Q4 2020 ADDvantage Technologies Group Inc Earnings Call
[music].
Thank you for standing by this is the conference operator, welcome to Addvantage technologies fiscal Twentytwenty fourth quarter financial results Conference call.
As a reminder, all participants and the only send only mode and the conference is being recorded.
After the presentation, there will be an opportunity to ask questions.
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I would now like to turn the conference over to Brett Maas with Hayden Investor Relations. Please go ahead Sir.
Thank you operator, we're joined today by Joe Hart, President and CEO and yard Watson Chief Financial Officer.
Before we begin today's call I'd like to remind everyone that this conference call may contain forward looking statements, which are made subject to the safe Harbor provisions of the private Securities Litigation Reform Act and 95. These forward looking statements include among other things statements regarding future events, such as the ability and then it technologies and its subsidiaries to maintain strategic relationships agreements with certain original equipment.
Manufacturers and multiple system operators as well as the future financial performance of Addvantage technologies. These statements involve a number of risks and uncertainties participants are cautioned that these forward looking statements are only predictions and may materially differ from the actual results or results due to various factors such as those contained and advanced technologies. Most recent report on form 10-K and form 10.
And Q on file with the Securities and Exchange Commission.
Information about on this call should be considered in conjunction with the consolidated financial statements and notes included and the company's press release issued earlier today included and advanced technologies. Most recent reports on form 10-Q, and 10-K the guidance regarding anticipated future results. On this call is based on limited information currently available and advanced technologies, which is subject to change.
Range.
Although any such guidance and factors influencing it may change Addvantage technologies will not necessarily update this information as the company will only provide guidance at certain points during the year such information speaks only as of the day to this call. During this call. We may also present certain non-GAAP financial measures such as net income non-GAAP net income certain ratios and are used with these measures.
And our press release and in the financial tables issued earlier.
Actually yesterday, which are located on our website and advanced technologies Dot com, you'll find reconciliations of the non-GAAP financial measures with the closest GAAP financials and as discussed as to why we believe those non-GAAP financial measures are relevant. These financial measures are included for the benefit and investors and should be considered in addition to and not instead of GAAP measures I'd like to announce and the color Joe.
Hart, President and Chief Executive Officer of Addvantage Technologies Jones. Please go ahead.
Thank you Brett and thank you and everyone joining us on the call today.
And well have an old brief conversation before the call started this morning and.
Was thinking back to about this time last year and probably more in the February timeframe March net.
Use of the pandemic was from what's really come and two though for from a you.
You know things were getting very concerning and you.
You know as we went through the last nine months.
Businesses around the world and it's been and.
Quite a tumultuous situation, we've seen businesses that have gone belly up we've seen businesses that have been you know cutting back to 25, 50% levels you know we've seen.
Lotto saw negative things that have happened.
And advantage, we were looking at things and saying look we've got to do something to build up our cash reserves. We don't know how long. This pandemic, it's going to last we don't know how deeply it may hurt us a you know we've really got a stock up on dry powder and find a way to weather the storm.
And really get ourselves and Oh, good protect them stable situation.
At the same time, a lot of our business is based on wireless growth.
And as we've looked at some of the you know growth opportunities related to Fiveg.
You know, there's a lot of confusion out there and the marketplace for investors.
All of the major carriers, our advertising that they've got five g., they've got five G. Ultra capacity Fiveg ultra wide band five and GE Fiveg, plus you know et cetera, et cetera et cetera.
By and large those are all variations and enhancements to afford you.
There are some I'll call them pilot programs, where they've installed and millimeter wave length by GE and downtown New York City or downtown Philly.
No L.A. or some other major area, but by and large and those are still relatively experimental.
No carrier has actually gone on a full bore construction program to convert their entire and network and cell sites, both existing and new ones that don't need a and convert those to fiveg radios.
