Q3 2021 COMSovereign Holding Corp Earnings Call

Good afternoon, and welcome to come Sovereign third quarter earnings Conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.

Please note. This event is being recorded I would now like to turn the conference over to Steve Gersten Director of Investor Relations. Please go ahead.

Hello, everyone and welcome to Tom Sovereign holding Corp's 2021 third quarter earnings call. My name is Steve Gersten and I'm, the director of Investor Relations for comp sovereign joining.

Joining us today is Daniel Hajj, as chairman and CEO and Fran Jan gel Chief Financial Officer, both of whom will provide prepared remarks, and then we will open the call up for questions.

Before we begin I'd like to remind everyone that certain statements made during this call that are not historical facts are forward looking statements that reflect management's current expectations assumptions and estimates of future performance and economic conditions and involve risks and uncertainties.

That could cause actual results to differ materially from those anticipated by the statements made herein.

Forward looking statements contained in this call are made as of the date of this call and the company disclaims any intention or obligation other than imposed by law to update or revise any forward looking statements whether as a result of new information.

Future events or otherwise, we encourage you to review our publicly filed documents, including our SEC filings news releases and website for more information about the company.

With that I'll turn the call over to Dan.

Thanks, Steve Thanks, Steve.

Okay.

Good afternoon, everyone.

Welcome to the third quarter 2021 conference call and for today's call I'm going to make a few brief opening remarks, and then turn the call over to Frank Our CFO, who will run through the third quarter financial highlights I'll try to keep it clear concise and.

Pertinent after France presentation, I'll discuss what we as a company are doing to address the ongoing supply chain and chip shortage issues that are impacting our not just our industry, but across the nation and highlight a number of important developments occurring in the business and after that we'll open the call for Q&A should you have any questions. After this call or if you don't already receive our news release.

Is this a messaging filings please contact Steve Gersten he'll put you on the list.

Probably looking at third quarter's financial results as we see significant increases in year over year revenue on a continued upswing sequentially with higher margins results are shy of expectations due to ongoing global supply chain disruption chip shortages and Larry lingering impact of Covid. These are the same worldwide challenges facing nearly every business today.

Additionally, third quarter performance was impacted by the delay in two significant government contract awards, which have shifted to the right indications are we did not lose those awards.

Simply experienced a short delay before contracts based on current trends our production capacity supply parts and on hand inventory. We now believe we're positioned to grow our top line results by 75% in 2021 versus full year over 2020.

And after France speaks I'll touch on our proactive approach to addressing supply chain issues as I said, including a good investments in inventory unemployed, our internal capabilities to redesign some of the radio products to lessen or eliminate the impacts plaguing our peers through these actions.

Actions, we're confident we can deliver improved results in this quarter as we already are experiencing and throughout 2022 with that I'll turn it over to the CFO Fran Jan gel.

Thanks to the introduction Dan.

Beginning with notice a few of the income statements for the three months ended September 30th 'twenty 'twenty. One total revenues were approximately $4 1 million driven by sales in our global Telecom unit trend likes dancy with contributions from suffering plastics.

This compares to 2 million in 2020, representing and imprison Uh Huh.

<unk> hundred percent that's the theater at that this is also up sequentially from $3 6 million reported in Q2, 2021 a 15% increase.

As Tom previously communicated revenue growth has been impacted by several factors. In particular is the continued shortage of key components and tight supply chain conditions, especially related to traveling less production of thoughts Pat has resumed and we are successfully addressing constraints.

Gross profit for the three months ended September 30th 2021.

Actually $2 3 million, representing a gross margin of 55%.

This is up significantly from a gross margin of 48% recorded yesterday and a sequential improvement from the 50% recorded in the second closure of this year.

This improvement was due to product mix the contribution of services revenue and increased manufacturing efficiency.

Well from plastics.

Looking ahead, we believe this level of gross margin is sustainable and it's quite high in contrast to our competitors.

