Q3 2021 Vislink Technologies Inc Earnings Call
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Yes.
Welcome to the <unk> technologies 2021 third quarter earnings update meetings. During today's 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'd now like to turn the conference over to Belinda Marino corporate Secretary of the board of Directors. Please go ahead.
Good morning, everyone I'd like to remind everyone of the safe Harbor statement referenced in the SEC filings.
<unk> Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward looking statements, including statements made during the course of today's call statements contained herein that are not based 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 Act of 1933 and section 21 E of the Securities and Exchange Act of 1934 such.
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 believe estimate upcoming plan target intend and expect and similar expressions as they relate to the zinc 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 business. Please refer to the company's various filings with the Securities and Exchange Commission.
Thanks Linda.
I'd like to welcome you to this like Q3 2021 earnings webcast I'm, Mickey Miller and I'll be joined on this webcast by Mike <unk>, our CFO, we'd like to take this opportunity to report our financial results and the progress we made in the third quarter of 2021, we will also provide an update on our latest developments and future prospects.
Participants will be able to submit questions. During the webcast from Wayne webcast page, we tried to take as many as possible.
We are very pleased to report that our revenues in the third quarter grew sharply to $11 2 million, which represented 133% increase year over year and over 47% sequentially. In addition to accelerating our sales growth. We also grew our profitability substantially over prior periods.
Recording EBITDA of over $1 million.
Positive quarterly net income this is a testament to our pursuit of realistic sustainable growth of the business, while maintaining our unyielding commitment to cost containment and operating efficiencies across the organization.
Like to mention some notable business highlights from the third quarter first we finalized our acquisition of mobile viewpoint I want to reiterate that we feel this represents a perfect complement to our 50 years experience developing and deploying advanced video solutions.
Adding their solutions to our existing offering expands our capabilities in the areas of bonded cellular and five G communications.
<unk> studio in sports production remote live streaming and drone backhaul solutions as a result, whether a business opportunity presents itself that requires a private <unk> network with public body network AI power production or a hybrid combination of these we have a market leading options offer. This is why we believe that we have.
Now have a truly best of breed set of products in our Arsenal.
The mobile viewpoint acquisition has already begun to bear fruit.
Namely the launch during the third quarter of digitally connect this is the first jointly developed product offering brought to market by our combined companies Disney connect is designed to enable robust reliable and economical transition of live video production.
Importantly, it provides a variety of data plan options and predictable cost and this is what sets. It apart from other solutions currently in the market. We feel this is a very strong potential for us we expect to launch additional solutions over the upcoming quarters that leverage the respective innovations in both dislike and mobile viewpoint various.
Cited about the new product releases that are coming down the pipe.
We will also have a variety of our video communication solutions deployed in events held during the Summer Olympics in Tokyo.
Disney wireless cameras and related components were utilized by our broadcast service partners and mobile viewpoint deployed 75 cellular encoders for outside broadcast as well as its trolley line product.
As a professional studio in a box solution designed to allow live streaming from home office or any other location around the world.
Believe it has a lot of sales potential.
During the quarter. We also participated in the world's first stand alone <unk> network introduced and Motogp. This took place at the British Grand Prix race, where we collaborated with daughter BT sport the University of Strathclyde to showcase the first live sports broadcast over a five G network.
This proof of concept system was considered highly successful and showed how stand alone <unk> networks are very suitable for broadcasting live video, even though to the challenging conditions of high speed racing.
We're excited to be on the ground for this innovation and look forward to commercializing future.
In the future with our industry partners.
We also introduced new product innovations during the quarter. These included updates to the quantum receiver.
A portable version of our IP RF transmission system, and satcom products like the D V 6100.
These product families have continued to be among the company's most well received in the market.
At the same time, we continue to refine our product catalog.
We reduced our overall product skus available for sale, removing items that cost us more to keep them production then to realize revenues from we've also been standardizing our solutions, making the world more modular wherever possible. This has a twin benefits of making items more reusable and also allows us to react more nimbly to opportune.
Knees that may arise, which may require reconfiguration.
I'll now turn it over to Mike Bondi, who will walk you through our financials.
Thanks, Mickey and good morning, everyone.
Here are the main financial results for the third quarter.
Revenues for the three months ended September 30th 2021 were $11 2 million.
It compares to $4 8 million for the three months ended September 32020.
Seven 6 million for the three months ended June 32021.
Revenues for the nine months ended September 30th 2021 'twenty two 8 million that compares to $16 1 million for the nine months ended September 30th 2020.
