Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the ADDvantage Technologies Group Report Fiscal 2022 Fourth Quarter and Year End Financial Results. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded.

pleasure your my Mr. now is to host, introduce It IR. Brett Hayden Maas with Thank you, Mr. Maas.

may You begin.

Brett Maas

operator. you, Thank

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

may today's to call the Securities provisions the certain we Safe this begin remind Litigation that which Private of I'd Harbor call, Before forward-looking XXXX. Reform to statements, like you conference contain subject Act are of

things strategic statements system ability original other future agreements These events, and future the forward-looking among and operators, statements certain as regarding of the as its financial such include multiple with well manufacturers equipment subsidiaries relationships performance Technologies as Technologies. ADDvantage of to maintain and ADDvantage

a cautioned of of as Participants the only Commission. recent Exchange XX-K on number in statements are file actual uncertainties. and due on ADDvantage that Form variety Technologies' factors results and or forward-looking the to involve and may differ Securities are predictions with risks a future such These materially from contained report these statements those most events

information financial Financial included Form and conference on included and the considered should Technologies' earlier recent in XX-K. in issued press today statements company's release notes the with ADDvantage presented in conjunction on be most this consolidated call report

ADDvantage anticipated which is on guidance on change. this on results currently future available Technologies The limited subject regarding call is information based to

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

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

of these and we discussion find You'll the about closest in these measures. financials with believe considered non-GAAP are non-GAAP be are instead included not financial and relevant. to reconciliation measures These financial the GAAP should a measures of investors benefit a GAAP addition of measures why financial for

to we December note the fiscal from comparing to its adjusted period XX date Accordingly, XXXX to XX. ending September December month like the XX-month company would are XX year the XX, XX, September I Finally, has period XXXX. end ending

are which is fourth ending quarter We in December period X-month XXXX XXXX was ending quarter XXXX. XX-month first period of which to X-month comparing the XX, December the XX, ending period XXXX the our XX, September our

call Joe, and the Joe of Chief ahead. ADDvantage President Officer turn to to over like Hart, now Executive Technologies. I'd please go

Joe Hart

everyone you, the and Thank call on to today. Brett, thank us you joining

both for for company good think XXXX challenges. economic resilience and face was of continued we of ADDvantage our very demonstrated Both segments a have and grew, success ongoing the year in I and conditions positioned chain the XXXX. supply in Technologies, the global

nimbly Our Wireless Telco customers network, responded care and work-from-home and professionally, OEM side, of side. team our and on taking on the enterprise our the carrier customers and excellent

the quarter on the the weather the of of cycles well, are While March we've side. side budget to growth north in start cash still regard. conditions this Wireless only the we and as our quarter the fourth different opinion. we as by December impacted our generation no performed up quarter surface in the XXXX often end-to-end annual opportunity, was on Wireless well Telco and think exceptionally of Telco holidays The The business meaning and scratched have come,

to quarters. a quarter over what X% end the three the grew revenue of last year, the was division Telco strong tailed off Our compared growth but December at quarter previous

half put XX% margins the an of in benefited the reduction revenue a from the for the increase end Simultaneously, we year-over-year. Wireless actually quarter-over-quarter, we cost followed improved second year. with by XX% division a quarter and revenue delivered year our initiatives to However, increase place Wireless, in throughout

cash time positive finished for at in the improved is generation to net provided growth turnaround our income Technologies XXXX. a was full balance for year the factoring profitability years down added pay year, X our the and enabled liquidity During arrangement. credit our us through sheet bottom-line in year-over-year. $X million This first ADDvantage also and and line a Wireless continued the and strengthen of poised on

year. from revenues ago quarter same XX% for the X% increased year Consolidated and a the

margin increased for a XXX saw points margins also basis improvement We gross the year. as

operating and improvements for only significant This full X% generation increased positions grow net grew we XXXX Importantly, we XX%. continue us our in revenue. expenses to income cash in as for revenue the year, as even

Our our do opportunities division Wireless for grow continues XG as XG XXXX. and in to tower expansion work for

segment rates year. and the double-digit for over delivered transport million of is offerings. quarters quarter $XX XXXX, company for X our reflecting growth The in the demand Telco for Our continued and network million result revenue of strong X $XX.X the optical enterprise for total

some uncertainty tensions, by some chain headwinds definitely we opportunity and next food Wireless is in is Wireless several there see for geopolitical the on XXXX. that is creating provider created services period the the growth upheaval of strong There another While division economic years. for our us side

opportunities. widely multiyear public of of in Wireless the opportunity the all X represents carriers the investing team tower enhance impending hope and CapEx exploit our expand We us discussed. that the see and made the dollars of some strategic billions these expansion this to The of wireless to across on carriers. have growth with will recent we a business hires We work Each XG opportunities plans carriers for major footprint are are carriers year. and opportunity Wireless our geographic our help the

demand may increase, bandwidth the thereby add CapEx continues While to need coverage some capacity. improve sites to for to and carriers increased slow consumer temporarily, leading and the cell

