MINM - Earnings call transcript Q2 2022

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Operator

Good day and thank you for standing by. Welcome to Minim's Q2, 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator's instructions] Thank you. hand over to today, your like Mr. now the to conference speaker I'd Hayden Carbonara IR. James from you. Thank go Please ahead.

James Carbonara

are of Thank QX Chief Financial With call Officer. XXXX Once Executive Earnings Hitchcock, you. again Tacker, Call. me welcome Officer; and on Incoming Patel, Board; Mehul the to Dustin Minim's Jeremy Incoming Chairperson Chief the

As on Relations Investor ir.minim.com. the all website for live today's materials reminder, company's a presentation available are at

I want may to remind today's that call statements. begin, everyone contain conference forward-looking we Before

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

and our analyze include release, to the to comparable is with please the non-GAAP non-GAAP may and to today's A of utilizes the of in well management our in Risk Annual a well of press expressed on Factors Report such GAAP in those company's For other contained XX-K Exchange as files that filings on too, XX-Q, Securities in with most reports could reconciliation as that available periodic numbers numbers company's statements, use from cause most that implied call filed uncertainties in performance. differ such in the reports see from time-to-time Form company actual recent subsequent results risks detailed the or note Please discussion as Form measures Commission. as forward-looking which the the the SEC.

turn please of Board Jeremy, the Now the proceed. over Chairperson Hitchcock, of I call would like to to Jeremy Minim.

Jeremy Hitchcock

welcome. morning Good James. Thanks, and everyone

and last Gray a announcement as changes Mehul serving take his transitioning career place months to officer Navy who our from has Chynoweth. is to publicly named would this the replacing United opportunity Executive quarter, leadership about as Mehul are to the duties senior leadership impact like Gray the Gray and company top the transition technology been will member Chief and and been joined will leverage, Minim operating six will cover finance his extending financial Dustin we made he proven sectors Minim. and build launching to to the has demonstrating Those be months distribution our has has experience confident about out was group success. and I leader line includes building channels. Mehul management, new advance and extensive through leading he and in line positions resulted Before to Mehul and committed thank Gray has strategy, have leaders the for States contributions growth. pursue Executive and He has manufacturing, the for week strong recruited software, CEO. to be and for Board contract I to our earlier the X. Chief market opportunity CFO shared as operations his team. instrumental six our I Patel address He a Reserve. Officer supply role orderly This our exceptional growth. September want chain our this of top product to an as greater take a a have new strategy transformation and extensive an ago then. change reach the recognize offerings in capable that upon in until of on of results

our proven level. the ability to confident business and next our are We that a take to lead company Mehul has

to Interim Financial strong role knowledge is Chief He will Dustin institutional of Accounting Vice the step Chief that that Officer. served Tacker, previously announced Officer. into the Corporate extensive Accounting professional of as and of and great also be experience at We was with has company. CFO a Dustin value Controller has the finance will our level who President our deep

Chief our of Officer of executive shifting Operating Lauten. Operations John Finally, the will of from hiring role a away following VP and departure a operational C-suite we be are the

delivering improving a on is requires committed Your results, deep Board which to focus operational execution.

this founded value. is when place. there in executing to and as team tremendous as value the turn proposition today it that, is is was the on already Mehul. call company compelling to growth and The Importantly, strategy committed that opportunity drive I'll to was is over With unlock the

Mehul Patel

value team Minim so transformation opportunity the Thanks have and of that thinking six to business has forward create Jeremy. recognized customers I've far. has I our the that progress by the and shareholders. the a strategy, be achieved been challenge of I'm part tremendous joined the months for to our potential encouraged ago. the

cost, reiterate improvements commitment continuing unlocking to transformation execution execution, about Jeremy's It will and success. of our all strategy with ahead, to our my software remark capabilities and tier cost this belief prudent is strategy. execution management be are to firm value. key Looking capital, digital reliability, chain of I top greater careful to the to robust want management allocation important supply the of and

