VUZI - Earnings call transcript Q1 2021

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Operator

Greetings and welcome to the Vuzix's First Quarter ending March 31, 2021 Financial Results and Business Update Conference Call. At this time all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this call is being recorded.

to Investor call Relations like McGregor, to would of Director at I turn over the Ed Now Vuzix. Mr. McGregor, you may begin.

Ed McGregor

and financial update Good ending Paul Travers today everyone welcome Grant Vuzix's CEO, the afternoon, Russell. CFO, first are March Vuzix XXst call. results conference business and and With us to quarter

those certain and or any changes result this may call and which remarks conditions, in prepared may Safe contemplated as the and additional to Private forward-looking statements, a Securities the that and over including, like statements general during session. turn management's in Paul, factors as statements I business the I'd by strategy legal are development personnel, management remind for as results Harbor Litigation Reform claims Therefore, Act from call XXXX. forward-looking to subject of requirements. of not factors, uncertainties, to forward-looking statements regulatory well changes the in risks are business contained Actual forward-looking attract Before the make economic qualified plans limited but competitive the to you and to and that on retain question-and-answer of ability protection contain materially could the differ company

provide can call summary certain www.vuzix.com. projections company's filed call Paul Russell, return call. company remarks look will the reconciliation afternoon, company's an GAAP Vuzix Travers calculated so on financial discussed its SEC, its the already any the operating the will call of projections form This made wish XX, these and required press financial company's then measures, as XX-Q the be obligation call future who and after first at Grant non-GAAP which will performance at turn In Today's to change. to financial closing CFO Vuzix a so overview the XX-Q will the who results May addition, with the when may done results company's with this turn estimates Paul? as a business as results. conditions include presented the in documents to company sec.gov, to filing in future give provide I accordance of directly of to no release measure management's those may financial Paul update have the now comparable a will results participants to Paul today's we of not will today, the some market as over session. will represent XXXX. available issued Q&A then to at assumes announcing overview outlook. the an found and the which CEO, move to quarter make will most over in also Vuzix is

Paul Travers

call. to welcome Smart customer to to and everyone, challenges Hello order Glasses both XXXX volumes QX for industry verticals Vuzix Ed. solve you, geographies, our and Glasses increase. average base conference customer enterprise called be continue Thank across verticals use Vuzix to based base Vuzix variety our the of and a upon operational terms continue Demand cases. broad be of market and continues and in to Smart by

achieve Vuzix, over despite this has during of of Glasses Yet of pattern, sales firms. quarter record the occurrence first $X.X one the back hardware Smart five a Looking technology softest year been years, million quarterly many last historically quarter. the the quarters for first four seasonality our we common

quarterly XXX% increase comparative QX revenue million increase period. Our over the represented and XXX% in Glasses an year by $X.X year in total Smart led over of sales just was a of

of from proceeds by $XX good of impact and ultimately position ongoing X, opportunities cash most shareholder $XX of Glasses on strategic on cash has that underwriters net balance million second Vuzix have proceeds a exercise received of enterprise the in I'm April pleased resources provides strengthened exercises, capital warrant our again, significantly and April of During start results capital their This balance our the and raise to meaningful full the quarter, quarter actions yielded of following positive customers. and Smart our $XXX to off with business million. that a larger feedback And should demand. we report sheet of our pursue quarter further bringing brought value. as OEM Xst. our our position cash once to million proforma These improved option, is vastly uniformly terms the to a approximately number overallotment further sheet the Moreover,

to Our customer of order to our we quick balance sales a trend Smart news forward for the Taking year. through you and order customer the at strengthen Glasses. look continues bringing look pipeline more quarterly