It just hasn't really truly taken place yet. So you know we haven't missed the window you know we're not laggards in respect to what's happening and the industry. You know, we believe that where we've come out of this both the you know the cash.
You bet 19 environment as well as you.
You know the Fiveg ramp plan.
We feel that we ended the year in a good place as we go into 2021.
We don't flow 2021, and Sterling, we've done a lot to clean up our balance sheet. We have proved our cash position and working capital situation and we feel we're in a good place to actually take advantage, Oh, well and Fiveg is really going to kick in.
Here in calendar 2021.
So.
The other day I would say.
And now we've been very bulk blessed and fortunate that and.
None of our employees have been personally affected or you know put on the sideline due to covert and 19.
All of the families are intact. So at the end of the day you know, we we really come out.
And a decent place considering all the troubled assets going around the world.
So with that I'll get to my and my formal remarks.
And thanks for bearing with me.
We successfully navigated a challenging global business environment during 20 Twond.
I'm encouraged that we exited the year and better position for sustainable success.
And where we were when the year began.
Addvantage technologies group was identified as an essential service.
Homeland security as we provide critical infrastructure and building and supporting communication services.
This designation allowed us to continue working during the pandemic relate and shutdowns.
We have been resilient and our cost and cash management.
And this discipline and helped us weather challenges in both our telco and wireless businesses during fiscal year 20, Twond and.
The shift to remote work and its office and shut down and a significant impact on our telco business.
And closure of special outdoor summer events impacted our wireless business and the Midwest.
The pandemic continues and we have no more clarity than you and when things will return to normal.
Or what normal will ultimately look like.
But we view these challenges is temporary.
As we navigated this business environment.
We wanted to accomplish three strategic imperatives, and strengthening our balance sheet for sustainable growth.
First.
We wanted to increase our overall cash position we.
We achieved this by increasing our cash holdings to over $8 million, while maintaining working capital and over 11 million.
Second.
We wanted to use this environment to reshape our telco and wireless businesses for expanded growth.
Just drive a more nimble and leaner business model by reducing overhead and direct expenses.
And our telco business, and we took approximately $11 million and write downs and goodwill and intangibles and inventory earlier this year.
This is back and made our telco business nimble and more competitive and bulk of cold and and oppose cold and business environment.
For growth, we invested in our wireless business by increasing our revenue coverage model by adding resources and sales and back office and supporting the increased and coming fiveg build opportunities.
For telco growth, we completed our investment for a neutral facility for our Triton business and Fort Lauderdale, which includes both our efficiency and our employee work environment, while allowing for expenses.
Third.
We wanted to continue to attract and retain great people to support our long term growth.
In fiscal year 2020, we rewarded key functional team members with.
With <unk> with restricted stock awards, which are tied to the financial goals of the company and shareholder returns.
We added new talent within our executive leadership team.
And these executive and spring the experience and know how to scale from Israel, while working within a lean operation.
Overall.
Our people drive our business and continue to excel during these challenging times.
As a result of these strategic imperatives.
We continue to transform our business model by.
By streamlining our expenses and improving our operational efficiency and positioning the company for growth and profitability as the fiveg transformation and accelerate.
I'm encouraged that we successfully improved gross margins by more than 1500 basis points, even with lower revenue.
In addition, we eliminated approximately half a million dollars and quarterly operating expenses, resulting in a significant narrowing of our loss from operations.
We are seeing clear signs that the fiveg transformation and finally begin in earnest and 2021.
We are well positioned to capture a meaningful share of the tower work related to this important project and the geographic areas. We currently serve.
I'm sure. Many of you saw that Apple recently released a new fiveg capable handset price.
Fighting the clearest indication, yet a b and pending fiveg opportunity.
All of the carriers are now advertising Fiveg services.
Signaling that the trend will accelerate due to consumer demand.
Industry analysts project that the actual long term upgrade of the networks is just about to begin and 2021.
These threeg fourg and Fiveg cycles.
Typically last seven to 10 years.
