Q1 2021 Ageagle Aerial Systems Inc Earnings Presentation
Financial matters.
Following the Kohl's remarks branded towards the club. The newest addition to our leadership team will join the conversation to provide you with some highlights into our future growth plans and product development initiatives and other business building strategies that we believe may best position us to empower and dominate the drill and age.
We will then conclude the call with the Q&A session during which we will endeavor to address several of the most relevant questions you sent into our IR team of gateway prior to today's call.
Since I became CEO in May of 2020.
We remain focused on leveraging AG Eagle strong foundation to ensure our company maintains its industry, leading reputation of providing American made scalable drone solutions to our customers.
We continue to execute on our primary growth objectives to meet the vision of being a global leader of the drill and age.
We have made huge strides and realizing this vision by.
By building on our strength through one pursuing highly strategic acquisitions.
To recruiting and incredibly talented experienced diverse team from within and outside of our industry.
Three successfully raising growth capital.
And for working to establish the industry's first true quality standards for U S based contract manufacturing.
Since the start of the year, we have made two strategic acquisitions that have transformed our business and has propelled <unk> gigawatts of new Heights.
As we discussed on our January call, we acquired Microsensor and parrot.
Mike of sense brings us and amazing talented team of industry professionals as well as the industry's premier high quality sensor technologies sold and over 70 countries worldwide and integrate into over 150 different drones.
And then in April we announced the acquisition of measure and.
And aerial intelligence company that build software to automate drone operation workflows.
Within the and program management user friendly flight control and and platform data analysis measures comprehensive software solution ground control helps businesses save thousands of hazardous man hours and creates millions of dollars and operational benefits.
Ground control is a leading SaaS solution offer and the industry's most advanced features and an unbeatable price point.
We acquired Mike of measure because of the software is essential to enable our comprehensive drone solution platform.
Moreover, they bring us and established and growing customer base comprised largely of fortune 500 companies.
In addition measure brings AG Eagle of World class team of engineers developers.
And by the way of Tech tightened.
Branded towards the club measures co founder and CEO was again recently named by Washington, and the magazine as an industry Tech tightened and 2021.
After all of you being recognized as such and 2018 and 2019.
In addition to his long list of notional accomplishments and industry of claims.
And also as the seat at the FAA table, having been appointed to the drone Advisory Committee by the U S Secretary of transportation.
This is the guiding group for developing the regulatory framework to integrate drones into the U S aerospace.
With brand and now survey the AG Eagle's, Chief operating officer, and as a member of our board of Directors, we look forward to benefiting from his leadership experience and industry influence and passion for all things drones.
With the strategic acquisitions, coupled with our ongoing recruiting efforts AG Eagle has grown our workforce from a small dedicated team of approximately a dozen professionals at the end of 2020.
Two of the industry for us to be reckon with that is fast approaching 50 incredibly talented team members.
I could not be more proud of the tightened net.
<unk> focus team that we're building as well as the nuclear opportunities we are creating for like minded high achievers.
Yeah.
Looking at our AG solution businesses.
Earlier this year, we announced the state of Iowa became the second state Department of agriculture to adopt our hemp overview platform.
The agreement allows <unk> to leverage our platform to manage online registration.
Payment processing data collection and compliance oversight of the hemp fields for three years.
In addition, we continue to work with the state of Florida to expand its use of hemp overview to manage oversight of temp and other high value crops and the state.
We are also continuing discussions with other state departments of agriculture, and expect that we will have additional new customer wins to announce in the near future.
As we look ahead to the rest of the 2021, we believe the three primary themes will guide us and influence our decision making processes.
First is precision.
Leveraging advanced technology, and drone innovation to deliver the industry's most reliable safe and effective solutions on the market.
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<unk> is quality.
Establishing the industry's first quality standards for U S based drone contract manufacturing and assembly.
And third is vision remaining focused on executing strategies that allow us to define entirely new standards of excellence and scalability for the enterprise drone industry.
Yeah.
As always I want to thank our shareholders. All of 152000 of you for your continued support of AG Eagle and for the confidence you have placed and our team.
We greatly appreciate your enthusiasm for AG Eagle and our phenomenal team Youre appreciation for the role of the drones will play and almost every industry.
And for sharing our vision for the future of the drill and age.
Now I would like to turn over the floor to AG Youll CFO Nicole to provide from key highlights relating to our company's first quarter financial performance Nicole.
