Q2 2021 VIA Optronics AG Earnings Call
Adults to differ materially from those contained in the forward looking statements.
These risks and uncertainties are discussed in the Companys documents filed with the SEC, including <unk> Annual report on form 20-F, which was filed on April 29.2021. Please.
Please note that any forward looking statements that are made on this call are based on assumptions as of today and the company undertakes no obligation to update these statements as a result of new information or future events.
And with that I'd like to turn the call over to Juergen.
Thank you Lindsey and good morning, everyone and thank you for joining US today first I will provide a brief overview of our second quarter 2020, what results I will then discuss our recent acquisitions revenues followed by all key achievements notable awards in the quarter.
I turn the call over to Michael who will review, our second quarter financial performance in more detail and provide our outlook for the third quarter of 2021 and the full year.
Moving into our second quarter revenue of $50.0 million increased 11, 5% year over year, driven by growth mobile display solution segment.
EBITDA in the second quarter of negative $11.0 million decreased from positive $2 million in the second quarter.
I'd like to provide a few words on the global component shortages.
While we have been able to successfully manage the impacts of the global supply disruptions and continue on our group gross profit our second quarter revenue was slightly affected by the solid shortages. While these shortages have been impacted many companies globally.
We still expect to record.
If you recall about 20% revenue growth in 2021 compared to 2020.
There is an increase from some of our component in transportation costs driven by the shortage. However, we are working with our customers on a case by case basis to resolve potential impacts on margins.
I am pleased to report that resolves the issues, we had with our equipment supplier for the new German facility without affecting our revenue by using additional production capacity in our China facility.
During the second quarter, we have already completed the site acceptance test notebook for the new facility and are now ramping up production for a large U S based EV manufacturer.
With our strategy of extending our leading position in the interactive display systems, especially for the automotive market, we acquired German use during the second quarter.
<unk> is a high Tech engineering company focused on automotive system integration and user interfaces.
The company provides solutions for H well.
Well known high end original equipment manufacturers through this transaction, we are strengthening our customer engagement and the early concept phase of the older design process.
Together this Germany is we can design and deliver compelling technologically advanced cockpit solutions, including but not limited to sophisticate user interfaces with brilliant optical sensing performance cameras for infusion and all types of enterprises with two functions like Suraj.
Few mirror replacement and driver monitoring.
We already had a strong working relationship with the company for over two years and are thrilled to welcome the Empire Germany's steel imports.
We also made a financial investment in six months EMS.
Global leader in touch controller technology with this investment we have expanded our collaboration to develop new touch solutions for automotive applications industrial displays and consumer electronics.
And believe that we will be able to produce new and exciting touch incentive solutions by combining our metal mesh touch sensors with 6% touch controllers.
We continue to receive project awards and further increased our presence in the automotive industrial and consumer buckets and Additionally, we are now expanding our presence in the overall EV infrastructure.
Market by providing display.
<unk> touch solutions for charging stations.
Our backlog and pipeline continues to be much stronger with much better visibility into the upcoming years. When do you believe this trend will continue.
Looking ahead, we will further execute on our strategy of driving our sales in the auto and industrial markets, leveraging our LCD optical bonding Samsung camera capabilities to deliver system solutions, while expanding the number and size of our projects within our existing customer base, we are constantly benchmarking and evaluating <unk>.
New M&A opportunities focused on electronic system designed to further increase our R&D.
Entities.
As announced in July the annual users has transitioned to the CFO role to talk for modules Peters.
I am grateful to Daniel for the work that he has done for the year, especially during the transition from a privately held company to the public markets.
I wish him all the best in his future endeavors, and I'd like to welcome muscles to the BLT, bringing lots of experience, especially in bucket markets.
With this I'd like to handle it will begin to present, our financial results and outlook in more detail.
Marcos. Please go ahead.
For Europe.
Got it.
I'm very pleased.
Second quarter results.
Earnings call.
Okay.
We would like to thank everyone.
Although our support Europe.
Over the last few months.
I'm excited for the board.
Yes.
To execute on the large opportunities ahead of us.
We provide cutting edge technology solutions for large and growing market and saw some of the largest and most innovative companies in their respective industries.
I look forward to hundreds of companies execute on these opportunities.
The business to achieve long term profitable growth.
As Tom.
Operating performance for the second quarter.
And then provide our outlook for the third quarter to the full year 2000.
Total revenue for the second quarter of 2021.
For the three points.
11, 5% from $41.0 million.
Second quarter of 2020.
However, as Joe mentioned, our revenue was slightly impacted by the global city shortage, which resulted in a shift with our customers with customer demand.
The third quarter.
Total display solution revenue was 30.30.
$41.0 million Europe through the second quarter of 2021 up 14.
Starting from 7% from $38.0 million euros through the second quarter of 2020.
Growth was driven by improving demand, especially in the automotive market, but also in the industrial sector.
Additionally solutions revenue represented approximately 86% of total revenue in the second quarter compared to 83% in Q2.
2020.
Within our display solutions segment revenue from automotive customers grew 272% year over year.
Peter.
