Full Year 2020 Vislink Technologies Inc Earnings Call
[music].
Welcome to the visit link technologies Twenty-twenty review of our results and business update meeting day.
During todays presentation, there will be an opportunity to submit online questions. You may submit online questions using the window on the webcast.
Please note. This event is being recorded I would like now turn the conference over to Belinda Marino corporate Secretary of the board of Directors. Please go ahead.
Good morning, everyone I would like to remind everyone of the safe Harbor statement referenced in the SEC filings the price.
But securities Litigation Reform Act of.
95 provides a safe harbor for certain forward looking statements, including statements made during the course of today's call.
<unk> contained herein are not based on any upon current or historical facts are forward looking in nature and constitute forward looking statements within the meaning of section 27, a of the securities.
<unk> 19, 1933, and section 21 E of the Securities and Exchange Act of 1934.
Such forward looking statements reflect the company's expectations about its future operating results performance and opportunities that involve substantial risks and uncertainties.
When used herein the words anticipate.
I believe estimate upcoming plan target intend and expect and similar expressions as they relate to this link technologies its subsidiaries or its management are intended to identify such forward looking statements.
These forward looking statements are based on information currently available.
To the company and are subject to a number of risks uncertainties and other factors that could cause the company's actual results performance prospects and opportunities to differ materially from those expressed in or implied by these forward looking statements.
For a more detailed discussion of some of the ongoing risks and some uncertainties of the company's.
Eight business. Please refer to the company's various filings with the Securities and Exchange Commission.
Thanks Linda.
Hi, This is Mickey Miller I would like to welcome you all to the visitor Inc. Full year 2020 earnings webcast I'll be joined on this webcast by Mike Barnes CFO visiting.
Companies, we'd like to take this opportunity to report on our full year results and the progress we made in the fourth quarter of 2020, we will also provide an update on our latest developments on future prospects.
Participants will be able to submit questions. During the webcast from our main webcast page and we'll try to take as many as possible at the end.
From 2020, we were impacted by the wholesale cancellation of live events due to the COVID-19 pandemic. Despite the ongoing market challenges, we started to see positive signs in our business by the end of the year, our fourth quarter revenues were over 40% higher than our third quarter rebounding to almost $7 million, which represent.
Our strongest quarter of the year, our satcom business sector showed particular strength in Q4 with revenue up over 13% and bookings up over 52% from the same period. In 2019, we also maintain a targeted investment in key product line, which will allow us to maintain and expand our leadership from providing advanced video.
Tristan across diverse industries.
In the face of this difficult operating environment, we took.
Concrete steps to increase liquidity and strengthen our financial position. This included a strategic initiative undertaken in early 2020 to mitigate the potential impact of COVID-19 with.
Targeted reductions in operating expenditures that were made in November 2020.
On the implementation of proactive spending cut across the business allowed us to really realize savings of approximately $5 million in 2020. It is important to note that a significant portion of the loss we reported for.
The year was a result of right sizing actions for the year $5 8 million.
Negative EBITDA of $16 million was attributed to one time write off of expenses related to reductions in head count facilities and product line.
These actions allowed us to underpin the company with financial and operating.
<unk> ability as a result, we entered 2021 with an improved balance sheet access to capital on cash available.
<unk> for targeted investments in R&D and channel expansion and strategic acquisitions with phase II of our financial turnaround largely complete we are now entering the next chapter in our story phase.
And which we will focus on pursuing profitable growth through both an increase in organic business development as well as strategic alternatives.
$50 million capital raise we closed in February February will greatly facilitate these efforts I will now turn it over to Mike Bondi, who will walk us through the financials.
III, Thanks, Mickey and good morning, everyone.
Now the main financial results of the year.
For the year ended December 31, 2020 revenue was $22 9 million that compares to $28 9 million for the year ended December 31 2019.
Gross margins.
We're 39, 4% of revenue for the year ended December 31, 2020, compared to 45, 6% of revenue for the year ended December 31 2019.
For the year ended December 31, 2020, net loss attributable to common shareholders.
Was $17 6 million or $1 19 per share.
Compared to a net loss of $18 million or $12 eight per share for the year ended December 31 2019.
EBITDA, which is earnings before interest taxes depreciation and amortization.
<unk> station for December 31, 2020 was a negative $16 million compared to a negative $13 8 million for the year ended December 31 2019.
However, $5 $8 million of that negative EBITDA was attributable to one time write offs of expenses as Mickey had mentioned.
<unk> is narrative.
We ended the fourth quarter 2020, with $5 2 million of cash compared to $1 7 million at the end of 2019 I'd like to note that we raised an additional $50 million of capital in February of 2021.