Thank you Michael and thanks to all of you for joining us on this afternoon's call.
Last Friday, we filed our 10-Q with the SEC, which can be accessed on the SEC dotcom and <unk>.
This morning, we announced some key highlights from the report.
For the three months ended March 31, 2021 revenues climbed to approximately $1 7 million compared to approximately 391000 reported for the same three month period and 2020 the.
The increase was primarily due to the revenue generated by the sales of microphones and sensors to its global customer base.
Coupled with licensing fees and revenue share received from the state of Iowa, and the state of Florida for fun and overview.
And it is also one of.
Of the to mentioned that Microsoft has outperformed its internal projections for the first quarter of this year.
And as our belief that as the result of becoming a part of the aggregate portfolio markets and value proposition to its customers and prospective customers continues to strengthen and the survey to accelerate the company's growth trajectory.
Our gross margin off of significantly improved rising to 63% for the first three months of 2021 compared to 55 per cent and the first quarter of last year.
The increase was the result of aggregate of strategy to expand our product and service offerings to include higher margin John sales.
Joe and sensor sales on SaaS and software solutions.
Looking at our balance sheet, our cash position remains strong with $24 2 million at March 31, 2021 and.
And that was after providing the use of approximately $13 million and cash for our $23 million acquisition of Microstat.
We also invested $206000 and ongoing product development of our sensor and software solutions and the first quarter.
Subsequent to the end of the quarter in April we completed the acquisition of measure for total cash and stock consideration of $45 million.
The purchase price was comprised of $15 million and cash and approximately five 3 million shares of common stock valued at $30 million.
As a reminder, we filed an initial registration statement with the SEC and February providing for up to $200 million can be raised through the issuance of registered shares from time to time and indeterminate amount and then in determinant time.
And the registration statement has been cleared by the SEC.
The purpose of the registration statement is to ensure that I eagle can opportunistically raise capital when necessary to support our future growth strategy. These strategies may include pristine and pursuing additional strategic acquisitions, and making investments and new product development and redoubling, our sales and marketing efforts to enterprise customers.
Now I have the pleasure of introducing to you a new CLO and member of our board of directors Brandon towards the cloud.
Randy will provide you with details and perspective on new recent development and Bobby and the integration of Microsemi and measure into I giggle as well as his thoughts on our collective the future growth strategies for Brandon over to you.
Good afternoon. Thank you, Michael Nicole and incredibly excited to be part of the aggregate team and to participate on today's call.
And some of the measuring 2014, the commercial drone industry is seeing tremendous technology and regulatory of the breakthroughs, leading many large enterprises move quickly from demos and proof of concepts to large scale drone technology deployments and mainstream adoption of drone technology is here to stay.
To service those customers, especially those looking to scale aggregate was working towards becoming the preferred one stop shop for and and drawing solutions, we're going to listen to our customers and provide the best solution for their specific industry applications, whether they are and energy company with thousands of wind turbines for a construction company.
And to monitor the progress around the World. This will include hardware sensors software and most importantly, the means to create actionable aerial intelligence. It is bad data that will drive future growth for the industry and agnico the ability of the leverage the data created by drone technology to many of these valuable assets and people and.
The real world and real time the <unk>.
Higher ideal team, including measure is heads down and making the investments and laying out new development roadmap by talking to our customers and incorporating their feedback some of the questions. We're asking how do we make sure. We provide you the solutions and bought and how do we make sure that everything we produce helps and define the standard for excellent reliability.
Safety and efficiency and of course, how do we make sure that we're able to scale with our customer and.
The aggregate, we're proud to say the of the knowledge and experience and we will continue to build trust with our customers and our business partners and is one of the handful of public companies trade at on the National exchange and access the capital necessary to fuel our growth and industry leadership.
While it's been less and amongst measure was acquired by aggregate and the new month more since the micros and the deal was completed we wasted no time, and bringing our team and our technology stacks together.
Measures flight control.
These measures of quite software ground control now supports Microsoft sensor payload, enabling Microsoft uses the benefit from measures mobile and web based of flight planning tools, including features such as terrain following measure.
The measures data processing support multispectral imagery captured by Mike its of sensors, providing an and and workflow for planning.
<unk> data processing and data visualization.
And the near future our technology development roadmap, maybe expand it to provide for advanced data analytics and deeper sense of integration and artificial intelligence machine learning capabilities.
