Q1 2022 ADDvantage Technologies Group Inc Earnings Call
Please standby were about to begin.
Good day, and welcome to that vantage technology's fiscal 2022 first quarter financial results Conference call Today's conference is being recorded.
At this time I'd like to turn the conference over to Mr. Brett Maas Hayden IR. Please go ahead.
Thank you operator, we are joined today by Joe Hart, President and CEO as well as Michael Wallace, The company's Chief Financial Officer before we begin today's call I'd like to remind you that this conference call may contain forward looking statements, which are subject to safe Harbor provisions of the private Securities Litigation Reform Act of 1995. These forward looking statements include among other things statements regarding future events.
It's just the ability of advantaged technology subsidiaries to maintain strategic relationships and agreements with certain original equipment manufacturers and multiple system operators as well as the future financial performance of advantaged technology. These statements involve a number of risks and uncertainties. There's been are cautioned that these forward looking statements are only predictions and may materially differ from actual future events or results.
Due to a variety of factors such as those contained in advanced technologies. Most recent report on Form 10-K on file with Securities and Exchange Commission financial information presented on this conference call should be considered in conjunction with the consolidated financial statements and notes included in the company's press release issued earlier today and included in advantaged technologies. Most recent report on Form 10-K , the guidance regarding anti.
Future results on this call is based on limited information currently available on advanced technologies, which is subject to change, although any such guidance and factors influencing it may change advanced technologies will not necessarily update the information as the company will only provide guidance at certain points during the year such information speaks only as of the date of this call. During the call. We may also prevent certain non-GAAP financial measure.
Such as non-GAAP net income and certain ratios that are used with these measures in our press release and in the financial tables issued earlier today, which are located on our website at advantage technologies Dot Com you will find a reconciliation of these non-GAAP financial measures with the closest GAAP financials and a discussion about why we believe these non-GAAP financial measures are relevant.
The financial measures are included for the benefit of investors and should be considered in addition to and not instead of GAAP measures I'd like to now turn the call over to Joe Hart, President and Chief Executive Officer preventive She's already Joe. Please go ahead.
Thank you Brett and thank you to everyone joining us on the call today.
We continued our strong revenue momentum in the first quarter with significant growth in both our wireless and telco segments.
Leading to 47% consolidated growth on a year over year basis for the quarter.
This growth and the accelerating five G rollout.
Give us significant confidence in continued revenue ramps during the balance of this fiscal year.
As we've been saying the five G rollout has finally begun in earnest leading to significant activities from multiple customers in several states.
We expect our wireless revenue to continue to grow from the $7 million range in the second fiscal quarter with further expansion in the second half of the fiscal year.
Our focus now turns to improving our operating efficiency and properly aligning our resources for future demand.
They bring us to expand gross and operating margins, while we deliver exceptional service to our customers.
The ramp in resources during the last two quarters and expansion into new markets.
As adversely affected margins for Q1 and into our Q2 of this fiscal year.
Action has been taken to improve margins and we will be reducing operating and general and administrative expenses to drive margin expansion over the next two quarters.
Our entire wireless team is hard at work at managing this rapid acceleration.
Working closely with our customers to make sure we have crews in place to.
To deliver on work orders as permits are approved.
Investor should expect not just revenue growth, but margin expansion as we move through the year likely peaking in our fourth fiscal quarter.
While while while wireless revenue related to tower work and other aspects of the five G rollout has already increased by 36% year over year.
We expect that it will continue to grow throughout this fiscal year.
Our recent growth has been broad based involving several carriers, including both long standing customers and new entrants to the market.
The work touches all the regions, we service spread across the center of the United States and touching many large metropolitan markets.
Our pipeline of new projects, meaning work, we have been awarded where we are waiting for purchase orders as permitting is completed gives us significant confidence that the long awaited five G. Serge will continue to accelerate for us in the near term.
As I mentioned last quarter.
