WTT - Earnings call transcript Q2 2018 | Wireless Telecom Group, Inc.

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Operator

Good morning, ladies and gentlemen and welcome to the Wireless Telecom Group Q2 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 introduce your host, Mike Kandell, Chief Financial Officer and Tim Whelan, Chief Executive Officer. Mr. Kandell, the floor is yours.

Mike Kandell

Kate. you, Thank and second everyone for us joining Good XXXX thank earnings our quarter call. for morning, you

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

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

Tim Whelan

and us. Q&A. for we revenues very the joining you, Good is start, the some our some above pleased our for we financials, which everyone, remarks of morning Thank with will Mike. are of $XX.X prepared guidance. thank review line and To then will Mike you high open After the million, end QX

of another of consolidated quarter Our revenue for sequential as segments. reflect year-over-year well results each increases, and our both, all contributions as three from

reflect growth driven we year. solutions continue includes signal XX.X% QX XX% processing our Our organic quarter-over-quarter hardware for by higher which cards demand consolidated throughout embedded revenues growth which the of organic to expect

we We consolidated of profit QX XX delivered are months and ending revenues $X.X we pleased in as income On compared of $X and to higher million a and net XX, a year. non-GAAP non-GAAP gross June approximately report improving basis, to adjusted EBITDA drive improving income operating EBITDA. prior the XXXX improving the million adjusted for also delivered trailing

as the quarter operations, Our have these our are quarter pleased realized through make products we and our are compared on we with will year to almost solutions, In also some segment, and performance of given carrier we Mike more of in unpredictability to pricing. bookings with million solutions new and we prior our results segments a backlog have the continued executing XX lean Across exiting included later. year, $X solid higher in also results with QX go-to-market detail progress last June network of of this and and improved spend strategies. go par

continue and for continue and our see XG them solutions which to advanced and centralized include rollouts, network spectrum and DRAN of efficient in investments designs segment demand this focus consistent to CRAN deployments. enabled we expectation on densification deployment order a XG carriers flexible The and which new architecture is revenues Our and flow with which control. products in and enable multi-carrier

performance As demand compared interface line. including integrated to high improved RF and components, and that high our solutions, are GPS more expensive quality specialized conditioning active new DAC solutions these our designs [ph] microlabs repeaters digital point solutions, from of our product create

brand Within also very the and customers are and improve on superior maintaining quality. margins profiles to procurement competitive reputation segment our our to which us also our cost performance maintaining while for we continuing and supply chain allows pricing our for remain

improvements of customers are go-to-market collaboratively front focus was the We deal with and our an end design which area working our of initiatives. project use design on with on [ph] consultative of flows improvement

networks in ended public we In expect segment, and our continue standards. Test safety solutions, and in forward are our the quarter-over-quarter readiness, growth Measurement months June emerging pleased to very investments with a X.X% six we and XX% Going XXXX in growth the we have nearly interest XG in military made product of new compared customer XXXX. be successful sales driven our government been base. continued to period environment has the believe and spend and same to improvements higher This in the capture what by we channels, will growth the a XX,

platform devices. product. peak launch product, pleased XXXXB is with the our And interest recent we focused next-generation in power Our XXXXC high-speed, replaces demands manufacturing older of challenging on management which this tests our next-generation the are high-throughput of new the of wireless very

to the forward solutions in finally, designs of expect And to complex Going continue Embedded XG for aligned segment in and XG to year. volumes in is earlier volume increased build base embedded various view The our continued this testing for due product densification, connectivity deployments is and base of and we've multiple cards enable test integrated Solutions millimeter requiring overall performance a invest cards solutions we later. out Measurement, the and technologies. resulted expectation quarter, to to of due in address and early network multiple those discuss therefore, wave expect continue expectation this The in wireless a users, hardware throughout our signal which in performance demand solutions increase due testing chart network realized supporting Mike This Test and our which growth and we've reserves earn test we and I deployment. demand the segment. driver the enhancements also access P&L estimate systems in demand recorded embedded emerging technologies for to and and in CommAgility different mentioned the cells, higher will segment, of to network has continued requirements other to stations improved key our the XG to replicate in higher network processing

the for hardware the customer. business demand solutions this with pleased of beyond an existing unit by exceptionally are We performance just and excited increased

for processing expect Going our technology, we are software for forward strategic potential of our growth and the mission embedded and and enabling future enterprise invest continue wireless and this traction in solutions, customized in deployment customization applications growth on projects build our in a about acquisitions. excited to years. avenue development, we organic digital releases signal to solutions larger LTE [Indiscernible] results network and reflect embedded to QX considerable product software testing to

revenue leverage EBITDA trailing $X improving years. It results in of prior non-GAAP and legacy the growth operating the improved continued XXXX growth profit a test measurement of QX from months. of ninth to five integration to Telecom growth since Wireless network and revenue business XX It And acquisition GAAP million drive in and for CommAgility demonstrates compared higher non-GAAP well and of acquisition. success profitability And and we EBITDA up reflects successful result for reflect as it quarter sense will improved growth reflects organic as quarter and scale our XXXX. the closing, expect organic solutions a success solutions. flow embedded significant the first the now In revenue makes accomplishments. operating demonstrates result margins represents CommAgility which expected and Our generation. results, cash segments greater of adjusted which as operational finally, should This

on our We in, are strengthening to wireless our segments of to growth three investing demand and adjust continuing the connectivity. for strategy, execute

in aligned IoT. in trends deployment the investment Our to to growth the military that, network larger investment, increased high we solutions. to highly private continue to the invest financials. our over carrier Mike the spending, to across deploying testing communication customized and going call from wireless through With developing, investment expertise are and the opportunities to segments us long-term And lifecycle core industrial XG densification, market turn and walk growth I'm in benefiting performance

