TESS - Earnings call transcript Q2 2021 | Tessco Technologies, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q2 2021 TESSCO Technologies Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, David Calusdian from Sharon Merrill. you. Thank ahead. go Please

David Calusdian

and for everyone, XXXX TESSCO's conference call. thank morning, joining you QX Good

are solicitation TESSCO's note be Please to Sandip Executive today future will forward-looking me Joining Mukerjee, not results anticipated today's filings. Aric discussion will recent and the the Q&A statements management’s management about Officer; Please President related Spitulnik, company's during that taking CFO. also questions note prospects. today proxy contain that and Chief and session,

that of risks differ public number over Sandip? the TESSCO’s can uncertainties, and XX-K discussed Forward-looking filed other Information company’s CEO. the may reports a statements in that to disclosures, President recent difference and TESSCO’s results to and such periodic materially today. and TESSCO’s involve Form turn be the found I’d Sandip a introduction, like Commission. those Mukerjee, call Securities most from including may With with and concerning Exchange factors cause

Sandip Mukerjee

and be you for ongoing of safe Thank you, families I and thank staying commitment and all the I proud David. to joining continue hope team TESSCO during pandemic. are worked the to your you services, extremely protracted safety public customers morning health during crisis. tirelessly our communication urgent dedication They to first with Good have vital needs the and responders this provide fill of the including of clients, offices. us.

Commercial to that Comm, sell that morning, is decision and focus this to our milestone this enables business. effectively our realize us I've quarters, higher opportunity certain we divesting shareholder business. made vision on sharing a Retail Retail with focused several we the plan To the growth been TESSCO infrastructure of margin, exit my vision, to value. higher For announced on growth offers transaction business. business, you to Commercial This TESSCO revenue Earlier drive Voice the to assets our which of

space. infrastructure customers to in the We construction be servicing dedicated solely now will wireless

our concurrent the assets resulting of in this a use capitalize from we help of the transaction and opportunity. opportunity wireless including all deploy in of and CBRS the to XG, and us LTE advantage IoT, rollout technologies, once-in-a-generation will proceeds of We some unprecedented industry, retail intend to the to new the further band, take from private on

second higher-margin due efficiencies; the operational excellent During We ability a progress manage our infrastructure bottom to our line the we able Retail drive in were quarterly Commercial business. to initiatives. sales fiscal and to, our manage performance bottom reserves; We revenues and report second, on fourth, quarter, related costs effectively brand strong were economic year margins and improvement pandemic gross made the decline and resulting results navigate implement downturn. such lowering through best inventory first, near-term expense; challenges we both such able line the Ventev effectively despite from improved flat our performance and E&O that our sequentially while achieved tessco.com; finally, reduce lower third, Retail additional of to

on quarter excellent I'll on growth during profitability. second and to we've today, call our the three-pillar our made During the report strategy progress drive

industrializing do strategy ensuring number includes: business reported do an our But capabilities want through performance segments. our customers in services a points we'll to that, have for year one, each distribution approved investing of our our you the this scaling complexity the to industry our growing and customers. points unanimously. value-added since the We to in operations, with; we pursuing third, I this progress by business This we resolve number strategy the been made pain being value-added Ventev it I for before early and on managed and significant talk and Board our strategy in when about company moment. easiest are innovator; our was in that two, offerings And have and walk three-pillar

with business. Let Retail me the start

key in in due that segment quarter, channel has continued impacted success performance by more shared the national drivers sale improved to gross revenue business our COVID. products. with more product and XX% the accounts by last able we increase been and As Ventev proprietary national improvement development margin. Margin challenge, partners Despite was heavily momentum and efforts. significantly sequentially new In into primarily and high-margin revenue of Retail we diversification included to quarter, this were strong sold ongoing resulted

and business, Additionally, realignment we allocation discipline. team to the needs enhanced cost operational fulfillment and resource achieved and the efficiencies support critical of through most