We already have purchase orders in hand for fiscal year 2022, construction that exceed the total value of our fiscal year 2021 total wireless revenue.
Over the last few months, we have one site awards to upgrade technology to five G for over 700 cell sites.
And we have increased our staffing to meet this growing demand.
In fact staffing is the most challenging part of this growth in this tight labor market.
Currently we are running at 45 crews and we'll be ramping up from there in subsequent quarters.
The <unk> opportunity represents a multiyear secular trend not just for tower work, but for data centers technology providers handset manufacturers and wireless carriers.
Each of the wireless carriers are investing hundreds of millions of dollars in the expansion and the Capex plans of the carriers are public information and widely discussed.
We are fortunate that as this wireless segment quickly expands.
We are simultaneously benefiting from other trends that are driving strong results in our telco segment.
The office dynamic has changed and people are working from home requiring.
Requiring an expansion of the telco infrastructure to facilitate a remote workforce.
Simultaneously, though.
Well documented chip shortage and supply chain issues have elongated the delivery cycle for new telco equipment in.
An important price increases have made new equipment more expensive.
All of these factors make our refurbished equipment sold by nave and Triton, a more compelling and viable option.
You can see the results and the financial performance of our Telco segment, which finished its third consecutive quarter over $11 million in revenue with an increase of 54% compared to the quarter of last year.
We continue to anticipate a leveling off of demand at some point in future quarters, albeit at a somewhat elevated level relative to the recent past.
Overall, we delivered a 45% revenue growth in the quarter.
Our margins and overall profitability were impacted by the increased spending to ramp up crews and capabilities as we expanded into new markets in advance of the coming demand.
But we believe that margins will begin to improve late in the current quarter with further margin expansion as we move through the year.
And our business reaches the necessary inflection points, where volume is able to offset fixed cost.
We also began reducing G&A and operating expenses as our new markets mature and we enter the second half of the fiscal year.
With that I'll now turn the call over to Michael <unk>, our CFO to provide a more detailed review of our financial results.
Nicole Please go ahead.
Thank you Joe.
Consolidated sales increased $6 million or 47% to $18 7 million for the first quarter from $12 7 million for the three months ended December 31 2020.
The increase in sales was due to increases in wireless sales of $1 9 million and telco sells for.
$4 1 million.
Consolidated gross profit increased 1 million to $4 6 million for the quarter compared to $3 6 million for the same period last year.
The increase was due to an increase in the telco segment of $1 1 million offset by a wireless segment decrease of <unk> 1 million.
Operating expenses increased <unk> 5 million to $2 5 million for the quarter compared to 2.1 million for the same period last year.
The increase reflects the companys investment in its regional growth strategy related to expected <unk> infrastructure growth.
Selling general and administrative expenses increased <unk> 5 million or 15% to.
$3 7 million for the first quarter from $3 2 million for the same period last year.
The increase in SG&A relates primarily to increased selling and commissions expenses to support higher revenues.
Net loss for the quarter was 2.8 million for the first or a loss of 16 cents per diluted share based on $12 7 million shares compared with a net loss of $2 1 million or a loss of <unk> 16 cents per diluted share based on $12 1 million shares for the same quarter last year.
Turning to our balance sheet cash and cash equivalents were $1 8 million at December 31 compared to.
$2 6 million as of September 32021.
Cash was used primarily to fund operations.
As of December 31, 2021, the company had net inventories of $5 7 million.
We continue to believe we are sufficiently capitalized with appropriate backstops to support near term business conditions until a more normalized business conditions return.
This concludes the financial overview segment of our remarks, I will now turn the call over to the operator to facilitate any questions.
Thank you if you'd like to ask a question. Please signal by pressing star one on your telephone keypad.
Do you are you may speaker phone. Please make sure your mute function is turned off.
Why your signal to reach our equipment.
Once again press star one to ask a question.
For just a moment to allow everyone an opportunity to signal.
