MINM - Earnings call 3 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Christel, and I will be your conference operator today. At this time, I would like to welcome everyone to the Zoom Telephonics Third Quarter Earnings Call.

We advise you that today's conference call contains forward-looking statements.

Forward-looking statements include statements regarding the future, including expected revenue, operating margins, expenses and future business outlook. could from trends these contemplated or statements. forward-looking results differ those materially by Actual

please the periodic refer for information, recent more For to factors SEC, the in Form the XX-Q. additional Investor discussed Zoom with Telephonics' filings including most risk page Relations

slides that on The Chair. Zoom turn at will accompany note, Telephonics non-GAAP too, the the of can now to Executive call website today's Please today's Jeremy call include call may use numbers. that found Hitchcock, over be zoom.net/investors. I

Jeremy Hitchcock

welcome is Good Third and Conference exciting and and more Telephonics' morning, to I the quarter quarter the talk point, also Call. agreement. Zoom call, about recently last said inflection of merger the I'm to On at our delighted that results Zoom an announced

agreement offer solutions opportunities provided company, with partnered already Minim's first, well will high-level combined a third with and and for integrate merge recognized software quarter. markets. On on for rationale management WiFi Zoom's update I'll signed The Minim, the hardware AI-driven provide next-generation platform. have intelligent merger call, operational Zoom ISP Minim software security market company and to as product offerings. by as We definitive and an on have to today's connected Zoom's home the the integrated an connectivity Motorola

Hamilton, and objectives for CEO Minim, company's will of before more Barry details detail results; Chynoweth, Gray the on direction our combined questions. share Jacquelyn CFO, will we financial provide Second, third, the third and quarter product into open more

released is information that in the slide that's morning. slide great provided turn was investors.zoom.net to the to Now on packet a time this

for in detail, this Slide at exciting share we look X the you rationale merger. If

are needs they products was and and develop we Zoom, and consumer our certain connectivity Zoom home to and innovative remains modem top show evolve. that brand our founded as name X at ranked products in in Motorola markets. committed retail other the products addressing sell know, consumer you under modems benchmark design, As networking XXXX

markets, You product, new integrated team of security an products your which X, Minim, management, your October with visible performance also about next you XXXX AI-driven positioning out other Minim. wireless in Together, as will way need focused offer company cybersecurity ongoing Internet build Dyn the may has prior following would home on turn network enhanced together XX, of and merger, running in the This was Minim company, hardware work was more different with management development to management In proven the so no of like attack my Dyn, by were profound networking all for with Motorola an road from sales, through more against more WiFi that By provides With of AI to an proven the strengthens the work platform market, Dyn than home the network Oracle. this security map. recall, vertically innovative space security to it and that founded XXXX. turns franchise the on also already consumer today, devices Denial-of-Service background, in an results. need only product, latest enterprise network. was we of integrated on software corporations a management. can Minim sale from But Slide basis, information not experienced XXXX is expanded as our company. I MHXXXX. big familiar merger enables into a led and and with to words, but brand an a attention our we

Minim So safe, offer Internet reliable I cofounded to home.

the sold offers an mobile to channel model. important current service on proprietary sales product and web basis slide, the SaaS Minim's providers, through and on As a platform applications Zoom enhancement noted business AI-driven Internet

we traction confident security employees our to and for market-leading network distribution. Zoom software business a to opportunity well Minim are adding the we to customers, looking also is in and combined that for development of has market so to enterprise Zoom's to with large future our and management, begun this In and retail growing address to positioned in have small combination, hardware, Minim the shareholders. offering with truly that Minim, are add and addition workforces distributed also positive with market. With ISPs our the Zoom's we products many and the gain our its connectivity,

to helped We point, Dyn. share are shortly looking our his XXx this forward partnering will of details and Chynoweth lead of company. more revenue continue to Dyn on approximately growth and I'm from the as will about excited opportunities me who have to joining CEO Gray again, combined together reached with Gray

Let were up Slide XX% XX% QX for and me financial X to history, sequentially quick in the highest of third million, now year-over-year. a $XX quarter. on overview to the revenue for Zoom Telephonics highlights quarterly recent Net sales turn our

growth since when started the CAGR. Motorola a that the at look XXXX, you If we name, XX% is under

So we are pleased with this progress.