EBITDA, which is earnings before interest taxes, depreciation and amortization was 1.14 million for the three months ended September 32021.
That compares to a negative $2 4 million for the three months ended September 30th 'twenty, 'twenty and a negative 578000.
For the three months ended June 30th 2021.
We ended the third quarter of 2021 with $38 million in cash.
Gross margins were 62, 3% of revenue in the third quarter of 2021.
Which compares to 31, 8% of revenue in the third quarter of 2020, and 52, 8% of revenue in the second quarter of 2021.
Net income attributable to common shareholders was 676000 or one cents per share in the third quarter of 2021 compared to a net loss of $2 8 million or 17 cents per share in the third quarter of 2020.
Net loss attributable to common shareholders was $2 8 million or seven cents per share for the nine months ended September 32021, which compares to a net loss of $8 million or 61 cents per share for the nine months ended September 32020.
Yeah.
I'll now turn it back over to Mickey to provide an update and an outlook on the business and our markets. Thank you.
Thanks, Mike looking forward, we see the following in store for our key market sectors in our broadcast and live production market demand is strong opportunities for growth in the U S are increasing as live events continue to make a comeback international there is areas. It remained strong for our business in particular at least other areas have some chat.
<unk> as Covid resurgence since have impacted the holding of live events in some places, although we expect to see recovery in the near to medium term. We're confident with the addition of mobile viewpoint to our family. We now offer a comprehensive range of technologies that can deliver more effective coverage of global sporting events with lower production.
Cost and increased opportunities for content development.
The Mil Gov markets continues to present us revenue opportunities, particularly with additional military and law enforcement targeted solutions at mobile viewpoint, but we've been asked whether there could be opportunities related to the recently passed federal infrastructure Bill.
We believe there definitely could be you'll recall that the bill your March over 550 billion of new spending on resiliency upgrades with the nation's roads bridges ports airports public transports and other public works.
It's like a mobile video surveillance and security solutions can play a pivotal role in enhancing such resiliency by delivering real time information on the emergency and critical infrastructure, helping to optimize performance and monitor potential threats also the 65 billion a lot of towards broadband presents an opportunity.
Revenue for our IP linked product line.
Comm market continues to present opportunities to us and we have seen new quoting activities since we refreshed our satellite product line earlier this year.
In summary, we believe there is no other company that can deliver live video solutions.
Immersive immediate intelligent as we offer fully engaging experiences for viewers through unrivaled video quality.
Reliable low latency transmissions using the latest cellular technologies and the intelligence of AI powered systems that allow a wider range of content to produce profitably than ever before.
In conclusion, we're more optimistic about the future than any time in the company's history.
Previously, we said we would stay laser focused on operating dislike with a mindset of financial discipline and that exactly what we intend to do.
Our balance sheet remains strong and our operations remain lean. We also said we would make intelligent investments in product solutions and acquisitions, where they make strategic sense and this approach would allow us to achieve profitable growth.
This is also what we have done.
And we will continue to do so moving forward that means aggressively refreshing our product offerings to maintain our industry leadership and continue the trend of innovative launches we've had in the first three quarters of this year.
And executing on business opportunities in the markets we operate.
In where prudent and profitable we're confident that we're well positioned to execute on the work ahead, and we look forward to updating our shareholders on our progress now.
Now we'd like to answer some questions that have been submitted during the webcast.
Mike do you want to take the personally will now begin the question and answer session. We may submit online questions at any time today using the window on the webcast at this time, we will pause for a moment to assemble our roster.
Yeah.
Yeah.
Maybe I'll take the first one.
Okay.
Okay.
Are we back on.
Yep.
Okay. Thanks, everyone. So first question obviously is the one that's on everyone's minds. These days and that is supply chain and so the first question.
Comes from Kumar and I'd ask how is your supply chain situation and that's a it's a very good question and the answer is that we watch it every day, Mickey and I have meetings with our supply chain people almost on a daily basis.
We did take steps in the last couple of quarters to protect that supply chain. We did make some strategic purchases. It put things on the shelves that we felt could in fact become scarce. We do see a tightening of the supply chain. We are cognizant of some of our more critical components are becoming shorter supply. So we are in fact.
Taking extreme measures to make sure we scour the entire supply chain to make sure. We can keep up with that and we we protect ourselves as much as we can given the current situation.
The compound question was that what happened to your newly.
