WTT - Earnings call transcript Q2 2019 | Wireless Telecom Group, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Q2 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

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

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

in and uncertainties factors results Report any occurrence risks forward-looking include involve not a events Forward-looking reflect in are company's risk to anticipated revise undertake or cause from statements the does number those that otherwise. results. forward-looking factors Important materially its in assumptions, update changes performance company's and affect that actual could any company or differ materially XX-K set actual the statements not guarantees to future on filed could information the The of those Annual of forth obligation SEC. with the Form to of

our adjusted certain we to with SEC. morning X-K issued measures. this or believe additional the of this to table non-GAAP provides to forth will non-GAAP We a that non-GAAP GAAP release measures measures with point management information in earlier out provide addition in presenting set meaningful views Also, in reflect furnished relating want filed the investors, how the measures Detailed which are we reconciliation morning to and Form reconciliations business. press GAAP information information, that to these

call to now Tim Officer. will the turn Chief our Executive I Whelan, over

Tim Whelan

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

Embedded by of we Solutions volumes same hardware results were slight improvement the see on high driven a QX XXXX, continue Our to and our quarter of business, as expected, cards. where

results first-half Test reflect offset Network Measurement. by and We Solutions Embedded in revenue which in revenues higher and are our pleased Solutions, with lower

to and improvements in revenue half. in see We expect Measurement the Test second

are results color see into year plan in in revenue on with the growth financials our the XXXX consistent and our bit. with that coming consistent budget expectation the also will more the Mike of second Our further provide very will just a opportunity year. half

the approximately On of and future One, a we R&D on in first with XX% strategic half our These LTE in you for strategic investments focused R&D operational investments areas. compared of the to and opportunities the our just emerging address are which last three, year. with XG where and test product as longer-term densification note pleased accelerated half, in are opportunities first software to growth for will stack new, see the the year companies we out meet our exceptionally market to And the to device drivers beyond innovative, standards growth XG in-building preparation and emerging laid for solutions to XG XGPP to and wave millimeter integration anticipated network requirements standards requirements by to bring XG, address system requirements. and public body. safety companies. network for three as we accomplishments level, increases are chipset which and in R&D view Two, infrastructure

of as it half successful investments. of to XXXX, realized we R&D our milestones Now, in and a relates the number product first

XG, stations LTE have XG devices reference and and to LTE advanced and XGPP's new software significantly development have allow and networks our of set private platform CommAgility mobile their our we processing. a our XG, for released own customers to standards, We full stack base towards software accelerate using defined of

small outdoor MCC densification and expanded products of in-building XG bandwidth solutions point cell and during future-proof upgrades evolve modular and XG which our or and as solutions, interface reconfigurations requirements multi-carrier, deployments, capacity have D-RAN build-outs. We for for expected multiband

customers monitoring excited and waveguide in-building communication regard our will in solutions. for as operating We've we results longer noise increasingly lab which over expect new participants the from endorsing that Passives applications, test system XG our DAS millimeter sources real-time announced and of And to production systems and and we traction, for test in communication wave rates and next-generation as introduced SMART we with frequencies requirements systems accurate public are Systems half, ensure are market increase build-outs. first term to for the XG safety our embracing other increase and requirements, enterprise

Some to reduce risks the partner launch base mitigate significantly NEPs, chosen solutions development examples Providers, will products eNodeB LTE Network for a being to include, and to develop LTE NEPs which the by for costs station Aricent market. Equipment as

network expert coverage, OEM radio technologies. Ranplan is in in specifications We products our dense interference, test system, scalable a multiple providing which VIAVI as XG signal needed decade-long provides throughput, of design the validating our evolve support. ultra-dense and XG access their XG across we relationship cells tester networks supporting and of And putting which announced for processing TMXXX to TMXXX a XG solutions inclusion upgraded VIAVI we in performance preferred network their extending are different cellular performance and XG accurate design partnership with and networks Wireless are networks. software, for network announced

leading stations the VIAVI As supplier, global XG have and TMXXX. all validated been the nearly base using XG

second bookings order our we million, we the $XX are funnel in improvements our to pleased on of of first-half and opportunities, expect flow to see with Turning and of year. nearly the our half that

