WTT - Earnings call transcript Q4 2017 | Wireless Telecom Group, Inc.

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Operator

Good afternoon, ladies and gentlemen. And welcome to the Wireless Telecom Group Q4 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mike Kandell. Sir, the floor is yours.

Mike Kandell

Catherine. you, Thank everyone. Good afternoon, you and for our thank us joining XXXX earnings quarter year-end fourth call. And for

Before we identified forward-looking begin, the I These Securities would like performance, to of current Act fact our current do meaning not Company's the the XXXX. today they Litigation on the Reform call forward-looking can remind management's remarks could expectations the statements within conditions of assumptions include Company's and be statements statements and of Private business by that everyone relate strictly and future economy and facts. to future other events, are The historical results. the and or regarding forecast based on circumstances

SEC. will Officer. meaningful believe our of Tim with out in presenting today issued over non-GAAP filed could additional call future annual non-GAAP in or set SEC. revise and from Important investors, guarantees press the forth that to update now earlier We to furnished these turn unanticipated statements changes a results. GAAP and reconciliations include Whelan, Company's number provides addition to information the does reconciliation non-GAAP materially information, factors to not I the any certain to we Also, The GAAP and that the adjusted which point the Forward-looking measures measures. factors in that Form could that its forward-looking actual in report involve the management those materially otherwise. occurrence want business. table information to affect release we views performance differ are risk results with forth relating undertake obligation to cause filed events Executive of will actual provide of of measures statements Form a forward-looking Company's reflect the Company those with information X-K or Chief Detailed to our reflect the how uncertainties are today measures risks set not any assumptions, XX-K or to in on and

Tim Whelan

Mike. everyone, thank you, for Good us. you Thank and afternoon joining

include comments our Mike’s financials, Our given an some do calls, We’ll XXXX, quarter our on revenue, fourth In will direction three and some for you the Q&A. business quarterly previous will we’ll company, quarter our agenda update remarks of we on financial direction the and XX, years. followed have our year-over-year and on in market open to earnings to and quarter review today. continue the then and results some you segments we of with fourth growth our start the ending and the $XX update prepared expectations line that December some reported million will we of strategy by go the best consecutive In XXXX. then the and is of I the over for which

We GAAP loss tax of GAAP which a $XXX,XXX quarter million, tax fourth which impact also reported income is law. net and the of of before million inclusive of the new provision, $X.X reflects taxes $X.X

$XXX,XXX, which of We four non-GAAP EBITDA XXXX the adjusted represents December profitability. non-GAAP also for quarters months EBITDA ending consecutive three reported XX, of

growth and ended year the of revenues and reflecting consolidated CommAgility or acquisition XXXX revenues. over million of XX, minute. organic in XX% give December the For million XXXX on of you $X.X a Measurement growth XXXX, were growth Mike $XX.X Network of our and contributed. And $XX.X revenue segments, segments this both $X.X million, growth remaining XX% more Test revenue the our of Solutions attributable our million across XXXX existing to will is details which represents nearly

increasing EBITDA XXXX which December XX, of tax for XXXX and adjusted improved with a of year-ended $X.X profitability deferred year is adjusted compares year million, flow. our The tax and ended was for $X.X operating expenses to corporate approximately million leverage for focus the EBITDA an the revaluing were EBITDA of losses drive breakeven XXXX. $X.X adjusted rate. net coupled to efforts Our inclusive cash driving to December million, revenues a from net new the GAAP non-GAAP non-GAAP result ended on operating which assets reflect $X.X deferred expense, was of the included tax tax XX, which million non-GAAP U.S.

drive EBITDA scale orders improve of generation. during $X.X With backlog improve million customer and and As the million or on includes higher leverage, in million, margins our we with profitability operating will the to We to the bookings we fourth non-GAAP grow to our size regard XX.X with profile Embedded in which greater expect of exiting approximately adjusted top-line, attributable operational we Solutions. which capital and also backlog realized are new year a accomplishments quarter. orders of booking $X

end been as as As backlog accumulation be commitments the define a define reminder, contractual the we of completed which not quarter, bookings order revenue yet. recognized the yet and we have at customer’s commitments undelivered and of as to

