AEY - Earnings call transcript Q4 2018 | ADDvantage Technologies Group, Inc.

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

Operator

Good day, and welcome to the ADDvantage Technologies’ Fiscal Year 2018 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Elizabeth Barker of KCSA Strategic Communications. Please go ahead.

Elizabeth Barker

Thank you, operator.

Harbor call, call like statements, of may subject the today’s that remind which XXXX. begin Private to conference the this contain Safe we I Reform to would you are Securities Before Litigation of Act provisions certain forward-looking as as subsidiaries certain These such operators, to multiple as relationships agreements among with maintain equipment financial ADDvantage future include, ADDvantage manufacturers performance system of statements Technologies. things, statements strategic ability forward-looking the the future Technologies original and regarding well other events, the and its of and and These statements involve uncertainties. a number of risks Participants ADDvantage forward-looking future and events cautioned most Form on Technologies’ as variety file are actual may due results only such to a recent the Commission. report are predictions Exchange that on Securities these and or of XX-K from in materially with contained differ factors, statements those call on and today. recent in the Form and earlier financial presented statements this information XX-K report release Financial earlier be press conference with conjunction Technologies’ filed considered most consolidated in ADDvantage company’s issued included in notes on should the included today regarding available guidance which ADDvantage future The subject is this is change. on to Technologies, information limited results based on call anticipated currently on

may such only as will information, of the change, Although influencing year. of update speaks information at call. the Such provide Technologies factors guidance certain necessarily any guidance as will not and only ADDvantage company it the the points this during date

non-GAAP which our measures. nothing Hart, tables measures not certain of Officer closest you addition release would these of certain present press President and further, ahead. Technologies. these are today, be will of ADDvantage financial ratios now GAAP like the are In with financials Executive a and for measures financial also included go such and please a used income in the non we are measures These measures measures. With reconciliation may we and call these investors earlier find instead non-GAAP in is Chief to call, Joe the the website discussion this about GAAP and Joe, to, benefit non-GAAP to relevant. financial that turn -GAAP as financial on During think should financial net addvantagetechnologies.com, why considered of with I and located over issued our

Joseph Hart

Thank Don Welcome Dave Sales. you, is Chymiak, to Technologies’ everyone XXXX call. Chief ADDvantage Officer; our Kinison, fourth With Technology President Vice Scott Elizabeth. Chief quarter our of today Officer; the and Francis, our Financial conference me fiscal

it’s here entering new are current and today We to pleasure for plans our all you of development, a and to be into speak market future. company’s a with the our chapter in our positioning about

are forces recap couple read leverage to behind, are recent discuss use I that our going Technologies. today’s will the opportunities can the results. we exciting new to both us the in we Cable our TV releases, that months to Then call a XXXX here position and driving implementing seeing been operational results, ADDvantage it market. segment fiscal of telecommunications you initiatives including emerge the Telco from very to has As press I’m busy at our

we’re year-over-year, large driven prospects to TV facilities the revenues by in offering drive in our divesting repair transform line value. and as wireless significantly part diversifying the major decrease trends a close the top Cable us in the further of decline business, locations. This the at recent business Cable of first as acquiring results. bandwidth over by well us business, our declines implementing Nave remaining strategic infrastructure TV XX% company’s subsequent the OEMs, are in headcount consolidation reduction XXXX shareholder operators wireless are an initiatives market television efficiencies Cable forced ongoing decade. to top have segment; our areas all customers new Telco impacted may the TV downsize led allowing at our a reforms target industry-wide and by press that Triton in expected and our primarily from decline segment in services all segment; customer you Revenues of a we This repair This and upgrades revenues As These revenues changes past to in major most of in losing improve line quarterly to impacted from caused These quarter Cable in our three for These cable year-over-year. XXXX. fiscal seen TV operators. declined Telco trends affecting repair market. overall to releases, cable both resulted have the and to X% and new was

our strategic have believe expand talked on of length our adapt strategy size the underperformance about to and facing we at about again, these have earnings where challenges and TV this breadth We changing base. Cable direction. the opportunity conditions calls, segment our Cable to significant are the of there year once previous talked the validated to services plan The the focusing growth customer by Telco our on we this market segment,

a we As a at review of establish company our business mentioned existing after framework units on our CEO being this analyze last for call, ADDvantage comprehensive Technologies July earnings year, our in initiated growth. and of fundamentals appointed to operational