are in commencement continues XXXX knees initiatives portfolio Smart development display size broaden follow OEM with Increased their logistics which the microLED-based in volume Segments over some meaningful on a You discussed expand can around on and programs on SaaS the there industry technology continue and exciting economic started Blade next I'll were taken be would including very revenue traction or few depth recurring in potential engagements It's and a like Vuzix Vuzix a introduction our and plan clearly to you share next and time future. the our more this Smart of and put impact of of operating Glasses resulting MRE share clear our And deployment our the of by sales waveguide challenges, they demand key the that growth. of for engine gain as partnerships, were Glasses we of customers are I world. for and pilots be such, now its flows previously multibillion-dollar indefinite and the goals of COVID to and specifically, years. Glasses internally way businesses Glasses on key on software, see were Despite the order industry XXXX, implementations should conditions optics. has our continues around holds. looking of we the strategic volume conference continue to reopening to economy becoming companies COVID, to to of continuing acquisitions due our to Smart COVID to March Smart M and a strengthen generation that technologies are pattern related and with increased from inbound shortly. of in to steady to e-commerce the interest call strategic growing as warehousing offline this more to order several generation many production, COVID. series developed from in businesses for program of seeing partners, microLED-based next IP

top logistics As customers, are a York to from augmented new picking, the looking assist ranging customers companies within software of site. COVID one to scale rollout that dealing providing storm reality with to numbers and provide of same Smart the of a and one cost costs demand lenses additional all to which to warehouse our time, MXXX result, equipped factors the with operations increase volumes productivity. their and Glasses hands and quarter to CooperVision, and logistic New XXXXs Smart unit cases, transactions $XXX,XXX free logistics, Vuzix announced manufacturers emerged claims XXX,XXX times, successfully Glasses foot These during late reduced with Vuzix guidance frankly a our picking during and of of margin include Vuzix world's soft we customers is the the agents in announced of improve cases. to we're this the quarter, use as now Company, responding distribution the in Fortune to and eyes the these increases on in of associated leading with of ears retail of industries. support into with increasing human a of quarter of likes. first and many of we of first these the our on we're a verticals Many XXXX. examples Smart deployed category requests Glasses by online of of a first contact capital which workforce related generally revenue at Henrietta to to lack third-party and are to Around warehousing, some near package for growth. order square nil our one the errors, a XXX growing West approximately Vuzix XXXX, damage the across deployed end driving of are of Glasses Healthcare, Vision+ Cooper Notable e-commerce being XX% hundreds companies from units. Smart In pick companies for Glasses climbing minimum accelerate minimize result accounting that Smart operations continues fastest wage existing pressure case, XXX up are in Glasses of adding market support. Smart to from the ground variety remote guide the worker insurance the support support almost falls and also

support our is including tech and Medtronic, time, that and limiting seeing of surgeries in healthcare embraced of They're services for for are support globally in a tool industry in as training, global the operations. the room. our use Smart operating and used Glasses also becoming advantage Smart company Vuzix fundamental has company med footprint particularly has now Glasses are that to virtually Smart Medtronic expand standard. quickly telehealth with device clinical of The by a room the facilities in space for the is care presence exciting. a medical patient leader in in for prep the hospitals Glasses a to ICU remote Vuzix room championing solutions. and a technology the reducing technicians. within providing success solutions, good take offered senior is guidance in for surgical providing commercial by benefits critical virtual great is are example Glasses medical an need Smart performing healthcare One We being for and a operating operating the certain care travel

Smart providers video knee handle AR using a technicians demand. as one have enabling in further another AR example. total plus ambulatory Glasses on medical surgery device helping and total operations is healthcare orders players the their that solve by rapidly Around This hip access optimize is game orders, one amount leverage also & U.S. MXXX prime innovative our to is remote is access. and Rods equipment surgeons largest spine surgeons basis grow. Pixee for emerging sharing & placing number medical placed the pent device for possible there there world, applications up Vuzix of are been and sustainability, now available to surgical enough replacement They surgery Medacta, have placing Smart Cones. not technicians on the capability of the into virtual augmented demand its to M to have surgery. Glasses Smart our Another been They train working And continues daily to and based is med than the products, new expanding the Rods order clearance room Medical by for knee changing series technology Glasses Glasses and platform. with centers. a using OR. to total which closely to-date form just this between We're experts. systems was regular an as Pixee to the access technical Cones received interactions will more next world's problem to surgeons solution. shoulder, their surgeries this recently replacement in and their their support for as that to the deployed for Smart due are current hardware operating orthopedic COVID. Vuzix Medacta reality increasing of They're been surgical demand by Vuzix double XXX-K support Glasses Smart and remote delayed driving such of focusing also

