AEY - Earnings call transcript Q4 2021 | ADDvantage Technologies Group, Inc.

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Operator

Good day, and welcome to the ADDvantage Technologies Fiscal 2021 Fourth Quarter and Year-End Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brett Maas with Hayden IR. Please go ahead.

Brett Maas

Thank you, operator.

by Rutledge, President Officer. the today well CEO; joined Michael as company's are Joe and Hart, as We Chief Financial

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

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

certain present these financial at ratios non-GAAP in are that income During issued net this used financial with website our and press such on in as located non-GAAP today, which measures our measures earlier also addvantagetechnologies.com. we call, certain release and tables may are

to financial a reconciliation discussion closest these the with of the find Executive Hart, like relevant. please the and and You'll financial I'd these These about should Officer both non-GAAP financial included of Chief financials now turn are measures not GAAP measures addition we ADDvantage and measures President GAAP to benefit and are Technologies. of be Joe non-GAAP believe for to over investors considered measures. ahead. Joe, in of instead call why go

Joseph Hart

the year and XXXX exceed significant new just our on again. carriers, have XG and issues results. our in The expectation. validates hand projects, segment entrant in for have segment This Brett, continued X and attractive, you purchase significant the including other Wireless or to fiscal has have quarter market, chip year months, have uptick to work-from-home for broad-based. Wireless. the of customers the already XG several everyone touches the this the XXXX. call growth services Wireless work quarter pipeline discussing to involves over are related aspects occur will double Simultaneously, surge to that fourth new orders orders DISH orders revenue in refurbished by permitting the made in Wireless where third we shortages construction Telco X $X showed total today. are that jumped XXXX X and either as work revenue the options. of new This that The longstanding purchase purchase been confidence The finally source. and makes and more we we sold been joining harder the waiting quarter not thank now. us tower meaning long-rated is We complete awarded The our ongoing in to It rollout fourth both momentum quarter. deliver strong been for gives service hand we total our supply you, value the more next And and to Nave fiscal for alternatives all folks customer, regions electronic work expensive confident we the $X.X especially X Triton fourth to time some of from Thank affordable us fiscal for in revenue. million million accruals looking will

continue Overall, anticipate elevated somewhat really future this earnings that positive demand result made we growth off Triton recent the a quarters, albeit strong revenue Nave in leveling of some a delivered has XX% of level in business at quarter. revenue all a in Datacom year was softness and at with nice for per the a The We XX% to a to sales earlier up our and past. had recovery year. COVID-related relative the share point from

to rest over one-time XX%. new This should Margins is fiscal multiple and a year our to material at during related XX% its up the have fiscal XXXX was benefited debt of to our on due change of 'XX impacted from costs from the expected related Those to QX was the the margin the of QX to Gross previous the of recent into XXXX. year margin carry QX the to profit markets. of of from forgiveness but starting much and revenues XX% related our the QX PPP dropped recovery extinguishment normalize Now were on been of one-time mobilization over quarter-over-quarter. order event. XX% current loan. benefit The 'XX

as from XXXX, better significantly expect We in our these the segment markets of benefit fiscal through making business more increase, of profitable. and workloads new we will economies scale, we that move

growing XXX cell Over sites, and demand. over won this for we upgrade have the staffing last our few increased XG awards technology we to months, have to meet site to

be challenging up ago a ramping we the crews from tight fiscal meet there is in in between this year half year expansion few QX of XX part of running XXXX growth during this most months market. our XX In fact, the we from Currently, labor of tower to are XX to staffing XXXX. will considerably second this even and greater up fiscal crews,

network As are be massive, out I the their and previously to said, C-block especially expansion Verizon XG build that will now spectrum. AT&T starting

of yesterday. wireless plans of are discussed. see carriers portion starting and States. now strategically that, manufacturers due just work crews The carriers. Michael, providers, This and tower and just established detailed very to are the in call to under work of results Rutledge, this results. a financial handset secular we With are to represents work capture the CFO, experienced Tower centers, review but piece positioned You information Fulton I'll Technologies provide turn effort, in not opportunity this United of our our just relationships technology often Michael reported across a center to ahead. trend, our to data new wireless over public key please manifest multiyear a for meaningful opportunity more the the markets of our is capital go and expenditure for X