and review, market. divest we result our resources Telco to this the Cable and both now existing segment, improving operations by segment a in the have As operations verticals a the complementary clear plan to action by focus entering its telecom TV of of within

our in to member original he with XX XXXX. to segment Tulsat, rejuvenate for been no him shareholder. towards business, This Broken progress the quarter for cable within to our employee agreement the Dave the a flexibility sell Board an by TV our a an provide of December over the We segment is a will to have Officer, the is shareholder Oklahoma already we November, we Technology to controlled company as Cable a facility $XX.X into Chymiak. On for Dave to and have employees Chymiak, ADDvantage, of Arrow, occurring this will approval, Chief the start longer company of controlled segment TV and sale closed but of third substantial who Cable that that sale will fiscal sale for of million dedicated In fresh allow material million XX, cash, the entered fit sees Directors. as the these a by we anticipate on Dave be Dave continue objectives. also $X Director of in Cable years. believe we is Dave made Founder subject and which

business. finalized, sale lease will million facility, our where Kinison, and the of will and July, visiting operational business. have month to of in segment. already We with us questions improve until Francis, from Cable as opportunities CFO; the inject Scott which opportunity our management company, telecommunications the myself diversify Telco review resources Miami facility VP we the Don of and operations, to – our transition will Dave’s observed to When Huntsville, our that operations sale derived We helped The within over continue well $XX Cable TV sale and with our Cable complete will combined listened in as the the TV allow into the Telco their locations The time to of grow we people more our Baltimore, for Cable met TV see our with segment of could significantly TV, market, and teams, Telco. grow insights recent in Alabama. carry how of such our efficiency cost, explain into telecom our they the significant Arrow importantly, to Sales; asked out field identify the spent revenue Broken streams from out allow to us redirect the reduce growth.

existing are in We both have long financial Telco that in initiatives build place put offering near to performance drive the the intended improved term. our and several and on

driven both carriers initiatives Nave of primarily which switches, businesses. a and reported to which and the XXXX, a across increase Telco As U.S. Triton brokers, of a end products, sales, results consist business X% segment Communications, provides our performance Communications in Datacom including enterprise networking its brokers in strengthened improved the reported the solid reminder, a restructuring at equipment year, wireless Nave enterprise market the telecommunication routers to the users Nave’s desktop sales U.S. by telecommunications Nave and we and a in In slightly operations strategy our model improved Communications drove used refurbished fiscal result and and earlier of growth. fiscal in Datacom quality implemented and Datacom were new is networking year-over-year. provider existing phones, and Triton telecom Triton both results new

a further across to Telecom, revenue In is of there and inventory reverse operations business believe located lower shipping and this customer are of times While base, operational of and operating begin optimize fulfillment world-class the streamline and we opportunities. wider improve contribute also steps from This taking which will will partner, a we to September we serving additional Nave encouraged movement are will logistics much at allow up to Alabama. operations the operations by to its maximize Palco to third-party running revenue Nave’s Baltimore, potential. Maryland this moved progress, efficiencies XXXX, room sales improve geographic U.S., Huntsville, and opening costs. move The order

products diverse a from base and OEMs, Nave including Lucent, years, and Cisco, well-known has the long-term Ciena top Over Fujitsu. sells trusted up Adtran, customer built

delivered This used top generate offering attributes better the an industry revenue experience products this Nave. higher-quality customers We’re are in increased will and offering products. move reposition Nave’s in for response services customers, begin Telco building certification the of and advance that we our investment to high-quality in equipment testing combines line To equipment, of the customers. we to made Further capabilities goal, We path believe as operation plans a profitability our quality more, option quality. a best will on improving suite to and be increase for with dedication with products broader and and demand forward highest-quality Telco’s this late to our repair Nave XXXX. ensure telecom and for solutions increased by customer to to to testing our background to

compared which Now XXXX in with moving the on million prior year. to a Triton, $X.X increase sales reported

performance. line was which been performance expectations, strengthen we on Triton’s can focused in operating this ways our identifying in While we have with

will units current our and our to of models we by customers our new allow our refurbish our a just down internal review, Triton prompted our ability requesting. hindering we decision refurbish focusing are that to that that road operation expand customer-prem more perform manufacturers also us on result additional will that the efficiently. to per person determined operation This was facility a facility As our to relocate

open and more lines In order opportunities. in addition, that new to stock identified reach sales we base to plan broader a product we customer

investing a XXXX and will a its top in manufacturers, are facility lines line but the commitment As buy move across multiple Triton’s results. refurbished sell. of We what to overall bottom that platform the we with inventory, additional new to inventory product result, can line we and grow in our investing for together, in believe we and additional improve us revenues know provide