Mike Kandell

Good Tim. morning again, you, everyone. Thank

systems. The As in Tim segment signal $XX.X which of mentioned, QX results quarter increases our where our represented the million million period. higher are for demand or used pleased solutions we $X.X Consolidated expectations. the with network embedded the were processing driven test by in hardware ago were year revenues digital of XX% realized we from growth primarily above

of inventory XX% charge million Our from QX profit consolidated XXXX. in million XXXX in revenue million revenue XX% $X.X lower QX impairment $X.X or gross of or increased QX a includes $X.X to $X.X one-time non-cash million. The gross XXXX of profit

Excluding for $X.X as higher which by impairment year, solutions, account XXX Test operations. of and we XX, material revenue sales by continues the define we network of with the quarter in basis, gross South savings, hardware cost. Canada, our profit and ending mix and basis point majority same charge, were a to U.S., and embedded realized revenue. improvements point a demand measurement our of which for profit power reflects XXXX, in as basis driven revenue driven meter $XXX,XXX The solutions XXX solutions, or test networks X.X% higher On the consistent. On And increased in the last regional compared June cost in realized improvement revenues the a for level, higher and inventory gross quarter product measurement a mean solutions. the we America million segment Americas

accounted quarter XX%, embedded Americas, EMEA and performing the and revenues respectively. XX% drive revenues in growth revenue ending continuing the our APAC respectively. outside America. solutions accounted of year, well The and XX%, revenue the Americas increase from APAC In XX% of X% EMEA in last of and hardware see consolidated For for reflect for and XX, higher on the consolidated June same North channels we revenues we regions quarter and approximately and Across Americas, in all the are regions X% U.K. XXXX the our businesses sales of decline to more focused EMEA

a $XX.X this of were bill to QX million compares in booking [indiscernible] With this the million period. ratio. revenues higher year quarter resulted the which Our prior XXXX $XX.X approximately in

of the of approximately backlog exiting are XX, XXXX $X.X backlog a the backlog increase an with from $X.X June second million. million We represents orders million of which $X in approximately of quarter

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

slightly particularly due embedded to and due increased decreased sales solutions channel investments Some R&D and slightly investments, expenses; in highlights our on higher marketing and to segment. expenses were expense And on expanding and the sales M&A operating our expenses. lower G&A XG headcount. integration Sales expenses

included in it referred therefore to to be increased change in CommAgility the Due provision in the due demand is financial all consideration signal the hardware out, same inventory purchase recorded provisions as foreign look a pertains QX increased $XXX,XXX an fair to Act. was share we QX as non-GAAP tax earn compared improvement specifically which to in the adjusted our XXXX. our results quarter for defined XXXX a enacted primarily $XX,XXX paid earnings the EBITDA value to paid of charge million contingent to for year financial the we realized included driven forecast the the at we revenue have our agreement. million EBITDA, to agreement. by for amounts increased global income a EBITDA in of EBITDA expected expected contingent Netting income adjusted calendar This acquisition. XXXX for performance same Also a in $XXX,XXX be share based and the as of we've & ultimately of which for CommAgility tax of intangible related Lastly, the charge. expected part Jobs to non-GAAP to the purchase estimated $X.X in of out Tax the quarter in was CommAgility million the XXXX of of out QX the as loss and is processing ago. period XXXX impairment on operating CommAgility earn adjusted liability XXXX, to impact consideration XXXX adjusted largely part growth the delivered taking tax of $X.X In operating $X.X consolidated second Cut non-GAAP in compared And low $XXX,XXX

in For to the sales XX, generated for higher ended working approximately delivered in operations by remarks. to XXXX. driven critical turn of we cash $XXX,XXX longer the in June to million adjusted some cash closing higher This which $X.X over increases to With receivable delivery was funnel regard to generate reflects win have with accounts months six non-GAAP same our months, million which and last compared which like XXXX EBITDA. $XXX,XXX flow, for $X XX time, flow ability the back for XXXX. million $X flow and of period we from larger in of a cash during backlog optimistic timely is remain payment rates. We customers inventory it reflects terms this to I'd about At of opportunities to from operations our Tim capital

Tim Whelan

for the XXXX are growth pleased and results as and of The profitability. half first half very continued we revenue we growth million our XXXX. Again, top Mike. first line of with year, compared you, driving to organic XXXX the of $XX.X on-track in Thank are execution

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

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

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

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

Operator

[ph]. post And our [Operator announce Please is affiliation coming today your Instructions] question first then Fernando question. from Canto your

Unidentified Analyst

we When should we're net any Michael. bottom-line. because see company we seen reflected meaningful it haven't expect but for revenues to I'm the the income on increasing

Mike Kandell

One of had It our impact tax our forward. a is going higher -- tax -- foreign forward. We to the operating profit. provision. we low of this act is were NOLs lower to to the gross from generate go won't earnings, quarter part net global but perspective is impact had impacted we hardware as continue ability cash mix impact the us to us charge that were income of income is income an tax things we impact that a which on going income perspective, and this the have this an our a has due a new which a of intangible imposes net going we quarter Overall, from to

operating to more solutions, forward. embedded As specifically see income should changes mix that software and more we going

Operator

Thank you.

at queue questions have this further time. no in We

Tim Whelan

you to again we Thank with speaking for you, today the forward everyone in our Kate. and Thank call you joining look future.

Operator

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

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

Wireless Telecom (WTT) 11 Aug 182018 Q2 Earnings call transcript