Michael Rutledge

the quarter up in was the $X.X driven million $X.X million quarter costs to in compared a to same $X.X last profit as fiscal Gross were $XXX,XXX fourth mentioned. the new of XX% for for XXXX. level with X nearly million, segment increase fourth profit due quarter associated fiscal than million This year for million prior increase the Gross Wireless Gross the increased $XX.X by $X.X $XX.X in of gross XX% the XX% million by $X.X XX% Wireless of quarter. Telco fiscal years compared Sales fiscal Joe. Joe quarter you, the highest XXXX for our segment. profit and Thank with increase the profit current were million, of margin fourth was in nearly in to the to more year. segment margins compared markets,

operating quarter our to increased quarter Wireless year, with we XX, $X.X services compared million Our for primarily ended ramp same the with the general associated supporting higher as work. million associated increase for was to XXXX, the in $X.X to million for the due commissions our by increased million quarter growth. costs $X.X with $X.X the anticipated largely compared expenses Selling, Telco increased million same personnel-related last which segment $X.X the due rate September was tower increased This million last personnel administrative with year. for quarter as and costs in segment company's expenses $X.X for to well as

of based million $X.XX $X or extinguishment the net the share the with our income gain same diluted debt compared XX a XX.X per loss per quarter quarter related diluted of a Finally, share on million million was net a $X $X.XX loan. shares fourth quarter forgiveness on last loss based of in non-recurring of net million million shares the was Included of of or PPP for for $X.X to income year.

For the to $XX.X year, million million, were up XX% sales last $XX.X year. compared

million, segment Telco by Wireless Our $X.X a offsetting increased in million decline $XX.X segment. the

profit $X.X Our last expenses share to $X million Net million diluted million compared loss or was with of last a $X.X XX% with last $XX.X the of year million $XX.X increased $X.XX $X.X per Selling, than or administrative general compared $XX.X XX% of year. million diluted loss million million $XX.X last by year loss XX.X compared to loss year. increased million on for was last with year. compared shares based expenses a by share gross $X.X on profit based shares by XX.X a year to million $X.XX million margin increased the for $XX.X more million year. for $X.X the net million year. to Gross compared with million Operating and per

XX, sheet. company XX, $X.X as XX, were $X.X XXXX, net with And XXXX, to of Cash of $X.X September million. Now was at XXXX. used and of September turning September the equivalents our to primarily balance million compared cash fund million as inventories operations. had Cash

year $X.X $X $X.X credit September decreased million. in by debt At $X.X XX, XXXX, million the Our of to million, line revolving debt ended million a financing September is outstanding which outstanding of XXXX, on leases. and million comprised XX, $X.X during was

to we conditions will capitalized call normalized remarks. believe This of with appropriate return. financial backstops to segment to overview our until over questions. the turn the near-term I support business any now continue concludes operator business more to facilitate are We conditions sufficiently the

Operator

Velmer William our [Operator from from take question S.A. Instructions]. first We'll ahead Advisory. go and

William Velmer

A quick questions. couple of

anticipated? for revenue, you hear the For for total gave revenue -- upcoming in I -- year for did year ending question. guidance $XX any just you fiscal give first didn't That's if million

Joseph Hart

for you your Joe No, Thank Yes. call. we guidance. Hart. didn't give is This

traditionally not We given guidance. have

William Velmer

Okay.

was for anticipate you Do believable potential updating of stale, looking a that presentation more put out $XXX and presentation, ending summer that than you were revenue million it's XXXX. EBITDA in positive stale? Your last kind huge so

Joseph Hart

raise pretty to to were the intending Yes, we capital was were was -- do. doing in right COVID. go that presentation That order recent start aggressive M&A of X, disappointing, raise to the was effort history an frankly of that We totally capital program. losses. given but understandable our year of we -- on That in X height

and for we're to the again during with see right potentially So turn we to that will and capital focused the But we something now, company shareholders done healthy which M&A. year, the organic. profitable been XXXX. way evidence around of organic we've we raising now have believe then will growth, at best focused was look get on on to And do which this completely and once