And require a major capex spend by every carrier principally in the first five years of each of these cycles.
Turning to our telco business, we delivered the strongest quarter of the fiscal year in Q4, EPS customer spending started to return to normal after a pandemic cutbacks.
This momentum gives us optimism as we head into our new fiscal year.
We anticipate double digit revenue growth for our business in fiscal 2021.
And we anticipate reaching positive net income on a quarterly basis by the end of the year.
Overall, we enter 2021 with several tailwinds.
First we have a lean and efficient organization positioned for improved profitability as we grow.
Second we are strategically position throughout the middle of the country with strong relationships with the leading wireless carriers and telco clients.
Third we have significantly improved our liquidity to execute our growth strategy.
Fourth we are at the beginning of a multiyear secular spending cycle and we are already starting to see wireless activity picking up and our southwest region. Another positive indicator.
Finally.
We have the right team in place to help us scale efficiently.
With that I'll now turn the call over to our Chief Financial Officer, Jeff and Watson for a more detailed review of our financial results. Jeremy. Please go ahead.
Thank you Joe.
Sales for the fourth quarter 2020 decreased to $12.2 million from $17.9 million and the prior year.
$5.3 million of this decrease came from our wireless segment.
And as a group felt the impact of Cobot, 19, honest business and Fiveg delays and infrastructure spending from the major U.S. carriers.
Traditionally our wireless group earns between $4 million to $5 million and revenue from the construction and deployment of temporary cell sites. During the summer months at large public gatherings, such as county fairs Air shows the Democratic National Convention or the World series and other similar events.
Most of which were either rescheduled canceled or like spectators and 2020.
We also experienced a decline in sales and our telco segment of <unk> point $4 million.
As equipment sales and tried and dropped.
Right and sales office telephone and IP equipment for enterprise networks, and most large offices were closed during the quarter also as a result of the COVID-19 pandemic.
However, even with a $5.7 million sales decrease gross profit increased by $27 million to $4.4 million compared with a gross profit of $3.7 million for the same quarter last year.
The increase was primarily due to the telco segment profit margin improving by $1.2 million.
Partially offset by the wireless segment profit margin decreasing.
Point $5 million as a result of lower revenue.
Gross profit margin improved to 36%.
From 21% for the prior year fourth quarter as wireless margins were approved in 2010 basis points and telco margins improved 1700 basis points.
As Joe mentioned operating expenses decreased <unk> million dollars to $1.9 million for the quarter ended September 32020, compared with $2.4 million for the same quarter last year, which was the result of cost reductions and our wireless segment.
Selling general and administrative expenses for the quarter increased $2.6 million to $3.2 million compared with $2.6 million for the same quarter last year. This.
This increase was due to an investment and building out the sales team for our wireless growth.
Net loss for the quarter was $1 million or a loss of nine cents per diluted share and improvement of $8.6 million compared with a net loss of $1.6 million or a loss of 15 cents per diluted share for the same quarter last year.
Adjusted EBITDA loss narrowed point $8 million for the quarter $2.1 million compared with an adjusted EBITDA loss of <unk> point $9 million for the same quarter last year.
Taking a look at full year results.
Overall sales decreased 9% to $50.2 million compared with $55.1 million last year. The decrease and sales was driven principally by the global 19, pandemic and investment delays and Fiveg network build outs.
Sales for the wireless segment decreased $1.6 million and $21.4 million for the year compared with $23 million and the prior year.
Wireless was significantly impact during the summer months by crowds safety restrictions and due to COVID-19.
As I previously mentioned sports and traditionally has there and significant revenues for the construction and deployment of large complex temporary cell sites for summer and fall Festival County fairs Air shows and large events like the Democratic National Convention and Milwaukee, The Indy 500, the World series, and <unk>, and others, which were cancelled or rescheduled this year.
Sales for the telco segment decreased 10% or $3.4 million to $28.8 million for the year compared with $32.2 million last year.