We Our near current second results financial year challenges challenging well the Minim's the Amazon XXXX, comparisons of QX event we're to consumer networking to QX as pre-pandemic pandemic, as are specific year. in sales. as X% Minim Day home our brands peak last QX of on event million quarter was ahead since Prime QX, facing this the of do that from year-over-year term equipment but is $XX.X see GAAP consumer cool decrease well revenue compared reflect spending which in environment, XXXX. shifted to down

e-commerce shift to trend to on continue platform well. continued consumers and directly though, our online aligned to perform this with and purchasing Importantly

a maintaining successful are Day. on amazon.com We number one following position Prime

Prime the last October Amazon by this were sales of encouraged second gross year, Day and Day year. Prime the from in announcement we are above XX% Our

Day a performance to sales, favorable the to Day only X% Prime according which increase Our overall in compares [ph]. statista.com Prime basis on rose around year-over-year

and reductions Target, we're seen at In tightening start expand have expecting nonetheless QX levels, additional of to sales retail at inventory during While our retail retailers at to including signs we won QX. continued sales we stores, in space footprint. we additional

end Minim in XXX,XXX surpassed now QX. Network Intelligent of have goal our We year

QX in revenue $X.X to million. Additionally, grew deferred

Lastly, of expect pair the to end of all them to our and we revenue MotorolaNetwork.com. and intelligent deferred that Intelligent our to continue sales by track remain this mobile accelerate will year, growth on Minim our on making app Network, products,

We price. Mesh and our to first to are products, work WiFi at XE also our parts helping bolster with evolve planned QX edge new QXX sell Both products pleased performance as WiFi from QXX, our a at cutting launched price the R&D to we we standards. selling chain products average With products on XXXX. the bundled efforts to successfully come other have to supply our high the keep will to Motorola of ensure portfolio portfolio help in from efforts products we're that as specifications, raise excited resilience it share motosync of app, our The Motorola and and perspective. both which competitive perspective turn point, market remain we both

of we million $XX.X a that Regarding rise to with QX to exiting our all from preparation Prime same Also rather of from small factors focusing returned carried for Prime note of gave and in $X.X increases QX. instrumental inventory of reduce the selection plan QX up $X held was performance. restatement. to to on driven of out and issue inventory $X.X than cash our was exited QX in our our executed million product by and the program on only ones. positions, from $XX.X new our was million purchasing million QX in in restated Almost inventory inventory We levels that recover purchasing worth is outstanding new the allowing for million the Day Day, items

in million exiting Friday, current year. $X.X With AR half and million year position quarter came collection exiting maintaining Our expected second the the half to levels, to the to the Prime due $XX.X the second and at Black cash higher prior inventory and sales of in our we quarter. cash Day expect our debt compared in of improve

to results. focus review continue and on to for the I'll R&D now roadmap business We financial do turn to additional our Dustin and of executing expect our capital. Dustin? require not growing

Dustin Tacker

$X.X depicted share restatement XXXX and the to through our reminder report XX, errors of on operations I presentation has Thank I net update website, you, was of we has to the restatement period the XXXX same $X.X the favorable the cover reserve our the in company ended or an X-K August The million posted net $X.X did restatement notified Form year filing financials X. earnings to pertaining that costing been from are statement ir.minim.com. the the would XX, like SEC the loss loss in that by the determined that A annual impact $X.X first to March on Form amended reduced an on error million that reported reported on loss for Mehul. will XX, originally inventory XXXX, XX-K million the offset ended The XX, The returns, for related adjustment. December had errors XXXX. period the December which by year-end March source million inventory a of was $X.X the net not the caused mostly ended million. friendly of net the

also XX.X%. by impacted correction our QX this by However, reducing margin gross

prior which Our X% the over million. $X.X totaled deferred is revenue $XX.X net down quarter million, quarter to the increased revenue for and

was Our second event. year and timing a Prime and quarter sales it a by the Day net in second quarter XXXX quarter was event was impacted of this third

quarter. margins down from gross For the were prior our quarter the XX.X% in XX.X%,

margin around as XX% brought to component be costing inflation increases. previously cost continues excluding gross and on despite one-time Our by noted headwinds the these