William Velmer

a question. And minor Okay.

the the major problem kind just paranoia Fed there problem? Or all XG the -- want there? What airlines? they a airlines is Is see rollout. noticed the the a you the of are You down major paranoid of to major really it slow about do is and

Joseph Hart

read earnings also that companies Well, MasTec I'm and some of radio everything read I Dycom others. some And subject. we've releases big about from big possibly can and in carriers construction this certainly the no recent expert, the I particular but frequency and like seen

all, didn't on this frequency of the auction years sensitivity of airlines. about First up this the before FCC study for put particular X for and subject

impact widely is around communication. no or with C-block world on airlines aircraft used this the the Secondly,

buy $XX billion, I Lastly, have billion spent, a to just of this $XX frequency. the know, don't total carriers

network spectrum. C-block this So building proceeding they out the using are with

They'll Now that not do necessarily flushed in are that But spectrum of the the sites. airport. what muted on to but get those building they an right everybody this on for have now, is not sites airport out. for until turning agreed is glide the turn all path, sites near leave anywhere politics

So it hasn't affected all. at construction

William Velmer

the place. was being really $XX numbers out or able about infrastructure play. U.S. is -- to from The you. this alone in just amazing. they're could work hope but XG would billion. just for to question more And place, the up than what One numbers the your to on was Okay. money considered that all $XXX that you can of because years $XX next the be you respect with tell this I And all much saw billion over tell, the It's range that is hope in really were an are couple billion. expand I XXXX from the to estimated infrastructure It's more is over -- company I I so numbers I to on hope us planning capitalize industry. spent there think they be there. Worldwide,

last comment. my of kind that's So

Joseph Hart

would wholeheartedly. We agree with Yes. you

for you thank that comment. So

Operator

And Gaspar]. on [George we'll question move from go to and ahead next our

Unidentified Analyst

Yes.

you a to more like on I'd related Wireless. little to talk First, number crew this that bit about

have the expose You indicated, think now? it to I you XX crews that market in was XX

Joseph Hart

I Yes, said. that's That's correct. what

Unidentified Analyst

crews crews those in-house of are many how And versus outside? Okay.

Joseph Hart

is, with George. you're your questioning, good So the consistent news

think. So for I'm prepared always it, I

So for always years with rapid use from my least time, and you ebbs be protect of of and subcontractor what And and to in that a where subcontract. to you're the like to and sort you the in go and X/X work XX% to workload. ups about the in flows, construction long is, experience case like growth, said this, downs on based at X/X in-house. years I'd subcontract you want I've this And buffer

So we're subcontract about the X/X moment. at

Unidentified Analyst

I got you.

And just years past to about the then in level was count give progress crews. year, XX a to maybe exposure. tremendous Okay. this it ago, a maybe And it us XX I was of remember, XX about year rose; If X XX. to ago, it crew

describe And how you has range? can crew the up so fast count XX to this XX gone to

Joseph Hart

backlog. about it's mean I all the Well, building

construction last really with Over XXXX plagued years, of a the the activity. all-time of low really Wireless has and XXXX, been business couple Infrastructure

corporate Sprint then let You paydown the delay merger, anything. at building in AT&T T-Mobile level. the alone approved, DISH have had even global the debt wasn't you And its in

impacted So a really things lot it. of

So consistently of there XX FCC then now are XXXX. happened T-Mobile and it yet, you cover in has wasn't after hasn't really work. starting say And X the DISH quarter, strong And constructing the build to quarter again. just the it volume AT&T Well, coming. heard you've has here to by look, but me last Verizon months. have XX% mandates to population been of is that

this longer took steep together than It come and XG all definitely cycle it's is last. So simultaneously we're current at a to the XG a prudent. swift little on but cycles, trying bit very and ramp. And be

operating expenses You our saw that increased.