of not future strong half all large revenue beyond in some customer cautiously and opportunities projects, which extend and which seeing segments optimistic be us of XXXX quoting are improved cause we bids growth. about second revenue, an but for funnel three to bookings only Our supports

profitability all to revenue the the revenue So, netting to continue segments improvements is in and year. in first-half half for first year's and growth we optimistic across it to last similar lift expectations half out, our second remain our to three

the in and execution cannot items, these over in formula years by our While we last lean plan history a encouraged we have outcome of R&D operational improvements guarantee our expansion. product of profitability winning and long-term for our the any have and two which growth we go-to-market progress, and and are been confidence

back Mike turn the through to financials. call will over the walk to I

Mike Kandell

revenue Thank the that were XXXX in quarter you, revenues Tim, release and our with good were morning first guidance Overall, published again everyone. $XX.X quarter line QX our the with Consolidated earnings of in May. for second XXXX our X% results expectations we with period, the on our Network of decreasing or increased an X.X%. nearly year approximately million increased which XX.X% from solutions digital was was XX,XXX revenue flat the ago ago shipments processing increase hardware. solutions Embedded of period. year signal

timing, lower accordingly measurement shipments we in and X.X% Test government decreased the second of half on expect to to project revenue shipments. primarily due increase was the This and year. government

to was revenue Our as same million quarter of compared year. XX% consolidated gross of second XX% the or million for the $X.X for revenue $X.X or profit period last

while tends Breaking of and gross solutions XXXX QX primarily compared XXXX services QX QX this of the XX% approximately segment’s Furthermore, hardware revenue revenue hardware software of down decreased by gross arrangements revenue. QX be XX% be XXXX, the embedded compared to the dollar was profit software hardware. revenue. and software services closing from mix and In in as contracts margin services software made of heavily as to XXXX to revenue, approximately these profit by in segment, QX revenues XXXX XX% the to of mix software solutions higher and and of whereas lumpy is and services to embedded total tend as embedded X% up was recognition services influenced and to software solutions included This services larger total revenue longer.

XX.X% profit period. in XX% but related And segment XXXX in margin the the current the XXXX volumes, gross to finally, product quarter initiatives decreasing flat nearly $XX,XXX a as ago reduction lower dollars QX XX.X% well period Network solutions XX% in profit XXXX test overhead. various on QX and gross gross year QX cost profit was in to the decreased from on year increased from in to mix favorable as from measurement

we in for our segment increase the accounted while On consolidated X% for and revenue, shipments and this and APAC South XX% half the second of government U.S., which America expect to consolidated regional as the of we a mentioned, Americas, EMEA define in accounted I've year. revenues the XX% basis, As of Canada, respectively.

This the solutions EMEA in EMEA, X% for compares APAC revenues in respectively in Americas, UK. of increase embedded the prior XX%, the consolidated and to the approximately XX%, and hardware sales higher period. The revenue year reflects

QX $XXX,XXX decreased QX approximately million million expenses XXXX. Our from $X.X XXXX to in in consolidated $X operating

period, as of year. was G&A from interest income impact expense marketing due and of was of that March and period the the expense $XXX,XXX before year other and expense a expense as paid the roadmap charge pound. the of taxes increased income the primarily consideration decrease on favorable prior the to contingent from on well decreased operating compared prior liability result recorded before accretion the recorded offset we contingent XXXX the driven in increase This and to higher The lower exchange other QX expenses R&D XXXX recorded $XX,XXX as British interest CommAgility and to $XXX,XXX $XXX,XXX to expenses, in was Overall, related related income. reduced development bonus XG expense consideration lower by $XX,XXX by in the foreign foreign on loss ago sales was exchange on XX year this gains, net increased expenses year increased of

was while the the balance cash price from yearend final This XXXX. million. on Turning capital well CommAgility revolver due payments to December as approximately for of $XXX,XXX as consolidated debt investments amount XX, to working decreased borrowings sheet, $XXX,XXX the in $X increased purchase

the the X, from morning, As arbitration in request agreement that on disclosed June footnote CommAgility XXXX. claiming breached XX we received in on Form-Q filed an statements this for financial entered Harris Corporation into to

our fees have XX-Q, the has non-GAAP we We As in claim defend this and approximately if any, $XXX,XXX capital believe merit monetary related claims. incurred be non-recurring special by stated all as cost excluded We item. damages, portion the to ourselves the of and covered our expect adjusted of EBITDA legal calculation in matter this to we legal intend a the insurance. in against and that amount quarter from to do no

