Q4 2020 One Stop Systems Inc Earnings Call
You are currently holding for one stop systems.
Paul for our financial results for the fourth quarter and full year ended December 31.
1020.
This time, we are assembling our audience and will be underway in about one minute. We thank you for your patience from holding enough that you. Please remain on the line.
Okay.
[music].
Yeah.
[music].
That's.
Good afternoon, and thank you for joining us today to discuss one stop systems financial results for the fourth quarter and full year ended December 31st 2020.
With us today are the company's President and Chief Executive Officer, David Raun, and Chief Financial Officer, John Morrison also joining today is the company's chief sales and marketing officer, Jim Iceland.
Following their remarks, we will open the call to 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 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 Raun.
Thank you Jonathan and good day.
Thank you Jenny.
Good afternoon, everyone. We're grateful you could join US today, I hope you've been Hollywood stay safe healthy and virtually productive.
Before addressing that financial operational and strategic strategic progress we've made during the fourth quarter I'd first like to thank our shareholders existing and new for their tremendous support we.
We hope your patience has been rewarded by the strengthening performance in the stock over the past several months.
In 2020, we seize the opportunity to take several transformative steps and have laid the ground the cornerstones for a stronger foundation on which to build on future growth.
These steps include a new senior leadership and corporate reorganization.
Reduced spending three new independent board members, which also added to the board diversity and we directed more focus on our long term strategic vision to increase shareholder value over time.
Regarding our financials. We are pleased to announce that we were able to exceed our Q4 2020 revenue outlook by $900000.
This was a direct result of our continued efforts to drive existing OEM business and our success.
Spanning our customer base offsetting some of the downside from the pandemic.
We see early indications of improvements with customers impacted by Covid, while we anticipate the impact will continue for some time in 2021, our energies are focused on a return to normalcy.
On the opportunity opportunities inherent in the improved environment.
As previously stated the pandemic impacted our top line revenue growth in 2020 with several of our key customers.
We identified about $14 million and lobster delayed business compared to our annual plan due to COVID-19 related matters.
More than half of this loss or delays in revenue in 2021 from our largest customer in the media entertainment industry.
During the fourth quarter, we saw on encouraging rebound by this customer as their three D. Virtual product line continues to develop traction in the market.
Their product premiered last year on American Idol has the virtual performance stage.
Katy Perry music video.
We expect our virtual platform to drive increased sales in the current and future quarters.
Dental return of live events should contribute to additional revenue from their core products on the second half of the year.
Earlier, this month, we announced a direct offering which further fortified our cash position.
In addition to this offering we achieved significant cash games through a combination of lower expenses increased efficiency and improvements in working capital.
Result is we currently have a cash position of approximately $19 million.
It gives us the ability to invest in key strategic initiatives that should fuel future growth.
Now before I provide additional color and the outlook for Q1, I'd like to turn the call over to our CFO, John Morrison, who will take you take us through the financial details for the fourth quarter and the full year 2020.
Following John will be Jim <unk>, our chief sales and marketing officer, who will share some information on exciting new products and discuss customer activity.
John.
Thank you David and good afternoon, everyone I'm glad you can join us today.
Earlier today, we issued a press release with our results for the fourth quarter and the year ended December 31, 2021.
The rate relief is available in the Investor Relations section of our website at one stop systems Dot com.
Our revenue in the fourth quarter was $13 9 million, which was up 7% from the third quarter, resulting from improved shipments to the skies and Raytheon how.
However, we were lower by 24% compared to the fourth quarter of last year, mainly due to program.
And then Nic driven reductions.
Most significant was the quarterly revenue for disguise, which was down $4 3 million attributable to government restrictions on large group events.
Approximately $1 million of flash storage array shipments to Raytheon were delayed to the first quarter of 2021, and we also had a one time program valued at $1 1 million in the prior year 2019.
These reductions were partially offset by $1 2 million in sales of one new for you Pro GPU accelerator being supplied to the U S Army.
Revenue for the year totaled $51 9 million this was down $6 4 million or 11% compared to the previous year.
Most of the decrease is attributable to the reduction in shipments of $8 2 million to the skies due to COVID-19 restrictions on large gatherings.
