Q4 2021 KVH Industries Inc Earnings Call
And welcome to the <unk>.
<unk>, Inc, Q4, 2021 yearend earnings conference call.
Today's conference is being recorded at this time I would like to turn the conference over to Roger Cable. Please go ahead.
Thank you Christina good morning, everyone and thank you for joining us today for our caveats industries fourth quarter results, which are included in the earnings release, we published this morning.
Before I introduce the others on the call a couple of quick announcements first if you'd like a copy of the earnings release is available on our website and from our Investor Relations team if.
If you'd like to listen to a recording of today's call. It will be available on our website.
You are listening via the web feel free to submit questions to IR at PVH Dot com.
Finally, this conference call will contain certain forward looking statements that are subject to numerous numerous assumptions and uncertainties that may cause our actual results to differ materially from those expressed in these statements.
We undertake no obligation to update or revise any of these statements.
We will also discuss certain non-GAAP financial measures and Youll find definitions of these measures in our press release as well as reconciliations of these non-GAAP measures to comparable GAAP measures.
Encourage you to review the cautionary statements made in our SEC filings specifically those under the heading risk factors in our third quarter Form 10-Q filed on November 4th 2021, and our 2021 Form 10-K , which we expect to file tomorrow. The company's other SEC filings are available directly from the Investor information section.
One of our web site.
Joining me on the call are the company's interim Chief Executive Officer, Brent Brunn, Chief Technology Officer, Bob Day log and the newly appointed Chairman of the board of Directors, Cathy Martinez was going to say a few words now Kathy.
Thank you Roger Good morning, everyone as Roger said I'm, Cathy Martijn I would like to thank everyone, who has dialed in this morning.
Before we get to the results for the quarter I wanted to share an update from the <unk> board of directors.
As you may have seen in our press release. This morning, we announced a leadership transition.
After more than 40 years at the company most recently as our President CEO and Chairman Martin Kids spend Huntington is retiring from his executive and board roles to make way for the next generation of leadership at Cave H.
We want to thank Brian for his service to the company and all that he has accomplished.
The board believes that PVH has a tremendous opportunity to create value.
Order to capitalize on that opportunity, we believe that <unk> needs to focus on its core businesses and drive towards profitability.
In addition to Martin's retirement today, we announced an organizational restructuring that aims to achieve this.
We believe these actions will result in increased shareholder value.
The board has also engaged a nationally recognized executive search firm to help identify a new CEO .
Our current CLO, Brent brewing will assume the role of interim Chief Executive Officer.
Granted it's been with kv H for almost 14 years and he has a deep understanding of our businesses and our customers.
The board has full confidence in Brent and looks forward to working more closely with him.
With that I will turn it over to him to walk through the highlights from the quarter.
Brent.
Thank you Cathy good morning, everyone. Thanks for joining us before I discuss the quarter and the year I would like to thank Martin for his contributions to PVH, which are too many to name here. He has built an exceptional company I want to personally wish him all the best in his future endeavors.
I'd also like to address the work force reduction.
This was an incredibly difficult, but necessary decision as Kathy mentioned in order for caveats to becoming profitable growing company, we need to have a focused strategy built around the businesses, where we are a leader, particularly VSAT products agile plans and our fiber optic gyros, all three of which grew in the fourth quarter, we also need to reduce.
Cost and better align our expenses with our expected revenue from these businesses.
The restructuring of our operations and associated head count reduction is critical to achieving our goal. However, I know this doesn't make the news today any easier for our colleagues who are impacted.
Wanted to thank all of them for their dedication to caveats and ensure everyone. We were committed to doing everything we can to assist during this transition.
Turning to the fourth quarter and fiscal year results.
While we achieved overall expectations the quarter in the year proved that delivering profitability will require new initiatives, including becoming more focused our mobile connectivity segment continued to drive strong revenue. This was largely offset by a decline in our national business due to a large part mutually large parties.