XX.X% points. due profit prior this was increase XX.X%, trading. ocean improvements made manufacturing to of by in This an quarter has quarter expanded largely over to the Gross Vietnam via in margin shipping moving from and to XX percentage

U.S. therefore, transitioning production cost higher of we're migrated ocean to the We from and to have Vietnam, tariffs, alleviating freight freight. air substantially impact

freight cost quarter see earnings we further in the shift with savings similar a QX. EBITDA in loss loss. see a $XXX,XXX. improve a continued some and ocean And per share to to story to reported expect continues $X.XX of We this from

is balance and in strong with a we top results. Last, leverage margins, the share. $X.X testament seeing retail our line company are X in market our cash are the strong distribution our On bottom in our a connectivity the better with of home of This market position position performance position, to gross terms is to at tailwinds strength intend and leadership, strong we sheet, million. we offerings. With improved combined sales and

X, a Slide show modems. gateways we starting few highlights on our from product update, Moving to first our and

increase pandemic continues and retailer and XX% in for a well, slowing there Retailers for and rely inventory the are as is of we in connectivity us signs saw life. people selling tell increasingly work no down QX. on home demand that Our products through

We DOCSIS our X.X continue This increases first enabled value our map, our product access by quarter. Minim powerful in the including app. MotoManage end gateway products, to of to invest this launching the gateway road granting users

Moving on we're where up WiFi the to demand to includes Slide XXX% Mesh our WiFi X, Minim, overall powered the by according our which first to market is market WiFi products product enter on research. year-over-year system, excited Group's NPD MHXXXX

system. adoption a largest on we MHXXXX, app. the WiFi has of Minim road our channel and XX% for standard MotoManage R&D, rate aggressively the pursuing product the quarter, user sales what's X this been are In Notably a are we seeing map, mesh next

I This to commitment received Google on Apple update Last, better out past update on mentioned MotoManage Play share great want the software. for was app XX, an and of quarter, we and MotoManage last stores. delivering showing quarter, Slide a to by the the approved gate usability which significant our functionality, expanded

with now results. that, Jacquelyn will the the to quarter I through And turn take third call to us financial over

Jacquelyn Hamilton

and for be morning, everyone. Jeremy, both and XXXX. third our financials reviewing year-to-date will good you, the quarter I Thank

from presentation with who our Slide those earnings will For XX. following website, be our with are I starting

tell story this a great have quarter. revenue We to

possible tariff weighed this that freight down have cost for have significantly [indiscernible] employing the year. previously reduced We reductions, are use performance our and exposure factors of where ocean

our strong, of line, QX the revenue On were top revenues million. with $XX

over Jeremy sequentially mentioned, and in or QX or history, XX% million million this XX% $X.X of recognized our in recent quarterly XXXX is year. result over As highest up up this revenue revenue $X.X QX

X in driven during from the for Year-to-date, to our home sales and XXXX. Best million with working million with our XXXX, associated ended the or retail the $XX.X third XX, ending revenues Target increased have due from for particular demand to months strength months September be to $X.X XX, top more $XX quarter. September X growth and in line to by XX.X%, Buy to The strength the in pandemic, continues studying million

We production. which of the moved our represented Vietnam, as as quarter approximately to third of XX% tariffs manufacturing we the continue to total of of reduce end the impact

margins on XXXX. our a quarter QX result, from in gross profit XX.X% increasing a As QX sequential in improved XXXX XX.X% to basis,

our the our freight percentage to total Vietnam to we XX%. During by on from sales quarter, reliance ship a of third U.S., reduced decreased which airfreight as expense the our products

to continue net basis, only year-to-date airfreight if was million, a loss meet growth. On continued will drive necessary $X.X utilize We to million to including demand $X.X and tariffs. in

would Excluding these year-to-date non-GAAP income breakeven. have tariffs, been net just over

of supplemental year. this $X.X also quarters We the airfreight second and million expense incurred third in in temporary

supplemental both million. $X.X would tariffs temporary non-GAAP have been the income net and airfreight expense, Excluding the approximately year-to-date

at unchanged share net QX per in per share in of $X.XX basis XXXX loss loss per of a sequential $X.XX share QX from quarter a XXXX. loss to Year-over-year, in QX. share a share and QX per loss was per on Net both improved $X.XX

ending loss of months XX, September a X was $X.XX $X.XX for period share XXXX, loss the same to per per the in as XXXX. net compared For share