The decrease and sales resulted primarily from telecom and IP opposite equipment as customers delayed Buildouts and new office space and upgrades of office based communications equipment as employees were sent home to work during 2020.
And we'll gross profit decreased $1.8 million too low.
$1.7 million compared with $13.5 million for the prior year.
[noise], primarily related to the telco segment for which gross profit decreased $2 million as a result of an increase in our reserve for inventory obsolescence and fiscal quarter Q2.
Partially offset by an increase in gross profit <unk> point $2 million from our wireless groups.
Operating expenses for the year increased $1.8 million to $8.2 million compared with $6.4 million last year debt.
The increase is attributable attributable to having a four full quarters of wireless expense and 2020 versus three quarters and 2019 as the fold and acquisition concluded and the second quarter of 2019.
Additionally, the company and heard onetime facility costs as a result of moving into a new facility at Triton and the first quarter of 2020 and additional operating personnel costs.
Selling general and administrative expenses increased $1.3 million to $11.2 million for the year compared with $10 million last year.
This increase point $9 million is attributable to having four full quarters of wireless expense from 2020 versus three quarters and 2019 again due to the fault and acquisition, which concluded and the second quarter of 2019.
This increase is partially offset by a decrease of $24 million and general and administrative personnel costs and the telco segment.
[noise] impairment of intangibles, including goodwill was $8.7 million and telco segment and the second fiscal quarter there.
The company determined that the changes and the economy related to the COVID-19 pandemic and the continued losses experienced and telco segment had caused the intangible assets carrying amounts.
On the books to exceed their fair values.
Therefore, after performing the appropriate valuations the company recorded a $3.9 million impairment charge for intangible assets and a $4.8 million charge from goodwill and the telco segment.
Net loss for the year was $17.3 million or and loss of $1.55 cents per diluted share compared with a net loss of $5.3 million or 51 cents per diluted share for the prior year.
However, it should be noted that net loss included the previously mentioned $8.7 million write off of intangible assets. It also included $27 million and.
Impairment charge related to a facility that we no longer use and inventory obsolescence adjustments of $1.8 million for the year compared to $27 million for the prior year, all of which were and the telco segment.
The company recognized a $1.2 million tax benefit for the year ended and 2020 compared to almost no tax and the prior year.
Additionally, the prior year included approximately $1.3 million and losses from discontinued operations.
Adjusted EBITDA for the year was a loss of $7 million compared with a loss of $2.3 million for the same period of 2019.
Moving onto the balance sheet.
As Joe mentioned cash and cash equivalents were $8.4 million as of September 32020, compared with $1.6 million as of September 32019, or an increase of $6.8 million of cash.
As of September 32020, the company had inventories of $5.8 million down from $7.6 million at September 32019.
Outstanding debt was $8 million at fiscal year end comprised of $2.8 million of a revolving line of credit.
$4.1 million of notes payable and $1.1 million and financing lease obligations compared to no debt as of September 32019.
At September 32019 notes payable were comprised of $1.2 million from our primary banker, which correlates to payments that we receive from a $3.8 million Congress or you know.
And $2.9 million other PPP loan for which we have applied for forgiveness.
Subsequent to year end, we have renewed our revolving line of credit and for one more year to maturity of December 17th 2021, and we have paid off $1.2 million note payable to our primary banker. We continue to believe we are sufficiently capitalized with appropriate backstops to support near term business conditions and told more normalized business can.
Missions returned.
That's going to conclude the financial overview segment of our remarks, I will now turn the Carl over to the operator to facilitate any questions.
Thank you we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone and knowledge and your request.
If you use and as Steve your phone please pick up your handset before pressing any keys debt.
So with that and your question. Please press Star then too.
We will pause for a moment as callers join the queue.
Our first question is from Georgia, GAAP, but shareholder. Please go ahead.
Yes, good morning, everyone.
Good morning, Jeremy.
Yeah, we can hear you and good morning, Okay.