And we will go first to William Zellmer with S. A advisory.
Yes, Hello, Thanks for taking my call couple of questions number one.
A real number or backlog everything seems very just curious what's the real backlog youre right.
First question.
The backlog for wireless as base yeah. This.
This is Joe.
Yes.
Claude for wireless is based on.
The number of purchase orders in hand or sites assigned.
We're waiting for the purchase order to come through but I mean, when I said, we have 700 sites in backlog I mean, that's that's what that refers to right now have we burn off some of that backlog, yes in the first quarter, we burned off 7 million.
The <unk>.
700 sites that I referred to relate to about $28 million in total backlog and so we burned about seven of it in the first quarter.
And.
As we progress through this quarter next quarter and so on will.
We will continue to get additional sites assigned to us by the carriers. So backlog is a bit of a moving target, but the 700 sites that I referred to.
These are typically taken average.
Revenue per site of about $40000 and by the way amongst carriers that can vary fairly widely but it's probably not a bad number to use.
What about the rest of this.
What's your backlog of the other subsidiaries.
Well the the telco equipment subsidiaries are.
Essentially.
Similar to retail ordering and bid and ask kind of opportunity. So they don't typically have a backlog there.
Uh huh.
On demand orders that come through Amazon Shopify et cetera in the case of Triton Datacom. So that's a daily weekly transactional kind of business.
The nave communications has a little bit more runway of about a weeks.
<unk> of orders that are in process, but they're they're high transactional businesses not really <unk>.
Subject to backlog more based on historical run rates.
So we talk about the bottleneck.
Copper.
Choice these days.
How much of your business is being affected by backlog bottleneck.
The product.
That's the case.
Uh huh.
Are you raising their prices I mean, you've had a good quarter, but you know you keep promising a better and better.
And even though that's positive and earnings but here we have another quarter, we lost another couple of million dollars.
You can't keep losing money.
Would you explain to us the business is growing rapidly.
You keep still keep losing money.
Sure.
This is another this is the third quarter since I've watched you guys and it just seems to be kicking the can down the road.
Yes, our telco business is is making.
It's making nice margin and making good EBITDA contribution.
The issue is on our wireless construction side, where we have deployed to multiple new geographies and new markets and have increased.
Increased our expenses in order to get deployed to those geographies and have teams in place and logistical support also there in those markets and that is a ramp that.
It's one of those you.
Experienced says youre better off to overwhelm the front end with resources and perform well for your customer right out of the gate and you ensure a much better future by doing that once you're in place and deployed and the market.
Sizing.
<unk> itself, then you can trim the resources appropriately and Thats, what we intend to do we intend to reduce our G&A and operating expenses on the wireless side of the business over the next couple of quarters to get back to.
Consistent levels of profitability and EBITDA contribution.
So in your base.
Matt you're correct, yeah. So basically you are.
Ah you're.
Youre getting players and once you got the players and they're happy.
Not going to they're not going anywhere and this allows you to give you greater flexibility with our.
Increasing margins would that be a fair assumption.
Well and the demand in these new markets you're you're.
You don't get hard promises on a level of demand as you deploy to these new markets, but you have a certain amount of purchase orders, which makes the justification for deployment to that area are justified, but you are uncertain of the demand as that demand.
<unk> shows itself, you then level the resources and reduce your spend because you're there and you can make good decisions about.
What the appropriate level of expense to revenue is.
And.
We're in a total growth mode, right, where essentially a doubling or more of the size of the company and expenses.
Have led the way to fuel these deployments.
Now's the time as we move through the end of this current quarter now is the time to start Recalibrating those expenses and get it back into a profitable situation.
Well, you know that I listen to you guys before as Ive mentioned and.
Isn't it time to maybe upgrade that presentation, that's kind of a very scale to give us a vision of the company in writing that people can review and maybe you do a couple of dog and pony with some brokerage firms out there to get your name.
We helped for a while and since you say you're in a growth mode.