As David mentioned, we are seeing encouraging signs with demand for their three D. Virtual platform and we should see a return on their core products in the second half of the year.
Recently, the Carlyle group purchased a 50% interest in the skies, providing them greater financial stability.
Other reductions in revenue included Raytheon of $2 9 million, primarily due to the timing of different programs.
Revenues were also down with other co VAT COVID-19 impacted customers and the elimination of a low margin two 4 million per million dollars project with a former customer.
And relative reductions, however were partially offset by favorable favorable results from our diversification efforts, which included $2 6 million to a new test and measurement company for our new Pcie Gen four products over $1 nine.
Direct with the Navy for a flash storage arrays and the previously mentioned $1 3 million of our new <unk> pro to the Barney.
This was further supported by our ongoing project lift we saw 1 million on incremental revenue during 2020.
The Q4 breakdown for our operating units.
One of our SaaS business contributed $8 9 million as compared to $13 9 million in the same year ago period.
Whereas here, our European subsidiary contributed $5 million in the fourth quarter as compared to $4 5 million in the same year ago period.
For the full year on <unk>.
Core Oss business contributed $33 7 million of revenue as compared to $40 1 million last year, whereas Europe was approximately flat at $18.
$18 2 million year over year.
Since we fully integrated <unk> into our core Oss operations in June of last year, we no longer report CDI as a standalone business unit.
This integration was part of our reorganization and cost reduction program that we implemented in the second quarter of 2020.
Now turning to gross profit.
During the fourth quarter, we had strong gross margins of 34, 5% low yielding on a smaller gross <unk>.
Profit as compared to the prior year based on reduced revenues and a higher mix of graduate yourself on <unk>.
Gross profit was $4 8 million.
As compared to $6 5 million or 35% gross margin in the same year ago quarter.
Gross largely with our core Oss business improved to 42% in the fourth quarter from 41% in the same year ago quarter. This increase was attributable to changes in product mix.
<unk> as well as well as an increased focus on margins organization.
<unk> gross margin decreased by 30 basis points to 21, 3% from the fourth quarter as compared to the same year ago period based on product mix.
For the year of 2020.
Gross profit totaled $16 1 million or 31, 7% of revenue. This compares to $19 4 million 133, 3% of revenue in 2019.
Gross margin for our core Oss business was 37, 3% in 2020 as compared to 38, 2% from the prior year.
<unk> gross margin decreased by one three points to 21, 2% in 'twenty, one 'twenty as compared with 2019.
Overall, our overall operating expenses decreased 9% to $4 3 million from $4 7 million in the fourth quarter of 2019.
The decrease was primarily due to cost reduction initiatives that we began in April where our workforce was reduced and moved cost containment programs were implemented.
Overall, our operating expenses as a percentage of revenue increased to 39% in the fourth quarter compared to 25, 7% in the same year ago quarter. This is fully attributable to lower revenue.
For the year December 31, 2020, our total operating expenses decreased 16% to $16 9 million as compared to $20 2 million in the previous year.
The decrease is primarily attributable to the reorganization expense reduction program executed by the team along with the non reoccurring goodwill impairment charge of $1 7 million in the prior year.
Operating expenses as a percentage of revenue for the full year improved to 32, 5% versus 34, 6% from the prior period, resulting again from our expense reduction program.
On a pro forma basis, excluding prior year goodwill impairment charge operating expenses as a percentage of revenue increased 80 basis points largely due to the reduction of revenue.
On a pro forma basis after adjusting for last year's goodwill impairment charge of 171 on our operating expenses in 2020 decreased eight 8% or $1 6 million.
Income from operations was 513000 as compared to $1 8 million in the same year ago quarter.
For the year our loss from operations was four 124000 compared to a loss of 779000 in the prior year.
On a pro forma basis, excluding the goodwill write off of $1 7 million from the prior year, our loss increased $1 3 million.
Net income on a GAAP basis totaled 244000, or one cent per share in Q4 2020.
This compares to net income of $1 1 million or six cents per diluted share in the same year ago period.
For the year.
Net loss on a GAAP basis was $6500 one.
Zero cents per share compared to a loss of 900000 or six cents per share in 2019.