This the this updates into to out call XG going the the results, to turning market. most XXXX. strategy, space about could planning and U.S. roll announced customers major we agreement carriers purchase now discuss reputations talk while from an accelerate services these should announced the industry. comes these Once the scratch, which the wireless two market and incurred major acquisition strong These to City services results acquire opportunity. a in both growth. Communications recently wireless exciting We I’m and the Francis, carriers. financial yesterday, sustainable assets over forward total you ahead. that, the original our the national over and price costs it a call a we as four on contractual over and Before year. Technologies companies operational infrastructure XX our through Scott wireless Fulton team, in $X.X To additional integration major revenue decision would years. similar wireless diversify services we it providing platform providing wireless crews subsequent can market into Mill we industry We our companies the Midwest Southwest the we Scott to We addressable with and of CFO, streams to these gives our into take equipment preexisting when and an revenue significantly, we Scott, with of strategic the Most of initiatives. have stream look to business, are platform to scale experienced the to all the the the earnings have the finalize price enter five that turn wireless more integrate please great initiatives manufacturers our financial move importantly, that infrastructure support XG long-term maintain the forward purchase that to should increase solid drive the asset entered growth anticipate emerging services of to relationships with to to next go of the in now the our costs million. in for integrators services purchase launch be that for U.S. With will I carriers, benefit from calls, plus us two for the wireless one

Scott Francis

Joe. you, Thank

of $XX.X million period last $XX.X the fourth For XXXX, for quarter same total our year. to of XX% the from million decreased fiscal sales

in to $XXX,XXX the $X.X for the million a $XXX,XXX, for for $XXX,XXX three same in XXXX revenue recycling September XX, to a customer the sales earlier. as decrease to last quarter segment months decrease by XXXX $XXX,XXX. Telco of and period revenue ended in the million last sales $XXX,XXX the refurbished decreased equipment decrease the ended of service XXXX, was XX, million of million months of sales Telco and was in a TV $X.X The first segment from sales business and for the $X.X in was equipment $XXX,XXX same year. primarily due to and was Sales $X.X new The in sales to service Nave respectfully. three for due respectfully, in equipment of fiscal shipments and $XXX,XXX to Telecom. by sales revenues primarily due decreased warehousing year. repair revenues Telco due Palco to in the for The loss to partially an decrease revenue large The decrease Our fulfillment due Nave of due quarter. part to for inventory, the referenced from the segment caused of Joe recycling operations increase The September timing the our period of decrease decrease move to Cable repair in in repair recycling primarily in the equipment of offset disruptions

and of management with restructuring three charge and The profit $X.X XX, profit for the Nave’s years. move million, both fulfillment period XXXX recorded a $X.X $X.X obsolete to in and administrative flat relatively segment last September for gross of Our was was We Palco. consolidated inventory in months $XXX,XXX Telco XXXX, in the Cable for increase compared months XXXX, XX, connection gross ended Consolidated the The $X.X for operating September million TV the same decreased XX, respectfully. of for period $XXX,XXX or Cable to for segment the three for of last ended our by gross to $X.X XX% as profit negatively the from three September TV ended year. million general remained an to inventory at and million decrease year. decision of impacted our segment’s operations $X.X same reserve million $XXX,XXX, in expenses and excess months order million

As charges incurred a Nave. at we following result, the

severance facility First, $XXX,XXX in to transfer from an we tracking will of in no to for moving we’ve and of a employees. Maryland utilized; $XXX,XXX incurred be impairment expenses Palco’s recorded software expenses inventory Nave’s to we Baltimore, $XXX,XXX secondly, related intangible Alabama; charge facility inventory thirdly, longer Nave’s operations incurred that Huntsville, of

recorded million was taxes a the recorded pre-tax income that had of that valuation million. ended provided three loss was or last Our XX, losses although, allowance We quarter, due against share a provision primarily was tax provision for September for three we $X.X for to assets. taxes the income $XXX,XXX, for XXXX for months XX, XXXX net loss months with deferred ended $X.XX $X.X compared we the $X.X million, September same or period the Net for share, a $X.XX year. our of of per per loss