As Micky mentioned.
Mentioned successfully executed on the main goals of our financial restructuring plan.
These included the following actions, we reduced our real estate footprint by 60%.
We reduced overall head count by 40%.
And we also eliminated all third party debt.
I'll now turn it.
We sort of Mickey to provide an operational update and outlook for the business and our markets. Thank you.
Thanks, Mike in 2020, we implemented integrated business planning processes with the goal of reducing working capital requirements and quote to cash we've simplified our overall business model and streamlined our sales organization.
<unk> by bringing it to tighter alignment with our geographic revenue breakdown.
New product development process has been put in place and has started to yield new product announcements. Just this week, we announced the launch of our brand new quantum.
Wireless IP native camera receiver.
This is a very exciting product.
<unk>.
Our complete total native IP solution that provides a foundation for the future of the connected edge.
As we see live events coming back it will give event producers unprecedented flexibility for their production workflows and also will spin off for benefits.
And our Mil Gov segments.
On the product management side, we streamlined streamlined our offering by 46% and expect to execute on the remainder of this plan in 2021. In addition, we continue to optimize our supply chain and continue to drive strategies to help insulate.
Fitz from disruptions as worldwide commerce rebounds, and supply capacity is challenged we plan to focus on a combination of accelerated organic product development, a redoubling of technical partnerships that leverage the deep contacts we've established over decades of existence and the evaluation of potential acquisitions.
The latest where they make technological and business sense guiding our actions.
We'll be our strategy that will encompass all aspects of our business and challenge all departments to obtain heightened levels of performance and efficiency.
Looking forward, we see the following in store for our key market segments.
In the broad.
<unk> cash live production market, we are beginning to see signs that projects were live in person sports and entertainment events are coming back online <unk>.
Quotation activity for infrastructure events is increasing and we expect this trend to accelerate as previously postponed and cancel events start coming back on.
Broad killer in the second half of 2021.
We continue to be the supplier of choice Premier Sporting events and most recently our equipment was probably featured at this year's Super Bowl. The NBA, All star game and Formula One World Championship season opener in.
The Mil Gov market worldwide military and public.
The county budgets continue to be oriented more towards equipment upgrades and legacy hardware modernization, we are leveraging our long experience in addressing these types of purchases to pursue tender opportunities through our expanded indirect partner channels.
On the Satcom area revenues and bookings remained strong and we expect solid growth to continue from both commercial and public.
<unk> say by sector customers for this business line.
On the services side, we've become more aggressive on of our marketing of our service business with extended warranty offerings. Now included an applicable quotations we've created a growing pipeline of service based business across three year four year five.
<unk> from the options and expect this to grow commensurate with revenue increases.
In summary, we are cautiously upbeat that as worldwide business starts returning to pre pandemic levels in 2021, we will be well positioned to capitalize on growing opportunities across our live event production.
Five year War Mil Gov, Satcom and service solution areas through 2021 and beyond.
With our financial House now on better footing than it has been in years, we are turning our attention to executing on our plan to achieve growth profit profitability.
Profitability and value for our shareholders.
We are very encouraged.
We are seeing given that in the first quarter of 2021.
We booked more business than we did in quarter to quarter, three and quarter four of 2020.
We look forward to reporting back to you on our progress in subsequent quarters.
Now we'd like to answer.
Any questions that have been submitted during the webcast.
We will now begin the question and answer session. You may submit a question on line at any time today using the window on the webcast at this time, we will pause momentarily to assemble our roster.
Okay, Great. We have a question John favor why new product, what new product should the investors be most excited about.
Well I think I'm excited about all of our products I think I've mentioned in the past, we're developing more products. This year and will introduce more products. This year. Then the company is introduced in the last five years, we introduced.
TB 6100 production.
Earlier this year.
One of our satellite products.
For compression and distribution.
And of course, our IP linked <unk>, which leverages on the Ats.
<unk> three <unk> standard that's happening on the communications World.
We're very excited about product.
We've secured some orders around that that we'll be announcing but we're very excited about that product and of course quantum which we just released earlier this week, which is the bedrock foundation of our future connected edge in order to have a connected edge you must have IP connectivity.
This product.
Our channel will be our first product receiver that will have IP connectivity and it provides.
Plethora of benefits not only to the live production world, but we can leverage that product base and move that into our Mil Gov consumer business as well so we're very our logo.
Customer business as well so we're very excited.
On the Clawback.
And so we plan to have future announcements that are again leverage around our connected edge thesis and theme that we are focused on and we're very encouraged about not only the products, we're introducing but Howard innovation of products. We are using standard modules standard both semiconductor modules and circuit.