Our quarters. to a backlog over within XX with two that one delivered is the following delivery of typically months majority

December compared is order as are spend higher Solution and to Measurement Test to Network flow $X.X backlog telecom, inclusion entering XXXX We The Embedded and segments. Solutions. success generally with the of along government XXXX. defense improved this environment And our of XX, XXXX entering to customer our we strategic portfolio and well $X.X in as with XX, product backlog and and as on channel backlog XXXX management, $X pleased very improved million December our the account attribute backlog includes investments, backlog, of million, revenues with million our higher reflecting improvements which

channels and sequential revenue of our across improve efforts product in accomplishments also R&D energize year-over-year resulted and to our our customer investments driven by improvements roadmaps in top-line facing growth sales our combined and our growth collectively disciplines strong our which and were with quarterly to segments, profitability. Our all

and of communication. enabling for advancing feature deployment advancing mission vision of the the our and testing continue wireless we make wireless course our to Over of development, the fourth quarter, progress enabling

Copenhagen segment, set spectrum by new design Solution carrier in leadership repeaters requirements Arena. Advanced is of demanding XXXX Stadium U.S. Solution involved the requirements, the solutions has small-cell initiatives. successfully aligning Radio solution In XXXX, multi-carrier network family of quality, which including deployments, Frequency address and XG Network to Solutions, networks. and is Conditioning customization in to segment evident Bank RF densification Royal new and and timing manufacturing signal active the build address Network deployments has which our digital and our also This outs been required successfully announced LTE GPS more and Our and product for splitters, launched

expand high-speed, portfolio with continues sensors power to commercial devices. product Our military new the communications and next-generation focused tests generation Recent devices and are noise manufacturing challenging of Test segment its high-throughput of wireless introductions and demands on for Measurement applications.

New XG wave technology developments designs. to emerging product also are and requirements in underway address millimeter test

of research of for in won selection project for recognition software team our applications Embedded and private Sullivan projects. Frost software leadership network LTE segment, customization product We’re product small-cell the the segment. also technology, development by and projects this a CommAgility in And XG very our Lockheed proud processing has and number the announced initiatives includes leadership embedded Embedded Solutions in Solutions’ also and including our technology of announced with digital The Martin. signal our

on capturing organic execute we strategic on industry into products, growth were expansion. continue forward by we spend on executing driven growth and As focused driving plans, and opportunity, new increases look XXXX, to to market expected which share expect

our highly a and consider will the in positioning acquisition, deploying makes have opportunities. for product company important last longer-term trends align we where We business. and are objectives strategically made communication the developing, In results existing large expertise testing it the to and XX the of also acquisition number our our with targets the aligned Together we accomplished months set opportunity market over financial reflect solutions. improvements summary, wireless customized have core with sense changes and solution and towards and we segments CommAgility growth high-performance to

to We call more ago positioned encouraged to are the to through in do walk we than to over to that, the we I’m going early now growth. XXXX turn have one work this were are back we capture us financials. year With today but Mike better

Mike Kandell

afternoon again you, everyone. Good Thank Tim.

consolidated will of Act; some highlight the of will XX we earnings million of ago; net broken XXXX consolidated following; million, which our consolidated reflects XXXX and in representing slightly XX-K, have I reminder, loss CommAgility, tax and and As a were results revenues which in These In our here above high-end impact million, announced a Cuts all or Tax press adjusted EBITDA of of our million, of impact call. and growth XX.X%; new that of release approximately $X include includes EBITDA the non-GAAP this which gross provision year compared of period. our reflect results non-GAAP fourth in as to loss a well. $XXX,XXX the adjusted out of quarter a comparisons. the $X.X expectations year-over-year QX results ago of year last of profit Jobs the from affect $XXX,XXX XX% of the a $X.X range