I over At Tim it some turn to would like to closing remarks. this for back time,

Tim Whelan

long-term in operational operating excellence. full-year includes are our Also margins expansion, gross low our XX% addition new to which product we to inclusive based to XX% XXXX channel to and XXXX Thank of and introductions, our reaffirming by mid annual and With digits operating include revenue in XXXX, XXXX on are you, we comparable reaffirming improved single the driven respect $XXX XXXX million to in growth guidance organic guidance, growth profitability. targets also which by acquisitions revenue Mike.

trends segment and expect product LTE We our mix, and improving will expect on offerings. of spend. revenue gross margins and XX% to approximately densification adjusted network including focused And deployment, XX% to to and product to we margin defense expansion, on XX%. lean network increased improving see margins Last, initiatives, market military of based sector continue strategy higher and XG growth private EBITDA remain

the plans we place. We are strategic of committed successful to for we well-positioned achievement execution the now believe in operational our And targets. are of and

now open you, questions? lines Thank the and please Paul, could you for

Operator

the Certainly. from gentlemen, your Please Ladies Bryce first and live. [Operator affiliation the for Thomas. is floor is questions. your question pose Bryce, now announce coming Instructions] your open question. and line is And

Bryce Thomas

Thomas with Bryce Grove. North Yes,

and positioned on provide where best how cycle, we Just, benefit on opinion stand or color if some or that are you the from your it? to XG upgrade you

Tim Whelan

of seeing and you, right end each XX-year will the so the of Each curve. to is cycles that a now. platforms. ten front Sure. opportunities of somewhat period, earliest the for we used The at XG just in reference Thank stages over the of in We XG previous benefit, benefit currently segments software investment is lasted we seven XG and CommAgility think will Bryce. are differently, research believe

ability now Within then, Longer-term, are and right And network benefiting hardware will continue we that densification, deployment. we to extend the that deployment. network our different again private plays of software, network see currently to combination customize into and the of solutions, cycle. from LTE our include we expect investment deployment cases ahead use will XG application and the right which XG that

and a so on spend, also we Test emerging new in defense require which and specific seeing requirements. and military finally the noise wave testing sources millimeter Noisecom, then standards it's very for touch higher are And increasing Measurement,

immediate ten think and three benefit longer-term as So across all should we this an last segments, both a cycle well is year a over period. there seven as benefit, to

Bryce Thomas

you. Thank That's helpful.

Operator

your live. is your And Barry and question you. question. coming your Thank pose next affiliation line the from Please Sine. is mention Barry,

Barry Sine

Good morning, gentlemen.

but First that dollar there I asked that, And On then Harris’ with not venue is, of any request all, you what expect? talked amount? about can a the for associated we am sure they secondly, the that process arbitration. for timeline have arbitration is

Tim Whelan

the than $XXX,XXX. Good dollar that expect morning, didn't Barry. be less amount, Yes, although it have claim did they specific to so a the indicate itself damages

In definitive still stages we're where going terms to timeline of in the for a and the venue, so it's all be timeline that of the working have we jurisdiction arbitrated. don't out, or early

Barry Sine

American Arbitration the it that Is or not Association is specified?

Tim Whelan

is not time. specified at It this

Barry Sine

looking Okay. in And earnings sizes specific bidding of funnel. third rough projects what projects describe the sales then the those at funnel be Could that guess sales projects, the release, you're are of about call just and you on of some that I the out they you the it's the in talked on? paragraph, some might

Mike Kandell

much. get outdoor funnel more the of We in projects venue. terms we because are into in-building too wireless you that the details which excited into don't than of be of in Yes, specifics. may the funnel terms the the build-out get attract even multiple in an run infrastructure venue-type carefully Barry. much in Thank, we the seeing don't rate, projects We're too

So, those and ago, both network size the we're and specific of years that's solutions. of number to projects saw we increase what over seeing the two projects