XXXX. another and revenue in consecutive their quarter was Telco positive segment of outstanding an had seventh $XX quarter Our year million. over This

our continues Telco to company. positive and margin segment contribution Our generate solid to

our please go call our the a detailed turn Michael now financial over to review Michael, provide to I'll CFO, that, results. With ahead. Rutledge, of more

Michael Rutledge

Joe. you, Thank

Consolidated The was ended XXXX. in increase or from the the $XXX,XXX. $XX.X to of increased sales increases to $XXX,XXX sales million XX, for X quarter Wireless Consolidated December in million fourth X% gross for increased $XX.X increase revenues the last compared was months quarter for to profit same in million of the to million $XXX,XXX $X.X period profit margins. due segment increase an year. $XXX,XXX to the The and for due $X.X Wireless revenues

efficiencies. or communication other months The cost the Consolidated professional selling of decrease G&A ended for by reduction reflects and in X impact operating consist our and initiatives December $XXX,XXX, insurance, XX, expenses include the categories, SG&A personnel, overhead, which of cost XX% decreased services, XXXX. improved

$XXX,XXX XX.X $X.XX with share, diluted XX on of last a or per net diluted $X loss $X.XX same Net for or million compared based of shares shares the share loss was loss million on quarter for year. the based per a quarter million

Turning to the results. full-year

$XX.X For XX% the of period XXXX. to XX% to XX% $XX.X an compared from January revenue segment million, increase to X, and sales $XX December Telco for year million. XX, XXXX revenue XX, ended were XXXX, $XX.X September the million increased million to increased segment Wireless

September Gross margin profit increased or million. margin gross to XX% expenses was profit $XX.X year $XX.X million the gross or gross a $XXX,XXX $X.X XXXX. ended Operating XX, of compared for XX% million to

increased expenses operating So revenue XX%. just X%, increased our while

on net per ended from loan. diluted million to which for $X.XX was extinguishment compared $X.X per Full-year benefited basic PPP net share XX, loss XXXX. or of year This $X.XX for $X a the $XXX,XXX and of gain a our a of diluted the million year loss income share debt was prior September in

net since As this of XXXX. Joe year positive noted, full income is our first

of cash September equivalents generated Cash compared sheet. and to in December year. from were balance $X.X operations XXXX. Turning XX, for the our We XXXX, XX, million million at $X.X approximately as million $X.X cash to

million. of As net of December the had XX, XXXX, company inventories $X.X

are conditions We to until appropriate with support normalized capitalized sufficiently believe more conditions business we return. backstops to continue business near-term

any will to the financial of This our the to I turn over remarks. concludes the facilitate operator segment now overview questions. call

Operator

[Operator Thank Instructions]. you.

Our is question proceed from Peterson, Investor. Please who first with is a question. Private your Ken

Unidentified Analyst

conference Yes. goal. year $X.X you. that a in million about of was much the achieved in discussed it Thank was the call, XXXX? in a Earlier savings How year,

Joe Hart

Joe Hart. is This Ken. Hi,

about of million XXXk. year a of of fuel thwarted $X.X quarter. diesel $XXX,XXX of about goal a our the achieved and that We the price was of kind in half So second the rapid quarter $XXX,XXX the

as it improve quite and still was and bottom-line helped it significant as wasn't both us but robust we hoped, top-line. So

On improvements that margin the helped COGS reported side, we we had which a lot few just our of nice minutes very a here improvements, ago.