Our $X.X loss of ended a with months XX, of XXXX. same adjusted ended the million, three income compared $XXX,XXX EBITDA the XX, September was for September XXXX for period

months XX on results. moving to Now the

large total the ended for segment XXXX. by and the revenues from sales September September Cable the and in customer quarter same fiscal increase the ended was sales. services million $X.X decreased million The $XX.X months the in XX from repair XXXX, sales, decrease months decrease of $XX.X a XX, for were offset revenues September the first XX due respectfully, the XXXX. in loss in for XX, service refurbished million $X.X $XX.X partially TV ended to primarily to decrease million, due a repair $XX.X For of in XX XX, million our last of sales million million of $X.X repair of primarily down $X.X period an of to months The XXXX equipment business Sales equipment year.

decision be million million, discussions and recycling XX, this revenue represented an Telco the company million September expense, expenses. its the with related As facilities in cell in The refurbished as million repair XXXX, income to compared year. equipment in of compared and management impairment and reserve the project discussed in equipment XX, analysis the lower equity increase that XX, sales goodwill XX, the $X.X over $XXX,XXX from from XX, for Nave and there of TV the subcontractor impairment recorded our reduced new the by of XXXX. us strategy, wireless September at increased the strategic year in past in Joe primarily sales an respectfully. to for Consolidated September several as performance. same results XXXX. increase quarters and our same primarily the sales carrying its for Cable overall partially year of a prior Nave’s resulted at period Triton $XX.X operations and was included decrease restructuring the indicators to for increase alternatives, in for gross experiencing $X.X force year. to YKTG primarily referenced the Since resulted XX, indicators impairment a million, were was sales of been activity partially $X.X increase third of value year the a results equipment closed segment a and recorded ended negatively million segment, inventory restructuring losses in sales of on Datacom months for of XXXX its equipment facilities. Other September segment we a due the and months due from consists The $XX.X the Communications Solutions September our The due earlier, goodwill segment, quarter earlier. gross The goodwill the XXXX, sales increase Cable its million million addressing for offset and sales reporting as XX result ended ended personnel including order for possible by The were of decommissioning a to which $XXX,XXX loss, of for charge profit charge for demand have for decrease increase Cable and charge. three million period investment with in profit repair Equity same TV the to implementing $XX.X can equipment to from sales an an year fulfillment decrease We lower Nave in part as sales for The The operating the last a Palco. surrounding primarily the Telco the XXXX, ended earnings last attributed remaining analysis in in our in excess Cable Sales a $XXX,XXX, TV of XXXX, in the zero impacted operating company year, XX% goodwill XXXX, obsolete three associated for year compared XX, losses. the year. September to of $XX.X by decreased $XXX,XXX. settlement of losses segment’s to the of legal increased $X.X decrease $X.X Telco to Cable by inventory to we million, million was gross for and TV in XXXX, in a decrease September September segment. in ended move profit Also, offset These impairment XXXX equity the in or of to was $XXX,XXX segment $XXX,XXX. in XXXX, $X.X $X.X This of connection our TV various for XX, performed consisted the of ended given Solutions, tower legal management the in YKTG lower lower projected prior quarters ended XXXX. the

quarter, for Our for deferred year September had pre-tax against a provision was $X.X XXXX provided at taxes $X.X to for XX, million our allowance income We tax we primarily we assets. recorded million. was income taxes recorded provision although, the valuation the due ended a for losses that

for the for was $X or a of of $X.X was share. September Cash XX, loss ended equivalents million, ended $X.X for compared with XX, year. ended as million, million $X.XX XXXX, compared period $X.X period XXXX September income XXXX. per EBITDA and of the Adjusted loss million were with XX, September XXXX months XX net of of $X.X same loss a Our XX, September cash the million XX-month last as