Operating expenses in the quarter increased to approximately $12 7 million up from approximately $7 9 million reported a year ago.

This was expected due to expand the size of the business, including five acquisitions.

Increases in R&D expenses reflect ongoing technology advancement as well as supply chain related reengineering activities.

Third close to 2021 expenses was slightly down from second quarter 2021.

Expense levels, which we believe represented the high watermark this year.

As part of ongoing integration activities as our three core business units like with Telecom Sky cellphone and power supplies, we have implemented a number of business process improvements staff realignment and cost cutting programs, we believe which is tesla pricing expenses already underway in the current quarter.

Looking at our balance sheet as of September 30th 'twenty 'twenty. One the company ended the quarter with $2 9 million in cash and approximately 10.8 million invested in inventory and six points at $6 7 million and prepaid expenses.

This significant increase was planned and reflects infantry belts to meet customers' demands primarily for radius and related hardware for the remainder of the <unk> and into 'twenty to 'twenty two.

As noted in the earnings press release earlier today Elliott stay in October the company completed an offering of nine and a.

Of course, our series C preferred stock raising 8 million in gross proceeds.

In this transaction the company paid down $2 75 million in outstanding debt.

At this point I will now turn the call back over to Dan.

Thanks, Fran Fran is not only the best CFO I've ever worked with today folks, but you just gotta love that British Lille, it's a bonus on top of everything So let me start by discussing the current macro environment of supply chain and ship shortages and more importantly, what are we doing about it first as other.

And our industry have already reported supply chain disruptions and chip shortages or having a major impact on their ability to source parts and manufacturing their telecom products. This also means that the end customers, including network operators will have challenges implementing their network upgrades and may face inventory shortages when it comes to maintaining there.

Network should radio link go down this scarcity is creating unique demand opportunities, though for companies with flexible U S based production and design capabilities like com sovereign.

And for the basics of supply and demand is as all of US know from first quarter College courses limited supply equals probably celebrations not just in components and products as well most of our competitors have raised prices by 20% or more.

We've increased pricing as well, that's snow, making demand for our systems, even higher due to our agility, we can redesign our radio products down to the board level to eliminate troublesome components and we are doing just that using our internal top notch radio engineering team, we've already begun redesigning certain elements of our products.

To eliminate many of these components and ship issues at the broader market is suffering with against this backdrop I'm proud that our team has been able to produce significant year over year and sequential growth revenue with higher margin amongst the highest in the industry, but our entire team recognizes theres more to be done and that brings me to my second point.

As we've said in past calls we have been aggressively investing in parts and components. Since early this year as we anticipated our needs ahead of planned production increases. This investment follows our clearly defined approach to supply chain management, which includes leveraging our tier one and two contract manufacturers, while standing up in house manufacturing.

Abilities, leveraging our direct relationships with U S component suppliers and leveraging our direct relationships with oversea comprise of integrated circuits.

This investment has required significant cash as you can see on our balance sheet. It has provided us with a cushion that we're converting into product revenue.

While we're not quite where we want to be with all of our products in terms of securing every part needed to support this increased production. We're in a much better position now to control product costs, we have either identified additional components sources or have begun the reengineering activities I just mentioned the design now what we can't readily procure.

Third as a team are focused and committed to improving our operating results in particular, taking costs out of the business through continued integration of our operations into three units global Telecom Sky sovereign and power supplies, our integration activities combined with our ability to maintain industry, leading gross margins.

And supported by increasing revenue levels, such as zones now occurring in the fourth quarter are critical factors in our ability to get the business to a positive EBIT level. During the first quarter of 2022 in terms of generating additional cash for operations, we plan to monetize several of our assets in the near term the meaningfully bolster our cash reserve.

<unk> without having to issue common shares I expect to give you all more detail on these efforts in the days ahead and I think the market will be very pleased to start seeing the positive effects of our disciplined strategy that we've maintained to this day.