Mode in ramping up this would be excuse me an ideal time to.
Visit the brokerage community because you definitely could use some cash.
I think that should be something to consider number one and number two a different question is the second quarter, we're still in kind of the winter environment.
Does that seem to affect our business ramp up in the areas that you are.
The majority of your work.
Inductor.
Yes, yes.
Kind of a combination of Ah.
You know the latest Covid variance.
Net.
Hits crews, both our internal crews as well as a subcontractor crews.
That is a bit unpredictable as well as any winter storms that pass through like in Texas.
Week or two ago, we were down for a couple of days so.
So far.
<unk> would work continues in the Midwest.
But there are days or a few days in a row, where you know where were shut down for weather. So.
We tried to build that into our budgets.
We've a lot of us had been doing this for a long time so.
You never know when winter will hit but it's predictable that it will hit January February March in the Midwest.
Correct.
And what about.
Yeah.
Go ahead.
No that's okay, sorry for interrupting I was curious.
What about an upgrade to our presentation.
There are some dog and pony shows with some of these brokerage firms out there to get some new eyeballs because you do have the tendency you don't put any press that you don't really let us really know what's going on except for.
While in the Qs and Ks.
So maybe that should be maybe get a little more aggressive but on attracting eyeballs.
Yes, I think thats, a great suggestion and thank you for that.
Hi.
With <unk>.
My preference is when we get to breakeven and we're about to approach profitability, that's what I'd like to be standing out there in front of investors.
Touting that we have grown the business and we have turned it around and gotten it back to profitability. So.
That's the game plan and from a timing perspective.
You know your suggestion is most likely something we would.
Prefer to do starting later next quarter.
Well.
I didn't get the representation and updated yeah, yeah, but.
There is the there is the.
In many cases, there are companies that always you're waiting for things to be perfect.
And they never are.
Waiting for.
The profitability Bell I'd be wrong.
Maybe you should look at it prior to the bell being wrong Youre growing about your revenue growth your market size.
Businesses are expanding.
Alright.
I really think it's time that really instead of waiting until profitability start to tell people about it.
Already expanded on on your on the revenue growth possibilities the potential you're increasing the size of your workforce and your crews.
That sounds pretty positive.
We're just missing one ingredient.
So you know maybe investors should start to be told now while the stock is basically.
Hovering around the dollar which is really kind of a sad.
I mean, it's hard to get survival on this thing.
Alright perfect.
You know you I think you all shareholders.
That.
Route.
You know the.
Presentation.
The acknowledgement that you're you're out there.
You know growing.
Oh, that's kind of where I'm at.
I think Michael and I are sitting here shaking our heads in agreement with you so okay.
Okay.
You have our commitment to get moving on that front.
Okay, that's great.
Lastly, maybe occasionally put out some kind of press release.
Tell us what's going on.
Instead of waiting.
For the quarter end.
I mean, its dream, but we won't be hearing from newmont's lightning for three months.
Yeah.
You know you you don't want to get lost there's a lot of competition out there for people to buy stocks in companies and you get lost I mean, you're in such an exciting area of <unk> Communications I mean, they've been waiting for five G for three years and it's here and waiting for profitability I don't think is the answer I think.
You need your pounding the drum now so thank you very much for answering my questions. Thank you.
Youre welcome. Thank you.
We'll go next to Kurt I'll remind us with Carl M Hennig, Inc.
Hi, guys. Thanks for taking my call.
To try to get a little more color on what you were saying.
You probably have mapped out and investors are probably wondering do you see cash flow breakeven or cash flow positive by.
By mid year, it sounds like based on kind of what Youre seeing on a monthly basis, where do you kind of see that turning April may June something like that.
It.
It's not in the current quarter, but it's.
It's it's.
It's.
So the plan is for it to start turning in that direction hard in the third quarter and be there in fourth quarter I mean, that's our that's our current projection.
Okay.
Do you.