Unidentified Analyst

Okay.

sequentially. On was sales lower assuming the Telco seasonal sales were that a Telco typical in sequentially, that I'm is down the quarter? that reason it

Joe Hart

order-driven part That a It's of sales business. was it.

say for network So when about to New Christmas for this closed was provider it by I'll you're selling are also, customers Thanksgiving those the week and of X months. But period year. Year's, budget or end XX% affects your closed

this years, didn't it's some it XXXX, tail-off, bigger. it year, see before was much, So as the that December in November, but significant, we year

I get year hit budget year. a slow So That's we typical. think for and budget that of with start-up the end pretty new

Unidentified Analyst

And how supply starting by with that? being the open management to up lastly, Asia, affected from does Okay. chain the Telco segment see

Joe Hart

crystal the question, that's ball Ken. Yes,

don't think we have at it's sure, some For know much. this how going to -- We impact. time,

sales Now as There's tremendous significant part the transport on going still in pretty amount fiber a a of that shift of across XXXX. construction offset, to country. network optical we equipment made

we get that of won't improvement we chain budget for offset the improvement. shortage think But further some we and supply really So that chip will year, sure. until know help into

Unidentified Analyst

Yes.

saying that's you company now infrastructure to in the a the XG equipment, is On are a optical supplier way?

Joe Hart

also providers The provider companies telephone well hubs, centers hub both. but Zayo, so network the wireless as to for backbone I'll like to providing as and the Everstream, provisioning. is both say, equipment Communications fiber No. private CenturyLink/Lumen. are the fiber switch Those Nave telcos, that public really transmission public

Unidentified Analyst

the to in I to of build-out the Is now? year budgets the generation. or does X many cycle a your secular a that years what a guess last the question of In see the X CapEx had X trend is carriers. right think this next on going one of how opinion, CapEx industry I Okay. sort

Joe Hart

but started are, those still and in cycles XXXX. is wireless XX this XX additional So ago, for doing, sites would probably are frequency cetera. in years we XG, later, et and building first antennas, we our expansion a of years. work differently, here lasted roughly have XG to our year XG XG either answered radios, XX% we And I slightly XX% But

and would initial I auctioned as the cycles mean, XG. most years. gets is these X in XG, XG on to traffic off these years keep and more say, bulk FCC, I first of XXth to strong round just going its in going X of on year. on, tends by of is the cycles each spectrum can frequencies voice big But the you with numbers, a be So build-out XX still the

Unidentified Analyst

Okay.

part necessarily of Wireless few division CapEx kind the years and the that be the XG increases is will for So the next Is correct? having the of, in and not carriers. sales XG XG

Joe Hart

I the being of the Well, XG. the the XG, installed XG still is still XG see spent top maybe radios think amount there's CapEx some bulk that towers frequency it at I of or sharing. but combination, some additional mean, on are being of you related,

Unidentified Analyst

are appreciate. you. Those Okay. Thank my I questions.

Operator

Thank you.

Our with next Please Cliff Puchalski, a Investor. question. Private question your is is who proceed from

Unidentified Analyst

Hello. Congratulations great the for question current about is quarter. My results.

also from unstable capital First economic of detrimental going? all, that throughout the through kind and banking States. on? any of conditions the cuts weather But like and have crisis the because weather the not of how you I'm the tracking the March, so sure, are increasing budgets this winter, been this you seen And there I current revenues? United events Are have prevented quarter, haven't

Joe Hart

We January January, in, with and Texas an ice where I north. in February weather up up in down impact storm late Missouri, early got We Wisconsin, Illinois, here in us worked February. Michigan, hit think, some saw we

that's an few come So traditional a will for and in in business. either time we up blast pretty see north will Midwest, it the but in occasional our or Arctic a typical days at

CapEx As far by impacted budgets, haven't as them we been yet.

in you'll total a CapEx. releases you They in CapEx one one about Verizon, the don't T-Mobile XX% that XX% think, details. give If them see the announced, any and read I earnings Verizon and of announced from decrease other decrease T-Mobile, AT&T, and

their carriers, that don't here C-band this how side a trim is you AT&T AT&T bit, in on XXXX. wired the has of will the still of much little the So AT&T, of versus but lot the deploy the I a year business. of business all spectrum to back think, know wireless new side like

the those too see ecosystem we the I'll won't while don't player So drop in And carrier probably think States' of we that to announcing side It's be quite we month, small see are in that any us side. still caveat spring. will the But tell will because till don't this CFOs impacts much. on or sometime a I may month last United carriers it, a that that. frankly, still major little off predict going the wireless impact I early we're on their in the you world. spending our to know overall

So And I forecasted a we think have we'll pretty just growth fine. plan. be aggressive

it where see we'll goes. So

Unidentified Analyst

So is are you're you capital I being us taking remind than assume taking a market you better small just spending. that share? Can share bigger players? believe why player, than important How more market the you

Joe Hart

in Michigan, headquarters, Yes. our into expanding cetera. Indiana, the Texas, within, a of et And with whether Alabama, we thing Southeast states Houston, cetera. that It out of region, do Wisconsin Chicago geographic begun work starts to of Iowa, it's the Mississippi, up are say X-to-X-hour or the adjacent or our an into, from same over drive et expansion Dallas We've like footprint. I'll states do Louisiana,