Let me now recap just a few of the milestones of the third quarter.

We announced the resumption of volume production at fastback as we commenced initial shipments under multi year master supply agreement with a tier one mobile provider I am pleased to note that deliveries under these expected to be completed at the end of the year are now proceeding ahead of schedule and we will have shipped all of them by the end of this month to that single.

Customer our team has been working with various units within the customer to expand purchases under the existing multi year Master vendor agreement in line with increased production capacity, we now have in place.

We announced the closing as well of our acquisition of Sabina in its innovative <unk> mobile edge computing software.

As we've said in the past and repeat now and I can't.

Can't give enough significance to this edge compute is perhaps the most important fundamental technology required for five G to operate as expected.

To date Sagunto is already powering the fastest five G network on the planet.

And has a series of development deployments underway with major enterprises and operators worldwide. You may have recently seen a press announcement from star hub and securing a strategic partner Hewlett Packard, who have launched a new solution called star hub five G multi access edge computing.

Howard buys Laguna as the edge, plus Hewlett Packard and Star hub are helping enterprise and government clients move time critical workloads nearer to the stores or wherever customers require this ultra low latency performance. This is just one example of a number of programs with top global communications providers, where sabina and its Mac.

Allergy are playing a critical role in the capabilities of forthcoming five <unk> systems and I expect to report more in the months ahead. Please research it for yourself I think you'll see the value proposition is orders of magnitude greater than you expect at Dragon way, we announced the North American launch of the extend multi gig E band solution with <unk>.

Our partner sick Lu one of the world's leading providers of E band radio hardware.

Extend combines dragon waves harmony product the industry's highest power packet microwave technology with our marketing market, leading performance of <unk> Ether Hall E band radios with.

With extend we have introduced a single solution designed to deliver long range ultra high capacity cost effective and ultra reliable wireless connectivity.

<unk> solution is ideal for mobile network operators rural broadband and wireless Internet service providers.

<unk> safety organizations as well as city state and local municipalities also benefit firsthand. This launch followed a series of customer and distribution channel presentations and Webinars conducted earlier this year.

And our drone business Sky sovereign, we held a series of over 10 live flight demonstrations of the other mass tethered drone system for members of state and Federal government National Security Law enforcement and first responders throughout late summer and into October. These demos occurred both at the Tucson facility and in the field longer southern border and then.

D C capital area response to these demos with stunning highlighting the unique capabilities of the hover matched to those in attendance. We have 15 plus follow up demos back in the capital area in the very near future.

Now for some recent business updates.

And the global Telecom unit, the fastback teams, finishing up works on the remaining links under that $8 7 million P. O for the tier one and we're focused on securing the next set as I said, we have several large new telecom customers with demand has been enormous and even some niche ones, including hospitality industry customers like the Switzerland in.

That Dragon way, we are working with numerous new customers, including a new tier one operator, who is wrapping up in the field testing of our radios were working on initiating P. O US now, but then.

We also delivered a five G. Open ran system to the National Institute of standards and Technology Engineers at Mist will work with Comed sovereign to evaluate and demonstrate the applicability of converged by G and Max systems in use cases for mission critical public safety and other programs utilizing our stand alone <unk> system.

And that includes both core and radio technology as well as our advanced mobile edge compute components.

At RF engineering, we entered the I P TV market with a new set top box replacement called Symphony Allegro.

Roku, where many of the others after receiving Google's Android TV, operator tier certification a qualification reserved for only a select number of providers. We are now preparing to bring this customized solution to large potential customers, including communication service providers, such as cable and fiber network operators digital content owners.

And large hospitality and residential facility owners.

At Sky Sovereign highlights include the work on several domestic and international sales opportunities, including foreign programs in Israel Eastern Europe and in Asia. In addition to the U S where we are waiting acceptance of our proposal for a significant multi year service agreement.

A drone we're working on a number of additional programs for our wass.

Tethered aerostat system with both military and homeland agencies.