Higher VP of supply chain, we did announce that we had hired Joe Carson to help us rationalize our supply chain to help us with our strategy on manufacturing Joe came in and did a terrific job helped us with that strategy and has since moved on to other opportunities in a mutually agreed upon fashion.
So thank you Kumar for the question.
Okay. Our next question. We have are you able to disclose how many andas you have in place with other public private companies or local governments.
That's a good question, probably I'd say.
Probably closer actually to Linda Linda what do you think.
So 100, but you blew that manages that for us so.
Yeah, I'm going to say, it's closer to 110.
We have.
Yep Yep, so and obviously.
Some people there's other questions of you know we can't wait to those expire. So you can talk about it but many of those have a tail, but once they do expire you still can't talk about it.
The other question. We have is is around the mobile viewpoint acquisition what are the areas.
Potential growth you see.
Well first of all when we when we made the acquisition we talked about how a live video was only 13% of the overall video on the Internet.
And it's growing at over 70%. So that was a large opportunity that we saw by combining the product offering of mobile viewpoint with our offering because with that we now have every conceivable solution to bring video to streaming so whether it's through our own proprietary costume solutia.
Whether it's through public networks, whether it's private networks or through satellite like Starlink and other satellite networks.
By doing that.
We have but.
More than anyone in our industry and the ability to serve our customers.
But the interesting thing through the acquisition. We found was the AI the artificial intelligence, but with viewpoint has been working for our customers are super excited about and we're talking with a lot of them.
What AI will allow our customers to do where historically.
Say division to division three type of sports they were too expensive to live produce because you had some camera crews now you can send them artificially intelligent cameras.
With a complete suite of production in the cloud and.
And you'll be able to produce a professional type of production at a much lower cost. So this is going to allow lower value content to be produced.
Alive, so everyone can enjoy whatever particular.
Sports or activity or entertainment that they enjoy watching and so we've been really enthused about the receptiveness of our customers in the energy and excitement around the potential there.
I driven cameras can do for their for their contacts as well as for the overall businesses or or University. So really excited about that working through here in the U S. Mobile viewpoint historically has been successful in Europe with those types of Europe, and middle East with those type of solutions now.
We're bringing those to the U S.
So we're really excited about that.
Yeah.
So good question someone asked are you kind of continue on your strategy of acquisitions. After mobile viewpoint. The answer is absolutely. Yes. We we have raised a significant amount of funds. We do still have a significant amount of cash on our balance sheet.
As we've shown this quarter.
Near and Middle term goals are being achieved we stabilized our business platform, we've minimized and mitigated the loss of the of money each quarter, we hope to move into profitability obviously.
We think that bodes well both for the shareholders and the stock price and we think that also gives us the opportunity to go out and add in and layer on additional capabilities onto our current platform. We look at that two ways. One we'll do it through acquisition and we will do it strategically through new product development and engineer.
And R&D, but we will continue to be very aggressive in terms of the outgoing out in the market looking for opportunities to add accretively to the platform that we've created to date.
Thanks for the question.
Thanks, Mike We had a question does like it was the first to have five D. It's 40 events, particularly Moto G. P have leagues here in the U S shown any interest in the same equipment.
That's a great question, let me just.
So why I think what we've accomplished with Motogp is so important first of all we did this in cooperation with BT sport, which is basically the ESPN in the U K a.
Daughter, who are the rights owners of Motogp.
In the U S. A lot of people aren't familiar with Motogp, but outside the U S. It's a hugely successful Brad they've been able to take motorsports and make it so immersive technology partnership that we've had over the last.
20 years to bring a super exciting.
Content to the public.
And by working with them when you when Motogp in Georgia are innovators of of a really immersive really incredible type of viewing. So for instance, this past weekend. They were the first to display a shoulder cam using our technology in Valencia. So.
What this does what <unk> does for us.
Is basically because five G as more spectral efficient, meaning you can put more bits through the pipe.
And because of more spectrum being available and because of mimo antenna, it's multi year and multi out and tenants you have more pipes. So more bits through a pipe more pipes allow you to do a lot more things. So many more cameras everything from Covid.
In the case of Moto G. P. We're doing four cameras per bike will be able to increase that and then more cameras around the the track, but think about you know a typical NFL football game.
My goal is to be able to put a camera and Tom Brady helmet before he retires.
But those kind of P. O V shots really immersive type shots to get the viewers right in the middle of the game I think are really.
Realistic when you have the type of five G network that we're working on.
So you know.
Can you imagine Eric Donald chasing down Tom Brady and Youre able to see it real time, I think that'd be phenomenal from his perspective.