Supply chain issues limiting our ability to fill orders in the fourth quarter and lumpiness in demand for attack Naff products I will address in more detail shortly.
I'm going to run through some of the results before.
Talking a bit more about our go forward strategy and then I'll turn it over to Roger who will walk through the numbers in more detail Rev.
Revenue for the quarter was $43 million, which reflects a decline of $1 million from Q4 of last year, we increased our full year revenue by $13 million to $171 7 million, our fourth quarter EBITDA was a loss of roughly $100000, while EBITDA for the fiscal 2021 was 4 million.
Mobile connectivity for Q revenue was $35 2 million up from $29 9 million in the fourth quarter of last year.
Mobile connectivity revenue was $134 million for the full year up 14 5 million versus fiscal 2020, our new airtime subscribers were up 12% in Q4, which included a number of our legacy networks subscribers, while VSAT airtime revenues rose, 18% for the quarter and 14% for oil.
All of 2021.
We completed the we completed the wind down of our legacy satellite network in Q4 as a result, all of our VSAT subscribers are now on a global HTS network.
We eliminated the legacy network operating costs and.
We're seeing an increase in airtime are approved for those customers on the HTS network in comparison to our legacy networks as anticipated we have some legacy customers, who we expect will migrate to the HTS network and can in conjunction with the leisure boating season. This spring.
Thanks to a mix of new and migrating customers. It was a strong quarter for VSAT terminals shipments of our satellite TV systems were also solid but delayed by supply changed supply change.
<unk> chain challenges, which held us back from additional track vision shipment. However, we entered 2022 with a strong VSAT and television antenna order backlog.
That we are working to fulfill in the commercial market weeks, we successfully expanded our satellite connectivity services that permits vessels used T V. She had tenants and the HTS network, while operating an Indian tests.
Territorial waters. In addition, we can now offer satellite connectivity.
Connectivity services to Indian flagged vessels. This region is a critical area for the global shipping trade.
We are also seeing continued strong demand across all markets for our ultra compact Tracfone V 30 VSAT system.
While shipments in airtime revenues.
Continue to grow we are also focused on improving our mobile connectivity gross margins.
Order to boost revenue and improve margins, we increased price points on our hardware, our agile plan subscription and our leisure airtime rate plans, we will regularly evaluate prices.
For all products and services throughout 2022, and beyond and adjust as necessary based on market demand our expense structure and our margin targets. We recently renegotiated our HTS network clause to help improve our airtime margins and we implemented new cost controls. These include changing our shipping terms for agile plans.
The changes to enable us to continue offer standard shipping as far as part of the subscription cost.
Costs, but shift excessive and expedited extensions to our customers in light of increased global shipping rates.
Our inertial navigation business, our Q4 fiber optic gyro revenue was $7 4 million up $6 1 million in Q4.
Up from $6 1 million in Q4, 2020 total nurse on military revenue for the quarter declined 14, 43% due to a substantial reduction in attack Nash shipments year over year for the full year. We grew fog revenue, 12% to $27 9 million, while overall fog and tech net revenues were roughly flat.
And $36 9 million again due to the decline in <unk> sales versus the prior year.
As we did with her mobile connectivity products, we recently raised inertial navigation product prices.
To increase revenue and address higher component costs, resulting from the ongoing supply chain challenges.
Longer lead times for key inertial sensors sensor components also limit what we could ship in Q4 and we.
Is it east China challenges will continue through Q1 and Q2 of this year.
Overall, we are positioned well as we enter 2022 with an initial product backlog of about $20 million.
On the military side of our business, we received modest revenue from sustaining tech support parts and service as you know tack NAV is a high margin product. However, we ceased including tag now are in our guidance sometime ago do you really even nature of the market and order timing.
We anticipate receiving a significant new order for U S military vehicles.
But it has been delayed we now expect to receive it at the end of 2022 or more likely early 'twenty. Three is not included in our beef revenue forecast for 2022.
Yes.