Congress for 35% of revenue compared to 7% for the second quarter revenue trends.
Revenue related to the industrial and specialized application and market grew 7% year over year, which accounted for 45% of revenue.
We're prepared to 49% of the revenue in the second quarter of 2000 trades.
Revenue related to our consumer end market represented 20% of revenue compared to 39% of revenue in the second quarter of 2000.
Yes.
Total central technology revenue was $9.0 million in Europe in the second quarter of 2021 down four 5% from $12.0 million.
In Q2 of last year.
Sensor technologies revenue represented approximately 40% of total revenue compared to 17% in Q2 of two long term.
Total company gross profit margin for the second quarter of 2021 plus 14%.
Okay.
Certainly 3% through the second quarter of 2020.
Driven by our fifth our display solutions business and better margins and all kinds of technologies.
Yes.
Our display solutions gross profit margin for central 7% through 2021 compared to 11% between 2012.
For Central Technology gross profit margin was 33, 3% in the second row.
Out of 2021 compared to 25, 8% in the second quarter of the previous year.
The increased gross profit margin was primarily driven by enhanced utilization.
Just to get production surfaces.
Now turning to our expenses.
Total operating expenses is two two.
$10.0 million.
<unk>, 21% of total revenue.
Which compares to $7.0 million Europe or 11% of total revenues in the second quarter of 2020.
This decrease was driven primarily by further strengthening our corporate.
Okay.
As well as public company related expenses.
Decreased our headcount as we prepare for further growth, especially complex environment.
Most of the industry.
And our continued to further enhance our organization to meet these growth opportunities.
In addition, as noted in our earnings press release for Q2.
<unk> reallocated, some personnel costs from general and administrative expenses to selling and R&D expenses.
This had no material impact from prior period results.
In line with our expectations research and development expenses 2 million euros for context of four 6% of total revenue in Q2, 2000, French upon which compares with $9.0 million or one three.
3% of total revenue in the second quarter 2020.
Looking ahead.
Continued investment in R&D.
Talent on a case by case basis for support for the development of <unk>.
More complex customer solutions.
EBITDA in the second quarter of 2021 was negative one.
One 7% in Europe.
Paths to positive two 6 million Europe through the second quarter 2020.
Yes.
We recorded a net loss in the second quarter of 2021 of $12.0 million.
This compares to net income of $6.0 million euros in the second quarter of 2020.
Based on a weighted average share count of 45.3 million shares for the second quarter.
Everyone.
This translates to basic and diluted net loss of <unk> nine one euros per share for the second quarter of development revenue.
Turning to the balance sheet.
In the second quarter with cash and cash.
Equivalent of $63.0 million.
Total debt of 2000.
Residual.
No.
Yeah, our outlook for the third quarter and full year of 2021.
For the third quarter, we expect total total revenue of 45 to 50 million Europe.
For the full year 2021, we expect revenue growth of about 20% compared to 2020.
These projections reflect continued uncertainty related to the ongoing impact from COVID-19, as well as potentially.
As well as potential components of capital strength.
In fact, our customers and profitability.
Possibly as a deferred revenue.
Overall, we are focused on the many opportunities ahead of us.
Particularly the auto and industrial markets.
<unk> may also require further investments in our R&D organization and production capabilities.
This concludes my remarks.
Turning to call back to the operator to open up the line progression.
Thank you very much operator.
Ladies and gentlemen at this time, we will begin the question and answer session anyone wish to ask a question My press Star followed by one on the Touchstone telephone issue.
If you wish to remove yourself from the question queue. You May press star followed by <unk>.
Using speaker equipment today, please lift the handset before making a selection.
Who has a question May press star followed by one at this time.
One moment for the first question please.
The first question is from the line of Andrew Buscaglia from Baird. Please go ahead.
Hi, guys. Thanks for taking my question.
We start out with.
Sort of what Youre seeing with <unk>.
On the revenue side.
The component shortages can you quantify what revenue might have been in the quarter.
And how much are you really embedding in that 2021 guidance is there a risk that that could.
It get worse from here.
Well, yes.
Okay go ahead, maybe giving some.
And so fourth quarter for that.
We had only as soon as you can see an SEC.
And it was mainly driven by delivery issues. Some components that they haven't received the sum of the parts have been shipped into the into the third quarter.
We enhanced overall this customer the customer we're talking mainly about consumer here and we seem to be overlooking the year. So this involvement and hope to guidance.
It's Doug.
Something at least at the moment.
The two.
To control.
He has to look at it.
So from my side.
Hope that helps.
Okay.
And that the U S.
Electric vehicle manufacturer production I believe you said was on track for Q3 can you talk any.
Talking about endo related issues, but that.
Net income so basically that.
We are now ramping up and in this quarter.
Overall issuance with the bookings have been resolved.
You talked about some some Canadian some reduction.
Sure.
Have they have been coming from component shortages, both because of the component shortage as such.
Some some other supplier programs they have for now.
Overall everything was okay.
And B is.
If everything works according to plan.
Beginning of the fourth quarter already at peak capacity of the Mexican capacity and 10 per month.