But when you think about that it's not just now video, but its also biometric data. It's it's auto data. It's engine data. It's every bit of data now that we can move through these pipes and so theres a lot of different use cases now can occur in a variety of sports a variety of entertainment and we take those same.
Technologies, we apply them to the military and government markets that we work in so this is the beginning of what we call the connected edge, where everything is connected you combine that with big data and.
Then compete on the edge and you were able to do some things that heretofore, we weren't able to do it. So we're really excited about our first step with Motogp. We've got a lot of people interested in doing similar type of demonstrations and we're working with those partners to work $3, but we expect this to be very positive here in the U S as well.
All of us around the world.
Thanks, Mickey Here's a question from Antonio Pro Vita Antonio asked kind of a two part question one is.
Regarding N V P. Our most recent acquisition do they sell hardware to be to be rental companies and the answer there is they don't shell to be to be rental companies at this point that they have.
Looked at a leasing model and they had leased equipment on occasion, we think that's an interesting idea and aspect of the market. We think it would be.
Attractive to approach some of our customers from a opex perspective, rather than a capex perspective, and we are looking at that it does require us obviously to put a piece of our balance sheet at play and or find a financial partner that would at least with us but we are looking at that we think it's highly attractive aspect of the markets that were.
That we think we'd like to look at the other part of the question was can you provide the financials that mobile viewpoint, we won't breakout.
Separate financials for mobile viewpoint ongoing we did file our most recent 8-K, a that did describe that business before acquisition. So I'll refer you to that 8-K, a standalone financials, but they are profitable business. They will I think remain a profitable business.
We'll integrate them from a sales channel perspective from an operational perspective, they are over in the Netherlands, and they do operate somewhat autonomously.
We're integrating their products with ours and we're very very excited by the <unk>.
<unk> of what mobile viewpoint brings to to visit link so thanks for the question Antonio.
Thanks, Mike we have another question is how are sales doing internationally I think when we look internationally, there's good and bad spots I think Asia Asia typically was over 15% of our sales its down under 5%.
<unk> co.
Covid still is challenging many Asian countries.
So we think that will be longer to turnaround, but we're encouraged because we're able to hit the numbers that we've been able to hit with slowness in Asia Europe, just coming back the middle East was strong as strong for us and the U S is strong but.
But in the U S. Our first responder sales.
Where we typically see higher numbers. During this time, we have a lot of decisions had been pushed out. So we haven't lost the opportunities they've just been pushed out as governments.
Governments try to sort out what revenues look like and what budgets look like as well as you know what potential.
We're funding maybe coming down the pipe. So I think we'll see 2022 to be strong in the first responder market that we haven't seen but overall, we're pleased that we're able to achieve these revenue numbers, having slowness in some of our key markets.
Thanks Mickey.
We get a lot of questions today, and it's more than just one person asked me about our share price and obviously, we don't give guidance, we'd like not to comment too to fully on the share price week, Mickey and I came to the business a little more than a year and a half ago and are are either first goals were to stabilize the company stabilize the platform.
Engage the vendor base get things moving again through the supply chain and get our operations and manufacturing Rolling again, we think we've achieved that and we think we've done a gone a long way towards rationalizing what was the old visit link what is what is today and into that and we've rationalized.
Is the product line, we've streamlined the operations of the company, we reduced the breakeven point down substantially we feel like we've done a lot to cheap.
What we considered our near term goals medium term goals are to continue to go out evangelize our customer base.
Provide and.
Introduce new products and invigorate the sales channel and invigorate. The sales process, we think we'd start to see that happen I.
I think this quarter is good evidence of that $11 million of sales as you know historically high for this company. So we feel like our midterm goals are being achieved our long term goals are to continue to add to the platform to strategically go out and look for acquisitions and opportunities.
Two to engage people in adjacent markets and to look for new ways to sell our products. We think if we can execute on all of those things. We think the share price will take care of itself and we'll have an increase in value.
And that's the way we look at the share price at this point, we think hard work step by step progress will eventually pay dividends.
So thanks to everyone for those questions.
We have another one from Pablo Quezada do you think you'll achieve profitability without any further dilution that yes, we have we achieved profitability.
As we said from the beginning our goal is to with our current platform to continue to generate cash and be profitable with our existing platform and then add to that I think we're in a position to do that there's some other questions on here around do we have a reverse split or dilution plan no. We don't we believe as you know we have $38 million.
Cash.