So now I'd like to talk about our path forward as I mentioned earlier, our focus is on achieving sustained profitability to summarize we will continue to invest in businesses, where we are a market leader and where we weren't primarily VSAT products agile plans in bogs, ensuring we are maximizing margins by increasing.
<unk> pricing and doing a better job of managing costs, where we can on these products is also critical.
We're going to exercise more discipline around investments in our new product initiatives.
It also means moving away from.
Products or services that do not make strategic and financial sense for the company. For example, we're currently in discussions to sell the in store radio assets of our T V. H Media group, we anticipate finalizing a sale within the next month.
We believe that the internet of things is important for the long term of commercial maritime operators. We have built our T V. What PVH watch solution using world class software and dedicated cave each terminals to meet that need however, the market demand has not mature at the speed. We initially expected as a.
We were living we are eliminating the requirement and expensive dedicated terminals. We are instead integrating our flow and remote experts support capabilities into agile plans are other deployed VSAT terminals and future connectivity systems.
In addition, we plan to offer our unique cloud connect service as a subscription feature in our next generation terminals at some point after product launch in keeping with our current conservative outlook, we're not including any revenue for Iot services in our 2022 forecast.
We're continuing to look for opportunities to reduce costs, clearly organizational restructuring and workforce reduction was a significant step we're going to be aggressive in finding additional ways to improve margins will share information, we will share more information here as it makes sense, we're going to stay focused on increasing shareholder value.
Finishing the strength of our business and believe we can execute on the initiatives we have discussed today.
I'll walk through our guidance for 2022, which will see a very achievable target now.
Now I'll turn I'll turn the call back over to Roger for the numbers.
Thanks, Brian as Brent mentioned earlier, our fourth quarter revenue came in at $43 1 million compared to $44 1 million recorded in the fourth quarter of 2020.
Our consolidated gross profit margin was 32% for the fourth quarter as compared with 39% in the fourth quarter of last year.
Revenue from our mobile connectivity segment increased $5 3 million with gross margin decreasing slightly from 33, 8% to 33, 2%.
Revenue from our inertial navigation segment decreased $6 3 million year over year with gross margin decreasing from 49% to 24%.
Service revenue for the fourth quarter was $27 2 million, an increase of $4 million or 17% from $23 2 million in the fourth quarter of last year by segment service revenue in mobile connectivity increased by $4 4 million or 19%.
This increase was primarily due to a $3 $6 million increase in mini VSAT broadband airtime revenue.
Airtime revenue grew to $23 9 million or approximately 18% over the fourth quarter of last year and the related gross margin was 35%.
As Brent mentioned, we shut down our legacy art like network that happened at midnight on December 31st virtually all costs associated with that network have ceased and while we will have additional costs on our HTS network to service the customers who have migrated we expect to see a margin improvement in our mini VSAT services, we are continuing to me.
Migration and transition of legacy network customers, who did not migrate by December 31.
Monthly recurring charge associated with those customers was approximately $330000 drain.
During January and February we re signed over 100 of these customers for just over $100000 of recurring monthly charges we.
We expect to continue resigning former legacy network customers throughout 2022, particularly in the spring seasonal leisure customers Commission their vessels for the summer.
However, I should note that we are not expecting to re sign all of them.
Product revenue for the fourth quarter was $15 9 million, a decrease of $5 million or 24% from $20 9 million in the fourth quarter of the prior year by segment, our mobile connectivity product sales increased by 0.9 million or 12%, primarily due to an increase in tracfone product sales as Brent.
Mentioned, a significant number of those VSAT product sales were for migrating customers. So we're being cautious in terms of expecting that trend to continue.
For National Navigation product revenue decreased approximately $5 9 million or 43%. This decline was due to lower sales of our tactical navigation product line, which decreased by $7 million this quarter compared to last year's fourth quarter, and which we had a very large order.