the loss segment Our versus profit a of non-GAAP Canada, the $X.X February or in level, include acquisition Solutions, XX, a compared full continues year of the a to of Tax segment, of million Americas, $X.X XXXX; of Act Test ending revenue. XXXX basis, the adjusted $XX,XXX to contributing of on for cash million new XX% includes million XXXX; full XXXX, in the we majority $XXX,XXX XX.X% compared provision, net XXXX. XX, gross and $X.X December $X.X newest year which of a to increased regional operations million, or flow loss define and XX.X%; reflecting America Solutions XX.X%; $X.X results revenue revenue financial account we and XXXX; Jobs On since tax impact for million XXXX. consolidated million $X.X Embedded of revenue and $X.X as of CommAgility net to increased On Measurement $X.X and our in America, compared our million the Network which million a a of North South Cuts in EBITDA from of realized

represented $XX.X Americas our or in see revenue performing and well regions compares full continue year XXXX, outside regional On we For XX% regions which we in the increased pleased and basis, the future. We a revenue the the channels revenues million. from of XXXX the businesses million, Americas’ growth or focused are to year. that more of to $XX.X were drive across our in on XX% all

strong million of million to and of XXXX. which new than orders, We $XX year. Our $X.X recorded beginning ending the over ratio in The backlog of higher gives nearly book-to-bill us or customer an $X million start represents X.XX bookings good of XXXX. the backlog higher approximately course were the a results

Embedded of profit XX.X%. gross year same impacted an profit increased factors, driven increase the $X.X XX.X% consolidated XXXX. XX.X% Network few QX was QX last profit was factors quarter both at Solutions margin compared QX sales the XXXX the of segments Embedded both and in gross in was period. Our is to The as XX.X% in mix revenue, a Solutions XX.X% ago. Measurement gross realized to include year XXXX in revenue. software and previously. hardware of gross inclusion Test of quarter period Embedded compared by to due which XX.X% XXXX the XX.X% Measurement and improvements a in and from Network profit and gross and by mentioned XX.X% profit higher obsolescence a in Test primarily or By segment, the volume year’s and inventory profit of to in gross Test ago was year In lower the Solutions compared we in Measurement, of and quarter fourth reserves same XXXX in as was QX the Solutions our ago period million, Solutions the the to the fourth the segment, in Network segment Solutions compared

million of million in following Embedded factors. to Solutions expenses ended year $X.X in ago. includes expenses the same period compared to QX our expense in added a $X.X December million by $XX.X to the increased in new $XXX,XXX a out. year by XX, Commission’s costs, Our change due due compared segment, higher research contingent the sales, and intangibles. $X.X of period restructuring We were $X.X primarily expenses QX increased channels; the increased ago. $XX.X departures. executive of to $XXX,XXX million for $XXX,XXX We purchase related to Operating as strategic operating operating in Consolidated liability from year-over-year related same a which decrease to account inclusion XXXX revenues on the expenses $XXX,XXX million of primarily expenses related year amortization incurred expense were the million XXXX charges to due expenses severance were to marketing the and increased and acquisition. CommAgility of and CommAgility the management related offset expenses million, and earn development These in gain for M&A our in year-over-year; operating consideration the and expense $XXX,XXX G&A by integration higher to $X investments $XXX,XXX

for the loss loss net year $X.X quarter to as for a GAAP the Our compared was net million of $X.X period. million ago fourth

this million, in effects in a tax rate of a which provision and loss Act quarter to the in the reduction $X.X included tax net Cuts December net fourth year's impact our U.S. Jobs new XX% Tax the Our XXXX, a U.S. deferred reflected resulted tax included which in and the reduction corporate of assets. enacted in of

adjusted loss was compared the year ago. $XXX,XXX fourth for of to a non-GAAP EBITDA period same a EBITDA non-GAAP Our quarter adjusted the in $XXX,XXX

December EBITDA inclusion full our XXXX. the as to is non-GAAP and million to our full providing Solutions of provided CommAgility. EBITDA the the year price XX, acquisition, well an shareholders purchase interest adjusted Measurement revenue year purpose owners For purchase Test and the Embedded compared the segments reductions for of of With adjusted several non-GAAP and and earn-out to price ended payments, profitable alignment for component segment. the of former the Solutions company for ended equity between incremental was the of respect This the the consolidated December the CommAgility improvement as XX, and growth Network in driven $X.X by $XX,XXX of XXXX,