We are enjoying tremendous success integrating the efforts of our sales team to be more cross functional and we've already have common customers and cross selling opportunities, which were actively engaged and pursue.
The consolidation of enhancement of our collective marketing assets and personnel is well underway. The best support the sales of aggregate and the end solutions as well as to nurture existing customer and reseller relationships at the individual brand level.
On the hardware side outside of say that Microsoft is currently.
Looking at.
Using our facility in Wichita and order.
To manufacture of their sensors, which will ultimately drive higher margin.
These are just a few of the integration initiatives and the aggregate of the dancing and I couldn't be more excited with how our teams are working together the future for AG, the looks very bright and I'm pleased to be a part of that.
And Michael Nicole I'll turn the floor back to you for Q&A.
Thanks, Brandon that work and then move on to our first question, Michael with companies like Pfizer utilizing drone technology to deliver crucial medicines and vaccines to remote and underserved communicate across the globe have you made any progress on this application for you here Joan.
Yes, as an active participant and the beyond for them and we're working in collaboration with the regional pharmacy to develop a turnkey drone delivery solution for delivering medicines vaccines and other medical supplies to rural communities.
Great going onto our next question.
Is the M&A remains part of your growth strategy do you have of target size of specific criteria that you were looking at when evaluating potential acquisition as measure of good our cat type in terms of size for future acquisition.
Any acquisitions, we make and the future of going to be focused on companies that are accretive to our end to end drone solutions Tech stack development we.
Continue to evaluate a vast array of companies. However, it is important for any acquisition. We make is in line with our strategic objectives and long term vision as the company.
With the measure and micro sense now under the umbrella are you kind of consolidate the branding until the one name.
Measure and Mike of sense, both have tremendous value.
And we will continue to leverage as we work to further establish ourselves as a leader within the drone industry.
We are and the process of analyzing how best to fully integrate our brands and evaluating the best overall branding strategy to accomplish our goals and objectives.
In the meantime, egg Eagle and of subsidiaries will continue to operate under under their existing brands.
Great.
The addition of of the measure and Microsoft and I can go fundamentally has for different businesses under its belt.
How does the organization see the synergies between us and and that and how does it ensure it has a leader and each of these segments.
Yeah as we previously noted we're building one company, which is bringing together the best technologies and capabilities necessary to create into and drone solutions capable of effectively addressing uses and agriculture and other commercial and industrial markets.
Perfect.
And you previously spoke about the micro sense acquisition and that Theyre multi spectral centers will be key for package strong delivery of drug.
And the team of elaborate on the competitive advantages to using multispectral sensors and package delivery John.
Yeah.
Yes for the purpose of clarification one of the reasons, we acquired Mike of census, due to the fact that they are a leading innovator of drill and sensor technologies and they have highly specialized expertise in this area of focus.
While multi spectral central's are vital for drone applications and agriculture, and thermal centers have even broader applications and industrial markets any package delivery drones that ideal developed will include sensitive avoid sensor technologies necessary to ensure autonomous operation of the drones.
With the recent proposed regulations that would effectively banned the expenditure of federal funds on Chinese made job how does the high.
You'll see that impacting their business is the common for AG goes competitors to make delivery Johns and China and how many components of the angles drones are made and the U S.
No the ban on the use of Chinese may drones has not impacted our business.
Wild of common for drones, the manufactured in China AG Eagle is focused on building quality and the Android solutions in America that serves our customers' needs.
Our final question here for today are there any updates to the shareholder lawsuits that we made.
As we stated and our last call we were able to easily refute the false inaccurate and misleading claims from the Bonita report and continue to believe the related lawsuits are equally baseless and meritless.
April 27 was the deadline for all complaints, resulting from this matter to be brought for so that will lead plaintiff and appointment of lead counsel can be determined and the cases consolidated by the court.
To date, we are aware of the three complaints have been filed with the courts.
However, we have not been served with any summons.
Nonetheless, we believe that these complaints are without merit, and we intend to vigorously defend ourselves against each of the claims.
Yeah.
On behalf of Nicole brand and myself I'd like to thank everyone for listening today and.
Google is a dynamic organization that is on the move.
We look forward to sharing details on key developments over the coming weeks by way of press releases are many social media channels and on our next quarter results webcast and August.
Until then please stay safe.
We're going to continue to work every hard to ensure that each of you remain very proud to be an aggregate of shareholder.
Have a great evening.
Okay.
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Yeah.