So go all are expansion carriers. of of we the also trying into geography. we deeper an share But with expand X to

and had Technologies has We've Last year, more XX the to with our we're we a big fairly trying And Fulton Verizon AT&T. always to business T-Mobile. expand push standard year, for been Wireless. with been carriers, a years; this DISH than supplier one new of

Unidentified Analyst

And wherever jobs it get you job do local than because or better the find ahead. -- you're that sorry, able you you is to go is there a expand, suppliers, more

Joe Hart

had, of say, the promised. certainly customer last that the they expanded we into continuity But and game markets deliver That's X where I'll work the plan. volume Yes. didn't year,

goal So up we to previous X the one and go the and And roots. weren't fine. from withdrew there markets maybe you're carriers and and the But X three two, then add we had back finishing is we of cities. also other we on your expanded from we into ended sites just about those worked another in plant it once that business last carrier in year

Unidentified Analyst

luck. Okay. Thanks for Good taking.

Operator

you. Thank

is question Please a George Our your who proceed Gaspar, from is question. next Private with Investor.

Unidentified Analyst

maybe Good going you the everyone. your seeing that give this then -- I if you're end you. forward? employment the and division. me the quarter the count first the that would year, of if the so you quarter? counts of year on update operation? your had where to you're working day and diligence how see change at the as that your Telco or Thank XXX we get last and how of end Can words, end of first In due crew and you the in in of management Joe, be, closer the at question and maybe to give could on us yourselves at And year your the situation point us recall, you at where did on other employment the

Joe Hart

aspect a answer your always to information of I Sure. but that little you to this, try a competitive I'll questions as there's remind George. bit

Thanksgiving, we the mid-XXs into And cold holiday crew Christmas currently in our up here months weather bad hit early like periods months, or So March. be probably vague. we back we're little count drop big mid-XXs. weather and But I'll around we the when a bit in back then, the the hit

the improved, So picked has weather work up. the has

I think XXs crew try be about question you've now this this for to in every to year-and-a-half. our is up the me goal year. asked to count quarter maybe And mid-XXs on

it, side crew with listeners, equates but familiar to the So you're on I the count Wireless know new revenue. any to

a So bellwether. clear that's

count probably which to But and XX%, of XX% average the our own in-house our with that in XX% to to subcontractor Wireless use sometimes risk XX% crews side we our XX% is personnel where we somewhere crews, try also range. mitigate crew on between

of year guarantee the the the risk don't workload, production offset use to don't by in when subcontractors try valleys any using and peaks that have we them. to sufficient we So we have

control So under and that our control. helps us keep under our costs overhead keep

Unidentified Analyst

it thought Okay. wrong was Telco I you All I standing are right. And that. remember employment but the may way on about side, on status? the I same XXX, be then maybe clear still pretty

Joe Hart

Yes.

You're I company. mean We're virtual remember is Nave XXX. Communications a way high. too that under essentially

pack employees. All that the XPL done ship, boards Palco like of and have and our repair a of and pick, is sales inventory the test partner, the things and Telecom, out handful We only key and of of by was and of huge year, And lot this Huntsville, same happen. a lot worked hours year expansion it and employees extra done Alabama. of handful had Nave a that who a make to days by

increase the added less about year. on this past in And their we had And a side, Triton roughly the XX% headcount half than a probably they throughout dozen year. business

the efficiencies a think production I So job XXXX. in managing good

Unidentified Analyst

the next of in where there's you're for it thought would change-out done? the customers on terms that? good. That are significant that Has much on if installing possibly back very work side Any on could The And towers customers and be doing. equipment that's your get that they where sounds really assumptions were question from some upscale very looking the a to to it relative you. us want changed go and ago? in give for now from tower you this Wireless X possibly equipment them the to tower thoughts years on business more X opportunity Thank

Joe Hart

expand has cover or work XG, tertiary Sure, In start in and to don't rural XG any cycle, They to and this secondary, metropolitan cover last then out the state. they an between think expanding coverage XG, corridors they coming into many. major the I highway the year. urban entire changed areas, start suburbs. cities year the the

So we've of second just year finished probably XG. the

Texas. won't sites of in location the parts and be tend to it in but will and out Longview be Dallas, of will be, the other So Midland

the that, after two areas. it will outlying or year out ensuing rural in in then, And be

third in be radios, behind those constantly antennas frequencies, next kind capacity, expanding that, after moving, to but adding fourth about urban year, changing out you're of of then back or technology. areas, you'll the generation the right geographically, So adding

