WTT - Earnings call transcript Q1 2018 | Wireless Telecom Group, Inc.

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Operator

Good morning, ladies and gentlemen. And welcome to the Wireless Telecom Group Q1 Earnings 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, CFO. Sir, the floor is yours.

Mike Kandell

Keith. you, Thank everyone. Good morning, you XXXX for our thank us joining call. quarter earnings first And for

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

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

Tim Whelan

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

by for agenda some and line Our include review some the then remarks of financials, Q&A. will we Mike's open prepared the will followed

are with million, $XX.X we it revenues very as both contributions year-over-year of increases, QX and our our as the three revenue First, pleased for consolidated of segments. from sequential reflects well each all

to add growth existing Our successful our organic traction line our strategy drive synergistic businesses results reflect in complementary top and growth to invest to through acquisition. and continue businesses in

very and improved are improved higher delivered gross income. basis, of operating delivered million we adjusted in non-GAAP On adjusted three and quarter EBITDA we that years. highest importantly, happy revenues EBITDA over which EBITDA as is $X.X the adjusted profit income Just improved non-GAAP net a

our $XX the book-to-bill flow. continued ratio, beyond order revenue As booking and X in a positive were million quarter, reflecting in strength customer approximately we look resulted XXXX QX to X.XX in

also continued orders in we've progress. We exiting which from XXXX. the to backlog the increase million, with make approximately represents an December first Across our XX, $XXX,XXX of of backlog are $XX.X of quarter segments,

platform new with connected Our all Network readiness deployments, address outs its deployment. spectrum Solution XG build evolve and multi-carrier initiatives, initiatives carrier segment product small-cell continues densification and to to requirements,

with underperforming network networks. We at our the and competitive continues performance work military increase total of portfolio design of devices in profile. us expand Measurement not help decreasing our producing and in levels We continue segment, more allowing quality seeing add to price In efficiencies our for which sacrifice while we We our services support the expertise our value to customers and the their be work communications improving applications. and cost needs are believe price quality. Test the premium this which is noise and add RF do peak conditioning by and cost repair field pricing to are also an lean customer product and an attractive And equipment initiatives also cost for commercial environment solutions generation performance ownership to manufacturing customers, in segment. stage for with sensitivity optimal offers which our for costly and and delivery far at than next-generation to our higher of replace power responsive sensors

challenging recent B demands tests next-generation actively selling next-generation the And product. in management market proud replaces product product, I'm high-throughput C manufacturing this on focused the peak our power of of our of wireless announce we Our new launch devices. XXXX is to which are high-speed, to XXXX today, the older

technology XG designs. aligned complex underway and network stations for multiple network base in access realized Solutions requirements early Embedded to developments wave and which also increase XG base address of are to And XG help test test cells testing users, demand millimeter our to we've different product New of our cards, performance segment, network enable in deployment. and is technologies. This for systems continue replicating and build testing multiple emerging

performance and year. the greater higher accomplished objectives we've business operational important also will the we've and applications non-GAAP scale size number processing a on proud software with including the our technology, embedded improvements flow results as customization reflect and approved profitability digital our In CommAgility we projects leverage margins and cash selection announced and communications which top satellite and line, project. to Overall, operating software improve we in drive summary, our for QX, very in grow Lockheed innovative last for expect we signal the team of also the We’re an EBITDA by of LTE expect over in Martin changes private network adjusted generation. financial to and made profile

strategy, strengthening three We growth our and to address to wireless on our continuing demands execute are the segments connectivity. of

densification, IoT. XG are deployment, industrial military segments and in from Our increased private spending, benefiting carrier investment investment network

and and call opportunity Mike to connectivity core and product our to Our growth deploying towards and trends performance organic strategic to continue expertise to through M&A solution that, larger wireless walk both customized, to our interactions market development, will position the growth us communication focus on over testing wireless set With for high solutions. guide back highly also to turn the growth aligned long-term decisions financials. I'm going opportunities the and

Mike Kandell

Tim. Good everyone. morning you, Thank again

increase So we we and $X million, expectations. filed press this as revenue in release QX, which versus margin of of in ownership reflects million XXXX. XXXX a you $X $X.X see days QX growth of $X embedded $XX.X our XXXX. QX XX-Q or quarter of in from QX revenue reflects of XX% and versus full an XX in contributions slightly approximately in growth ago and morning, in the solutions, of solutions our included revenue period expectations ownership results The QX delivered of Measurement revenue from million represented Test The and XXXX in the with approximately our QX, year of were Consolidated XXXX, approximately million in million revenues line ahead embedded increase segment. in remaining period

segment in increased and last mix. increased product XX% a year. QX $X.X XX% XXXX sales. And level, our same due Network higher higher cards margins reflects On of inline Our and government favorable consistent in and primarily and consolidated used our $X.X or revenue gross compared from to Solutions. mentioned QX XXXX ownership XXXX. higher and were XX% $X.X to mix profit in margin higher Test Measurement in driven volumes of both improved Test Measurement full XXXX million realized and Solutions XXXX higher approximately XXXX, of segment $XXX,XXX revenue demand quarter a almost Solutions, XX.X% existing Measurement Consolidated XXXX CommAgility to XX, QX, Network ending I quarter Test for revenue revenues XX.X% by hardware to QX million $X in as to March U.S. QX XXXX with and due well gross Embedded the as the quarter in favorable margin backlog of to for product as we in gross Solutions. Embedded Test the previously, from in which million in from million QX increased