See any insider buying coming you know management team at <unk>.
These levels with your confidence in the business to go forward and all that kind of thing with where the stock is at any idea on board or management.
Stepping in to show confidence.
I think it's a great suggestion.
We.
We haven't had that discussion amongst ourselves here in the building with the management team but.
Certainly with the share price where it is.
Unfortunately, it where it is it's a great. It's a great time to consider that so.
We will take your suggestion.
And hand here and see what we come up with.
Thank you I appreciate you taking my call.
Welcome.
We will go next to Edward <unk> private investor.
Yes.
Yeah.
This is ed covered well.
I'd like to give some explanation on these.
The volume I can't quite understand how you can possibly have almost 13 million shares traded in one day one that's it's actually.
Yeah.
More than their stock outstanding could you make any comment on that.
There must be some.
Connection to the account for any people or somebody or institutions.
You've got mutual fund you guys.
Other groups.
They're the owners shock.
I can't imagine the whole volume trading in one day.
Yeah that's.
Hi, Ed This is Joe.
It's happened a few times to us over the last.
Two or three years now.
Those big days.
Over the last couple of years have been like a $3 million, a day or a $4 million a day.
Yeah.
The recent $13 million a day was I mean, there I don't think Theres any real explanation for something you start to get some growth and some activity going in your trigger some algorithms.
And some of the investment houses and trading firms in.
All Hell breaks loose and.
Everybody thinks they know some kind of secret there there was no.
Logical explanation base.
Based around the business trends or business news or anything else on our side that triggered that it was.
Strictly.
And the oddity of the market these days and.
Theres, probably other people on the call that are more.
Advanced in trying to explain that but.
Hearing.
Yeah, but.
The.
Hopefully the dwell bancshares, you'll see is if price go up.
Sure it would've gone through the roof.
Yeah.
This is Brett it's the advent of algorithmic trading right. There just people flipping shares appears slipping chairs back and forth very rapidly. The same share just changing is very rapidly. So unfortunately, that's the world.
Trading World that we now live it right I mean, there's an audience watching the stock and you know hopefully we keep longer term shareholders within this volume.
The longer term shareholders see their liquidity and they start to buy shares and accumulate it settles down a little bit, but the algorithmic tradings what's doing this.
Yes.
<unk> the positive results of management.
Oh good.
Is there any shelf registration out there that.
So it would be affected by this.
I know you were talking about raising money.
Someone takes a look at this it looks as if there Ben.
Raise.
Private label, maybe at that particular time.
Reflected in the 12 band but.
Yeah, I mean, we still have an active S. Three registration that's about two years old now.
<unk>.
<unk> still has about $9 $5 million of capacity left in it.
<unk>.
We have not been active in it and Oh.
At current share price.
Yeah.
Probably won't be active in it for for a while but.
It is still there we would like to use it at some point, but that's why our total focus is on improving the performance and profitability of the company and then.
We believe.
The share price will take care of itself from there.
Along with other good suggestions like update our presentation on the website issue more press releases you know very.
Very basic marketing.
No.
Alright.
Secondly are you telling your story.
There's so much.
Publicity out there in five G in such a positive nature and.
People aren't even aware of the company.
My childhood about hospital and the Sag I'm just talking about it.
Giving people the opportunity to see what the books agile is you don't have to wait until it's rather bold people.
We'd like to get it at a lower level.
When you are profitable and things have turned a assuming they do.
It'll be reflected and then people will even try to buy the stock.
As you know, there's a really a very small.
And the last time.
Well when they got a short position.
They had the shorts is not granted this exact sellers.
Uh huh.
Yeah.
This isn't going to happen all of a sudden one yeah.
So one quarter of profitability the everybody is I try to get through the door.
Hopefully.
Agreed agreed yes.
Thank you Ed.
Yeah.
We'll go next to George Gasper private Investor.
Yes, good morning, everyone.
Hi, Good morning, George.