over and we paid note approval, We for of pre-tax million XXXX. of we semi-annual of shareholder quarter cash estimate loss result consist be price will subsequent to million in for Now already Broken XX, In which XX, resulted our a September November In December anticipate this of XXXX, sale like agreement contains Joe of for our transactions discuss of purchase controlled in in we connection monthly occurred I Cable facility Tulsat with many has TV installments $X and by interest have is segment rate discussed. the million The a sell $X.X by This Tulsat, this Cable the to major entered the that promissory approximately an a an third of with one Chymiak to fiscal subject company This Chymiak, to would to Arrow which million. million. some occurring $XX.X will $X.X in an closed to Dave that controlled This detail sell sale sale cash. facility company years, in of five operations Dave $X.X X%. on into Chymiak our our XXXX agreement of of more year. our segment of in these In with headquarters. per pre-tax subsidiaries, for of with a our company’s $XX,XXX, gain $XXX,XXX entered rent facility, million. TV XX-year $X.X lease Mr. a transaction or into with

$X.X Arrow entered financial totaling of I we of to deferred remarks provided loans longer the of of facility section our As Oklahoma. operator the in XXXX, matures revolving will with agreement the XXth our our agreement used under term financial different turn with funds we This another credit over be This a Bank credit million contains by December and the financial with In of over forbearance resulting a from $X.X we line and sale gain the lender. now. million period. sale Therefore, the Then right agreement into a the and no primary cash call XXXX. of million. for result December now leaseback of internal questions. credit are pre-tax of our on overview transaction, will concludes our the XXXX, October/November lender lease line facility $X.X outstanding Broken credit to now payoff this

Operator

from you. Thank Instructions] [Operator Investments. take first our with Hess Michael question We’ll Hess

Michael Hess

all, example, the that our business? Cable when the numbers, will for the numbers, $X.X Thank TV we’d those sell said September that Cable understand be XXth is hit? wanted you when when – very in much. December lose we will and, sold And the to in or of I’m or TV just we we already facility business, million, first

Joseph Hart

Joe Yes. that? This is to want do you Scott, answer Hart.

Scott Francis

Thank Yes, I Michael. will. you,

were these to XX. all September subsequent So transactions

XX-year gain we quarter, over the lease. the time. building occur shareholder the on in nature the you that then the leaseback then losses actually mean in it’s because won’t until which anticipate cable transaction, actually And occur cable I so actually transactions, actually And the sale and not you because will little later, sale gains until sale from referenced, of actual will these transaction that the occur approval, the of point our of loss the see So third a will in resulting complicated, a December. on

Now will because now it’ll what Cable said, that rolled into the believe recorded. a the of will, But won’t quarter. which be part get the again actual get – the million is with resulting be net $X.X be of approximate third day at into end actually us, will we that so thinking that we’re loss won’t until transaction the once and that transaction rolled gain building occurs, get that then actually from will that it on cable the

Michael Hess

liabilities know how does or the work? How the we than the buyers? less it, sale selling to quarter in being Thank Cable Are for work? third off I we’re the sale And inventory does between you. guess, now over TV certain sent I selling inventory. are

Joseph Hart

well as might it. you stay Scott, Yes. with

Scott Francis

I that. will do

Okay.

we segment. with different of the cable again, Michael, that selling them. are – companies stock the companies There’s of the So, actually all that, those five comprise of the of

So net so business cash. it position of except is not just itself, the asset the entire for it’s

inventory, the not with happens what just is, liabilities all there it’s AR/AP, really it’s it. associated So

loss. – Broken $X.X way of million Arrow you facility, just – subject it for to the facility after sale, loss how… – it’s the it’s the million all That’s turning effectively all the so, And out net remove $X.X net is a that’s a the as it’s net asset

Michael Hess

the go third it between will a that and inventory off how And like able work? be capital now to adjustment, you like Does is working them, to the sell does or that quarter?

Joseph Hart

company operate approval traditional until is the capital in a the shareholder will as working as yes, deal. There’s third is point as it where such But adjustment the every in quarter.

So place. ADDvantage’s period until that profits, come time, approval to ADDvantage everything shareholder in that business, right, it still is takes of still

company So it’s operate. our still to

Michael Hess

Thank you very much.

Joseph Hart

You’re welcome. very

Operator

from question Gaspar] next [ph]. our we’ll [George And take

Unidentified Analyst

Yes. Thank you. morning. Good

do its Just if cable does all cranked handled operation? the – execution ongoing you the the the much handle the to that sale rental facility terms previous of past cable the post sell How get agreement question and in inventory. the for operation identify your question. cost? this facilities, out Can there was because future regarding an of How and rental of you the costs

Joseph Hart

Thank Yes. Scott are just vein. in it. with same to ask going to you, I’m the all stay George. These

So, Scott, away. take it

Scott Francis

Okay.