we obsolete longer our review on and generates purchases excess through focus SKU returns warrant to changing business and to the rationalization Despite highest execution sufficient inventory of continued environment, rigorous capital profitable this accessory investment. most performance device QX, and inventory Finally, reduction and of brands. no running, improved mobile in our the Retail with managed inventory, more on vendor

ensures is business retail this have mobile financial of products accessory as growth. the and to legacy, profitable certain business includes our sale simplicity part drive While of sale we most retail-related and device brand assets. the Retail Ventev flexibility relates recognize TESSCO's it that we to operational well The inventory enhanced as other the of as

business transaction. suppliers of continue closing customers will to orders the support We until fulfill and and Retail the the

our Within transaction VAR our all our clear In and that wish the segment, I moderate their take suppliers. apparent. than Voice service TESSCO we'll as a became markets. customers smooth ensure made and business end it there to to carrier closing we supplier hard that COVID-related business noted impact operators impact team also first seen In sells greater and we reputation work we outside they fiscal I'm until Integrator Their Commercial and business. to this COVID-related the that to this this them and worked was place and other work have then QX, and extremely best business, QX, later private and closely wireless of who quarter, had Retail is our to success with and partners VARs users. this transition. have integrators to our Within expect was a serve We grateful the possible. our And Comm. directly industries customers our ecosystem. system infrastructure support includes diverse numerous join

last greatest access. the the that required was in-building impact projects with quarter, COVID and from with primarily venues As

of an customers As one advanced hold. to project due our was to entire was the prepared a example, and integrator in facility install network put on an COVID, wireless

as in utility However, we infrastructure. investments have other continued capital that their such markets the wireless serve, vertical,

let For or data. consumption AMI. with example, more see advanced market on by we customers energy infrastructure, working meters enabled utility are AMI comprehensive consumers metering Smart

customers mounting solutions trucks for upgrades, receive providing orders their utility and for fleet fleet vehicles. In addition new to AMI, we continue to from

specific spectrum numerous strategy actions area sales in We and to investing utilities QX quarters. drive renew first, servicing executives have in won that for industry good on seeing and include: CBRS for at growth power solutions. have past we industries; utilities second, generated the in revenue sales progress regulated Ventev result from in We have of developing our marketing demand seen the also to teams market auction. verticals. taken four Recent solutions overlay The the our our we efforts are recent a specific vertical in sector for FCC three focus the have the and offer, a customers is this saw the growth the utility of utility in custom our

through website. we and revenue and tessco.com call year decrease margins in success almost the our overall, this done year, website, of Ventev's a product we e-commerce Looking ago our at VAR that, of same a making At financial percentage time, in in sales. sequentially. points, handled to X% earnings past have segment XXX VAR saw in key improvements due just sales shared I to factor business the our being a business. business that percentage XX% Integrator improved higher basis a the QX contribution VAR in year-over-year higher this was to gross resulting and real our decline primarily of In the

with of XX%. tessco.com year. the growth grew Our realized in over revenue commercial direct the website was was our industry through and revenue total the XX% sequentially marking year, sequentially. past X.X% business tessco.com This margins by up tessco.com quarter sequential for X.X% first VAR a quarter grew also in highest revenue revenue through sequentially,

to either a easier among best in search eyeballs tessco.com. as the for more the past orders calls, recent website's paid making or customers to ease use without the attract In industry. continuing our In consult mentioned it rated to to in and and information search salesperson. place to having tessco.com, best of to engine investment are find I've optimization We improve our surveys, continuing customers have

average effort, improvement doubling While made have this visitors including several is we past monthly during quarters, the ongoing our the site. to an significant

our contributed of had of spend margin, our growth the XXX-basis positive infrastructure We sold generated VAR the revenue combined and VAR that XX% and the tessco.com percentage products with higher-margin increased impact tessco.com products to our increase we addition Ventev that, In customers. on the revenue, Ventev to also revenue to and infrastructure in in margin market. year-over-year gross Integrator point higher higher