On a pro forma basis, after giving effect to the before mentioned goodwill impairment charge from the prior year GAAP income was down $803500 from $779000.
7790, $7000 in 2019.
On a non-GAAP basis net income totaled 636001, four cents per diluted share in Q4 of 2020 as compared to $1 3 million or seven cents per diluted share in the same one year ago period.
For the year non-GAAP net income totaled $1 4 million or eight cents per share as compared to $2 3 million or 14 cents per diluted share in 2019.
Adjusted EBITDA, which again is another non-GAAP metric was $1 1 million in Q4 as compared with $2 4 million in the same year ago quarter for the full year adjusted EBITDA was $1 8 million compared to $3 2 million in two.
My team now.
Now turning to our balance sheet.
Cash and cash equivalents totaled $6 3 million on December 31, 2020, as compared to $5 5 million on September 32020 on.
Our cash position as of today and David mentioned it was approximately $19 million. This is the result of the combination of net proceeds of $9 2 million from our offering earlier this month plus our recently improved operating cash position during the first quarter of 2021.
This improvement from our year end balance is mainly due to a reduction on working capital requirements, resulting from collections on outstanding customer accounts receivable and management of inventory on hand.
Most notably is the pay down in accounts receivable from the sky to bringing our count current and more closely aligning our day sales outstanding accounts receivable with the payment terms for accounts payable.
We are very pleased with our significant improved cash position, which provides security and sustainability for the company during periods of economic uncertainty. Most importantly, it means we have sufficient liquidity to meet our cash requirements for current operations paying down debt.
While also supporting the growth and strategic initiatives of the company.
This completes our financial review I would now like to turn the call over to one chief sales and marketing officer, Jim items.
Jim.
Thank you John and good afternoon, everyone. During the fourth quarter of 2020, we closed four additional major OEM opportunities.
Including two industrial one instrumentation and one autonomous driving project.
2020, the program wins totaled 16, which matched 2019 without the pandemic.
As a reminder, we define program wins as those expected to yield $1 million or more of revenue within four years.
Our 32 program wins over the past two years contributed $18 million to 2020 revenue, including $12 million from new customers supporting our diversification initiatives.
In addition to adding new customers in 2020, we expanded our breadth of project wins inside our most strategic customers. For example, we now have four major project wins within various divisions of Raytheon.
After being awarded a Raytheon Premier vendor Excellence award in 2017 for a five year $36 million contract for radar and sensor flash storage arrays design for the Navy's P. Eight Poseidon aircraft, we added project wins across the entire AI workflow landscape.
This included a large format data center in the Sky AI threat detection system, and our multi server AI target recognition and threat detection cluster.
These systems provide AI training and inference in the harshest environments.
We were also awarded a multi GPU missiles stimulation system with Raytheon for the missile Defense Agency.
These wins at Raytheon to have led to the direct program awards with the Navy for Flash storage arrays that John discussed earlier.
Sure.
In 2020, we primarily marketed in a virtual environment using social media.
Virtual events and Webinars alongside strategic Technology partners.
Video and Marvell.
Looking forward in 2021, we plan to use a hybrid format of virtual and in person events based on the reopening plans for several trade shows in Q3 of this year.
Our net hosted webinar in April will feature our edge AI rugged server and data storage solutions supported by our flash memory partner Piazza yet.
And later this fall we plan a live demo exhibits at sea Aerospace defense and security equipment International AI Summit and supercomputing.
Despite the global challenges navigated in 2020, we are focused on driving strategic sales diversifying our customer base and executing upon our new go to market initiatives. We believe this strategy will drive future revenue growth and industry expansion opportunities for Oss.
Now I would like to turn the call back over to Kay.
Thank you John and Jim.
As John mentioned, we ended the year nearly $52 million in revenue, while concentrating on building a strong foundation fortified by financial financially solid balance sheet.
Disciplined management strategy.
A key initiative in 2020 was improving the bottom line by reducing costs on all fronts and increasing operational efficiencies. The combination of these steps on our recent $9 $3 million raise puts our cash position at very comfortable levels.
Now for 2021 on our future.
We have defined and started implementation of a multiyear strategic plan to enhance our product roadmap market position and value proposition for targeted industries and customers.