$X.XX a QX XXXX. $X.X in net and was loss a negative restatement $X.XX net basic share XXXX negative per or compares diluted and or first loss basic Our of This net $X.X quarter the share. million million dilute $X.X of with loss million for before per

million adjusted or the adjusted compared million negative $X.X For EBITDA $X.X EBITDA before was the as prior of quarter, to negative quarter. restatement $X.X in million our negative

the million close also timing. end was Now increased $X.X quarter-over-quarter the million, XXXX. compared of had the equivalents $X.X million March increase a million balance and an paying of at due by look in at in to to cash decrease $X.X XX, receivables a the largely debt $X.X accounts decrease to $XX.X million The quarter, driven of end the sheet, quarter, a and adjusted cash of compared the down at prior of million cash the to quarter. $XX.X basis in on for a at we Inventories

levels This of XXXX. down We of with $X.X levels inventory not XX, debt March of liquidity. credit. we quarter outstanding to on closely was that monitor enough demands outstanding market and We of ended production having balance draw put a our the meet the having risk company's of $XX risk as compares $X.X million, debt the the inventory with line against as to million pressure continue inventory which in million on

I Finally, close would with stock discussion brief on a value. like to our

X-K filing, Minim does received company XXX-day April value that additional operator, that compliance Form no XXXX monitor for and As and growth to I'd the like period. the of this requirement compliance XX, in sustainable on to concludes XX, open build company be meets XXXX, to price, advisors indicated from the by questions. NASDAQ operating of continue On execution price intends options. regain for our the April longer line my $X. engage a its an our financial company plans the to the That October consider company front, With side notification XX, XXXX bid available minimum eligible incorporate not through may If remarks.

Operator

[Operator B. Riley. go ahead. you. comes question Josh from Nichols with first Instructions] Please Your Thank

Josh Nichols

statements issue; inventory not? the one, going Yes, issues, well to potentially what's or to up kind internal as like XQ be expected rectify when control completed the just to accounting of to are follow those are done impact and the been on

Dustin Tacker

Thanks question. for Josh. the Hey,

just by our the XX-K/A, So and right tomorrow also so we based the saw -- QX released given to expecting release tomorrow have last afternoon the as you all tomorrow current our week. the we should now, time sequentially filed in is X-K We're on all afternoon. timeline, XX-K/U, filings

in corrected the So And Josh the to errors no regards have you'll see going all forward. forward, the tomorrow. we numbers then going impact

it. monitoring We are

gross any putting it adjust this are to forward forward We going should not procedures go margins. impact the and

at we margins have expect be to the we around be should that So which stated XX%. before, back we

Josh Nichols

Great.

a to you have revenue you could back margins, visibility Prime there? like about We've given Day, So tell how been I XQ it through us so XX% right. is some from like should guess, perspective, already anything looking

Mehul Patel

Absolutely.

on but modeling from So the from QX something on news from same and that seeing. -- time, based we're be Josh, that, standpoint, also you to the getting around to based seen we've we're a the our are still of demand others expecting what retailers the softness we're and the close at we

we what announced the trying trying think Buy Best on Target levels to yesterday, inventory. inventory over same maintain to has are cautious just we're last -- out or the their and So based what I comes thing. yesterday, done

maintaining So we're talked about and position that Josh. we current watching and before what our

Josh Nichols

Great. flow, that you actually up, wasn't right in cash the other inventory build capital And I to right some or had is are exactly to and -- get know XQ, measures result in enacting worked how what's And You inventory positive previously continue going the flow? better cash timeframe? was thought the like, spending to was long or or kind what of the in result of clearly right? much and XQ happen XQ to that going is