I'd like to dig into this.
<unk>.
Took place.
And this issue regarding aircrafts.
Yeah.
Okay.
Have them.
Close to airports and landing.
Can you describe.
What it's been like for your crews.
In and around these particular airports.
Nationally are in the areas, obviously that you're working on.
With where you're required to get back up on towers do somewhere.
When they.
Airlines were insisting on.
Kenny.
Communications.
Temporarily.
Closed guy.
Or is that okay.
He'll be dialing in from this.
Round level and it doesn't require any of the areas where can you explain that.
Okay.
I can explain what I.
No I think is going on but.
We have not directly been involve with are either installing radios within the glide path.
To and from the.
Any airports.
This year.
Specifically in the C band block of spectrum that was auctioned off.
A little more than a year ago by the FCC.
Effects.
Tim meters of some aircraft types.
Not all.
And.
Really it's a.
As I read it's a matter of AT&T and Verizon.
On those.
Towers that they have installed new radios related to the C band spectrum.
They hadn't actually turned.
Any event on they were about two.
And so they were asked to hold by the FAA. They all agreed.
And then since then they've agreed to.
<unk>.
Either redeploy that spectrum outside the glide paths.
Hi.
I think it's simply a matter of.
Giving.
The aircraft manufacturing industry a chance to.
Replays and upgrade the technology on the aircraft altimeters and once they get all that done over the next couple of years it won't be an issue, but for the meantime, it is on some aircrafts so it hasn't affected our business whatsoever.
And both AT&T and Verizon have the.
Our ability to.
Turn those radios on and off in that spectrum.
Or to not actually <unk>.
Engage those radios, but I mean, they both both companies continue to deploy that new technology all over the U S.
And.
Theyre just trying to adjust it in the glide path.
Okay, Alright, thank you for that question.
Okay. The next one is.
The crude development at <unk>.
You indicated.
Yeah.
45 crew.
Level.
Yes.
Can you tell us how many are in house crews.
Right.
And inside Cruz <unk> side can you give us a comparison of how that has developed let's say.
At the close of the last fiscal year with September and.
Where's your what's your upside target in total crews and in House group.
Yeah.
Yeah, I guess I would say I have [laughter].
No real upside target or.
I'll say.
<unk>.
Maximum threshold, Georgia.
If the business continues to double year over year.
This year and next year in the year after than will be.
Expanding the crew count accordingly, both geographically as.
As far as following the work with carriers or improving.
Improving the density within existing geographies, so I don't have any limit.
In my head or in our budget plans as far as total crew count if we match the crew count to match the backlog right.
And there are there are weeks, where that can go up and down a little bit.
Where either we hit weather delays or we might hit some permitting delays.
And then everything gets completely turned back on in a.
Small geographic area I'm talking about so you know we're at 45, we were probably running in the mid thirties.
On the last quarterly call.
I say, probably but I mean, I know it because we track it on a daily basis as far as ratio of.
Internal crews to.
Subcontractor crews, we're probably sitting at the moment at about <unk>.
Three to one subcontractor crews to in house crews.
Aye.
Have for decades.
Believed in the strategy of having <unk>.
A bigger subcontractor base of technicians and crews than than your in house and that becomes your insurance policy and buffer against the ebbs and flows of the work.
So.
Sure.
We're very happy with where we're at.
It is a very tight labor market.
Where.
Constantly recruiting and you know it's.
It's a it's quite a wild west out there as far as our recruiting and retaining.
<unk> crew resources. So we work that every day every week some full time job so.
We're kind of happy with where we're at right now with SKU count.
Okay.
Interesting.
Anthony.
Actual work that you do daily or weekly.
Can you give us a percentage of how much is and towers and how much is.
Away from towers.
Is there any way of giving us some.
Indication.
Revenue stream.
Versus your total.
Well I would describe it as.
It's all <unk>.
On the sell side.
So it's within the fence line of an existing cell site.