I real need was what there. kind I you – of question where – kind of to your may So, George, lost your

me – help on I lost you – kind what were you of can So on going. where

to You’re how asking rental ADDvantage – is expense what going in what? how terms of affect – the about

Unidentified Analyst

made Well, you’ve sell. deal here to a

got rent already a operation, you is the the I part of sale selling cable will operation of transaction operation significant the you’re within But those When the now assume the covers facilities. the the no that which cable longer -- the You’ve utilizing be a rent facilities. affected renting. facilities, selling

Scott Francis

Right.

Unidentified Analyst

change Technologies? structure that Will the the continuing rent company ADDvantage associated with cost

Scott Francis

Okay.

you’re Now I’m where following going now.

facility, there affected lease we and into That’s people, expense ADDvantage. why we at different an is, – sold is, it’ll reason our and than to the here. month-over-month move go will our basis. nominal on third sale, headquarters. expense, some the Tulsat, upon is one That’s at be XX why being consummation but a folks space will rent a headquarters, have not what the facility. office we happen which We’ll our Broken happen which Tulsat held we quarter, Arrow less So What’ll in a

that a of does place, the when Dave question? way, that and/or company, – your make the the sale lease we’ll that will So effectively right? as and facility, Does answer XX-year get sense takes

Unidentified Analyst

in accounting completed? terms the sale versus assume adjustments out of some to So after the of be Tulsat going here structure netting the there’s related that to parent cost company I is

Scott Francis

So…

Unidentified Analyst

The cable operation, excuse me?

Scott Francis

be a all of there’ll discontinued going out want there’ll to be have through to – adjustments Well, for restatement be – this yes, be and operations through term, sorts likely forth. not. I more that don’t will speak completely than we’ll but be going so of process

So…

Unidentified Analyst

Gotcha.

Scott Francis

that a and will financials terms the what right? you’ll retro …this be complete rework be of post, seeing in

Unidentified Analyst

Right.

Scott Francis

everything. see So that way can you

Unidentified Analyst

you ultimately, this, summation headquarter ADDvantage could move elsewhere from the And Okay. on like its in location? previous sounds then Technologies’ it

Scott Francis

accounting move relatively back-office headquarters folks an personnel, space it’s office and IT, Yes. we is ADDvantage so into basically Well, them can HR, easily.

It with of or floors that. a hard won’t anything dealing not us. be move people like XX for We’re

Unidentified Analyst

on do ask question XG to see long get operational Great. concept. you How I taking in that could area? additional And if it an the

Joseph Hart

George. Thanks, Joe. is This

Unidentified Analyst

… beyond what you’re acquiring? Yes.

Joseph Hart

Well, we taking over operations be to are teams. going existing

So…

Unidentified Analyst

Okay.

Joseph Hart

in …the Chicago, Fulton operations and companies, they standing Dallas, and have Mill City Minneapolis.

Unidentified Analyst

see. I

Joseph Hart

And and teams crews. existing crews construction existing tower small they have and cell management

to have a XG platform of have these are business that the community bring that to been it’s nicely, are that for And business for scale-up than XX the – we this we starts years operating them. and book the and more emerge with a can So they as entities well-known wireless growth think really pattern.

Unidentified Analyst

along this. stream initial that And tell us the making revenue you’re you that What’s – you with Okay. could can acquisition come the made? that

Joseph Hart

million XXXX, about in I it’s current current – for would approximately the the revenue. calendar well, $XX year them just yes, say that The Yes. – for for business

Unidentified Analyst

see. I

Joseph Hart

that additional in And launch build XXXX. growth initiatives, which some we will expect that we’ll calendar up

Unidentified Analyst

I very that’s see. good. Thank Well, kindly. perspective. you, sounds That

Joseph Hart

George. You’re welcome. Thanks,

Operator

Sam Rebotsky SER Management. next with We’ll from question Asset take our

Sam Rebotsky

any take of that up you’re the consideration does a gentlemen. the into the you take loss result written transaction, it afternoon, of million. estimate Does on of $X.X the that until And in occur time till consideration goodwill sort sale Good that the continuing of will that pre-tax will been Yes. approximately the books hasn’t losses Could sale, into on that carrying timeframe? sale off? states we the

Joseph Hart

Sam. for on Scott, that here. role to I’m Thanks a since question, just your to he’s one deflect Yes. going

Scott Francis

Thanks, Joe. Yes.