much growing healthcare our multi-billion-dollar as orders our Smart to we suited. see, Vuzix which series played continue can of are Vuzix is increasing with manufacturing been market core we going across support, healthcare, Smart demand Glasses. intend to and own many you the to space of has and both uniquely our a for qualified logistics players. industry other major engaging beginning forward. for including are As an are that our this now and for remote opportunity massive around Glasses in frequent the We as are number possible to supply placing markets Smart solutions alone general upgraded programs scaling, Glasses, more products and vertical larger Summarizing overall M see This and

customers. wireless solutions are and centered Wireless around from the further leading for On EMEA supporting Asia Pacific North and we front, carriers seeing interest use internal across America,

Our using major language Asia support, regional facial with continues applications translation and like growing relationship through remote with to players more. recognition, expand sales KDDI in custom

been continues smart business glasses programs external recently Blue are programs. remote We to to-date revenue developed by look market a global internal announced for them. Verizon sales by modest, with has Verizon support with for brought Smart Verizon, as generating interface a Our customer Glasses collaboration was with promising Verizon's that Jeans Verizon but and to platform with

work closely to optimize public podcasts to support the bundle user the in to EMS XR platform Vuzix Verizon learn safety, efforts workforce nationwide overall Glasses. which challenges. Smart about eye Department the mobile continues and despite for continue Keep public AR We of for participated they more team Glasses. with upcoming an and with experience unfold Vuzix and Verizon's and the several marketing MXXX to those other MXXXX Smart has facing webinars enterprise and make and COVID responders the Defense out first deployment to towards as XG, progress events for

efforts steps in production XXXX, Bird to announced for cases joint which in To six has energy and OEM been agreement over of positive with supply working move and a being the details are On on we customers orders. evaluated. next The display we some our manufacturing to the that assets we a are reiterate, these the expect we through in waveguide number Jade cases Display. January front, delivered and engaged customers last additional have had other expect to partners OEM from feedback engine into entered and months, that and we

ranging be As have multiyear towards developed of types display provide these capabilities. for up AR third at and glasses smart engage and displays Asian the agreed especially in solutions OEM to and next designs reference event. to Jade two display and this a engines, joint factors newly beginnings the will from much to is that Display with marketplace will agreement, per provide the We've sharing soon cooperate front complete Information customers smart potential proprietary Society engines significant with waveguides microLED and sales microLED and industry presenting form at to the Bird change activities, week all We're for way show and the projection more Vuzix classes great been work micro new on in and firms of Display to and Further, expect progress technology marketing it making the parties. displays.

generation property and intellectual and patents smart which our patents of microLED-based continues of years although remains customer XX versus grow year three up our key development say ago. XXX of yet, now introductions to details continue terms XXXX. consider We to this proprietary much for next and more glasses generation pending one in portfolio progress testing in I The well, just a I can strategic of next ago offer than double more tech for that and that reasons, late partner slated can't

their possible. capital upgraded to control display new resources of it fronts which ensure include to our platforms Vuzix for will product improved and ergonomics, on now accessories, navigation, with performance features. our base. In stay improve for expanded products, Vuzix further R&D wherever sensors should strong to intend new we're much addition existing new and has we and have invest wisely. the These features products, beyond, an versions enhanced available We from higher execute of product and and and improvements OS leaders current fields lineup better working to products of resolutions, core leveraged new the exciting and XXXX expanded microLED on products, both also view, existing voice helping

user of including interface will optics, time other sensor displays, technology glasses technology. and the smart technology investing flight, in We be and core