pickups a Rajant a a panel builder solution solutions solution a turnkey an and received customer in America; which U.S. received Australia; installation technology operations VARs our machine solution, for warehouses Rajant South X for enclosure Ventev sold the integrated company; solution, optimize VAR a WiFi installation TESSCO's floor for order wins for an food market tile in orders networking sealing and to Europe; making mining utilizes for major provides which fast solution in chain, in Cisco a multinational partnership utilize to customer notable include: power purchase a for Some a to military continuing efficient. system; wireless our Ventev orders purchase offices; upgrades installed our Ventev in more purchase of

efficient products of infrastructure Moreover, industrialize due of is heat from is wireless are in they requests specifying able select enclosures and Our tell designs interest are Ventev factor forefront such to customers. attractive environments, and as This ease has efforts to greater leading us withstand installation; and and aesthetically utilization weather, more resulted enclosure range that greater so moisture, many seismic Ventev broader for installations. power strategy friendly at systems; of for to antennas. activity; Ventev projects environmentally form because sustainability aesthetics harsh the a solutions. of and our Ventev that our Customers small to Ventev pleasing our

at sight. as plain In say, is hiding in good our fact, things really customers Ventev

like TESSCO. I'd observations market. currently public Turning is current unique The begin on our carrier represents communications. the the situation. the customers and XG to carrier including of hand, ecosystem, its to carrier impact with of in wireless about one future a status the ecosystem technology On some on

our for hand, We that begin carriers, major is customers, our intensity when imposed by pandemic. construction other the or the we have business know significant share of near-term of market growing. the extremely current including from XG constant infrastructure the some our partners This bodes On increase a well carriers to reality construction. of remains

our For build-out the increase infrastructure continuing in This DAS by our installations and pandemic of shared XG to QX. our accelerates. business of part, with to be share we of and Last government to revenue positions offices. through permitting we a primarily logistics impact certain laser-focused of continues relationships the the the carrier grow restricted the access as delays of ecosystem related this case gain caused on breadth closure in on the for that was combination to the in capabilities. quickly well and and remain chain quarter, municipal technical us supply our Much and carrier venues customers depth of

data we centers on IoT and side, emerging see VR to like massive XG will interest technologies increasing positive applications follow. the latency EDGE for the and in the designed requirements AR, On deliver that

I'm for our quarter and purchase suppliers, closely are We to is working received area orders such pleased and that a TESSCO. with have new this we deployments. say for This customers

had in We carrier hundreds expect and introduce in successful QX. well government the resulting with opportunities customers CBRS wins CBRS country, power enclosures us spectrum as conducted around giving ability We with solutions the the our The of in significant this more a Ventev awards. significant applications in of to area, ecosystem. auction

motion companies building in out a now infrastructure again, with invest on ramped in acquired needed has The the in yet not a spectrum. their to Here number up. is necessary the to position capitalize build-out of process

defense a to this the of coast of sensors One by deliver year This the along provides selected supply proprietary TESSCO to fiscal that was Ventev U.S. customers our contract sole of by deploy largest was high a expect a components, number piece contractor awarded including line. and source fiscal our to of division. from the margin, into us remainder business solutions throughout with XXXX. we department on this

deployments for their are products this transition large of volume utilized of Ventev in customer's to two of detailed will and source selected Ventev organization that Ventev from position all a monitoring shared not and telemetry a several to customer examples and provided includes early just array production. innovative sites. that thousand had towers. I And an be where belief wins ecosystem strategy demonstrate quarters proprietary custom This to too, we tower the across engineering result carrier an the supply carrier VARs committed a also markets, value design for is organization Another TESSCO could solution my integrators. capable working. industrialized two prime across a sole our our customer strategy component. it, These of focus These proof by of I ago

