are understandable.
With.
Entertainment and media.
The media business going down and the impact of it.
That being caught my eye in that.
The Q3 inventories comparison.
I noticed that the net inventories seem to have gone up about 35.
Percent, while the revenue down 13% I Wonder if you could shed some light on that.
And it happens to be our quarter end result, we are bringing in inventories for the fourth quarter.
Associated with more military sales in the fourth quarter, and we are having a bridge.
Those inventories in earlier I just to ensure that we have the supply chain there as there has been an extension.
The lead times associated with coal of it. So it's just a matter of a timing issue. There are we will be through that X that inventory by the end of the fourth quarter when we ship out.
During his military sales.
By December 31.
The thing I'd add to that is.
Right.
What I'd like to add to that part of it also is just the the situation to our largest customer we've been carrying higher inventories throughout the year as a result of that Fortunately were burning through it to some degree but.
And you know we work down they are but they went from.
Basically are there we're doing a very large number and it just fell off the map in Q2. If you remember so we had a huge pipeline coming in at that time, that's just been hard to bring that down but.
We're working that down and.
We don't see risk with it.
Good so use that you've done to slow moving in a bit.
So that this analysis that doesn't buddy.
Yes, we pay very close attention to I do a detailed analysis every single quarter to make sure that we're comfortable with that so I think everything there is sellable.
Great. Thanks for the answer I have one more question that is about gross margin longer term.
What are your target for 2021.
We haven't provided a number yet we want to say on that John Yes, I will.
Tell you with with our current model that we are showing how that we are modeling is having as the effects of covance.
Laughs food Dart in July of 2021.
One model and extending out for the entire year next year, we are basically showing that our margins will be relatively.
Consistent with the current year.
Okay, and how much of that is attributable to a consistency in the amount of revenue as well as our product mix. So covert persists, we are seeing won't probably see consistent margins as we saw this year.
Competitive I will say the incentives to drive that up I mean that that's there's a lot of focus on that we just materially can really point to something yet other than activity. That's taking place in the organization, but it's a huge focus of the company to be able to drive that are pure after year.
Okay keep up the good work guys.
Thank you appreciate it.
And we have no more questions. So I would like to turn the conference back to Dave on for any additional or closing remarks.
[music].
Thank you Abbe and thank you everyone for joining US today, we look forward to talking to you in the future and reporting our progress. Meanwhile, so reach out feel free to reach out to John Jim or me any time.
Abby. Please go ahead and wrap up the call.
Thank you Kevin.
Now before we conclude today.
This call I would like to provide the Companys safe Harbor statement that includes important cautions regarding forward looking statements made during today's call once.
One stop systems cautions you that statements in the presentation are not a description of historical facts are forward looking statements. These statements are based on Companys current beliefs.
Today's expectations.
Such forward looking statements include those regarding the company's expectations for revenue growth generated by new products design wins for M&A activity. The inclusion of such forward looking statements and other should not be regarded as a representation by O I stress that any of his plans will be achieved.
Actual results may differ from those set forth in the presentation due to the risks and uncertainties inherent in our business, including without limitation that the market for our products is developing and may not develop as we expect global pandemics or other just faster disasters or public health concerns, including Cobank team in regions of the world.
Where we have operations customers or source material or sell products may affect such markets.
Our operating results may fluctuate significantly, which would make our future operating results difficult to predict and could cause operating results to fall below expectations or guidance.
Our ability to successfully integrate.
<unk> operations systems technologies product offerings and personnel with acquired companies may prove difficult and adversely affect our financial results.
Our products are subject to competition, including competition from the customers to whom we may sell and competitive pressure from new and existing companies may harm our business sales growth.
If rates and market share.
Our future success depends on our abilities to develop and successfully introduce new and enhanced products that meet the needs of our customers.
The likelihood of our design proposals, becoming design wins is uncertain and revenue may never be realized.
Our products fulfill specialize me.
Charles and functions within the technology industry and such needs for functions may become unnecessary or the characteristics of such needs and functions may shift in a way as to cause our products to no longer fulfill such needs or functions new entrance into our market may have on our competitive position.
We rely on the limited number of supply.
Leaders to support and manufacturer design process, and if we cannot predict our proprietary design rights and intellectual property rights, our competitive position could be or we could incur significant expenses to enforce our rights are international sales and operations subject us to additional risks that may for that can adversely affect.
Affect our operating results and financial condition, and we failed to remedy material weaknesses in our internal controls our financial reporting we may not be able to accurately report our financial results and other risks described in our prior press release and in our filings with the Securities and Exchange Commission FCC, including under the headings.
Heading risk factors in our annual report on form 10-K, and any subsequent filings with the SEC.
You are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of the conference call and we undertake no obligation to revise or update this information to reflect events worse.
Circumstances. After this date hereof.
All forward looking statements are qualified in their entirety by this cautionary statement, which has made under the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Before we end today's conference I would like to remind everyone that this call will be available for a replay.
Place starting later this evening through November 26, please refer to today's press release for dial in and replay instructions available via the company's website at <unk> Dot one stop systems Dot.
Thank you for joining US today. This concludes our conference and you may now disconnect.
Well.
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