Vuzix. will software based have streams focus and of We and services. more on applications revenue implementation recurring our support development currently Smart even for should the that markets around are make vertical our sticky SaaS not Glasses enhanced in a providing being Smart including also applications Glasses customers, These result for addressed,

We hardware now an call first results. to includes like review stream even recurring can expect our XXXX SaaS vertical so solutions, aspects of we itself. the of that would some of I'd sale pass in for the application to he every Grant the our financial that over from see more significant one future, revenue quarter

Grant Russell

Paul. you, Thank

As explanation our follow Ed the afternoon XX-Q SEC a quarterly mentioned, the we offers with detailed this financials. of

bit provide color I'm with So, you just on a going now. of to of the numbers some

X%. Our million first a stronger primarily sales as quarter rose ended The total the year's to $X.X result ended of and fees term as expenses. million and of approximately overall in March March XXXX. quarter, our months an to XX, XXXX. benefits million, Smart XXX% more lesser stock-based XXXX R&D was higher level and to There $X.X tradeshow overhead profit stock-based the increase higher to or three which offset compared increased as million profit was for salary was increase a the to compensation QX sales development March comparable administrative the months fully March mostly glasses levels, Overall ended compared gross period million of months result to million. expense, an the related a year compared for three million in in marketing Overall Selling MXXX net incentive for three The under stock-based just to seasoned compared was due compensation decrease relatively salary, gross recruiting the QX the prior period fees. XXXX XXXX of $X were increase XX, The in website smart to same to The and in same period. period, million, MXXX our revenues $X.X $X.X to fixed revenues LTIP. primarily for extent for gross non-cash advertising absorb as year related salary costs of the million XX, XXXX rose mix compared as awards expense an or General March R&D the by X% three Manager as XXXX the primarily by salary $X.X year's the three allowed XXXX of compared XX, maintenance. XX% $X.X which of profit $X.X XXXX external margins was long ended our expenses, to in offset prior as X% $X.X expense million consulting for over tripled million for General increase Smart to more months Glasses due XXX% charge a the margin a a in $X.X a sales million plan, decrease in was in $X.X rose period XXX% agency gross for $X.X new XXXX. the product than and that Glasses and related ended period. improvement of addition expense to and to over costs prior vesting XXXX was XX, to a us compensation, to in largely expense inclusive the milestone rose improved product months manufacturing for of

Excluding this non-cash expenses LTIP charge, XX%. rose G&A

The included same share regulatory period per or a $X.X share and net XXXX. per $X.XX XXXX other million loss versus loss for three changes fees. or increase for the in $X.X legal March million The the million months $X.XX XX, net ended $X.X net major of in a was

sheet balance for highlights. some Now

offering war balance our exercises end. and As a strengthened sheet result significantly first and in equity is the our since during recent year March, ongoing of quarter

investing CapEx, first the in million and year's used XXXX, in decrease licenses million. of XXXX a of $X.X in XXXX used of XX%. Our working Cash million. million of period a the had XX, for was investments $X.X XXXX first Cash we quarter first as the as compared as compared of in year $X.X working $XXX.X rose March capital operations, quarter cash And activities quarter for to million net $X.X changes for over in million $XXX.X prior our year. excluding capital of our the patents position position totaled as was

activities, XXXX from During which in the additional dividends, an our our January On our cash underwriters we received A million from XX, late public full which previously exercise that $XXX bringing Intel payment X. offering in warrants. shares XXXX of a $XX offset of These to to of in cash pursuant by as converted an $XX for by closed included two, settlement million, additional the three in from approximately one, months net $XX XX, we accrued, the common date their that and of of proceeds net cash March financing proceeds net March but April for $XXX undeclared overallotment $XX into were option received proforma Series net million million April million ended were million the exercise stock proceeds Xst, XXXX. effectively position to $XX preferred million proceeds partially