After confidential discussions with customers much research trend analysis review of core strength and our current business. We have identified a focused segment within the fast growing edge computing space.
According to XI on market research in 2018, 90% of all data was created in the cloud or the data center.
By 2025, they expect a massive shift where 75 per cent of all data would be acquired.
And processed at the edge.
I urge computing space is expected to be one of the fastest growing technology markets for years to come.
To better understand where we offer the greatest unique value and innovation, we look at the three different components of the edge computing space.
First <unk>.
Smaller data centers have moved to the debt edge closer to the users and data creation like.
Like the cloud and large data centers. These are environmentally controlled buildings. This portion of edge computing does not take advantage of Oss is strength of deploying the most advanced technologies and harsh environments. So this is not a focus marketplace for us.
Second the edge has billions of simple Iot devices that collect information and may or may not take specific action. These.
These tend to acquire low levels of performance and do not have latency challenges communicating back to the cloud or data center on the edge.
This includes anything from multiple devices in your home like a thermostat or an alarm system to sensors on the factory floor.
This is not our focus.
Our strategic focus is on are quickly developing third segment of edge computing.
Call It AI transportable.
This includes anything that is not in a fixed location but requires.
The very latest in high performance computing for AI, we're responsive action needs to be taken immediately at the very edge.
This trend will become more widespread with applications, including mobile containers equipment drones aircraft watercraft submerged MRSA bowls and land vehicles.
The challenge associated with these AI transportable.
Is where oss's core capabilities and expertise is strongest.
And we believe we will offer the greatest growth and will offer the greatest growth opportunities throughout this decade.
Our our value proposition offered the absolute highest ruggedized performance without compromise.
These harsh environment, making it an ideal growth segment for the company.
Demand for this type of AI performance in these challenging applications includes military theatre of Tomorrow for all branches of the service.
The U S and NATO have programs and ambition to implement AI with most of the actors are nodes, including land Sea air and space.
This includes autonomous and partially autonomous control threat detection defensive systems and portable command centers.
On the industrial side, we will continue to preserve pursue different types of autonomous vehicles as well as specific applications related to medical oil and gas and mining.
Hey, I transportable revenue is currently the fastest growing part of our business.
In 2020, it was about 20% of our revenue.
And currently represents over half of our prospective program wins.
Directly tied to our value proposition and strength these customers on opportunities represent our higher margin business as well as where we win follow on programs.
We look forward to updating you in the future with our progress in this exciting fast growing AI transportable space.
With the close of the first quarter of 2021, only a week away. We are pleased to provide a revenue expectation of approximately $13 million.
While there remains uncertainty around when will finally conquer the pandemic and return to business as usual, we believe the worst is behind us.
We are seeing signs of improvement in Oss has become foundational stronger to execute the strategic plan to create increased value for our shareholders.
Now with that.
I can open up the call to your questions.
Jenny.
Thank you.
If you would like to ask a question at this time. Please press star followed by the number one on your telephone keypad and if you're calling from a speaker phone. Please make sure that your mute function.
It turned out to ensure that you signaled reach of our equipment.
Again star one to ask a question.
Yeah.
And we will go first to Scott Searle of Roth capital.
Hey, good afternoon, Thanks for taking my questions, Hey, before diving in on the edge AI transportable.
Wanted to just clarify a couple of things on disguise I'm not sure if I heard a number in the fourth quarter I'd love to hear that if you have it and it sounds like you're starting to see a recovery now based on.
The newer three D product before you start to see a recovery based on the traditional entertainment products in the second half of this year. So I was wondering if you could give us some color on the fourth quarter, what youre seeing going into the first quarter of that certain of $13 million assumption is disguise and kind of how you're thinking about them contributing over the course of 2021.
So this is Dave a couple of things first of all we saw the.
We saw what we believe was the bottom in the third quarter with them. So we saw increased growth from the fourth quarter.
That was primarily all in the new three D virtual products, which.
You're getting more traction we expect that's going on the project growth into the current quarter and future quarters, and then the second half low layer layer back in the kind of business. We have enjoyed in the past and.
So we think we'll be in pretty good shape later this year with our largest customer.