Dustin Tacker

Josh. question, Good

did was that to we did clamp result inventory were point, on mentioned statement we So because purchases a the already get time I as water us right we now, of in down and my we it this at to time however, have the earlier, minimal it, takes and until very coming clampdown, well the get in. and of

we of that good have a So do already. visibility

of terms for flow to In to three the turns the expectation to improvements, cash inventory is of turns. forecast be end year and by improve going my

at sub point, this close or even are We one. to at two

to to turns. get So I'd three like

get ball We then And to into play the to turns up track. -- this go half, good Josh forward really operations into controls have clean turns. And we this going first at of that four QX point. get the place year up to that into at of the the process a back in that's point to we this to side have get push in three and our plenty end to

Josh Nichols

or sequentially, cuts being planning more the and as well I the down With Is to and question particularly any those sales seen implement that from there to mean, expense, in Even me, on right? on expenses the creep term marketing of under what's quarter-over-quarter is last to as control then And kind you've the here, profitability revenue expectation XQ the in continue for focus company G&A the up get line. near OpEx? right?

Dustin Tacker

question good again. so Yes,

like control So had streamlining are and do. soon but see for be some anytime going employees, things and soon, not reduction third of and that try looking we're the even that consolidations at put to every place we're my flat things had expecting that to rate costs, vendor But quarter that looking inflation into done is any control to with quarter. we those for in as to that aspect because to can prior but quickly force of inflation in expectation possible run the as to adjustments to in that cost continue we of adjustment and we we

flat and between expect slightly I better. or that So to be everything do

Josh Nichols

or OpEx, levels $XX million if right, top one Yes. from since to company to imply probably just doing I the far guess margin and pretty is like that. so of is more I if flat of be add OpEx breakeven, do million going and gross need on have right, $X line a you'd would probably XX% will kind the margin, you

rest I specifically biggest would have inventory how release cash? working guess, item to sheet what's So your you for far from to down the some expectation you because capital. opportunity levels, the where have balance like, ratchet the the that's can on come

Dustin Tacker

Yes.

and terms that get too end to So, now. our with I've and terms of even and right we're to initial monitor right improve much on bit My a that, four the pretty of And inventory, helping in terms now I we as better execute of we're to us heavy continue down partners, get can said than aggressively times. many our and goal by three those way partners, that. terms is on if those little are lot we to ODM going year a working

forties. I As you mid-thirties, has was don't XX transit low versus or before to every to, days know, XX time quarter. this thirties worse at that the gotten in in point low know, We're close early, COVID

also on convergence that So that a of pushed pressure cash cycle. lot

our in help agreements we're those right working to close there to aligning with pretty us getting place. now. terms we're ODMs that as in And to So well of

Josh Nichols

in I'll Thanks, back hop the queue.

Dustin Tacker

you, Thank

Operator

Instructions] next Go One David [Operator question comes an Tokos [ph] Your ahead. moment. from investor.

Unidentified Analyst

lot with y'all. few obviously Hey, doing? of good are months changes over a over couple the and you of actually the morning the last management How last years. There's team been

a three four been revenues, I've or an I like, at years investor though things. for see couple number So announcements. a I see and seen now look I've net even so I of the

revenue on side. couple a questions have I the So

I is there's not side, think a been have made traction I'm going on number things. side trying revenue think I places announcements not about it's -- be doing you're need and to it. India, I revenue seeing those. expenses, where you're the of just I'm to manage to countries you the But and other business; new there. like any do know

not market the trying So getting I'm to understand you're expanded in? why you've you traction play when

Dustin Tacker

for question. Yes, sure. Thanks David, the

we So on ISP in right those we're be the India, the space Indonesia, trials trials. some in continue now, to and based Africa of in, in

those trials in of in terms almost to so place. of stage those of six kick whenever between Some mid we're XX good months take in months, those we're trials. trials the off If anywhere

have it some to solution to tractions allow are we of be has to mid-state in next come always is which level, software-hardware and for to combinations, those as solution one As that those strategy lot the to to thing any soon of and the takes but hardware see with of but with of you're fruition, software us well, mix. do been be a same those. as we a to time get looking only the that's to start traction when it going we It solution the doesn't us, or necessarily

we'll of XXXX fruition. by see those come hopefully to try we'll to some So

Unidentified Analyst

you. Thank

a was for asking back like, that's COVID company together bit, still I've to believe I stuff. Excuse but to relates supply problem. right? COVID worked time and It's made you chain issues, was it view? little to Are And whole look the And or international it we a office past now? and us But feel view you that go, little be as guys bit sucked, a stuff. need COVID is, now question there's probably for behind was a spend French. to now time point we need some I a are right? your everybody. to forward you like based how -- proceed? terrible economy do do of you get past big the a Because my more It -- question, that, honest. like at a kind that's of So to past States United I'm in and more come on know it that, you