First first question is right relative to.
He changes overall that you made it calico.
And your new facility and.
Can you describe it.
The expansion and repair services, and the expansion and distribution and product line.
That you can experience on a more positive basis going forward.
Uh huh.
Hi, George it looks like and Joe May have got disconnected Reggie or are you in that line can you take that question or would you like me to take your yeah, absolutely yeah, I can take it so and good morning George.
Good morning.
[noise] relating to our expansion at our Fort Lauderdale Triton facility. You know we are fortunate to locate a real estate's base, where we could design a facility where.
Where the work flow process would it be able to allow us to you know we.
Refurbish the equipment, we refurbish and sell in the market.
We are working on expanding our product line, there as well and then and our other for our other telco company and they look at Telus, the upgrading our repair capability, there as well to better serve our customers and the market. So hopefully that answers your question George though net additional questions. Let me know.
Oh, just one and the scope of the telco a base.
Hoping your.
Capacity to expand.
Our nation and.
Nationally and from that and base I mean, how do you view that.
Well I think though with the just the distributions that we have and the Fedex.
Yes, other carriers as well as the web presence that we have in person and presence that we have with multiple large carriers and well positioned to growth and to deliver across the country, you know and and you do a little bit of business internationally as indicated in our 10-K. So I think we're positioned us to handle and the growth across country George.
Okay.
Okay, Alright, and is is there any Eric how are your your cost structure are your.
Acquiring pratik crane, and Towerco and how have you been tech can you give us some thought about.
The cost structure and.
On a per unit basis, Oh, it's going now versus say a year ago.
To acquire Pratik.
Yeah very good question, George so with the cobot environment, we have some opportunities and because business. This low to acquire product at prices that were more favorable than a year ago, what gets you search and the market and looking for a different avenues.
And then used to acquire equipment and then we can be more competitive and increase the hard and so there's great opportunity and we're always looking for different avenues to acquire equipment and no. It's been pretty good this year versus last despite the headwinds for sales and I called it.
Okay. Thank you and the other.
Correct, correct, George George Yes, and sorry, it's Josh it's Joe I would balance that with you know Reggie it's been working very hard to.
Make sure that you know, we're not growing the inventory to a level that we can't support with sales and and historically that has all that has always been a challenge and and as you have seen over the years, you know well well have a good year with our equipment.
Business, you know a pretty good and a good year and then it'll be offset with some inventory write down because of either steel aged or inventory and just repair and that was purchased you know and some kinda bulk fashion. So you know red Reggie It's got a very a sort of a delicate balance.
Thing at between buying product, that's Ah at good prices and yet keeping inventory and very manageable levels. So oh. He has been doing a really nice job since he's taken over.
Wonderful wonderful Oh, Okay, and now and extend this questioning too and.
The and the.
Good.
Five G.
Expansion Prabha.
Probabilities are not opportunities.
And the <unk>, you know and you explained basically ER and early comments here.
The impact of Cove, and and the slow down and but you're also and suggesting that debt fiveg and break out going forward could be.
And consider about and I'm sure a very opportunistic opportunistic for.
And your company.
Good how are you prepared now and can you give us and <unk>.
And any commentary on your crew count.
And how it's compared from say a year ago and.
And and and I know that it's probably tech keep crews together when.
Your business is down, but if you're going into a better period going forward.
Yes, we and need to cruise to accomplish the effort and.
And and can you talk more geographical also about how.
How you view your activities going forward through.
And the calendar year 2021.
[noise] sure.
So if we look at the carrier and you know Verizon right.
Verizon has.
Historically been kind of and steady Eddy they build out spend their capex on a pretty regular fashion year after year, and they they expand or whatever and upgrades and new technology on a steady ongoing annual basis, 80, and t. tends to be a little more bulk.
A lot of four or five years up front, a big span and then it starts to sort of.
Average out a and a little lower level.
The.