We're optimistic about the closing of those two delayed awards I mentioned earlier.

I believe that will happen very soon our vision has entered into several teaming agreements as an and is in late stage negotiations for new product design and deliveries ranging from a large international environmental sensor and government programs, including a sizeable contract that record.

We expect to announce developments on these efforts again, shortly and our power systems business with production underway on the 120th went away batteries sales and marketing activities are quite well underway targeting verticals, including consumer on and off road commercial fleets. We're also near production of the 132 heavy duty system designed for.

E D Marine and over the road transportation applications and have begun discussions with potential international license source of this battery technology, both to produce and to accept and distribute.

Finally in our R&D and technology efforts.

At Blackstone, we have completed over the air testing of the inbound full duplex technology, the better than expected results of which have confirmed that the technology delivers roughly double the efficiency of wireless signals. We are now ready to begin sales in licensing of the first phase of this technology, which is a standalone electronically reconfigurable antenna.

We're excited about this one because it enables some wireless network operators to quickly benefit from electrons Ibs D technology with up to 100% increase in simultaneous bandwidth without having to replace their radio hardware. This kind of capability will be critical to the success of <unk> systems, such as integrated access them back.

Carl and will allow operators to begin reaping the investment of the billions of dollars in spectrum they own.

We expect to announce the introduction of this new product later this month. Additionally, a whitepaper entitled and band full duplex communications using a novel adaptive reconfigurable antenna detailing the over here over the air testing and the electronically <unk> antenna.

Configure technologies, it's been submitted to go Mac Tech.

22, that's scheduled for March 'twenty, one, where we look to have the opportunity.

Presenting more of this detail and signing up with potential military and government customers. We believe that Blackstone is uniquely valuable technology, a key differentiator in the marketplace and is an integral part of our product roadmap as we commercialize our next generation of <unk> radios, including Polaris G. Two scheduled for.

For introduction in the next few quarters VA.

<unk> continues to advance development of its novel Silicon Photonics technology, completing additional tape outs and production of the semiconductor designs. It was also recently awarded a critical new patent Grant. We believe is a quantum leap forward and silicon Photonics technology.

At this point I'd like to open the call for any questions operator.

Yeah.

We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad Youre using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at the time of pause momentarily to assemble the roster.

Yes.

Okay.

Again, if you have a question. Please take please press Star then one.

The next question comes from Theodore O'neill from Litchfield Hills Research. Please go ahead. Thank you very much in France remarks. She said that there were you were seeing key component.

Shortages, especially and I couldn't make out what that component was would you mind repeating it.

No I don't I don't think COVID-19 or that I named a specific component, but I can tell you. There are a couple of amplifiers and there's.

Another one made by Qualcomm are very difficult to find in some cases, what we're seeing is for instance, today, we were quoted $100 for a part that a year ago was 70.

We're not going to do that so we're designing off of parts and when we design out apart which is very.

It's difficult to do and get done in a in a short period of time, but we're very agile team. So what we do is we run through and design.

At the board level, we pulled apart we look very carefully across the landscape of components worldwide. We select several that may or may not work, we take take those we put them into the board level with a fairly you know.

Hi assurance that it will work and then we'd have to test it and we tested across a wide range of conditions. Once that's done. We then go ahead and produce that board put it into the radio set and then test. The radio said, we can do that in a very minimal time period, where others cannot and.

I think that's a token.

Definitely kudos to our engineering team led by Dustin Mcintyre and Bud Patterson I hope that answers that okay. I thought Fran mentioned, something specifically, but yeah I was going to ask about if there were price increases that you just wouldn't cotton.

Two more questions. One is can you give us an idea of what revenue would have been if you hadn't had supply chain issues in the quarter and are you still seeing these issues here in Q4.

Sure first question is.

What would we have had I think we would've had somewhere on the order of 15 to 17.