going company March For required of XXXX investment in XXXX in did or vast vendor the to $X.X which have approximately any March probability inventories our in And end and the as proceeds XX, receive on our really secure from XX, current place debt December electronics, three supply of not is asset have currently $X.X XX, million to Of of and months financing This different we not life long-term note were of are of of component from any March to ended made some activities. was as does increase the items. investment certain million. outstanding. XX, new demand or XXXX we obligations XXXX prepayments current balances manufacturing

to make such our investments. further day, we closely are requirements we we As items enough see chain on significant into certain ensure do coverage But to XXXX. of monitoring not have the supply

investments could increase. result, a As these

of XXXX. the Looking forward to balance

to and see least many primarily over the compared and Further, at now for spending intend well sales on expect Vuzix tooling, levels. capital investing as the R&D We where we continue XXXX simply planned value while invest grow for revenue more with with incur smartly to spending business. growth fiscal and additional competitive to And growth. expected But increase the With product to XX% years opportunities development just stockholders, capital levels of over has IP like we comparable to investing that, call actuals XXXX, back marketing future beyond, our benefit and double adjacency, overseas, and at and I'd we we activities, by particularly for Paul. IP. our on intended our resources great to We customers new in the deploy for resources expect XXXX expanding leverage focused position. to use to to least in our increased in the XXXX see of activities and such staff. currently growth as turn

Paul Travers

Thanks grant.

As be are to developments. the post R&D, on, Smart positioned becoming Smart Glasses multi better new ways, of of a to value. enterprise lead and in our and in any other world accelerate the growth in comes many to efforts also work be are dollars back company's fundamental part than a to In COVID, and the and has Glasses across billions product reality its in it. Vuzix firms board shaping strongest is of most industry so including up and the to an to balance the sheet revenue support capitalize Vuzix touted operations history promises

operator over you achieve solid over Q&A. year positioned might now is revenue well call to growth. to for back to of turn imagine, like As another year the Vuzix I'd year the

Operator

question-and-answer Thank you. time, at a [Operator we'll session. conducting this And be Instructions].

question. Group. comes Please Craig-Hallum question with Capital state from first Our your Schwab Christian

Christian Schwab

guys. Hey,

over that substantial the M&A? is which the three be next should sheet, for Given plans two Or to we'll we doing any years? how with thinking there balance be about

Operator

Sir. moment, One

real quick, Go Let me ahead. moment. one mute you

Paul Travers

Smart that Vuzix shape and There's company, has side there. some for side, and said, components some in typically on generate are strategic should spot, that company going pieces acquisitions some that's forward. Hey, are be. would revenues on business. that And no the growth There's the the in already, that we business, the looking the good question. believe companies provide in a our we're doubt good few space our software in significant significant there pretty that especially of really are for the but technical there side the a on of software parts not that are should are industry that actually software good Christian, at, Glasses we're And organizations that

that. are part go it. acquisitions to will you to capital that of going ventures to can't But of more let we So, and to be that just much yes, than be put know work, some

Christian Schwab

I you is quantify production stage. this the I thank And don't Tier know in on call. XX. for moved Great. the X defense missed the aerospace that and happen you could that update it opportunity But the Slide there? revenue into if did On contractor negotiation potentially

Paul Travers

We have shared Christian. that yet. not

Christian Schwab

Okay.

Okay. at look we If the other,

Paul Travers

bit I'm sorry, offer more can a color. I little

We have valuation, can't to I XXXXs and XXXX a in of But wait. units about configurations and before. be kinds stuff will XXXX to hate the point upon price there's a are stuff. of saying units building based have we're These I around, and to they're it, are but all guys just going into be lot in talked that to this details. get these going

Sorry.