And.
Uh huh.
For example in the case of the new dish installations, it's about 40% civil work, which is on the ground.
It's.
Trenching for conduit for fiber optic cables and power cables.
To bring it over to the.
Radio cabinets we.
We have.
Hi.
We build platforms. So we can mount their radio cabinets above ground a couple of feet off the ground.
So that civil work is probably about 40% of the scope of work and the on tower work is probably 60% and that can vary from site to site carrier to carrier.
Okay, and then can you describe.
The.
Outline.
Your activity in total.
State by state basis as it is the Midwest area.
Chicago, Milwaukee and the top two.
So they are in Illinois and in.
Michigan, or Minnesota, Iowa, Nebraska.
And D and obviously.
Obviously, Texas I am sure is important.
Can you just give us a little color on.
You are you have been and where youre trying to go.
Yes.
It varies from year to year, depending upon.
The carriers deployments for the new technologies.
And the markets that they built the prior year and are changing.
The following year so.
It migrates, but.
This year, we're probably.
We're probably.
Yeah, we're probably back to about a 35% Midwest and about 65% southwest.
Okay.
65% Midwest than 35.
Outside of that.
No. It's the opposite it's about 35% Midwest.
65, <unk> southwest Yeah.
Yeah, and and we believe that later in the year and next year that will shift that.
There are some big plans taking shape for.
The great Lakes area, So we'll that.
That will probably shift somewhat.
Okay, all right and then a question.
The increase in.
Shares outstanding in the quarter.
It was like 400000 am I correct on that.
Yeah.
It was about it was about 600000.
600 dose okay, how many of those shares.
Sure.
Distributed to employees.
And.
And where they had a certain price.
The majority of those shares were actually purchased through the S. Three.
During the quarter at various points during the quarter.
Yes, Barry.
We have quite quite honestly that day, where the volume went off the charts to $13 million.
We tagged along on the back end of that day and sold some shares.
Just because of the sheer volume of activity.
Okay.
Our employees are basically on a.
Three years at a time so they they get.
Restricted shares of stock.
Based on performance on an annual basis and.
That vest over three years for any particular offering so.
It's.
It's not a large number of shares in totality, but in any given year, probably an extra.
Maybe 100 150000 share something like that.
I see I see.
Okay.
That's encouraging.
And one question.
<unk>.
Talking about telco and that whole segment.
<unk> done very well.
I mean, it's.
You don't hear too many people congratulating.
And the work that went through in building year.
Equipment.
Warehousing and operation in Florida.
Miami and.
And how that's all going.
And of course.
As you have indicated today.
Out of this activity.
<unk> experienced in recent.
Few quarters.
It relates to.
People.
Can remotely.
And in the lack of that.
<unk> availability.
<unk>.
Do you have any thoughts about expanding that operation too.
Geographically or in terms of equipment.
Distribution.
Expansion.
Any thoughts on this.
Okay.
It's.
I mean, we think about and talk about it all the time, yes.
For sure every quarter.
We're reviewing the existing inventories every quarter.
It's a bit of a tricky business as far as you know your your inventory that you have on hand is constantly aging. So we're trying to play off selling down existing inventory while we're.
You know finding.
Products that we can sell.
On a flip basis, where we don't have to we find the inventory we buy it and then we sell it.
And it comes in the left hand goes out the right hand kind of thing.
I think.
We believe that we're in a bit of a temporary situation.
<unk> the global chip shortage in the global supply chain.
<unk> Jam.
We think that that will.
Okay.
That will eventually right itself.
Our team has done just a fabulous job here the last.
18 months and we.
We have seen expanded sales to.
New clients and new fiber.
Competitive access carriers, so I think it's more about expanding our sales channels.
Not necessarily the product lines.
We want to stick with what we're really good at.
And we think that the market situation is a bit tenuous. So we're I think a little cautious about <unk>.
Investing a lot in new product or new product inventories right at the moment.