So back, the yes, it's technology location-wise. is always, say, work And I'll then then, improving. the outward constantly and it's moving moving is

So highest-quality constantly to trying being to the out greatest and subscribers. have their are the signals sent carriers and latest

constantly ground chain tower space own for Crown say So I and you read can can from have just year need X space the but earnings on American towers. they on food and out think the reducing read that's the improving on that you Tower, they their really tower. up changing the it's XX leasing robust where the I'll a constantly Castle about their not releases and out, owners, and it's forecast and

So just that's I to evolve to think continue going and grow.

every and And or Xx because video need holes, then higher et macro creates shrinking of speed shrinks which increases requires cells. Xx the which a in the which country bandwidth the going cells, for number is today, to are sites cell the cetera, cetera, that et streaming, the sites the bandwidths, for they diameter creates demand faster speeds, as cell need and have more

So constantly be why in your going a touch driving this car. that's the an honeycomb and handed be right? it to to growing you're cell edge amoeba the for to is they of calls It's a off as have cells to cell business like that's call all and to cellular, cell from your

but expansion away. sites to this ebb on for compared growth the some growing. There of natural start need cycles really of it's its flow never and G one So later at use, always big is goes the and cell

Unidentified Analyst

going in a little from towers, change getting your away to chances that? bit But do call last the equipment how about and Can associated see the and comment away you've sub-work talk yourselves, that to we broadly you about on you you've ongoing, involved towers? towers do talked in the company see more going related that you then are in the get from And made. for last in Okay. outs with

Joe Hart

by like you what sure Are not sub-work? you about work? underground I'm talking mean

Unidentified Analyst

does equipment signals be further And involved? further assume Underground, away I away a right. for and an installed has that from the to sure towers. from this broadly making get And further lot just And equate more that taking to appropriately that getting avenue open towers of the there's up you they away.

Joe Hart

up. I'll Look, that there's enter us for fiber to the to plenty our vehicle medium not optic of of but X network and today the think sort not equipment That's long-term, meaning have that's motor we fleet -- opportunities X I to set say, construction, years. core into competency.

We for set have it up Wireless.

next cells, to structures are So that there years. are probably coming in not would XX Those it. had that be That's light really volume advantage need take pole-like big something which if over we opportunity week, could small poles, towers. increase of we telephone the poles, the

So ways there's to think other for I play. us

customer that we sense, offer what consistently so certainly need at business it services, what in very ADDvantage to that get expand sideways If we do before either the still to we take profitable if they inside in have we and we're this and trying into we're of young already to additional we'll first, we really and services. opportunity Technologies do. it from in flows good the But profitable do us at the makes additional it. location of advantage start

Unidentified Analyst

more that of in I equipment the that this offer I more And capacity opportunity in that's to it's that away your I'm move got that's analysis China and encouragement and much would here. coming about positive United terms Right. China real towers the opportunities. there's we've appreciate Well, recent you the forward. has as can feeling very in grow just up one would from towers a now to going the from going opportunity to think more it closing, reduce of in my on that here. equipment that we sure our on And And be get States to last question from response very

Joe Hart

Yes. Yes, Yes, it can. should. it

of Huawei current the replace The the that's ZTE really there's there think rip to lot or fanfare effort network. yet FCC. of has Congress out related the that via not I in a equipment and funded

hope in I lot than I more So with there's be understand a so. involved ever George, still politics think that, to involved

Unidentified Analyst

very a to to will Hopefully, expansion great that this it going kindly. luck you you guys Thank going good Okay. significant be Take XXXX, some care. this lead All is year. And forward. right. and to

Operator

questions to floor to are Joe comments. no There time. the I this Instructions]. over Mr. would [Operator further closing for at back turn like Hart

Joe Hart

just thank you, ADDvantage that want their Technologies. today any and have everyone in to the you operator. I for participation call Thank interest in

good, and team, to We the management added have a strong recently side. it we've on Wireless

believe feel business. made turnaround We on a bottom-line XXXX significant this like in to we the and between XXXX. continue We

have We the that full-year every intention continuing XXXX. of for

for you thank for support thank today. So your and you attendance your

Operator

teleconference. today's concludes This

You may disconnect Thank you this for your at participation. lines your time.

ADDvantage Technologies (AEYGQ) 21 Mar 232022 Q4 Earnings call transcript