So, had third the Cable to already segment. the question. written this year, of the off we related goodwill quarter of all Sam, In good

zero there the have So there. left segment – are Cable nothing so there is values now, goodwill on that the

– As the until entered that’s the any having place. gain far next into as that the agreement a have over several Cable the it as couple months days loss of – right does that or million, income anticipated, we ago, is is segment loss project of in the the try taking the That to maybe sale right? the of not as – $X.X date of

Sam Rebotsky

Okay.

of $X.X the loss December the – XX is So million of as XX?

Scott Francis

but an It’s date, of estimate as that yes. Yes.

Sam Rebotsky

to approval. third it to you closes, expect So the get extent quarter the

– gives that the the six-month for we period lost sort So closing? you’re million year for –about might as the $X.X Cable expect for fact you much that September the the as the And million you XX, of timeframe. about talking losses $X.X ending XXXX, that till

Scott Francis

how I’m don’t really know not I – to Cable is perform. going

we absorb, So or now has, our show it I will Cable George of continuing was ADDvantage segments operations same discontinued our continues on discontinued that and the mentioning tell as the you still is will cables, would our then infrastructure Cable here’s what Telco income. be trajectory collapsed also the losses part I will as has it restating be and wireless entity new that is financials And the income performance net the ADDvantage operations to then into because the earlier, as then will to business extent any with of net that segment. segment ultimately, the

Sam Rebotsky

Okay.

Scott Francis

be I yes, And into but the so just absorbed clear. the it make – we’re to but answer – gain/loss want on will question, as transaction. your that’s sure not ADDvantage,

Sam Rebotsky

trying Okay. just some on sort based shown seems in, project numbers rationale you kind logical. the that in and you’ve I loss make of to the of

and Now, substantiate showed these goodwill have? the $X,XXX Telco How and maintain the we Cable million carrying of that year-end, Telco sort let with you’re do goodwill. substantial me million. at the we that showed And TV of look $X,XXX sort the on the the losses loss

Scott Francis

take that. ahead go and may you Joe,

Joseph Hart

Yes.

Sorry, Scott.

Scott Francis

That’s fine.

So, on our each Sam, do year. goodwill we analysis

because some to happen Telco that were indicators So we the of Cables, do in earlier – there. year

– that’s third did So and write-off why we the in quarter. the

done goodwill in shown suggest place right and that the sustain projections initiatives of analysis there. our can have that that’s because that now, have Telco the we would we our we With

which they we based are in justified then they we go successful strategies on the goodwill think expect charges for we’re for have will for impairment we’ll and be analysis don’t be, we we, were reason, that work thinking, remodify then initiatives if if could And these way that reason, the admittedly, to yes, the the through went out initiatives Now like whatever every that and have then redo. year, we whatever And obviously that’s then results through. would we see. these will If don’t that the pan we in we But go analysis. will and result. them we to,

not based…. it’s So

Sam Rebotsky

Yes.

Scott Francis

on certainly …on on but projections, past, – right? future the based

Sam Rebotsky

much to do you Yes. loss? grow have How sales to eliminate this

Scott Francis

the Eliminate loss on.

Sam Rebotsky

Telco? the On

Scott Francis

traditionally we there, we future What don’t guidance – provide Sam.

we’re we typically you you it margins I we could not provide been just prepared deflect, at take do segment can’t generating What that. we the don’t to that you. – to be show able but tell Telco extrapolate to you that and is guidance that there So could the have that, out, the calculation, to not information to and can provide trying

Sam Rebotsky

sales – Are our what percentage are – how our sales increasing?