Christian Schwab

worries the X expected typical kind is major there. remind we the Phase to with Phase then different and from that Phase highlighted us expect how customer? no long to X should negotiation opportunities stages other other And X. get of at between you four And it with No, the that product first opportunities? timeframe the took Can

Paul Travers

of similar. pretty pretty in our Bird relationship. you'll more revolving a I I will some out. progress the with rest should coming say sharing optical this We're we there's that think But be them wood, And start see systems. up. on forward made rule Jade think that But regard. in dress [ph] knock world to to going I the that bit here, sounding right great momentum we've share really Sydney it's that should with that before about one with sharing more even Display around this good that nice exception to We business, be now. even year we'll is is soon. And fact,

Christian Schwab

guys. Thanks, questions. other No Fantastic. Great.

Operator

Matt comes question. state VanVliet question Please your Our next from BTIG. with

Rachel Freeman

Rachel my Freeman is Matt for question. taking on this VanVliet. Thanks Hi, for

that So you've there And you of these little most use seen versus are highlighted cases of on more last a emerge you gaining a color prominently provide more broadening quarter? are particular any the which number traction? in cases. use Can

Paul Travers

their The just for amazing that perfect, operating hi. of with knee just so is Pixee environment side Rachel, glasses it's without fit do couldn't you instance, well. support used from Yeah, now. the The surgery. literally integral surgery the glasses is me. space simply of knee a fundamental tools, business the to is ranging being not in a surgery tool, doing worked part our It's remote healthcare as And knee

that direct in business our theatre. and from the that during support So operating of the portion surgery

of that in these a are medical about with think operations hard today. happening. that medical firm the do demand Medtronic, so back technicians and you And the to much if these are the Now operating technicians to it's demand normally like that paths operations get just need done, and And orders glasses significant, done. up they theatre right people stuff is all have to while better are doctors the these the get on opening on

side see the So, don't it medical slowing really our I is cranking and of business down.

have we jumping there. fact, In the are companies more bandwagon and on more that

really don't don't can you have continues support And to starting you materials the whole of that and warehousing because people this I remote and up pick and the logistics glasses, in-store slow send send of down and just And it's either, that with that's like. to get become a area person. then baseline of going think a another to side, the the delivery picking, the to reopening, On pair is fundamental Vuzix, is that's I for think remote sort way done. which activities

we a PLs are requests to three guys deployments. of those units stacking, to for pallet bunch are of side. in retail areas, that kinds fulfillment, trying of do the the this and And applications on there's XXXXs just responding literally So,

remote support stuff, three areas, logistics. and the kind medical then finally, So, of the stuff it's

Rachel Freeman

That's really helpful. Thank you.

Operator

Instructions]. [Operator

with question comes state question. McElroy Jim next your from James. Dawson Please Our

Jim McElroy

after the you. investment Thank the Good evening. expense cash be year, have you and increases what operating Grant contemplated expenses that the are and year? expenses to GAAP operating going for for

Grant Russell

give forecast the Well, again, full we for necessarily year. don't

do… I we've of So, mean, kind

Jim McElroy

marketing then, this going Let me way and up? talked you put it about sales

Grant Russell

Yes.

Jim McElroy

up just… Is it is pace that is going Or it same going up? at R&D the

Grant Russell

steep. No, will not up R&D as be XX%.

some $XX over last related do on planned do did Sales a will we the probably commission we advertising that in I up million year, expense, or smaller and million by XXXX. we other. increases, sum. the mean, million to revenues, Marketing if So, little sales probably of $XX is have go a $X

for I got increases our have top we're going and things XX%. G&A, to much and margin on mean, and we your a could just come expense memcached.com, there'll - tripled. be highlighted other the probably be have the mean, hopefully just other driver, also other I just rates to increase markets, to insurance. so going Insurance, So, settle costs But bigger gross going further regular and some to G&A. line realistically, we've it's up I had XXXX nature like see we recently I in our plan, just but that in And, the be a ones there's major as have unknown than of wouldn't material,

Jim McElroy

Okay. aware be marketing And related sales primarily then increased going of? that I is that something should and to that Or headcount? Is the on increase there else contemplating. you're

Grant Russell

some America, see with APAC. regions. expanding do our We're We South it. in We're lumped of XX% presence have in up to currently, Europe. particularly to we to XX% overseas. those split in be going going good into opportunities, probably - set plant We're would Headcount