other logistics is proven well second, to on by immediate our as management the TESSCO the necessary respond inevitable wireless capabilities that and that in relationships most to construction production steep All manufacturers; the the to infrastructure. great future carrier with transformation improve are of ecosystem key TESSCO growth important infrastructure so and carrier nation's capabilities three capitalize position performance initiatives of to unmet with one ramp of numerous opportunities. securely gives our areas: commences, IT third, shared the in companies that the to outstanding positioned needs engineering space; proprietary this to quarter, the me critical completing I of Last confidence

excellent digital modernizing platforms. systems, We progress made have enhancing by our our

a brief update enhance We on the I mentioned call. on strategy would like three-pillar demand three-pillar brief and our in to you planning give that continue our I strategy I systems a to our that now tools. our updating earlier core update

well We on line industry. in TESSCO, top to to transform effort are positioned strategy the margins and executing this remains compete an ensure in improve our and TESSCO to

First, business we growing do and that are business to we are the we First, our easiest are company ensuring value-added with. distribution

our intimate Over taken with more TESSCO steps few the customers. has quarters, last to become

to support We a needs. our of and customers. redesigned This have deeper processes and sales led our specific have sets of smaller teams understanding has specific to operations focused on relationships stronger customers'

services telecom We for management general are providing more contractors. materials sophisticated

also provide fulfillment to engineering We cost value-added scalable for of from design products our resellers. services timely and

to capabilities VARs them of our their value-added services are a enable servicing fill and end own in extend variety customers Our reach. and gaps wide their

We serve. understanding have the we of vertical developed a keen markets

been we for investments to Our And a long in strength heritage and industries market. been differentiator the utility, we long-standing other public lead have and have to making us. that continue safety ensure

solve vertical forestry, market transportation, state industries oil government, and natural to internal local added to executives regulated have by we problems including as safety. customers. our sector, collaboration resources received such public example, For mining, gas, addition cover and The and utilities, been have well and intermodal our resources suppliers education departments customers, federal, public as complex enhance for and and these such and of

Second, driving Ventev we and our are scaling our industrializing operations, capabilities innovation.

into This And resources, designs; enclosure to industrialization ecosystem. We innovation focus significant reduce the the have added quickly move taking the and to the and inventory sales Ventev new ideation, we and invested added product ideas products applicable to number to testing time, working SKUs to existing flexible internal phases allow of engineering advisory agile teams innovation to through in a successfully third following: parties; and sold will industry acceptance done an and then enhancing and and product first and more on into modular, internally with production. acceptance both products influencers; instituted with The customers management and have market process them demand; with the rationalize external carrier information products led bring created and receiving key to process, innovation VAR already for from customers. team in has manufacturing an be and vet to increased resources; innovative larger channel. council, through products and market

the and design to Third, high-margin investing value-added industry, combined we of out which are the points building multi-technology offerings of will management provide a Capitalizing stand advanced ultimately resolve of engineering and we in services, a array multi-vendor, are we our pain logistics revenue. confluence place an services on with at source and customers. industry, capabilities, for and complexity our where unique managed in

and certain throughout focus engaging Our can next will in this grow productize market first the true offering services design other the our bring by the are partners. giving quickly fronts: and services to to the TESSCO and in services. maximizing lower-margin these base, three to efforts such been to number tower details away of help secure and to words, the or, in design new customers new customers value stage we is revenue; promote engagement; of our on services the customer our utilized the increase have we more the monetization to efforts In quarter. using of business sell service design of rather use effectively than of design technology them accelerating areas, on share our offerings more The services proof-of-concept product

also have salability customers to additional turn These VAR and will to the call Aric? with that, sell our final of to the for differentiate provide with help provide Aric value capabilities I established their With the customers. financial us the review. We the end TESSCO capabilities feedback maximize and with to beta will customers over product. themselves help