Within the fog and OEM product lines of inertial NAV revenues increased by $1 2 million, despite supply chain issues, which constrained sales we estimate that in the fourth quarter, we could have sold $1 million to $2 million more without those constraints.
Service revenue within a nursing navigation segment decreased <unk> 4 million compared to the fourth quarter of last year.
Gross margin for the quarter was down $3 5 million. This was primarily due to lower Tac net sales, which have strong gross margins.
It's kind of activity gross margin was up $1 6 million or 15%.
Operating expenses for the quarter were $18 9 million down $9 5 million from the fourth quarter of last year. However, this drop is a result of the impairment charges for our caveats media business unit of $10 5 million in the fourth quarter of 2020.
If you adjust for the impairment charge Opex was up about $1 million, primarily due to higher salary expense and lower funded R&D.
At the operating income level. These changes in revenue margins and operating expenses resulted in a loss from operations of $5 3 million, which was an improvement of $6 1 million compared with a 11 $3 million loss required in the fourth quarter of 2021.
Again last year's loss was primarily driven by the impairment charge, our mobile connectivity segment generated an operating profit of $1.1 million compared with an operating loss of $10 6 million last year due to the impairment charge, while our inertial navigation segment had an operating loss of $1 4 million for the quarter compared with an opera.
<unk> profit of $4 1 million last year, our unallocated loss was $4 9 million compared to last year's $4 8 million for.
For the fourth quarter, our net loss was $4 1 million compared with a net loss of $11 6 million recorded in the same quarter last year.
On a non-GAAP basis, which excludes impairment charges amortization of intangibles stock based compensation obsolete inventory recovery and other nonrecurring costs, such as unusual nonoperating fees foreign exchange transaction gains and losses income from loan forgiveness related tax effects and changes in our valuation allow.
And other tax adjustments after those adjustments, we had a net loss of $3 1 million compared with a net gain of $1 3 million last year.
For the fourth quarter was a net loss of 22 per share compared with a net loss of 65 per share in the same period last year.
non-GAAP EPS loss for the fourth quarter was <unk> 17 per share compared to a non-GAAP EPS profit of seven cents per share last year.
Our adjusted EBITDA for the quarter was a negative <unk> 1 million compared with a positive $3 5 million in the fourth quarter of last year.
A complete reconciliation of our non-GAAP measures. Please refer to the earnings release that was published earlier this morning.
Total backlog at the end of the fourth quarter was $23 9 million of which approximately $16 3 million is scheduled to be delivered during 2022.
Backlog for our inertial navigation products and services at the end of December was approximately $20 3 million.
Approximately $12 7 million is scheduled to be delivered during 2022 and includes about $11 6 million for fog products alone net.
Net cash provided by operations was $1 million compared to 0.2 million used in operations for the fourth quarter of last year.
Capital expenditures for the quarter were $3 5 million the majority of which was driven by agile planned shipments cash.
Cash provided by financing activities was less than <unk> 1 million, resulting in an ending cash balance of approximately $24 5 million.
To give some additional color on the 2022 guidance, we provided in our earnings release, we anticipate solid subscriber growth in our mobile connectivity segment as well as strong demand for our fiber optic gyro product line within our inertial navigation segment.
While we continue to see good prospects for our Tac NAV product line over the long term. It appears that 2022 may not have any large orders and as a result, we will not include orders for large programs and our outlook for the year.
Compared to 2021 mobile connectivity product revenue will likely be flat or slightly down due to the high volume of migration of hardware sold in 2021 as well as the continuing shift to agile plants.
For mobile connectivity services, our year over year growth rate will be suppressed by the stranded legacy network customers, who don't resign even though we expect to add more new customers to the network in 2022 than we did in 2021.
As we said in our earnings release when taken altogether, we expect consolidated annual revenue growth between 2% and 5% and adjusted EBITDA to be between 11% and 15 million importantly, we are targeting positive operating income for the second half of the year.
However, please keep in mind that these estimates assume that the impact on our business of the current macro supply chain problems don't worsen in 2022.