Total it could've been as low as 11 and it was really is kind of dependent on some of those contracts that I mentioned there were a couple of military contracts that were sizable that would would have.

Done a prepay if you will and earned amount, which is calculable as revenue so I do believe.

Not only are those have those shifted roughly maybe a quarter to the right, but we have seen additional opportunities come in which we thought we would have and they're starting to produce now this quarter. We think again this quarter is extremely significant we do still see some of the impingement.

But we flex left and right I guess, you could say to try and try and push those.

Negative impactor as out of the way, we will still see some issues with.

Supply chain and some of the.

Components, but.

We're designing those out as fast as we can and we're seeing a quick turnaround time. So it will impact us I think it will impact the broader markets clear through may or June of next year before.

Supply actually comes back to meet demand and I say that based off of some optics, we have into other production facilities that are working furiously around the clock to ameliorate these impacts.

But that's that's my response, okay, alright, thanks very much.

The next question comes from Jeff Rubin of JCR Trading Corporation. Please go ahead.

Hey, guys. Thanks for taking my call great job on navigating in these challenging business times. My questions can you go a little bit more details about the ways that we're exploring to raise cash without issuing any additional shares.

Yes sure.

China I can only comment there are several assets in the business. There was some inventory and some others. We believe we can monetize in the near future and by the near future I mean immediately.

There are the potential of spinning out a couple of the units we acquired to fill strategic holes. If you will and again you've heard me say in the past you know do we want to do this organically or do we do it the acquisition while some of these via acquisition that we've done might not have otherwise direct impact on.

Telecom, we believed that there were certain aspects of those units that did so you probably will see in the coming six months.

Couple of the units that we're going to spin out or like go up but we keep the exclusivity of those components that we acquired them for in the first place. So if they have an applicability to telecom that is critical which we believe they did but they have a broader market that is not related to telecom. Those are the ones you could probably expect.

To see some spinning out of those and that's all been part of our strategy from day, one so as we spend those out a we get a lot of cash back in and we retain exclusivity on what it is we bought them for it and that's the important part. Furthermore, we're working with industry partners on a few programs, which we believe will allow us to not only extract value.

From the inventory, but allow us to tap existing partner inventories as well to bolster our sales pipeline. So I hope that answers that.

Thank you.

You bet.

The next question comes from David Levine of Trickle Research. Please go ahead go ahead Kyle.

<unk>.

So I just want to make sure that I understand the supply chain issues are largely on the telecom side, how did those impact any of the drone business.

Yes.

For instance.

In.

<unk>.

If somebody has their.

Uh Huh, Mike on and its a repeating here we go.

What about that David for instance, in Sky sapiens. The motors that we have on our quad rotors those run sometimes between 'twenty four 'twenty 700 volts Theyre very specific motor and the windings of which were custom designed by our own teams. So it's it's been difficult.

<unk> for instance to procure those so we're having to buy.

I guess you could say inventory of those ahead of what we expect sales to be but we've got to buy them now because they're longer lead time, so do they impact the business well, yes of course are they going to prevent the business where the sales not not in the least it's just a matter of proper planning ahead of time, So where you could have gotten components in 60 days.

Times of six months out now so we would have to have to purchase them ahead of time or put money down on them and commit to them and that's what we're doing so other than telecom.

There are a few sticklers, but we're dealing with those we believe in an adequate fashion.

So on.

On the drone side as well is the no I think obviously with respect to delayed rewards I mean, I suppose that that probably.

Sort of has to do with kind of just a chaos.

Border without waiting into that but but.

It is.

Is that is that been the the essence of the delayed rewards and I guess, what I'm also wondering is.

Initially I sort of envisioned you.

Selling drone scanner into the telecom space in terms of maybe.

Temporary towers in those kind of things is that still something that we should be is that still something that is out there maybe more than just conceptually are there things going on that sort of suggests that you'll sell drones into that space as well I mean I get the government thing as you know.