Let's say from clearly I think you were asking the question on the number we cited but we were down $4 3 million year over year on disguised in the fourth quarter.
Okay, It was down $4.3 million okay.
And if I could as well just component availability, it's obviously been a big issue throughout every supply chain.
Globally, right now and I'm wondering if you could give us some updated thoughts on that what you're seeing particularly as it relates to things like Gpus in memory and.
And how that's impacting the outlook for the gross margins.
So we definitely have seen it.
Fortunately throughout 2020 and into 2021, which may look worse than previous year, and we've taken action quick and it hasn't impacted our revenues in any significant or material way so far.
So we're staying on top of it we believe that as far as price increases.
Those are things that we have to pass on to our channel on our customers. So we don't expect it to impact our margins.
Okay, Great and then lastly, if I could just in terms of the pipeline of opportunities I think in the past you've given some idea in terms of the level of RFP activity I'm not sure. If you provided those numbers I Miss from I'd love to hear some more color on that front and then Dave specifically as it relates to edge AI transportable I Wonder if you could delve in a little bit more.
In terms of.
How youre thinking about the ultimate market there in terms of how you go to market with partners, what additional incremental required investment looks like and again. It sounds like this is a higher gross margin segment more software content. So I'm trying to understand the investment required there and ultimately what that does to the financial model or are we talking about you guys sustainably.
Having $35 40 per cent kind of gross margins or what is the longer term target on that front. Thanks.
Okay.
So I cant help on the design win front.
The outlook well going into this year, we were in the 21.
The opportunities that's been growing even in the first quarter were up at 24 as of today.
So that's what we're tracking and typically we've seen anywhere from 60% to 70% win rate on those projects plus others a layer in the layer in more over the year.
Okay, and then and basically what we're saying is more than half of those are debt square on the AI transportable space.
Let me.
The other questions first of all our.
Our higher margin business tends to be things related to military and AI transportable and so that's really where we're focused as far as additional investment we're going to be careful with that so we were not in a situation, where we're just going to go on and start spending and the $19 million, we're going to be very careful.
I think we've proven that that's R. R.
Methodology.
And but we will not hesitate to do it if we believe it can radically accelerate our growth and so we're looking for those opportunities.
Great. Thank you.
And well go to our next question from Ruben Roy of benchmark.
Thank you.
Nice job guys, finishing up at a challenging year.
Dave I wanted to pick up on the last question on end.
Some of that.
And get a little more context around.
How youre thinking about their strategic.
<unk> maybe too.
Edge area I assume some of the stuff that you're doing with Raytheon.
With the storage.
On the containers as well as what Youre doing with left would be.
You know kind of things that you're talking about here. So I guess can you tell us.
In terms of some of these new projects that you're working on with customers.
What types of projects are they are they edge servers or any type of detail on on the type of work that you're being asked to do and if you've.
Come up with some initial ideas on what the market Tam could look like for the next three to five years for kind of for Oss.
Yeah, absolutely. So a couple of things for one is that first of all.
This plan is based about is a lot about focus so we've already had success in this area. They are transportable, but when you look at the data in that space is just very attractive versus other things. We do so again part of it that's where it's nice is we're not starting from scratch. We're just getting the organization more focused on it as we believe it will provide.
A higher returned to the company on shareholders.
As far as Raytheon on left you mentioned those two yesterday with debt into that category for sure pretty much anything that moves you said like.
I think he set a server on edge.
If that server is it sitting in a vehicle or something that needs to move that has challenges anything from heat space cooling.
And then it would be a fit but it's not if it's intermodal building with air conditioning, we're trying to make that really clear because historically, we used to try to chase that business, we'd end up losing it because there's too many players you're going up against the Big boys and it ends up being a price play.
As far as markets market size, we're trying to still sizes, but we believe the market today is somewhere in the $2 million to $400 million range.
Other people may not define it as AIG transportable. So we think that's a good name for it and we think this is something that a number of years out could be $1 billion to $5 billion in the next call I'll try to hone that in a little bit more we're doing work on that front, but it's an exciting space. It will be I think the fastest growing space in it.
It is the laggard in the edge computing space.