Then it will be.
This is how it looks like today.
And we.
We are up and running again, the bulk of the China production in China and.
So it's continuing to produce in Germany.
Okay.
And.
Maybe one last one.
On the R&D and G&A in the quarter was a bit higher than I was expecting.
I guess, how much how much is that related to German nears, but is there more of a onetime in nature expense in there that goes away and should we expect.
But those to get back to normal like more normalized levels next quarter.
<unk>.
Thanks for the color on this issue.
And with Germany, as Roger and adhering to engineering company basically vehicular threat intelligence.
Intelligence the talent.
<unk>.
<unk>.
Okay.
And related to Germany.
The run rate.
One time.
This amount of capacity.
Multiple tumor volume also understand onshore and royalty.
But a little bit hard to understand if you could repeat that that.
It would be helpful. Thank you.
Can you repeat that.
Germany is we bought engineering talent.
Additionally at cost that we have.
And R&D is about <unk> 5 million related from Germany.
This is on a steady run rate. So this is another onetime effect thats going to be increased.
On the cost and on the R&D capabilities.
The future ongoing.
Okay got it thank you.
So now it's better.
The line, yes, Okay battery outback for the phone.
No.
Yes.
The next question is from the line of Anthony Stoss from Craig Hallum. Please go ahead.
Good morning, guys.
How much revenue did you book from the acquisition in the quarter.
I think metals that suggestion for you.
Sure.
Hold on one second please.
In the quarter of one 5 million or so.
Revenue.
I'm, sorry, I couldn't.
I understand that Covid.
So excellent revenue is below <unk> 5 million for <unk>.
<unk> revenues for the acquisition is less than <unk> 5 million.
Okay got.
Got that we bought and then.
If our tenants who didn't buy a turnover.
Okay, and then maybe if you wouldn't mind, commenting on the fact that.
You had negative EBITDA and instead of I think you guys are expecting positive well what were the biggest impacts that related or that allowed us to be negative.
Yes.
Yes, let me so let.
Yes.
Handover to Baxter, and so thats, just upfront and maybe a little bit more Cologne, Germany, Assortments, we had some in the group.
Already we have them under contract to work on internal projects already.
So they keep only a limited amount of external revenue related to.
Prototypes and concept.
Samples for local Oems.
In the Bay area. So.
<unk>.
Mainly within our R&D projects.
Just to get a little of both.
Color on that.
For the revenue.
Develop.
Develop and waited buffaloes, you can say something to say something about the philosophy.
Decreased costs, especially for adding talent.
Our organizations.
We are holding.
<unk>.
Listing expenses that were not part of last year, because we were not listed and especially have you added.
Yes.
Commenting capacities not only Germany, Israel also added <unk>.
Valencia in our organization by hiring talent and by expenses for external consultants to support us in ramping up production.
Okay and then my last question.
Here again.
Your own metal mesh technologies, yet you're partnered with Sigma.
For their controller did you not have your own internal controller or why did you end up partnering with these guys to have access to their controllers.
So we will be August so controller for painting, the semiconductors and the use controllers formed from ethanol from microchip from from <unk>.
Any other companies, including web com, depending on the case.
But we have Washington component development in general and what we see with these six months EMS controller technology.
That we can basically cover all applications at the end of the day.
One controller.
If everything works out as we envisaged but also this was almost a reason to take a share in.
<unk> to be able to follow also SMS and invest total follow all the developments very closely.
And to combine that with our mechanistic logic of additional advantage business.
At the very lowest competing so we have already a very good sensitivity that will be sequencing control, it's actually even better.
It became rewards.
Switching mode, and some types of applications and wants to combine this fall.
How much I should go into detail.
We can also combine the sensor high English because we can touch sensor switch.
So as of bytes opening.
Yes.
Amount of applications that yet.
Marketing.
Okay, and then maybe if I can just sneak in one more so.
A lot of discussion over the last year related to your North American EV for the cold form can you help us understand maybe other automakers how many design wins you have for some of these higher value co form systems.
I think.
I think <unk> mentioned.
Whereas if you have thoughts on coal.
Form opportunities will be producing organic volume OLED sales nearly per use in production.
Ramping up.
More.
This year.
Also in China.
And.
<unk> ramp up.
Yes, actually more than five or six cities.
Not to that extent as you'll know that particular one.
<unk> hovering.
Of the people compete with peso weakness will be dashboard, you shouldnt behalf.
Took its place behind the glass.
We'll be with the cluster and building center information display.
Okay. Thank you.
Welcome.
There are no more question at this time I hand back to Mr. Wagner for closing comments. Please go ahead.
Hello.
First of all I'll, thank everybody for joining us on the call today, we look forward to updating you on our next quarter.
And overall.
I think we will.
In Q2.
Updates in between the next.
And almost all this fall so we hope with the industrial tool in between as well.
Thank you everyone and Bali.
Alright.
Sure.
Ladies and gentlemen, the conference has now concluded and you may disconnect. Your telephone. Thank you for joining and have a pleasant Paul.
Hi.
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