There's a couple things going on here and they all had pilot programs with millimeter wave length Ah Hi, Dan [noise].
That's right.
But the FCC has got a big auction going on right now for C band, which puts 300 megahertz of spectrum out there for all the carriers so.
I think the bidding is up into about a seven $8 billion at the moment and that spectrum. So it's very active and the other thing is that dish dish must start building its new network and that they voted radios from Fujitsu and from Cdti other Taiwan.
And we expect and dish will start construction and about the middle of 2021, so probably about that and June July timeframe, we'll see dish start bill and they've only got about three years to cover hassle and U.S. population. So that's going to be a fairly rapid and build up.
As they start their construction.
From our perspective, you know you've heard me say on the prior couple of quarters.
And our business.
Almost dried up here during the summer and the south well well well.
We're very active and very busy.
You know were little under 20 crews working in the back and the southwest. So we're encouraged that our building our businesses [noise].
Rebuilding itself and the southwest region.
We are essentially and up the middle country, a company so southwest from Texas, All the way up to the Canadian border, Illinois, Wisconsin, The Great Lakes area as well.
The plain States, So island, Nebraska, Minnesota et cetera, so our bread and butter and the middle of the country and that's where we want to stay focused.
And not be chasing business.
All corners of the country without a good plan your ability to supervise and so [noise].
Hopefully I've answered your question I think it's it's it's building [noise], but.
I always throw that caution that you know [noise].
Watch the news the northeast is good and hit by tremendous blizzards, and ice and snow and that can happen and anytime in the Midwest as we know and we're entering winter. So you know just a I feel good about 2021 overall it is finally happening.
Though some investors day of kinda cast a wary eye and say you know this guy keeps promise and fiveg, but it hasn't happened yet [noise].
Right, So ah, but we're almost there George [noise].
Right and could you could you comment and.
The revenue stream and the wireless Oh, Yeah. If you were to divide it up this to the type of business a C and.
Tower work I taught how were installed and that color and saw itself, but maybe the accomplishing the equipment and towers and relative to.
And let's say.
I'd I'd be going.
That the.
If you work that's necessary.
Away from the towers and fewer debt.
And can you identify it in terms of percentage is.
Oh, how much.
And is done and towers directly versus away from towers and can you comment on how much.
As necessary to accomplish for effective fiveg away from that towers.
Well, that's all [laughter], that's that's a lot to identify but you know I.
<unk>.
I would say this that.
[noise] of all the Capex. The Capex is predicted the capex spend for the next four or five years is predicted to be about $30 billion to $35 billion and year.
They expect that by 2025 about 350.
Mobile subscription at 350 million mobile subscriptions will be on Fiveg compare.
Compared to about 1 million today.
So in that 30 plus billion dollars a year Capex then.
Probably half of that and spend on.
Fiber optics technology to get signals to and from cell sites within the public switch network Cross town Cross State Cross country and half of that's on wireless and other that wireless spend.
About 30% is probably on the equipment itself, probably another 50 plus percent is on.
Services needed to actually upgrade the technology and the existing sales.
You know so.
There's about 400000 existing cell sites out there and they all have to be upgrade like he so you know you know that the opportunities pretty a men's and I would say services for Fiveg probably about.
20% will be on adding new sites, 20% to 25% could be on small so and then the remaining will be on upgrading and I'm.
To fiveg on the existing cell sites.
I see okay, and well that's pretty and.
When you describe some of these numbers it looks like there's a.
And room for considerable expansion.
Once maybe Ah you get get along here and a couple of quarters.
Is it and finally finally and like that just ask that your nearly through your first quarter and now.
Being that this is the 17th of December is there any any comments that you could make for us and.
How this quarter has gone or <unk>.
And.
Oh.
And that's a bit of a tricky one because we usually don't or comment on forward business, but okay, but as I said I think the wireless activity is picking up that telco a activity reduce.