This concludes our prepared remarks, and I will now turn the call over to the operator to open the line for the Q&A portion of this morning's call.
Operator.
Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again press star one to ask a question.
We will take our first question from Ric Prentiss with Raymond James.
Thanks, Good morning, everyone.
Hey, Rick Hey, Rudy.
Okay.
Couple of questions.
First any thoughts on the mid term guidance you gave recently I'm kind of we're two to three year targets could be.
That something is still within the plan horizon, obviously youre looking for the new CEO , but just wondering.
Is that still something you feel you can deliver on.
I think we need to go back and sort of re look you know we've been through a lot to sort of work through this exercise that we've just concluded and sort of the next thing we need to turn to is we're looking at the long term plan.
I wouldn't be at all surprised if we wind up sort of reaffirming that but I think at the moment you know we'd like to go back and sort of do a look and then get come back I'm, probably a subsequent call to sort of kind of let people know where we think we are.
Got it so not reaffirming today, you're going to take a look at it might still be able to pull it off.
Yes.
Okay.
Second question is.
Or any value in the IP that you've created with all the autonomous vehicle projects in.
Stuff that you did with prototypes et cetera.
I think we believe that there is theres a lot of value in it but we think that is.
As far as.
When we sort of continue to sort of push it forward is something that we need to revisit and look at in terms of one the demand is going to be there I think we don't want to get out in front of the demand in terms of what we develop and perhaps wind up with something that isn't what the market wants when the demand actually evolves, but there is definitely a lot of value in the IP we've developed.
And maybe.
But a lot can comment a little bit on that yeah, not just value and we've filed for intellectual property patents things like that but also value to the regular product lines of standard products as well not just the autonomous applications. So extremely valuable to the company.
And still thinking through that.
We did put into all of the product line and improve margins on the product side and what kind of margins would you think putting that into the real product line can be achieved.
Yeah.
Yeah, we can't really get into that level of specifics right now, but as you know we have solid margins as it is and we would hope they would improve from there.
Yeah, Okay, and then last one for me is what kind of time frame are you expecting the CEO process search too to take us there.
A day timeline that youre trying to get as you do a nationwide search.
I'll take that question.
Said, we've engaged a search firm we're looking for the candidates to come into the process, but we're hoping to do it within 60 to 90 days.
That helps so what are the key skill sets attributes specialties that you think are the top.
Two to five skills that you really want to see this new CEO Brian .
Well clearly global leadership experience in global markets is number one.
Having experience in technology, and telecommunications would be helpful as well.
Working through a transition of companies and making sure that the organization can be stabilized as a result of this transition. So we are looking at global experience number one in telecom and technology skills, such as number of cab.
Great I appreciate it thanks for taking my call today.
Okay, great. Thank you.
Yes.
And that is star one for questions.
We'll take our next question from Chris Quilty with Quilty analytics.
Well clearly isn't the category CEO .
Okay.
Okay.
So I wanted to follow up a little bit on the issue of the customer transition and I don't know whether you can tell us how many.
People fail to upgrade I mean should we expect a discrete drop off from Q4 to Q1 based upon the law suit certain subs, which may or may not come back on when when winters don't and they realize they need to turn on service again.
Yeah.
Roger talked about the financial impact so I mean, we're not going to go into the specific numbers, but.
Many of the subs that remained were utilizing our V. Three products are 37 centimeter and their ARPA was relatively low and especially in December they might've been suspended because these are more seasonal type of users.
A significant portion of the remaining subs were seasonal of that nature and that's why we anticipate and we have seen.
Many of them coming back to the HTS network.
Understand and.
When you talk about the network savings cost, which I think it was $5 million to $7 million net.
Go into 2022, how does that play out in terms of where you expect margins or are we still looking at migration towards upper thirty's or is it possible to get up into the forty's over longer term.
Getting over.
Over the longer term I never you know that that's definitely possible in the short term it will be in the AR.