Great. Yeah. That's very helpful context, Thank you for that day, but I guess the follow up question to that would be.
When you look at your other products and assets.
Yes.
Potentially entail some day emphasis around some of the other areas.
Areas that you guys have been working on whether it's some of it's about the integrated with CDI or aggression or whatnot.
I think the main thing to think about it is that we're not going to do anything that first of all impacts our customers.
Great customers, it's just really focus where we move forward, where we put our greatest R&D dollars.
Moving forward is going to be where the highest return is.
We're not going to turn this balance sheet.
Real quick we got to build this over time and not hurt the revenue on the process.
Right right. Okay last question I had was just kind of more on the.
The outlook.
For the rest of the year and specifically around the skies and kind of.
On the layering back on some of the core revenue how do you see that working I mean is there inventory out there that they can work with once we start seeing from live events coming back or do you think that youre going to see a switch turn on and you guys are going to get a bunch of new orders.
Yep.
Sort of going back into normal or how are you thinking about that maybe for the second half of this year and maybe longer term.
So first I think we're going to have some nice results from the virtual products, which is very encouraging because there's a lot of pull on that area and then the second half. This one large gathering events and sure there is some.
Inventory on the channel.
On this stuff, but I think we will see an impact on that as early as Q3 and most likely it will be in Q3, So I think they're going to rebound from pretty good customer for us this year.
That's perfect. Thanks, guys.
Thank you.
And we will go to our next question from.
Brian can swing from Alliance Global partners.
Hi, good evening guys.
Can you talk about how your.
How are you.
As it relates to the.
AI portables can you talk about the competitive landscape and how your technology stacks up I believe you talked about you're using the latest Nvidia technology talk about where your peers are and then for those that aren't using that technology that may be equal as what you are how old you identify.
And what is your go to market strategy to replace them and bring cash.
Last our technology to those customers.
Yeah.
So I think really you can look at the market and three three different segments first of all you've got inside design teams that we will compete with you know whether they're going to try to do design themselves, but that's the challenge there is like we've done it.
Raytheon, where we have to show our value and they decided to use this over and over second you've got the big players in the market the growth which would be the the.
Mercury's Curtiss Wright's they tend to go to market with one mature.
Products full mill grade.
They're really good at doing that but we see a demand that says.
That's great, but I need the latest technology I need the commercially available product how could you give me that that commercially available product that's sitting on the data center.
The latest and greatest in putting this harsh environment and that's what we do okay and I think the players that do some of that didn't get really fragmented.
No public companies that tend to be smaller ones and this is where we really believe we can take.
Initiative and carve out a real leadership in this area and awful lot of value.
And what is the sales cycle for replacement like that where somebody might not be using the latest and greatest. He said is it quick because they realize they need faster speed or to take a long time convincing the capital investment they've already made.
I think it's the same we've seen in the past commercials anywhere from six months to 12 months military is anywhere from nine months 18 months in general kind of thing.
One of the things just to point out when.
Jim talks about having X number of opportunities those are way down the path, but probably already bought some stuff from us the prototyping I mean, it's not like Hey, that's a guy who would want to go and pursue.
And so that doesn't that doesn't mean, it necessarily takes that long to turn into revenue for us and in some cases, we may lose on I've done some revenue with them already.
Great. Thank you.
And well go next to Christmas Scott with Noble capital.
Hi, guys I'm sitting in for Joe Thanks for taking my questions Congratulations on a solid quarter.
Okay.
A lot of my questions have been answered but can.
Can you after the offering recently, what's the current fully diluted number of shares outstanding.
On the 18 five.
18.5, thank you.
And.
Let's see I think I heard the number of shares is not fully diluted I'm, sorry to interrupt you taught us 18, and a half million standard.
Not only does it.
Do you have a totally 18 and a half.
Right.
It's 18, and a half million shares outstanding.
And on a fully diluted.
Yeah, well you would have.
Have about another 700000 on top of that.
100000, thank you.
On.
I heard some comments on revenue and the margins being down I think John made them a.
On a little more detail around that please is that related to Europe, and increasing or ongoing lockdowns total.
The drop downs.
So first of all the freshener, because they're more closer to a bar type model frankly.