As a with equity no X.X back accordance for shares call these in agreement. XXXX in result performance of earn payments provisions XXXX and the first forfeited be million there provisions, be of will out XXXX the the approximately of will in purchase quarter

the operations more our and in expected the of ended non-GAAP lastly, regard we investment same As in We EBITDA. With $X.X processing proposition pleased segment cash the million deep value accretion a an as expansion adding our year in of debt we excited are capacity the with long-term XX, net with of our to company gross an growth and remain growth in value ago. very improvement we thesis, in the outstanding digital the our also deployment reduced flow quarter Furthermore, December have scale profit signal period which LTE XG adjusted bank about revolver. closely liquidity, and XX, have to and software solutions; continue profitability; original this adding and very flow aligning cash for enhancing Tim to enhancing debt noted, private from networks; embedded higher opportunity to included of under positive $XXX,XXX and the expertise; and immediate and layer year XXXX, a XXXX. borrowing additional our asset December zero from based engineering

an XX We term for As loan, principal for base XXXX as XXXX. reminder, to a a in December our provides XXX,XXX remain and loan of up to subject million facility operating credit maximum borrowing which $X of based outstanding flow asset availability. of confident expectations in generating balance a cash a our has revolving

CapEx we manageable consider to and XX% by have maintenance which be driven driven We by needs investment. XX% needs,

and deduction also a state an have we in have it to interest Tim to federal tax turn this some modest time, remarks. cash We burden to principal over And At low tax and UK. NOLs the like lastly, the for due I’d U.S. closing in R&D back and payments.

Tim Whelan

Thank Mike. you,

are So with accomplishments our overall, very in pleased we XXXX.

Collectively, for market we CommAgility completed our and executive our flow balance organic growth. we’ve recap, in strategy; trends. expected include resulted integrated refreshed we’ve reflects invested revenue upgraded of million offerings; go XX% the generated XX% in growth, acquisition; operations our growth which and revenue debt. re-sharpened sales We we team; future to zero $X.X sheet successfully this product cash from and net a channels As our we

million the of range operating first Looking we and million. our of QX XX%; $X.X to and we million expect we between expect revenues be approximately $X.X million; to quarter in expect expenses $XX.X gross $XX Non-GAAP into of margins XXXX,

expertise we higher year A ownership XXXX; on backlog prepared communication. continued wireless; An densification and XXXX; to carrier Expected and driven XX.X not in for budgets. in-building months full expectations in remain CommAgility expectations, to In level opportunity XXXX of While from has provide XX in wireless only the months summary, expected some small-cell Telecom deep increases investments defense Wireless in by spending we CapEx thematic versus of resulting a positive guidance are following: growth and million Group RF XXXX, have $X.X the

large and history well we and with a install known have recognized and brand products names base tenure long have of customers. We

We approved growth and centered and on trusted communications and communications three enabling agencies. and Group Together, industry, with the of in and evolution continued development, segments carriers, our a two a represents defense the areas and vendor of wireless are investment government testing deployment the Telecom collectively focused an mission wireless unified technology. lifecycle military a an Wireless across company and

anticipated growth please while we’re We wireless of to for lines open the you. technology could diversified stages time across solution of you at expect And Catherine, segment take the long-term diversified in wireless same if questions. customer sets, addressability. diversified advantage lifecycle Thank the across across communication, the also trends and the

Operator

floor the for gentlemen, questions [Operator is and Ladies open now Instructions].

Mike from first Your is Sir live. question your Crawford. coming is line

Mike Crawford

quite helpful? that and of translate think of to The maybe give terms Crawford that’d regarding percent the providing be revenue be given is you Mike for that between XXXX business, your in breakout Riley overall backlog, if and -- how a in question what much split you B. DoD thanks would today could is QX from FBR, the might overall military military guidance. how carrier/commercial and from

Tim Whelan

question is here. break-up military and estimate for have DoD I’ll Measurement, carrier is Solutions the We try approximately government. I to spend quarters oriented would towards of while primarily Network and not exact The but segment the Test an the answer while entirely, Mike, don’t that three