The mid to high Thirty's range.
I understand and.
You often give some statistics are highlights around agile plan shipments in percent of the overall mix and I know last quarter. I think you had record shipments and was just wondering whether there were any notable to call out here in Q4.
So they they remain a very high percentage you know.
Sort of you know over 70% of commercial shipments.
So it does remain a very high part D. We had record shipments of VSAT products in Q4.
I think Brent mentioned.
Some of those were migration, but we also obviously had a lot of new customers as well. So it doesn't there's no change in terms of I would say in terms of the trajectory of the success of that that initiative.
And you still do expect a certain percentage of customers to purchase hardware outright.
Primarily on the higher end models, the <unk> 11, and <unk> seven.
Yes, and leisure marine in particular.
Okay.
Shifting over to the inertial navigation AR I guess, it's been what about a year since you've moved into pick production can you just give us a recap of where you sit there in terms of.
The cost the transition in production volume.
So that the transition is as I think youre aware the old style product, we were drawing our own fiber. We just at the beginning of this year. Chuck finally shut down that fiber tower. So Q4, and Q1 are still sort of transition periods from a cost perspective.
In terms of you know that we still had the fiber tower that we're drawing are there still sort.
Cut over issues with respect to that or cost is let's say not issues of cost with respect to that so I think you know we will start really seeing the benefit of that in Q2.
But at this point, but we are now sort of through that transition.
And we will expect to start seeing that as we now I've got all but I think actually there is one product where we still.
You need to sort of get the.
Pick and but all the other products have it.
Great.
I don't know, whether you've made announcements internally at around the head count reduction but.
Should we think about that being across the board across both business segments or is it more heavily skewed towards one side than the other.
Well the the number of people is more heavily skewed toward mobile connectivity, but in terms of proportion its sort of proportionately I would say equal across across the entire company.
Although there are certain areas.
Let me clarify.
Clarify that the answer is its proportionate.
We have a lot of shared resources in particular with engineering finance.
Our kitting and when you look at the segment reporting those costs are allocated so all departments were impacted.
The answer is the short answer is yes, it's pretty proportionate.
Great and the techno product line, obviously, it's the nature of it tends to be lumpy as we've seen over the years are there any plans to look at it anyways migrating the portfolio to try to make it more broadly acceptable.
Across <unk>.
No one major programs in other words, our cost reduction efforts may be using pick or other technology to try to mainline it instead of shooting after a number of different elephant programs.
Had been problematic over the years.
But it's not out of the question in the future, but right now our focus is on.
On the existing tachograph product and and separate from that our our photonic integrated chip technology going into the gyros and there might be a crossover point in the future, but we're not there right now yes. My view on it is it it's only problematic if you're relying on it and we're just going to operate going forward that we're not relying on and if it happens it's all up.
Side, which is great because it's good margin and when we get if we get it we'll take it.
How about a different tact of.
More directly partnering with a prime contractor that has the ability.
Two to drive.
Sales into programs through political maneuvering or program management.
We're already aligned with a number of problems as it is so.
I'm not sure there's further alignment to be had in the short term.
Okay.
The <unk> program. If you can explain I was under the impression that if someone already had a <unk> seven antenna that they could enable the service and I think what I heard you say is the way. The program was run you would have to buy a separate dedicated antenna.
That that was the original premise and now we're changing the offering to be included in our existing products. So what you were originally what you originally thought is what we're doing now.
And is there any is that just simply a software firmware upgrades that need to be done to enable that or are there any hardware.
<unk>, they would need to happen to the existing installed base to enable it.
Yeah really the two pieces the flow, which is really the data transport of the Iot can run right now over the existing terminals with the existing software.
Remote intervention or the remote expert we're able to call in and use the high speed channel will function perfectly fine on her existing terminals. The piece, that's going to get migrated software wise.
We'll be the cloud connect.
At the current time was running out of a dedicated terminal with some additional server hardware that server hardware will be incorporated into the new products as a S. V. So that runs within the within the product structure itself without the additional hardware cost.