Got a good operation got a good team, so telco and are producing and sort of the budgeted budgeted level you.
You know.
You know, we're not out of the Kobe situation and all those are great hope and expectations around the boxing, it's not widely available yet and.
We still have a I'll say the momentarily.
Week or two we are calling team situations with employees you know or people are out work and then the network and with the public every day and so you know we do hit a moments in time, where you know Oh.
Accrue or a few crews get shut down for a bit as they you know somebody they're exposed to somebody who is positive and tested. So you know its thing it's not perfect and we're heading into the holiday. So this is never and never our best quarter of the year, George and so you know.
But I I think it's going to be a strong year.
Okay, All right I'll go I'll go back into queue. At this point, let someone else asked that question and I got a couple more but I'll wait.
Hi, Thanks.
Once again, if you had a question. Please press Star then one on your telephone.
Our next question is from Bob Jones and shareholder. Please go ahead.
Yeah, you guys their presentation.
And this last summer.
Where you are.
Goals and grow revenues from 50 to 250 million.
Can you comment on where you stand as far as does.
Does that still doable and.
Basically how will you get there.
Or would it be through acquisition and organic growth.
Hi, Bill, it's a and some Bob and some percentage of our organic growth. I mean, we are we're still bullish on the ability to grow our existing operations, which are basically Dallas and Chicago centric and to grow that business and.
It's you know I've seen this and through the Threeg and Fourg cycles before with other companies, where you know we've been able to grow the business from 50.
50, 60 million a year or two a six 700 million and you know over a six seven year period. So yeah, yeah yeah.
It's quite possible to do and organically, but it's also slower.
And as I mentioned, the bulk of the Capex and the Fiveg cycle will be spent in the first five years, and but 10 years cycle. So we believe that <unk>.
On top of the organic growth we need to be.
Fairly aggressive about and M&A program. So we're positioning ourselves to begin working with potential.
And.
Investors and Oh go on a capital raise programs and allows us to a.
Look at really good target companies that have both a a cultural fit and as well and the technical capability and reputation.
And you will allow us to expand our geographic footprint.
While we're growing the business up pretty dramatically and I feel the 50 million a year each of the 250 million year is it's actually quite doable and and something I personally Don and number of times and my career and and you know.
And just.
Got to have good targets and I and you've got to have good customers and you know we have both of those so I'm feeling very confident and bullish about our ability to grow the business.
Do you currently have any acquisitions and site.
Oh sure I mean, there's always a [laughter], there's always targets on the radar there are a few out there that are you know we like a lot and so you know we're working on a weighted toward so you know trying to make some progress in that regard.
Okay and would win and he would those acquisitions be financed through Uh huh.
[noise] through a sales and in stock and you guys did a registration and for a shelf offering I believe.
Right right the the shelf offerings been out there for a number of months and it was capped and just a little bit and $14 million and the registration documents.
We sold about two and a half million dollars worth of shares over the last well since June and you know not a big amount and there are some day, we limit so you're never going to see a big swath of shares that comes through the S. Three and so.
We're looking at our options, whether it might be a capital raise through an S. One it might be through attracting a large investors or private equity money or to.
Gypsum and there's a lot of options about how to raise the money whether its debt and whether it's equity and so I would say, we're we're just in the sort a fact, finding a exploratory.
Oh phase of that right now.
Yeah, Okay, and we'll hopefully you will raise money when.
Well it was going to price and school [laughter] [noise].
And how many thank you for English and upon right you walk and you're welcome.
Our next question is a follow up from George Gasper a shareholder. Please go ahead.
Okay. Thank you.
And Joe the <unk>.
Follow up here is that.
And when you're you complete.
Work on a tower and how.
How far away from the tower and Youre, where go from a specific tower and I think maybe back a couple three four quarters ago, We we were <unk> and <unk>.
We were talking a little bit about this opportunity away from towers getting and.
And and on individual I wager streets or whatever exactly.
What is the opportunity away from the tower and terms that distance.