QX basis, define revenue Canada, from U.S. account of because hardware our the the XX% Americas continues majority in in revenue. in a we've approximately Solutions and Embedded the QX to XXXX as to gross revenue margin of the XX% for On Our America decreased XXXX, South regional XXXX. which of mix higher

ending we Solutions to EMEA for we regions of our the America. XX% of increase March well revenue drive and the XX%, Embedded Americas, of consolidated and a respective. businesses channels the APAC our XX% performing our regions on UK. XX, growth quarter Across revenues. reflects are XXXX, and For in outside and customer the EMEA The the XX% consolidated North the approximately focused hardware sales higher in all for see same continuing APAC more XX%, and accounted In and to accounted Americas, of revenues EMEA revenues XX% for the quarter,

$XX at had continued As our noted, Tim approximately ratio book-to-bill million QX to and strong bookings we another the be quarter. in positive in

of we are this happen $XX of an we our year the contributes XXXX, our gives of of booking sets XXXX. working are for The XX, every December at strong quarter nicely the with XXXX the this don't positive The for than we each second at a backlog ending to While first XXXX. a and million $XXX,XXX March for and good quarter encouraged million $XX.X year, on end expectation QX backlog to to half nearly expect at start start backlog or XX, approximately basis. higher to us the up fiscal a higher ratio revenue cumulative

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

were year the XXXX expenses QX operating a same million to consolidated million Our period $X $X.X in in ago. compared

EBITDA, QX non-GAAP same ago. income acquisition. investments for quarter. $XXX,XXX to and of And first Netting in a taxes by and driven at against a for in in to future for of adjusted of XXXX the growth. as of delivered a QX compared non-GAAP operating it of marketing headcount to our reflect lower non-GAAP period adjusted year M&A $X.X gross the as margins, all with were XXXX increased by quarter expenses sales Embedded due in XXXX to decreases of increased which XXXX of to full well in CommAgility in XXXX offset and as operating expense CommAgility expenses, quarter QX expenses R&D U.S. QX XXXX Network increases out QX QX we've the million improved growth, and Solutions. the adjusted quarter ownership largely a because of to income revenue was realized integration Sales to the ownership as net XXXX increased operating This G&A $XXX,XXX QX And EBITDA improvement Some before control the look balanced EBITDA compared highlights related comparable we taking the the from of expenses expenses XXXX XXXX compared some $XXX,XXX full Solutions R&D the careful on

and remarks. cash over is flow XXXX. from flow last in for optimistic adjusted acquisition, cash to remain and of increases non-GAAP As XXXX. million call, in I'd mentioned during stock issued net With in X.X it in reflected We our as were by time, ability earnings liquidity, working that XX, about the QX operations our income statements regard quarter. This during offset XXXX. connection three turn forfeited back this forfeiture was generate EBITDA our approximately March now we're of our ended to shares our CommAgility At the months closing with the in some for to like and Tim capital financial to common

Tim Whelan

Mike. Thank you,

in very are results. we start our XXXX So pleased with and the strong overall, QX

revenues quarter XX% communication. the to In be XX% of Group million, Looking to second RF into $XX.XX expect level wireless expertise expenses $XX.XX in margin expect to ending million. and between operating gross QX $X.X deep $X.X June in the Wireless we Telecom XXXX of XX, we of million million and range of has non-GAAP a approximately summary, expect we

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

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

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

Operator

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

post then your today question Canto. coming first Fernando Our affiliation is your Please from question. announce

Unidentified Analyst

quarter. good Hello. Mike morning what and you congratulation a Good are now? Tim At running percentage on of capacity

Tim Whelan

about clearly meaningful capacity, to to Yes, lean think operations, cost in room the cost adding terms of initiative think us additional manufacturing grow percentage allow additional I and XX% prior approximately I to would XX% have we manufacturing improvement of structure. as --

go-to-market think rates. customers our continue coverage I design the to terms strategy, results as in opportunity see for about look As front-end with of partnerships we're sales win resulting to increase to of good going we in

of and the go-to-market operations think a as sales versus I it So bit little manufacturing. differently

Unidentified Analyst

Is Okay. to why lower the for reason quarter? first us there the total is any revenue guidance than the

Tim Whelan

we Well, of and certain be on so basis happens are lumpy business delivery times. a can based the and project projects of that timing

careful has recognition and of acceptance rate recognition is there revenue the a of business, the project only customer. a portion more revenue the by is there significant project is it and the which based upon And that is run while the portion another so it business call a whereby is a completion

Unidentified Analyst

Okay. All on very and right. very much good thank a Well, you congratulation again quarter.

Tim Whelan

Fernando. you, Thank

Mike Kandell

you. Thank

Operator

[Operator in queue this with. Instructions] further any closing would have no We at to time. you finish questions like comment you Do have

Tim Whelan

forward future. today. you joining And with we look again Thank the our you Thank you to everyone all Keith. in speaking for call

Operator

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

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

Wireless Telecom (WTT) 13 May 182018 Q1 Earnings call transcript