Kind of hard to get your arms around in terms of timing and so on and so I'm kind of wondering what the drone business looks like in the telecom space.

Yeah, let me address that in two areas number one.

Number one in the idea of selling a drone.

Let's just let's just take a.

Let's just take an example, if you sell a drone and argonaut amazing hypothetical Crazy number you sell a drone for $5 or you could run a three year program.

On a leasing basis, where you retain ownership of the drone you operate the thing on a lease and you can make that lease a $17 or $18 over a 36 month period with certain number of hours and when you go over that you charge more that has a far far better.

Our business model for us that is actually is whats being demanded right now by several customers. So we are we are scrambling fast to put together. These systems in these types of arrangements that we can deliver to customers and start to start the operation for the immediately now the second part of that question on Telecom, yes absolute.

We're working with a single customer right now that's a fairly advanced and we are actually have put on it or a.

New upgraded I guess, you could say feather light radio system with leather light is a four G M. Five G system.

That you if you if you look on the website you can you can see what it is made by VNC. So we actually we can mount that up top if it's a four G. We mounted at the base of its five gene using antenna, but it actually we do have fiber optic and that tether. So it is immune to RF interference.

We have a GPS denied environment capability of up at the rate the airborne unit. So it's a very unique capability that you don't see much from others. There are other tethered systems, but nothing is like the silver mass, it's like an aircraft as compared to our model.

It's incredibly different and that's why the government is so interested in why even some of the tier one telecoms are going Wow I guess, we undershot that one maybe we should look at this hover mask because it's really what we need so yes to answer your question more succinctly.

We are working with that and we expect some good good sales into that.

Okay. So that's that's helpful on a number of levels. So let me know if I could just ask one more question. So I was a little confused because you brought this up actually at our conference and I and I haven't quite wrap my head around it.

So I'm wondering if you could just provide a little clarity so it sounds to me like you're saying that one of the ways you intend to address the supply chain issues is to potentially produce some of the.

The items that sure having trouble in the supply chain procuring produce them yourself is that did I get do I have that right or is that am I.

Not understand all of that project.

You got that wrong, [laughter], where we're not going to produce silicon chips or.

You don't try to compete with Qualcomm Intel.

TSMC all the others, where we're not we're not going to get into that what I'm, saying is we're actually designing out those hard to find parts and where we are designing in an easy to find parts that are more reasonable you know I'm not going to pay $100 percentage that part you're now saying boy my revenues will be really high and so the unit for 10 Grand but we would make.

A minus 5000 that you were just not going to do that so we are designing out those components quickly testing them make sure that.

The equipment still functions as good or better than it did before that's what I mean by we are we are producing a different way of doing that and dealing with the supply chain that we don't see others quite able to do because they're not quite as agile.

Any of those components components that you've been able to develop internally.

Okay.

No I mean, there are ways of dealing with.

When you get transforms in the middle of Silicon and then they're very simple there are other ways of dealing with it.

By not going to that level you can.

And now you're starting to get into intellectual property.

From David but.

We're not designing components, where we are designing new systems New board level.

Capabilities design out those difficult components and design and new ones, we're not producing the components, but they are readily available ones.

That makes more sense, but that's that's helpful. Thank you.

You bet. The next question comes from Lee Alper of Hammock investments. Please go ahead.

Alright.

I think you said you.

If I got it right that you are looking to be.

EBITDA positive in early 'twenty two can you go over some of the specifics or do you think youre going to get there.

Yeah. Yeah. Thanks. So the question is EBITDA positive I'm again, I'm not going to get there I might achieve it.

As well as we noted in our remarks, we continue to implement this company wide cost cutting effort.

And that's normal when you when you aggregate 15 businesses theres going to be a lot of redundancies and overlap and that just is a waste. So we are we're.

We are continuing to integrate these activities turn things down consolidate our business, which we've done into three main units global telecom sky sovereign and power supplies.