payoff Arkansas, some Houston, and profitability. other cross each over of markets, that into get the Austin, I target the tower and expense Antonio, OJT take mean, adding. logistics acceptable those some with volume these Detroit, and there, markets a is that builds these And to expense. That's of been training, up in and up talking Mobilizing some incremental level onboarding new new we've of started. setting Louis, an couple then weeks San about as the cross-docks then of and to But markets St. in crews. those of facilities is training you

process. of it's bit So a a slow-moving

have who a team this of been veterans seasoned We kind have ramp up before. very made of through

So it's nicely. finally I think together all coming

Unidentified Analyst

what -- see, what's XXth in those since is crew month give quarter fiscal quarter, you relative the of specifically numbers? past year? first average crew the of December, quarter Can the this your this now would your count. I first for on us it's Can your to count relate okay. fourth you ending This be

Joseph Hart

say ago, to was XX, that I mean, the compare XX so real-time a counts like XX or months I crew to increased Yes, would few information. XX I when about by so,

we last XX We reported that XX running that been we months. of August. to have So -- at couple in the were XX

then you, that see QX QX move QX. as guidance, call into right? to drastic we're this And ramp-up we're last year. quarterly with hesitate during conference plane quarter as through the and to the So we give in of going rest -- the was we I So on the but had a same

as I remarks. Second my half 'XX active, in said quite be should of

Unidentified Analyst

also additional build-out? it's on XG your tower of And putting Yes. just you're just a in not but of Joe, it's that's terms away required of something the where generating from, the the from revenues magnitude in tower, terms this

Joseph Hart

Well, the it's site. for us on cell mostly work

the is first the to to way. groundwork, existing into or the fiber So cases, going who We right the is optic equipment. add cell especially on cell groundwork there like platforms In and site, some DISH cable the bringing fiber in at sites of for we bring time. for somebody new line out from are property

some part revenue each ground cell is is that the infrastructure from there site. level So stream work of

Unidentified Analyst

into moving Okay. Obviously, I I now. congratulations Telco Telco you're All that significant up. reach right. new of helped Florida. on just -- the And And the in in the facility could side? build-out I get know Alabama

really And try near has stream is describe a term? what the Telco payer you revenue that? technology to all to any Your forward continuing of term, is you about giving longer drive on forward some thoughts this moved the basis. on Can in in

Joseph Hart

I and pleased grateful the revenue returned. am obviously stream that Datacom Triton

that in stream monthly cut on basis. was half COVID During a revenue

network. we Telco all don't in off done how little it's out the has that supply what impact, normal, long a that the last? mean you bit So especially an last. of how on. be the port, is used for question building came on see normal. past ships have is know, in chain all And team long to will articles chips The year that crystal up don't are this a core and current back a pictures What we beyond so it to nice job very got I the it and continues of mean that ball nicely somewhat there. has of unpredictably quarter. I this Los will the Angeles taken Nave George,

So for we're have decent way event. that it Telco optimistic We the to just for no a knowing good will sure. be year of

Unidentified Analyst

see. I

they've then lastly, companies it's have be into really you expansion shares today That's on million, pleased point, market now shares about many Wireless there number that and you’re out out And recall. of contents this got a the outstanding all shareholders, Okay. huge at very number this in the And XX.X program the in growing. for if only that I stock the company, shares the are area. that in of to by modest

you the Can through about for or additional need comments maybe expand how sales X some is an thoughts I So the And in on this, or make past you to trying I question the acquisition? view operations. basically, the brings that getting any through point. made share this? do know some think you've capital stock to up acquisition that

Joseph Hart

And or it didn't to an frankly, investor as call have that caller, we think -- said knows raise our I think history. sense. Well, not make good it so. just in I ago had X.X and at years to environment took we capital I time, And that at the run trying first performance about financial a that's is quite a on everybody that

Our really in here our job pledge XXXX. that to around get and turned is

focus by some a strong get significant to So of do quarter more aggressive that very trying sober we're now, to quarters And we our need of at on is getting M&A. we about raise way in being to company But this followed to for look have this right believe capital profitable. that we'll profitability. a then couple breakeven

Unidentified Analyst

very And very you momentum have And do. absolutely just a and you're have. forward do And to year. really the the forward able to the something nice by related been trying that all Take fiscal end it's going on amazing current to everything And appreciate Okay. I call. it, things you've holding substantial you to this together everyone this going we're of looking Joe, care. that you approach that's way