Mike Crawford

And does the of that fiscal ‘XX for affect government resolution another outcome does another couple how to budget to Wireless Is continuing -- not? that we that whether government real know of or weeks is run. Telecom going have a in the left yet Group we’re affect

Tim Whelan

It’s business that. revenue, a $XXX base a and impact teens on to in tone us pacing to size for down We hard with little understand our $XXX in bit the and over billion more billion bookings. fact the in of increase appreciate expected our the trickle say it’s of low of doing difficult

excited exiting we’re backlogs give that We’re quantified trickle analysis But of can’t level will happening down what’s with have. and a flow expectations higher about actually you to the order XXXX. at we I that how more --

Mike Crawford

My question budget was the that in delays, there accrued of be up if it once any place, because was there but like more would was that’s actual sounds the not case. CR

Tim Whelan

the expectations not flow. we Yes, order QX have of in delays seen

Mike Crawford

And change relates to that you then Are any in for last build question of seeing DAS pace WTT? out. opportunity

Tim Whelan

still DAS In We’re building architecture. always and it cases not some wireless it’s is. seeing spend,

level are higher deployments. We D-RAND seeing C-RAND C-RAND

We flow deployments DAS active expectations. right and contained move that order a we towards say requirements. the on trends and Those from would order now seeing are flow the are small away are seeing within I a move are cell spend increased

Operator

Bob your line Your Mueller. coming next question is live. is Sir, from

Unidentified Analyst

the [Rob quarter Measurement million, fell any and almost why could question reason and in UBS. Test answer Tim Mueller], $X fourth for on Mike that? you off the a --

Tim Whelan

in second whereas measurement a revenue ’XX I of Rob up out was in the the and was I ’XX. up what it the and first then test some mean in in XX% things we order of in think the evened Yes, year year-over-year. overall, half flow delay caught saw year half

quarter timing that’s year-over-year a of XXXX flow in was comparison. impacting the it order So

Unidentified Analyst

think behind you So obviously? you that’s

Tim Whelan

Yes.

Operator

coming question line Sir, from live. next your Your Fernando is is Canto.

Unidentified Analyst

and on year. also conference. Tim congratulation the good I congratulations and Mike, an a winning to award quarter good on Tim very want a And being biggest

Tim Whelan

Thank you, Fernando.

Unidentified Analyst

be you forward? are deep going How going XG

Tim Whelan

of product segments new requirements of impact business and seeing our that XG the trends We are of in happy are terms specifications. of each new

we’re we’re at We So to that and growth indexed that the aligned is front we’re end. that happy see that curve.

public markets argue markets. The the by of everything are market two with level early see yet that that’s going fully standards out be carrier because in than a real You’ll the engineering been defined. XXXX a defined technologist would that’s requirements, the discussed Those announcement rollouts. more be XGTP marketing body. is It’s fully in somewhere XG to expected period to the by

in innings us and quite to we’re very we’re think XG early as what relevance I very, for talk pleased segments seeing their customers a So of are. but each needs that futures to three about the we’re our opportunity

Unidentified Analyst

going other the is analyzer Navy? thing the how well And Boonton is with is the

Tim Whelan

the quite pleased pleased available. the from our of We’re flow government and with we’ve But announced flow order Navy, some quite some that the from with order that. we’re of the and publicly Navy

Operator

from Sir, Mark Robinson. line Your next question is your is coming live.

Mark Robinson

wondering if in the tell outstanding quarter? So already that or you in Is me first reflected the shares decrease could back? just will call just they

Tim Whelan

face outstanding will shares about on The income impacted What first will the excludes calculation statement, million. shares. quarter when issuable we decrease X.X EPS is under the in the by back the call however not because contingently GAAP any calculation execute EPS of the the

Operator

no There in queue. further are questions

Tim Whelan

you. Well, thank good everyone have us. And for Thank evening. joining you a

Operator

Thank you, today’s This call. and ladies does conference conclude gentlemen.

your have wonderful. disconnect Thank participation. you this your may a lines for time at You phone and

Wireless Telecom (WTT) 12 Mar 182017 Q4 Earnings call transcript