Cited about modules, so that we'll be able to leverage our circuits by bringing more cost effective products to market faster rather than reinventing the wheel on each new products. So we're very excited about the work that's been done in our new product development area as well as our transition into the operations.
Mickey I see a question what are your plans.
Circuit on the additional capital that you've raised.
And here, we think we've optimized our operational platform throughout 2020, we believe we have a platform that can deliver profitably.
On the revenue that we're anticipating and hopefully deliver more as we increase sales our focus is.
<unk> invest in engineering and R&D to bring new products forward. It's also to look at and potentially invest in potential partnerships.
And relationships with technology providers that can augment what we bring to.
To our customers today, and we are very aggressively looking at other potential.
<unk> additions to our portfolio that could augment what we offer and.
Increased the scope of what we can offer to the customer.
Another question in Q3 call you mentioned, a large order for our new racing series.
When do you expect.
Two yes, thats true, we still have not announced that we hope to be announcing that soon we're very excited about that solution and that event and we'll be announcing that as soon as we work through the details and the PR departments of the company that were involved on that but again, that's on track to be announced and we hope to announce.
The announced as soon as we have approvals from from our customers.
The question is the downsizing complete at this point, we believe it is.
We always do reserve the right to optimize the platform to make it more profitable to us to optimize it for future business. Our intent at this point is.
<unk> increased spending in certain areas that are strategic to the company E Engineering and R&D like I had mentioned previously.
We do believe with the $5 8 million $6 million write off that we took in the fourth quarter that we have substantially optum.
Optimize the platform at this point from an operational standpoint.
Is to have another question do you have any updated contracts to announce soon that are in the pipeline and.
What do you see in business going forward. So yes, we do have.
Some announcements.
To be coming in the future as we mentioned on previous calls.
What we like.
And what we require our customers to be a part of those announcements and to support those announcements. So we're working through the details of orders that we've won as well as the future orders.
But as I mentioned in the beginning comments.
In Q1, and we typically don't give.
Guidance a quarter ahead.
Do we just completed Q1 yesterday in Q1, we booked more business than we did in the last three quarters of 2020. So.
We're excited about a the acceptance of the new products that we're bringing to market coupled with.
The market coming back to some degree obviously were cautiously optimistic.
But we made commitments around on what will continue to happen relative to the pandemic, but we're very encouraged by the robust activity both in quoting and new product orders or new orders that we saw in the first quarter of this year 2021.
Question about the effects of Covid and whether it will continue.
We came into 2021 as Micky mentioned previously we did see a fairly strong quarter from a sales perspective in the fourth quarter and we're seeing very.
Sorry.
<unk> bookings in the first quarter as Micky just mentioned and we think Thats a sign that things are starting to loosen up on our customers are starting to come back in.
Contingents or opening up so we feel fairly bullish.
That.
We'll see an uptick in bookings in business in 2021.
Yes. Another question what do you plan to do with the cash you have on the balance sheet.
Again, as we've said in the past.
Our lives that we have raised in the February Ray is focused on growth.
And in several areas, both strategic acquisitions or as other questions are we in discussions around acquisitions, yes, where we're looking at a lot of different opportunities. We've made no commitments and we will continue to pursue opportunities that we see.
That augment what we do but also opportunities that we think have tailed.
Tailwind based on the connected edge and what's happening.
Both with ubiquitous IP and various wireless technologies are being deployed.
So.
As we've said we're very focused.
<unk> on that cash not for operating but for focused investments in growth and we'll continue to stay extremely focused on.
Using those funds to target the growth areas that we see for the company.
Is the question about.
Our stock is trading today, we believe it should trade in the future again.
We take the position that we will do the best we can operationally.
We will.
We have raised capital to expand the business to invest in the future.
As Micky said to potentially look at strategic partnerships and acquisitions, we think if we execute on those strategies. If we optimize our platform. If we go out and we find the right products to sell to our customers augment our portfolio.
We're successful at that then we think our share price should grow obviously and.
We're happy with where we are today in the market.
We've had several questions are on NFC.
I think thats a great question, it's something that we've been studying and taking a look at obviously, we capture a lot of original video.
And so we think it's interesting for US we continue to investigate that.
We're about that.
We will also have an NFC of this conference for sale after the call that's April Fools, but.
But yes so.
These are very interesting and given our position in terms of capturing very engaging very unique.
Video.
It's something that's of certain.
Interest to us.
There is a further question as to whether we will raise additional capital in the future.
We think at this point, we're positioned very well financially.
We like the financial stability that we have at this point given the additional capital raise we accomplished in February of 2020.
One however, we are looking at various opportunities and alternatives and we do reserve the right at some point to potentially raise more capital, but right now we feel very comfortable where we are.