Generating cash and so we think we can can you do this given the markets that we're in and the opportunities that we see with the new products that we've introduced.
So we're encouraged by what our customers are saying to us around our products and how excited they are you know for instance, our quantum receivers that we introduced early this year has been a massive success, we see as a native IP receiver for our proprietary networks, we've seen that deployed.
As we said in the in the Olympics.
And major sporting events around the world.
And a lot of our partners are gearing up with that today. So we're really excited about the products that we've had and the new products will have a new introduction similar platform introduction in our first quarter of next year that we're very excited about will be the first responder market.
I think if we can as Mike says, we continue to focus on innovation and generating new products to work closely with our customers. We think there's tremendous opportunity to grow this business continues to generate cash and then on the M&A side, we'll do both complementary and also areas that we see growth.
And.
As investors you need to understand that we are super focused on cost and cost containment.
Ideas of the past does lake of Av.
You know not being as focused on that are gone. We're very focused on that will continue to maintain our discipline in that area.
Thanks Mickey.
Good question from Hassan Hassan is asked is why are some of your operating costs going up.
For two reasons, one obviously, we've shown a lot of discipline.
Our operational cost structure, but we have experienced some public company costs like D&O insurance and other things that just go up unavoidably, we can't help that some of those costs are rather large.
We've also invested to some extent in more additional R&D and engineering, we feel that we were a little bit underserved little bit underman. There. So we have increased our spending in places, where we really feel it'll provide the maximum amount of benefit.
And then we also going forward, what you'll see will combine the results and the expense streams of mobile viewpoint into our own and that will obviously Intel at an increase that would be obviously more than offset by the revenue that will add to the topline.
Thanks for that question.
Yeah.
Okay, well one more question then.
So maybe we'll do two more questions one on the power of scripts going with bonded cellular we introduced the digitally connect.
Two weeks ago.
We're getting interest there we've had some demos that have been acquired.
It's still early on for that product.
But we continue to build on that and have a complete suite of products to support that but we're encouraged by the reception that we're seeing but I would say that the AI cameras.
Are the area that a lot of customers are focused on it. So it's new it's different it's super innovative and they think they can do a lot of things that cause there for their content creation.
Yes.
Yeah.
So we'll go with one more first of all I'll, thank everybody for the questions.
<unk>.
You see when Mike.
Yeah, I just another kind of Pablo asked the question that I think has been recurrent in the questions is do you think you can achieve and sustained profitability and there. The answer is absolutely we can help Mickey and I have.
Have they put a lot of hard work into trying to stabilize the company rationalizing again the supply chain the operations.
The head count our operating expenses.
Endeavored to kind of reinvigorate our channels and we think that that's a it's bode well for the company. We think this quarter is indicative of all the hard work that the team here at vigilant has put in.
Making I couldn't have done it without an incredible amount of effort from our team worldwide and so we think we've turned the corner. We think we're on a path to.
Increased profitability, which obviously increases shareholder value, we think we have a great.
Opportunity to go add to the company strategically as well so we think that.
We're well on our way to creating a very profitable company.
Yeah. So first of all I'd say, thanks, everyone for the questions.
And thank you to our long term investors.
Then talk about our plan.
Our discipline for the last.
567 quarters and we appreciate that you know, we talked quite a bit of our investors and we appreciate the support that we get for those that are in here.
For the opportunity to long term, we will continue with our turnaround plan that we started when we joined in early last year.
And we're starting to see the fruits of our labors of the team throughout the world and the focus that we've had.
Since both Mark and I joined the company.
One thing I can say is we're just getting started we see tremendous opportunity for this company in the markets that we serve as well as additional markets to leverage the technologies that we now have and other technologies and capabilities that we might acquire.
We're very encouraged by what we see and we think we have a tremendous opportunity both in the near term as well as to do to make this company like when I started we said we didn't come here to have a small company we want to create a company that makes a major difference in this world and we continue to be focused on making that happen we've done.
A lot of the blocking and tackling to get us where we now can be profitable with our current platform and we see opportunities to grow that platform as well to add to that through merging and acquisitions.
We'll continue to be diligent in how we maintain our cost and how we deploy our capital.
You own this company as investors redeploy this capital with you in mind to make sure we're going to get the best returns for that capital and.
And we continue to focus on that and you have our commitment to do that on your behalf.
Thanks, everyone. Appreciate your questions and appreciate your support.
Yes, thank you everybody.
Thank you.
The conference has now concluded.
Thank you for attending today's presentation you may now disconnect.