Scott Francis

Again, traditionally on I’ll give forward thing. the that. do same say can’t to We I have guidance that. don’t

So…

Sam Rebotsky

September what the September quarter? Okay. the the quarter, sales Say, over prior June – did in quarter the do

Scott Francis

Okay.

caused as So the move three three was down of for at did said that by lot actually the months, our Telco the disruption our Palco months and a Nave due I in operation. go information, and slightly the to

more be a will probably lot January, in these – effective a initiatives March more timeframe like So fair assess, forward. place this a last was in and quarter February, we’re to putting probably of into quarter

basis. a historical So that’s on not – it’s

margin it So then many to a be to various Joe have repair, similar brand-new. To similar extent, was our we’re that’s new trying into we what businesses to margins, be line in do – that these of of could initiatives are a the discussing able but those and effectively different top get the increase that will sales. will be these like revenue. But terms

Sam Rebotsky

that of? backlog Do we can have talk any we

Scott Francis

want Don, to you that, address or you Joe can. if

Joseph Hart

mean, inventory Yes. really, well somewhat it’s that much every quarter maybe the you new like about something as a every on product day, businesses I backlog so orders of environment. aren’t as But in I function mean, sales, can and it’s that of there. based a add and would really sales. say fulfilling Don, Triton Nave week each backlog. come I not

Don Kinison

current our you’re think I what No, and forecast the business time. relative doing the are as month-over-month at correct. mean, to quarter-over-quarter them we I is numbers

but terms of deals coming that a necessarily that, how So expected funnel functions. business of little in bit in, having not of a have that’s we the are

to As Scott and spoke on the line. focuses grow with bottom helping earlier operational the relationships customers, the reducing efficiencies, business overall our and while continuing grow Joe

far, businesses. where those we’re we’re do very on in comfortable And feel that track so in at and to both of

Joseph Hart

costs allows circuit operational us the down of repair, would and services. that for In operating of say moving out been they��ve some can inventory, and I order Yes. reduce like and services moving into investing major into products lines OEMs. manufactured to in test really additional that cramped their Nave gain the and the additional and case some And Triton, expand previously inventory it’s add product where them fulfillment our additional efficiency, by years were we boards that the refurbishment to a facility facilities some Palco formative that in

acquisition assigned with two backlog, kind services better a with of going to we as and those sell-side typically the on the business with and So case backlog that’s it wireless here services operations. the has into evolve In about just of of been going what’s City, Fulton Mill that orders you’re of Typically, where average, have backlogs to out on eight and running you infrastructure. your over your months the that backlog, to what sometimes schedule period. two in you them – months to three XX-week coming have

large multi-year typically massive to not ongoing an it’s or infrastructure projects, up you it’s available. that resources the matches So have business

Operator

question to move follow-up We’ll our from Michael Hess. next

Michael Hess

quarter got gone? ask said. could wondering I’ve you if color what on was given answer But a has how you. I the this, you calendar not just follow-up guys what Thank I’m give line you question. the sure can fourth to have

Joseph Hart

of combination Scott be it No, a would and Don. probably

to want you first? do Scott, go So,

Scott Francis

– Well really think, guidance. provide we I again, I Michael, and think, don’t

So of can’t we lot physical actual there numbers. provide really color a in of terms

a of into right don’t put trying lot assured, and we’re the that don’t at time. to initiative make – rest this moving trying point in now these There’s are growth parts But just we place. the So this forward looking we put to we provide in trying place. just initiatives to

Michael Hess

Well, congratulations transaction, Okay. on the Scott.

Scott Francis

very much, Michael. I appreciate it

Joseph Hart

Thank you.

Operator

closing or any question-and-answer additional the to today’s remarks. Joe to for Hart back And like conference concludes I’d that turn session.

Joseph Hart

them Thank time for today, who get We every learn and and thank your really you questions. call operator, some. the you, everyone joined do to appreciate from we we

for So that. thanks

are But do operating that a place. have trying really here our verticals our we transitional telecom we company’s improve week entering costs also time And the in the we executed to way build up out the we strategy growth Telco trying reduce in, and as We’re week and operations. into we’re within the the diversify company industry. new in further development, against to our business

made progress top the months year. place And far. over by in in to both growth, and our next we’ve and plan encouraged so the U.S. drive coming think line we development we bottom drive, can line investors. forward important several have We’re to a which We the we think solid is

and We our opportunity. expect advantage the will Cable services these plans to grow new us Telco coming to TV together really with to divest operations and market wireless allow take add of strategy our the

the turn this back for to in your participation thanks session. to close So And with the call. I’ll that, operator the

Operator

for Thank participation. Thank today’s you. call. concludes This your you

You may disconnect. now

ADDvantage Technologies (AEYGQ) 28 Dec 182018 Q4 Earnings call transcript