Okay.
And one other question how are visiting take advantage and cash in on the <unk> Revolution, We think <unk> will be a key element of Inc.
Extended edge connected extended edge.
No matter what wireless interface. It is whether it's <unk>, whether it's <unk>, whether it's a proprietary mesh whether it's Wi Fi six we plan to have the ability to to take information from all elements and take proactive action in the markets that we serve so.
We see <unk> as very low cost way to bring Iot connectivity as machines connected more on machine and clearly the connected edge is all about that and then taking that data and that video.
<unk>.
Using AI to make better decisions to make proactive decisions.
And to do it at a much lower cost and then can be done today in the markets.
The question about.
What do you think youll be increasing your focus on international growth, whether it's in Asia or other areas.
Again, I think we do business is currently all over the world.
We have.
Business in Asia Middle East.
Europe, North America, and South America. So we are always looking for opportunities to expand to increase our reach globally. We think we have a sales team that deploys very well throughout the world and I'll, let micky comment on this as well, but at this point.
We do look proactively at extending our sales coverage if it makes sense.
Yes, we have a lot of questions about specific customers and as we've noted on previous calls.
We have a general philosophy that we don't make announcements without our customers.
There is involved in those announcements.
Being a part of those announcements in terms of improving those announcements. So when we do have the opportunity to announce with customers.
We take advantage of that and we.
Really push hard with our customers to make some announcements from some customers don't prefer to make announcements and certainly that's up to them.
But where we can we will there'll be assure that where there are opportunities for us to put out a press release from out of new customer or a new order, we do and obviously, we don't do it around every order, but if we think it's material we think either.
The midstream market interest in company as we mentioned earlier this quarter, we had our $4 million order with the U S.
Army.
So on these are very valid.
Valuable customer of ours that we continue to execute on so we're very excited about that so those are the kinds of orders that will it will continue to.
To announce.
Be assured we will and but in some cases, we're just not allowed us to talk about it.
Okay, let's start.
I want to appreciate where we have a lot of questions on here really appreciate the involvement and activity of the shareholders from great. Great questions really appreciate so were not ready one more question.
Let's go through there's a lot here.
Okay, Here's here's one last one who are some of your biggest competitors in your space on what.
But five year goals are most critical to getting you closer to those big.
Players I think when you look at the markets that we provide into we see areas that we have.
Part of larger markets like the ISR market per Mil Gov.
It was a multibillion dollar market.
<unk> production, we see in some of our proprietary products we.
We have a large position.
<unk> on a very small market.
And then in Satcom is is a massive market. So we play in in a variety of markets and we see opportunity for growth in those as well as other markets. Our fundamental belief is that in the next 10 years every industry will be reinvented.
And our REIT be reinvented for three reasons connectivity to machines, whether it as I mentioned Wi Fi six by G. Proprietary costumer mesh machines will be connected data massive amounts of data will be collected and AI on top of that data, we'll be able to make much better decisions and we.
We can make.
As humans looking at video so we see massive massive destruction in a lot of different areas and that's what we're on.
Cutely focused on is where the best opportunities to leverage the capabilities, we have as well as acquisitions, we make to bring that reinvention to those key market segments and industries.
On the future. So we're really excited about the capabilities that we have and leveraging those with a tailwind of this massive reinvention that we didn't see happening in markets throughout the world.
So we think we've got a great position, we've done the financial restructuring, we've got our operations and new product.
Development engine, working and continuing to improve we've got our cost structure in place and now we've raised fresh capital to focus on growth. So we're very excited about our potential we're very excited about the opportunities that lay ahead of us and as I mentioned in Q1, our order book.
We're really.
Excited about what we see there and we hope that continues.
Our team members Invisalign, we're very proud of the work Thats been gone I know theres a lot of sacrifice from everybody on the team during 2020 to work through the pandemic. There was a lot of challenges that were overcome we did that cost effectively there are lot of sacral.
Related to that were made by many people and everyone on our team. So we're very thankful for that and we're looking forward to continuing to focus our efforts to bring shareholder value to our shareholders want thank everybody for your support.
And look forward to providing you with updates as we move along.
Thank.
Macro by body.
This concludes our question and answer session I would like to turn the conference back to Mickey Miller for any closing remarks.
Thank you as I said, Mike and I are both very excited about the opportunities for this company I think a lot of the hard work that we've done.
Thank you very last year, we're going to start seeing the benefits of we're very focused.
And as we said of our first call.
He came here to make this a large company to build the kind of company that all of us want to work for and we're very excited about the team that's in place and the efforts of our team members and look forward to continuing.
Done.
Focus on shareholder value and growth.
Thank you everyone.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.