Our margins tend to be in the lower twenties I don't think it was radically down it's just more of a nature of the business. So it's product mix one free for the Yeah, and then you know as far as like margins overall since our revenue was down.
We're spreading overhead over a smaller number of dollars, which impacts gross margin remember also so we see positive things happening.
And this company, creating a foundation so that when we pull out of this which we think we're starting to do.
Lots going on very much more to the bottom line.
Right. Okay. Thank you.
And the.
One of the things I think I'd like to add something to that is.
As you know, we gave guidance of $13 million.
For the current quarter.
What's kind of interesting about that number as last year in Q1, we did $3 3 million that's pre Covid, we had no impact.
Disguise was very strong.
And.
So we're in shooting distance of that in a COVID-19 world, which really backs up debt, we've layered in new customers and.
We fought our way through this and setting up for <unk>.
The future.
Sorry to interrupt David on that I'm going to add $10 million to is number one.
Feel free.
Three for free.
$13 four so I don't want to let go on that $10 million. So actually that was up 13.
13.4 was an all time record for a first.
First quarter force last year and as I say, we gave guidance this year at about 13, so well we also fell in line.
It's not all the Sky is it's more on this on new new strategies that we're focusing on.
Yeah. Thank you that sounds great and then the last question from me just with.
From a parts of improving employment.
That impacted your ability to source employees, especially maybe engineers.
Okay.
No we've been pretty stable I think we've created an environment.
But they're thriving am they feel challenged I'm excited about our future so were doing pretty good.
Great. Thanks very much.
Thanks, Chris.
And we have no more questions at this time I'd like to turn the conference back to our speakers for closing remarks.
[noise] [noise] okay.
Sorry about that the second time I've done that.
Thank you Jenny.
Thank you everybody for joining us today, and we look forward to talking to you more on the future reporting on our progress in the meantime, please feel free to reach out to John Jim and me anytime.
So Jenny please go ahead and wrap up the call.
Thank you.
Now before we conclude today's call I would like to provide the company's safe Harbor statement that includes important cautions regarding forward looking statements made during today's call.
One stop systems cautions you that statements on the presentation I'm not a description of historical facts are forward.
Looking statements. These statements are based on company's current beliefs.
Patients such forward looking statements include those regarding the company's expectations for revenue growth generated by new products design wins or M&A activity inclusion on fresh forward looking statements and others should not be regarded as a representation by Oss that any of its 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.
If the market for our products is developing and may not develop as we expect.
And that mix or other disasters or public health concerns, including COVID-19, and retire from the world, where we have operations customers or source material or sell products matter of fact such market.
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.
On our bodies to successfully integrate the operation systems technologies product offerings and personnel with acquired companies may prove difficult and ever Sally 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.
On my business sales growth 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.
I think I heard of our design proposals, becoming design wins is uncertain.
On revenue may never be realized on.
Our products fulfill specialized needs and functions within the technology industry and such needs or functions may become unnecessary one of the characteristics, especially within functions may shift in such a way as to cause our products products total rockwood fulfill such needs or functions.
Entrance into one market may harm our competitive position.
We rely on a limited number of suppliers to support a manufacturer design process and if we cannot protect.
Perhaps teri design rights and intellectual property rights.
Our competitive position could be harmed or we could incur significant expenses to enforce our rights on international sales and operations subject to protect us from additional risks that can adversely affect our operating results and financial condition, and we fail to remedy material weaknesses in our internal controls or financial reporting we may not be able to accurate.
We report on our financial results.
And other risks described in our prior press release and in our filings with the Securities and Exchange Commission SEC, including under the heading risk factors in our annual report on form 10-K and in subsequent filings with the S. E C.
You are cautioned not to place undue reliance on these forward looking statements, which speak only as of the day of the conference call and we undertake no obligation to revise or update this information to reflect events or circumstances. After this date hereof.
Forward looking statements are qualified in their entirety by this cautionary statement, which is made under the safe Harbor provision 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 replay starting later this evening through April Inc.
Please refer to today's press release for Thailand, and replay instructions available via the company's website at IR Dot one stop systems Dot com.
You you for joining US today. This concludes our conference you may now disconnect.
Alright.
[noise].
Uh huh.