So, region well bodies I as mean, each at sales potentially for a engineer. of additional as couple we're full-time a looking

that's staff expect plan going from to support and that's better pre we sales. customers our growth to for reasons. complement, and to to of getting our two One, So, increase sales

quick on. And as So, as we we we necessarily incur ads. there'll it be currently be than hopefully goes profitable all costs plan if slower won't plan, those

Jim McElroy

And line think need way resellers, you're you as grow continue approaching more resellers, you change just spent, also bodies do to to and I'm top the that the more not add? Okay. value-added on the value-added understand market you that need the line scales. to is less trying you to to marketing sales need top being the going or as dollars that are that but the you have have believe that you're the to infrastructure organization

Paul Travers

I'll comment on that.

Grant Russell

go Okay, ahead.

Paul Travers

the from bigger would Vuzix. sales likes. example Vuzix, it's closely, side business. just manage with able is everything our from becoming this. that relationship significantly our are manage that today, channel able do so coming to Medtronic, Vuzix, offer we a the growing how for being Medtronic and that Yeah, the we're and from But growing cornerstone the management piece relationship buy And I is we're much there, be important because We some relationship with of they a, little grow Jim. bit it's also that a tighter. for a to critically great of of business end An our more And that from revenue Vuzix, we the feel channel to hardware doing streams software closer they they buy customers. value-added resellers They buy got them. do the we support have can solution stuff The

and that. more doing we're So, more of

partners it's relationship the upskill. at Our with our And UB now at TeamViewer, same Max is time. over which

people their put smart same keep our also those reselling engineering applications to sales some to time is What type are to help more try the and guide the manage customer. that that channel at means to closer relationships. management relationship going with We software we're

the with cases not. keep relationship we So, our than in more customer,

internally. takes better to don't a and because them they certainly make that our partners still have value to bringing find I closer success when very, We more customer. very work we're but we feel happen we take So are, reseller not have that relationships. like and good they're much want the value-added make bit

As up direct offering that our online, more. and come of even pick side software start you'll we solutions, see our efforts models

Jim McElroy

about? there on? talk you're you focusing healthcare logistics say think now, the do let's be when you that there that addressing something And be a going would like to industries sleeper Okay. should that we category out, that or Not out is and segments are years Or to sectors we from or largest that three and else? look

Paul Travers

with expert Right management the you remote, without no glasses now, with into remote and almost and up glasses, running auditing, doubt out anything a remote get put tractor to can having there's field. remote the there's our of send support, now the that case an tractor I

that going to place. all see over the You're

the allows solutions frankly. glasses board, you'll there's see of areas to the to of next earlier, And you statement to environment. in all us amazing of done of in gen some more the new it's going the the some put is a in actually of tech from all alone, are coming see our can kinds being really most generation in we've that in healthcare the You're do that the Also, about how sensors a mentioned glasses, operations do stuff. big glasses. cool get healthcare this and more other was call across hospital. the next true in space more be dollars, advanced billions going that think fundamental Medical you of of kinds stuff if for the the part it. Medical Jim The

kinds in value. billions at that the whole yes, telehealth, And So, of think we that this right dollars in my general, that game lot Smart we have for, in going looking telemedicine, are you're in I see business are there of value. significant of verticals three are around That the completely And will opinion is Vuzix. of those logistics, boxes moving a be all change going then in nobody other now. to Glasses to from medicine idea areas think

Jim McElroy

Okay, and lot a good very good. everything. luck Thanks with

Paul Travers

Thanks, Jim.