These efforts along with a higher sale levels that are we're looking at that are already underway. This quarter along with the high expected margins are our internal projections for the significant top line growth in 2022 is quite reasonable.

Easily foreseeable.

From my point of view, obviously, there are things like I can say and I can say from my point of view. This is one of those will dove course things, but I understand I can't necessarily convey to you every view that I have a ham.

Hampers, our competitiveness b I'm not allowed to but I. All I can say is it's reasonable and foreseeable based on both the cost cutting efforts to higher sales and the higher margins. It's just a natural evolution.

Okay. Thanks.

Thank you.

Okay, maybe one one more.

The next question comes from Larry <unk> of how our family offices. Please go ahead.

Hi, Dan My question is if supply chain and logistics issues continue through 'twenty, two 2022 or get worse do you believe you can still support sequential growth.

As I see it today absolutely yes.

As I noted earlier and as echoed by most suppliers and vendors in our industry the supply chain disruption has gotten worse than expected.

And the supply and pricing of keys key components has gotten worse, but in our case, we've been addressing those issues through our previous investments in inventory as well as this redesigning products to eliminate our reliance on these really hard to find or expensive parts. So through the redesign efforts actions, we're pursuing with distribution sales partners.

And the new products were expected to launch and <unk>.

<unk> income, which eh.

We're gonna commercialized several projects next year and just just watch the news on those things. It's a very unique business model, we believe theres going to be adequate our sales.

Sales growth adequate inventory to support the continued growth as we say into 2022 and I think again towards the latter half of 2022, you'll see an easing of the.

Why issues I think it'll be an issue for everybody else is going to be done in may I think it's going to lighten up considerably in may and June and for those who have a plan to head I think it's going to be minimal impact, but I think it's still going to be an impact to the larger markets through the end of next year.

Great. Thank you.

This concludes our question and answer session I would like to turn the conference back over to Mr. Hodges for closing remarks.

Yeah.

<unk>.

Yeah.

Alright.

You've probably heard enough of me, but I'm gonna conclude todays calls with just a kind of a summary of a few remarks.

On the top line performance point of view at the end of the third quarter were not where I wanted to be due to the supply chain, but based on production capacity in the supply of parts and on hand inventory and the drama been beaten about redesign I believe we're well positioned very well positioned to grow the top line results by approximately 75% or more this year.

Over the $9 4 million reported for the full year 2020, and the explosive performance predicted has merely slid to the right a bit and we're starting to experience that already this quarter. So to repeat as a team. We are laser focused and committed to improving op results in particular, taking costs out of the business through the continued integration of <unk>.

And continuing the trend line up in production to meet the overwhelming demand. We believe these will have a positive very positive impact on the business, which will show up in our results from the current quarter.

We have a strategic approach to maximizing the cash available in the business to support our continued growth and we intend to do this as I said as we've committed to do in the past without diluting common stockholders from a product and technology perspective, we've made significant progress over the business over the last few months over the next few months rather.

We plan on introducing new hardware and software offerings as well as anticipate adding to our growing list of new partnerships in both commercial and government cuts so in summary.

<unk> headwinds impacting our entire industry, we've been able to significantly grow our revenues year over year and sequentially with strong margins.

We're adapting to the challenges ahead by utilizing our internal engineering capabilities to lessen the impact of global supply issues on the business increased production and accelerate commercialization.

And sale of unique and valuable technologies, we're protected on them by more than 180 patents.

Although there remain global challenges, we intend to continue the business on the investments we've made honoring our made in <unk>. Our made in America commitment and participating in the <unk> Revolution now underway.

All of this supports our view that 2022 is going to be the large the year the largest growth for commscope sovereign.

We are beating our competitors on growth during a very difficult time and I know, it's on me I wish we hadn't I wish I hadn't given you my my optimistic approach back in the first quarter, but I'm, telling you it slid right and it's going to happen I want to thank everyone for their support thanks for joining us today have a great week.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Hey, guys.