Thanks, Anne and frankly, Youll see you frankly see our cash situation. So it's not like we've got a.
Stockpiles of cash that we can go off and divert into.
A lot of new inventory.
Okay, and you mentioned.
Cash position my last question, Eric could you identify.
<unk>.
Again, the amount of money that is coming into the company and the basis of it.
Seo.
<unk> Division to Dave Shea Mac that took place with a couple of years ago.
Is that does that come in clearly and how much does it amount to on an annual basis at this point.
Dave had a five year note, which was.
All public information, Dave had a five year note.
Dave pay that note off in full.
Probably about a year ago or so.
So there.
There is no incoming.
Moneys from that.
Former sale of Tulsa.
So there isn't anything coming in at this point from that sale.
No.
Okay, alright, okay. Thank you and finally sir.
All your answers I appreciate it.
It could be very interesting over the next step.
Six months.
See this path.
And.
And based on what we did in the last quarter and 17 mill range and buy for that $68 million I would assume that you can drive that to $85 million to $100 million in a year.
Yep.
Any comment.
Yeah.
[laughter] well certainly.
Certainly.
Manageable grills growth.
We'll take all of the growth we can get it.
As long as it fits the strategy of the company and is in the geographies we can serve.
And we can make money right.
Okay Best of luck to you going forward here.
Okay.
Take care, Thank you Jordan.
<unk>.
And as a reminder to ask a question that is star one on your telephone keypad.
We'll go next to Anthony Markese private investor.
Hi, good morning.
Your sale.
<unk> for the quarter are greater than your entire market cap at this point so clearly people are.
Disappointed in what's been going on.
Speak very elegantly and glowingly about the future of the company.
I'd like to make a suggestion models to see some insider buying.
Haven't seen any home since I believe 2020 at significantly higher prices by one or two individuals.
I see zero insider buying by any of the directors.
So on one hand.
A lot of confidence on the other hand.
Thank you.
Really.
Show a vote of confidence.
It would be wise to be able to see some implied or bond and then again I'm not trying to count People's money, but certainly to see zero one thought of bone.
Given all the opportunities.
All of the success that you forecast.
I think that would be the best way to convince people that.
The turnaround with the wheel.
Yeah, I think it's a it's a great suggestion and it's <unk>.
<unk> as well.
Yeah.
I would use a bit of a weak excuse and just say we.
We've had our heads down trying to manage our way through all of this growth and turned the company back to profitability.
We've kind of lost sight of that and.
I appreciate both yourself and the previous.
<unk>.
Investor that asked the same question.
For reminding us of the signal that it sends to the marketplace. So I appreciate the suggestion and it's kind of it's going to.
Make it a lot in here, it's not make it a lot easier for Brett and his team to market the company.
To introduce the company as a company that is a cheap on a.
On an asset basis sales basis, whatever you want to call it and at the same time be able to say hey, not only is it cheap, but insiders are showing their confidence by buying the stock.
So do I like with stock trading at a 52 week lull in yet.
I'll just get them.
Well it looks like ramp up with multifamily so in any case I guess.
Yeah, It's just it's going to make it a lot easier to market. The company as you go forward with some insider buying as evidenced.
Competence of management.
Yes.
Thank you for the reminder, we appreciate it.
Yeah.
And at this time there are no further questions.
Alright, well, thank you everybody for joining us on the call today.
We appreciate your support we appreciate your interest.
We are clearly focused on returning this company to profitability.
We have been.
Deep in the effort of trying to grow the business in both the telco and the wireless side.
Have shown nice growth two quarters in a row on the telco side, it's been three quarters in a row.
And now is the time to get this company back to a profitable situation and so that's our mission here over the next two quarters is to get us back in that position in a solid fashion and set the stage for.
Fiscal 2023 already so thank you again for your time and your interest. Thank you operator.
Thank you. This does conclude today's conference we thank you for your participation.
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