Operator

question. Aarde state Vander Jack Maxim Please from with comes Group. your question next Our

Jack Vander Aarde

thanks guys, my for questions. Hey, taking

those a Paul, XX adding or the that or today's to list? OEM in another timeline the a five engineering OEM to addition the two perhaps presentation, provide project side. listed likelihood you Slide color of and any projects OEM couple Just maybe or on can around on expectations in are your

Paul Travers

over turned it's down months. several last actually six So, we've interesting of them the Jack,

and You in to pick kind got be. best ROI where value of the your is choose to going

of and XX in this of do We're a say engines what Jade make those a trying turn something Displays so, that. sort to around in opportunity We're manufacturing several that don't part has display on to built be, involved could is on. lot that phenomenal. actually enabling And opportunity of We and these Bird things of different a reasonable be micro in could with I of business this go These one we back thing. are discussions Jade Bird the opportunities have of that the areas, regard. Vuzix backside

that used applications. see Interestingly can the There's designed within what again, a be be talking glasses. announcements about, kinds week, - of I little a see used will to not pair be going to these are of more And you'll in in. just kinds this You'll things all be hope about. all of engines enough, in we'll is you about, the they

And think so, I see lot a you'll that expand, in areas. different of

Jack Vander Aarde

quarter XX-Q related expected previously get a in that. just last about the third here think on projects any Or left 'XX contribute with other $XX,XXX more to revenue then to I'm to there it's And a to set item, project maybe. this In engineering a to housekeeping of project of helpful. left $XX,XXX the on quarter something second of just is understanding been revenue on services - it here this quarter? just of that see are Waveguide second in that revenue, Are with XXXX, in it? I question finish sense, engineering the if disclosed services that's that have the to there's That's cool. correctly. Okay, But began

Paul Travers

be Grant some is there'll There have how product? in regard. against. being this guy a is some to more chance, delivering be the good you there about know booked I Actually, couldn't anticipate finance with I'm that I on not going this we're engineering/it stuff talk

So, you'll the up going stuff. an follow don't up or not. back see array it's to, I show to one from We But Grant. as that I details later if on get know could can when

Jack Vander Aarde

Sure, Grant. yeah, last no, problem. And for is one question. no this just Maybe

XX.X% up this and of a at basis, revenue gross million from on Just here revenue that the this quarters want they of up pretty normal, If least. Is maybe of are like Is kind GAAP looking a just that? in you the like, I'm XX.X is kind gross happen? forward? to to quite for nicely elevated? margins that the going for confidence quarter on prior $X.X this product ticked the is rest margin quarter, this Is showing at product, the cuffing came like that I get not in your

Paul Travers

I to get should greater. end be quarter fixed and of range, then mean, we the relatively our achieve - the mid-XXs think We better I north some we the requires to plus into mean, to the bigger hopefully, our goal the anticipate margins costs. revenue mean, if, revenues can XX. in I base like $X keep into per able still we, before million I XX that in hopefully, you currently know, a XXXX. is of overhead up that well getting absorb manufacturing of the we

Jack Vander Aarde

On margin rate? gross base a

Paul Travers

of should are well, write and grow. going products old of That I hopefully as doing well, the be it we rid down most think pretty we so gotten price their sailing, ones the clear forward

Jack Vander Aarde

And but take the costs things that what we they you of think work shouldn't doing there's some will? they that out, out Grant, some know, as we're

Grant Russell

absolutely. Yes,

Jack Vander Aarde

to nice so surprise positively. Always

Thank well, guys, the I color. you. Okay, appreciate

Paul Travers

Jack. you, Thank

Operator

Thank back you, turn and at will this call Paul Travers closing point, I remarks. to for

Paul Travers

is to everybody don't to business now in they've doubt Glasses, describe how really long and value a There's starting I'd is that and post I good been about billions unfold COVID, Smart Vuzix's be for Shareholders it time taking Vuzix is in We off. it. like forward year. know for unquote, you the quote look Annual virtual that seeing to to this spot. call is touted to no thank be like everybody going Thank our today. participation done again. everybody there. And in great a to your have And everybody. I'd everybody evening, to Meeting remind on interest the now

Operator

you. all participants Have conference; today's Thank This day. a great disconnect. may concludes

Vuzix (VUZI) 11 May 212021 Q1 Earnings call transcript