Dustin Tacker

inventory behind us part most in we is it, want plenty we there shipments, things just of prior we're the we of, terms terms goods example, had be to are prior to ship. have time, the to successful that in place our For as any same but in finished able we discussion call, of for at make

new launches, lot terms the of get delays the supply technology come availability of of that's how the that. In and a and we because where NPI the product on do new

you on are around making in a those of we're we've been marching time. components. time done that for, ahead we of sure know, So driving We've lead weeks XX lot terms we of

QXX the timeframe that product and were initially Street. launches still COVID of our get mentioned had promised to we've and to that been in we and close QXX time during as them So two that able the launched driving we

partners excellent strategy, engineering our So to and build gaps execute We'll timing. our with the to to on close has we'll on continue any an team ODM job done work operations. continue with out to continue

continue to to we'll that that do So do forward. going we'll continue and

pull other we'll execute, future way, compared as we're to much see think but that work product in I we the as some the of we'll delays, well maybe to possible. to the So those of of forward competitors, some our gen with is where next but partners positioned continue and those continue

Unidentified Analyst

sounds who the quickly you need And is, accounts Okay. a shares, the was flow concern slide like, one And cash basis own to then more you And the going last in cash And I asking but or So stock on though, the that it's they're my $X.XX dwindles position don't to question, it lot great. it's high, you of isn't not down. the questions then was go and to not not, because something have first but plenty page of based XX also spend the like shareholder so cents. There's when inventory, go incredibly to you positive? be to I I think on two questions, I presentation, will as a that. results expect person I'm go if have hear my that. receivables, as honest. is money And today here, that like I the XX

you'll seeking I question and frankly, do, cash of so questions think here. of it I there so people wasn't. out But kind is, were -- the run two improvement will that quite there's worry someone and

That's terrible. of us would the six-month question the dollar, take stock the the be but don't investments. of terrified that's shareholders' off the -- company on the split -- below is if the would so is, I a NASDAQ. and crush same question, You'll reverse be did extension one That we're a kind kick

be fair you plan get cash statement? -- don't you is, if flow that you So I'm think that to positive, cash that, have do would what hearing to I enough a

Dustin Tacker

controls driver. I've pressures, put has we've internal right? been terms our to fixing I want been Well, the That to don't turn the put inventory now to our -- has to been cash, so want to allow us that place has said, of don't do we've I right Since is in goal, that. -- that goal the in put in to internal here, gotten

that what neutral to I turns into like three that flow at said, I So cash to be positive. turn us help or turn to expected least we're looking into, back

the shareholders won't to myself us. going allows continue so. some cash of goal to yourself get look of terms in options angle into that Board to the put the any but of those we of it from or and our the do options reviewing us stock every options, our because we yes before all is and make that the detail make some to and In look sure like we're XXX adjustments. I NASDAQ others price, we time days front more are sure -- are at extend give And, to and we'll at make to

So tuned that front and please some on stay news that soon. on deliver definitely we'll

Unidentified Analyst

Okay. very Good for you for everything. your Thank you much guys. time, luck

Dustin Tacker

Thank you.

Operator

this There are questions further no time, please at proceed.

Mehul Patel

again you we myself for thank Jeremy forward few Well Dustin look a and joining and months. Thank Okay. on to you. the and call today in again talking

Operator

and today. call thank Have you a Ladies your gentlemen, for conference your great you concludes ask lines. this for day. We and disconnect participating please that

Minim (MINM) 18 Aug 222022 Q2 Earnings call transcript