And to complete let's say a single project and a specific area for you can you can.
Can you describe that.
Well typically for something like a five G expansion or upgrade and technology.
And not only have the work that's at the base of the tower and up the tower and the top but you often have to bring additional fiber optic cable to that tower and you know all driven around both your neighborhoods as well outside.
Two and some other city so in the city towers are close and street. So maybe it's 50 feet to 100 G 200, she to get to the Street and you know you're going to take a fiber cable out to that street and it will be connected by the phone company or the wideband carrier.
Who will flow through into the network and if you're out and more rural areas. So those access roads to the sites could be a quarter.
Quarter mile half mile something like that from the main low so it's it's it's fairly a it's a fairly controlled environment and you know it's not like you're building out in the middle of a national forest or the mountain range or something like that and.
I see okay, all right and and there is so much a discussion about you know the opportunity on a daily basis hearing.
And.
Investment commentaries about the net.
The <unk>.
Opportunity and to.
Fine companies that are associated with Fiveg.
And in terms of what they're doing but most of it.
At this point has been concentrated on the equipment side from the commentaries and Wall Street and it it looks like.
And there's there's a pretty interesting.
Potential come.
Coming from the install.
ER side equipment and star side, and that's where you come into the picture. It would it's going to be interesting to see how this and follows the commentary that you've made here.
It shows up.
The dramatic opportunity going forward.
And and if.
If you are able to accomplish.
A decent amount of the potential out there it should give you opportunity debt.
Look for some types of acquisitions of.
Two and.
And run your revenue stream on an annual basis outside by hopefully what will be a very significant margin or any comment on that.
Well I think we agree I mean, there are very few companies and a publicly traded space that are in this business. There are few multibillion dollar companies Maass Tech dot com quanta to name or the top three.
But there are.
Barely any and the sort of small to medium sized company in other words and the sort of thing.
30 million to 500 million you don't find many or most of them stay private or they're one owner companies that you know work their way up the ladder and eventually they sell off.
So we feel that we're in a good place we have both the experienced team. The credentials you know we've got a core support group that has done this before and and that's that's kinda critical right from and overhead perspective, we have a back office.
Spy and core services provided by folks who have done this and other scaled this business up before and that's critical to us being able to you know rapidly grow our business. So you know from that 50 million to the 250 million right, yeah that people, who know how to do.
And they've done it before and you know we've got those functional leaders and.
Project controls contracts some contracts you know back office and all the different services as well as construction and you know we feel we're in a good place you know as long as we pick good targets and remain disciplined well, where we're going to we're going to do well and this growth curve.
Right, Okay, and <unk> and <unk> closing time, and I would have and service and.
Also and you're you're a large substance of being in the southwest.
And looks very attractive from the standpoint.
Net more companies are moving out and California, and the West coast, generally and they're moving into Texas, and Arizona and I don't know about new Mexico, potentially there too, but there's some pretty sizable transfer is being taken place are taking place from.
From San Francisco, South and.
And and and through California and to this.
This Texas area, which would seemingly puts you in a pretty dynamic position to take advantage of what is going to be a better market and the southwest.
We we feel we're in a good place we agree to and track.
Okay. All right. Good luck to you guys. Thanks, very much makes sense. Thanks much.
There are no further questions registered at this time I would like to turn the conference back over to management for any closing remarks.
Well I just want to thank everybody again for joining us on the call. Today, you know, we all wish that results were better than they had been and 2020.
But given what's taken place around the world and both in the technology space as well and you know with with.
Gold and 19, we feel fortunate to be where we are.
Hi percentage and businesses that haven't made it through this and dynamic and I don't want to overplay that but we feel that we've made a lot of prudent moves trimming trimming and the fab getting ourselves with the best people and the right position.
And being able to really leapfrog from where we've been to where we want to get too and 2023. So a.
Thank you for your continued interest and investment and a and B and its technology.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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