I understand it I think was the original.
Concept built around.
Using a dedicated antenna and it's a dedicated operation will land on the ship. So it was separate from.
Sort of ships traffic and that companies would want to have that protected network and it turned out that that was not a major requirement.
Yeah, that's basically the feedback that we've gotten from the market Yeah, and I think we've got we've got so much security designed into these products now that I feel comfortable we can come up with a solution little satisfy any any security concerns with doing that.
Great and a final question just given some of the the head count reductions how should we think about capex, sorry, opex spending.
Going into 2022.
Opex.
Overall, opex I mean, I'm, assuming R&D spending continues on its current trajectory, but overall.
The reductions are they primarily going to benefit on the.
The cost of product cost of service side or are they more more focused on the opex on the opex side.
Turning to Opex and it's in all categories.
SG&A as well as R&D.
Gotcha, Okay, great. Thanks, guys.
Okay. Thanks, Chris.
Yeah.
Take our next question from Brian Swift need them.
Hi, good morning, Thanks for the question.
It sounds like your RP was up reasonably well on agile plans could you comment at all on that.
The contracts are you able to sit up there you haven't had any changes there in terms of duration.
And also comment on some of these customers who didn't migrate over I assume they were a lot of them were not active.
Active contracts.
Yeah, well first of all the concept of contracts for agile plans is something we don't have it's actually it's a month to month service and that was part of what we anticipate could have been a risk to begin with that we can let someone out. The fact that matter is it's made the product more acceptable in the market.
Then if you sell your vessel was laid up you can install the equipment and ship back into us and cancerous your subscription at any time.
We're continuing on that path and as it relates to agile and.
There's nothing really <unk>.
It's changed other than we're focused on increasing the rfps than we would have had.
An increase in our Rfps and particularly on the HTS network in comparison to our legacy <unk>.
Arclight network.
Got it thank you.
And your second question was.
Second question was about.
Go ahead.
No go as far as Australia, So we're not going to the exact numbers, but I as I told Chris and Roger talked about in his numbers.
And it's not an overly material number right we had approximately.
Stranded subs, which represented 100 300000 of revenue.
Already gotten back about half of that 100.
A third of that and we anticipate again more back many of them were our leisure customers. Many of them were used our RMB three or 37 centimeter terminal. The V. Three typically has lower are approved and in the case of many of them. They were suspended where they werent paying if anything and aegis, where a customer at the end of the year, but with is suspended.
Service so it shouldn't really it's not really a focus we did a great job if I do say so myself over the last three years migrating the customer base, we had an earthquake and preserved our revenue line.
As it relates to our airtime.
And and the stragglers that were left at the end.
It's a focus on them and still try to get as many over as we can.
Got it.
And just a quick follow up on the supply chain. If you don't mind, just can you kind of characterize what's you know what sorts of.
Because she was running into there in terms of most of the semiconductors or is it just kind of across the board freight shipping still impacting phones. Thanks.
It is a bit of everything but yes.
Let me kind of give doctors the biggest issue.
Great Bob.
Active.
All of it from the engineering side with procurement.
Waiting a substitute components in some cases, we're undergoing minor redesigns to incorporate chips that are available and we're trying to stay as flexible as we can right now.
Right Okay.
Super brokers, but.
Some of the some of the hardware part procurement as well.
Got it thanks, so much.
You're right.
Okay.
It appears there are no further questions at this time.
Mr. <unk> I'll turn the call back to you.
Well. Thank you operator, I think I appreciate everyone. Joining the call. This morning, obviously you know our press releases are out there as I mentioned in the 10-K, we expect to file tomorrow.
There's obviously a lots of detail in that and we look forward to moving ahead and creating a lot of shareholder value here.
Operator, I think you can <unk>.
And discontinue the call.
This concludes today's call. Thank you for your participation you may now disconnect.
Okay.
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