Joseph Hart

George. Thanks,

Operator

our [Operator [Edward Instructions]. Culverwell]. on next And to from we'll move question

Unidentified Analyst

SEC. always raised you have a in money Is that with I but original see understand the the there, and for Yes. But was company I registration them you correct? back, -- privately, the also a was company. different I underwriter have

Joseph Hart

we referring about ago? did Yes. Are X.X year, registration to you a the that years S-X

Unidentified Analyst

-- indicated releases the shares I'm of you was It's along something way could registration. your sure. not at SEC discretion. I'm just recent your like in sell one you an not it

Joseph Hart

registration and Yes. that That's X.X the current. ago, it filed about years is we S-X still

due been of combination mean, shares, the things. We price of have selling any the to the not share the I performance, way to and substantive those kind

it is available us. still So to

a You're X correct. year sort or the shares. about It sold originally we sort outstanding We $XX.X the that of raised shares float about million that thing. about million, $XX.X $XX by and total did million X raised million it was million about and in progress of ago,

Unidentified Analyst

that was in? price what And

Joseph Hart

-- $X.XX, Those $X.XX] average. were [$X.XX at about

been So be the selling, just price share sense makes I hasn't mean, where any it so... to

Unidentified Analyst

a here. sizable turnaround you Well, certainly making are

Joseph Hart

our No, so. that. I on all we hope mean is effort focused of

So in a Yes. direction. the Thanks. we're We'll take right headed quarter.

Operator

we'll next ahead And and go from our Caramanidis Kurt question Hennig. move M to on from, Carl

Kurt Caramanidis

backlog you to book, better kind alluded I building the backlog? to be, queue. like much and getting see out of do this seasonality top that's kind bottom as each the so as going QX not all line quarter goes much was just you've ramping then strong 'XX. out, growth per your whatever year as meaning think But in I And profitability You of quarter while in and in mentioned

Joseph Hart

answer give I've want how tried always of guidance. much to to away I to question. to the your from know decide that trying stay I'm specific because I

I quarter think is this that ramping. current of one the still

like started upfront market upfront of that. material, it's in a of in get you and So the investment these investment new logistics the you people to the per get investment setting material upfront costs some an and up an cross-docks and in make the markets, to things couple make

had crews this we've current tower and costs quarter. some training during -- for that So

started October. So this back in quarter

take a off ramp really been of the of calendar it's So growth. part process for XXXX

end 'XX through on see And We're on continued side. so more at for as going the be Christmas So at break. detail, growth exciting the I we mean impolite, to much not and of picture. the Telco then us time, year same just into an too Wireless side calendar without we're go tail that. hopefully, you the the the trying about get

Operator

hand And with now I the that, management or closing additional would back to to call over we have like for no any further questions. remarks

Joseph Hart

operator. you, Thank

We’ve Huntsville, say investors been long as investors XPL those into So put been long I folks of years. just in have transition have of time AEY in and last XXXX for long in folks facilities Alabama. couple in in to for would operations equipment it's pull. a both on paid side It's our years. and equipment that joined location Telco been that a been that of new business. those year reported That's Florida of the recently a this It a our last the really off last the couple here

company obligation we like the be call that. going not we're few to next calendar ramp-up had a immediate, We that Wireless growth and reach focused good in everybody year kind had steep today. environment over ramp On but business, to on of just fiscal around as of to of are get again. turned go a 'XX And is in know went we then and start XXXX. bought company We into the 'XX, off of and early of And XXXX. we in our profitable, a I flat we going where on side in that we kind clearly profitable XXXX. Fulton We've back seen we were construction this months. the described XXXX. which in is an within situation It's our a the reported to be suddenly the are in QX our this

that think So to we is happen. pledged we for this be are make the to AEY starts its to year going shareholders. deliver that And

the and very we confidence. your for continued we you much. hope you thank can So Thank return investment

Operator

that, And call. conclude participation. does that today's you your for with Thank

You now disconnect. may

ADDvantage Technologies (AEYGQ) 28 Dec 212021 Q4 Earnings call transcript