Moving company XX. XX as XX, bonds issuance in fully expect of period are including start XXXX, $XXX,XXX tariffs. provides performance related in balance $X.X to sheet on these mid-XXXX. restricted The being of and invoiced, to of September released has highlights. for prior Tariffs we paid Slide Slide cash of as to million performance the bonds cash beginning payment

higher an the increased see products. increase period, to demand current during purchased in we growth. which meet which quarter that an support this payments inventory includes can increase inventory due yet accounts to payable, our not for reflecting as assets includes current You work liabilities, in And for the

dynamics, unchanged As a XXXX. result of these capital essentially from is working X QX

a and of nothing company the to the XX, of As million September outstanding XXXX, $X loan $XXX,XXX drawn PPP credit. debt of related against had line company's

our strong sheet for improved the exciting map we summary, strong third entered to support growth, have future. with profitability line and a top road the quarter balance In

the the that, to hand call insights Gray additional I'll Chynoweth for Minim With into over market.

Gray Chynoweth

you morning. way of I'm currently of this Dyn. Minim, Officer Jackie. previously was I'm with Operating the Chief and be delighted here you, introduction, Jeremy and of CEO really Thank to By

XXX internet I Oracle customers, CNBC. for grow annual revenues the XXXX, X,XXX to Pfizer the time some Netflix, more we were including closely brands, providing While Dyn from from set as such Twitter, more million million decisions per and $XXX optimization daily the worked year. to preeminent Jeremy employees than enterprise and to than XX company with By bought $X increase course to for in digital

we the be that combining with the and I customers, innovation are employees reasons able of Together, we're some just want positioned company. you share to growth shareholders. about Minim. for extraordinarily well strengths of to enthusiastic Zoom an benefit so and drive Today, We'll and

Slide at management the XX. company on team the Looking combined of

him with see and We of Jeremy. of and simply experienced to the can have people be an we Dyn, company. team notch that and capabilities. to success the the group generate great I that to blends thrilled I'm similar at success side in just here look forward experienced management You working rest the top combined with back together

combined key Co-founder excited by of Alec I'm at Hayward, Nicole networking the was Chief who'll Intrado. a of and Hayward, OnSIP, particularly Antidote Co-founder which and Rooney previously as members be management security Minim, Officer, and a as Meetinghouse Alec also Marketing and Technologies his team. background that served software and was Agilent, acquired Nicole Minim, Cisco. HP, includes of companies recently

In technology capable terms the products, that and this with company, a into growth. is a superior structure transforms -- combined is of the that driving equals team hardware-software merger the of business us accelerated a of of merger higher-value

in which definitive quarter. we noted, Jeremy completion the merger, later reached expect to part the subject customary of conditions, agreement this for of As we've finalize closing to a

combination opportunity, values the Minim reverse at To third-party Zoom a transform valuation and as help all-stock secured for strategy $XX triangular technically this merger. consider would Board million, a Accordingly, transaction, how committee Minim. Zoom's structured which is Zoom's

and the Going importantly, levels to power company expect to and sustainable growth. to staffing at rebrand the our approximately FTEs, forward, and our we talent deliver to maintain business XX change ticker technology symbol most

I'm company, to technology by $XXX As of That's spend over familiar a a XXXX. years. the of in we're the global Slide shown This exceed global X CAGR to all on billion combined market, growth are is XX.X% next a truly this expected drivers in sure XX. to wireless as positioned operate exciting market you.