Test segment, but which very the some opportunities Within we're are current and that repeat we're are of seeing branches customers. military seeing for different exciting military the the Measurement customers,

some to we're into and nice mill, some the traction as the a or North of the cluster or CommAgility, America good but to revenues, recurring And Solutions those seeing those. every year Test then not repeat solutions within other Measurement and third seeing and markets it we relates every year So, as Embedded we're defense, they sales specifically in bring research. channel

hopeful conversations, of can some more qualifications, current discuss in within go so, traction quality as to the hope kinds of this year in some funded these bring we we're we can in-depth good the after. seeing the And year. terms design and of calendar We're we conclusion that projects calendar current the can we of

hope that helps? So

Barry Sine

one projects tens dollars way, of let that you if of of answer projects? the these win can more be Yes, you stab, hundreds dollars this thousands thousands as or of are would some dollars these me of millions of take or in the

Tim Whelan

size, the think of the think of $XXX,XXX Yes, of over a we so so as above we projects are plus which and are as about that mega projects size, category. projects and think in $XXX,XXX and even There's over we $XXX,XXX some the multi-million. in funnel, these mega

Barry Sine

Thank enthusiastic, Very great. you.

Mike Kandell

this is The Barry clarify the American is hasn't been before to just want the my to jurisdiction. I again. is What arbitration out worked Association. be Mike going answer. And yet Arbitration

Barry Sine

you. Thank Great.

Operator

coming Thank your announce from you. question. And Please question pose is the is your Robert Robert, next Marcin. affiliation line and live. your

Robert Marcin

international traction Thank in for you call. with Capital. Penn of CommAgility core Are acquisition my the sales kind synergies before with any the and Marcin, was Robert or you the business company? what Hey, seeing taking guys. any

Mike Kandell

yes, a and is overseas it's relationships, our is deployment helpful regard. being we've us that the international opportunities ability come defense in our our company an overseas certainly contractor, but is that application U.S. answer channels, presence had extend but the to overseas Yes, through our to specific actual

Robert Marcin

assume company’s for to United XG really for the telecom an just the nature I going opportunities into and And is parts opportunity markets, we're North selling or well. any than gets to or other ramp value-added not that be just more at in products there I'm figure America, but now South Japan to ship take related into build-out is if when we're because budget, as to that opportunity China products America, of or abroad R&D of global the the there out cooking, foreign those XG business them Europe. creating States much trying nice the of all with there's or and innovative companies the

Mike Kandell

Sure.

the So unequivocally yes. is answer

you'll we'll that where of When use that's of impact different they invest. of much be, thousands on our XG count behind end after how have for impact an users to in at can opportunities it. that unique need where But wireless densification. how utility opportunities. industrial Europe think though the as the not in cases larger U.S. typically to well. structure will in of XG so funnel we different where will international belief we'll any and is about They names of space have private generally international of XG millions use have requirement deployment international need LTE wireless you geographies they for are interesting requirements. large mining, and current have and and industrial LTE we're levels devices, chipset terms in to type It's but Our think where as we we is and corporations specific connected more do the of catch networks that compete represents very the see of an interested in that, up in customization that that seeing there to environment think about telecom, that or factory may IoT connected you be companies production be go very thousands devices some

we cases be infrastructure more And XG infrastructure. takes will that is that as believe XG than market more so a off that application the emerge use and that from cases

generally transaction We that the are believe to leadership. approved. in T-Mobile emphasis of knowledge to to because deployment to an see public in U.S. and to merger T-Mobile made that inclined will investment of that and an that commitments Congress the XG get acceleration favorably there and spectrum the in result the which order more others We markets continue for is it's push Sprint,

a to healthy We're excited what XX over as that. we see years. to seven five period about investment about three we're to is excited So

Robert Marcin

I you or All a of it to right. this if three percent revenue Do build-out did be led business international domestic versus by build-out foresee ramps. U.S.? it any XG just the as years two going is in mix early ramps stages or

Tim Whelan

that do mix ramp quickly. to now what to that hard we the is that's believe the guess more U.S. be. Yes, likely most But in will the investment

Robert Marcin

All right, you. thank

Tim Whelan

Sure.

Operator

are [Operator questions lines. And from other the there you. Thank no Instructions]

Tim Whelan

Very great you have today for you Thank to everyone and soon. good. Paul. a speak Thank you. Thank joining day we'll and us you,

Operator

does you. Thank this gentlemen, call. conference conclude Ladies and today's

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

Wireless Telecom (WTT) 13 Aug 192019 Q2 Earnings call transcript