economic the [indiscernible] see and top-level More we First, shift home to more employees ensure their work connectivity title home. from need to

continued home. Second, the on there for product continued with network in performance technology XG, is technologies wireless are as WiFi and refreshes higher upgrades X example, driving spend upgrading such

devices at Third, with growing grow. in per the and increased over-the-top instead smart home of reliable, home devices, continue to home devices demand regular gaming home XX cable, for streaming devices connectivity of XXXX, adoption will the secure to media

we depends and could ready that honestly, focus. our massive or get opportunity on down And work. excited We market to have quick a more action not simply be more to

Minim opportunity, a at acquisition point, the want was To emphasize to and Slide share by sales unlocking growth this XX. Minim's why to I channels key to opportunities on underscore and this look afforded

First, Internet Minim's sales brings business service models anchored channel in for new a Zoom which sales providers, hardware. through

a software model number revenue as by employs subscription of a as with Minim service or the a Second, Minim. managed that SaaS home networks offering, scales

starts and automatically a given scales revenue with a For customer, minimum our user growth. commit with

growth into new the and Minim's both revenue customers. penetration by such, driven is of As user customers base greater existing

the In new and growing product, higher and small workers, important software is medium-sized security selling provide currently in billion with product and can Minim Minim by affords connectivity, necessary addition a to for View $XXX.XX support or the Research. Grand businesses. valued ensure market, medium-sized the software recently Minim businesses into a in at to This targeted productivity their small which value ISP ensures sales at workforce well remote launched remote productivity channel offering worker This as substantial environments. as market, another management market, working that home another

the the leveraging team my see including opportunity Airband Microsoft also Initiative years key point we and and look in this working combined channel you to logos I our summary, and partners ahead. exciting In experience affiliation of I with industry forward that and today partners, Telarus. our to capture to

it with And turn to I'll that, back Jeremy.

Jeremy Hitchcock

technology, in questions. a provides Thank this basis. proprietary hardware-software are we market that I growing vertically market, Gray. to and for sustainable look innovative growing with There's clear a question on an business forward building you, that global to exciting wireless with forward with allows an road path multiples healthy us and no map integrated a with participate plan products SaaS higher merger franchise a now business. Operator, ready a

Operator

[ Instructions] Albert question comes ]. line Your the of first [Operator from Hanser

Unknown Analyst

And number break can earn-outs certain million if hit associated great separate you us and One, metrics more Wi-Fi device separately, number? kind down are metrics give then some of but on Are new pathway. the in with color of the X on differentiator and down into the with the Congratulations number? of structure a the its that capacity quick $XX the drill XXX, that headline questions. cycle? that just or of and benchmarks around product product there of kind time

Jeremy Hitchcock

while way on more be a products SaaS that show and take I an be in on We to the the numbers lay out, first number it metrics, the SaaS are takes on question a will Thanks, to for that. number, hear that believe Albert. but I'll ways SaaS important Good you'll blend you. think metrics. more basis. traditional think, a as I a new an part numbers seeing Certainly, come acquisition to on that. revenue and meaningful up counted to ongoing customer the

So stay tuned question. to that

And turn around structure, for valuation then of first to Jackie. question I'll the and the the it part the acquisition over

Jacquelyn Hamilton

employed and parties were of to the Minim. for the and a develop respect also fair we company With unbiased its the of aspects All valuation, valuation assistance financials help company conducted the at. acquisition company's analysis, the own to looked third

at in market. looked also company at company's prior We valuations. looked the credit comparables the And

Unknown Analyst

all it million issued certain today according is X? Or Is the earn-outs you staggered metrics $XX integrate as hit upfront? by being the and company to

Jacquelyn Hamilton

the at based take There is it are And metrics. no or It on same a place transaction. stock will staggering all performance earnouts time.

Operator

further we [Operator Instructions] have Presenters, questions. no

Jeremy Hitchcock

and look our Thanks and to everyone joining morning, updating well. us you we for this Thanks, be progress. on to forward

Operator

conference today's concludes This call.

now You disconnect. may

Minim (MINM) 13 Nov 202020 Q3 Earnings call transcript