Aric Spitulnik

good morning, and everyone. Sandip, you, Thank

was the XXXX the for million in was XX.X% to fiscal quarter. second with margin Gross points of the the The second reduction higher ago year. fiscal to totaled product the across first despite the quarter mix Gross the Gross the SG&A due volume. as gross grew management. quarter Commercial success Retail as our we're for segment. economic our cost-reduction despite flat charges in $XX.X both and significantly inventory, actions flat increase fiscal expenses XX the related infrastructure the the to success and improved lower from initiatives last including solid facing and of sales, current in the from $XX.X Ventev profit the our discussed, drive improved of XXXX sequential a same was essentially from Sandip reduced aggressive million XXXX. improvement result of quarter business. second trade-in segments, to reflecting in quarter first $XXX.X mix, down favorable basis profit to headwinds with sequential As XX.X% costs, of million year compared compared primarily quarter product to million, environment, in strategic and sales a well of of of This quarter XX% demonstrates $XXX.X bottom-line Revenues improvement inventory million the for were $XX.X margin, a sales.

year addition, allowing recorded second efforts, income a a tax income place the we in of put XXXX, expense fiscal In the bad compared benefit income quarter as us reserves loss before was $XXX,XXX $XXX,XXX of taxes year result a from debt to XXXX. ago. reduce of collection In strong $XXX,XXX of before in fiscal with

sheet. E&O tax the the on quarter, million. We expect quarter generate first million a million $X quarter. filed in we quarter. reduction fiscal $XX.X line refund our year. well fiscal in cash XXXX return, continue Also, the and to in our $X to second in balance Due of a credit accounts from that our the elements we this inventory later key came improvement we initiative ended payable, regard which Inventory a has we maintain year of Effectively very with healthy the performed lowering second been down near-term balance and managing to our mostly of

our comments divest few a have I to recent up, and wrap business. announcement the I Retail exit on Before

million balance our with we on the the sheet, as a monetization second the million transaction as $X flow and years. operations the Comm As million to the result well of a from cash XXXX of in another the four expect aggregate the $X retail next in to exit net $X remaining retail items to generate $XX of of Voice fiscal the half over range million in

time. of products group will customers but of most continue some to the We of small for at closing to we of our transaction, Ventev a sell retail the short inventory will sell a period sales

during not selling will pay and receivable continue and so or on we We are those fourth payable, amounts quarters. the accounts collect third accounts to

in quarter TESSCO, we close thanking we conditions. continuing the line to this encouraged half continue for join the are of forward quarter and We latter XXXX, contributions expect to to improvement our Voice the transaction to various their to of fiscal will and look subject In make with third implement to Sandip in Retail the I will initiatives. we bottom by successful transition. closing, a aggressively performance work solid our our Comm in team second

second public revenue the due historical carrier expect we the As the to market the in to a third in but we margins growth to segment quarter, return gross half Commercial with more year, look of product mix. sequential

related second that recur. with the associated to changes in During quarter, expect receivable and inventory estimates accounts reserves would benefits to recognized not we we

and associated other Additionally, costs we incur initiated expect recently to responses with solicitation. consent incremental to legal the

fiscal XXXX, of continue meaningful ahead. Sandip that, business the incredible and the Commercial side take put to questions. the will opportunities I a Looking beyond as make to focus investments heavier we With your on will we be on capitalize happy to

Operator

[Operator Instructions]. you. Thank

with Nolan Maggie from is question first William Blair. The

Your line is open.

Maggie Nolan

to sale wanted the the pieces profile about the Retail ask considering of I segment. of margin

had that longer carrier some retail part wondering profile. profitability And the your that's margin what with of that of is the specifically So a in are that around segment now no profile historically higher-margin comes volatility thoughts public managing future equation. the and I'm

Aric Spitulnik

look Hi the to fairly to we have that's If Retail go zero margins, be for business case few Maggie, The the going the as gross will at essentially Aric. been quickly. the past quarters, it’s Commercial operations. ongoing

higher So a your some that. I will carrier If a as probably decline in in those it the see quarter was dig market, little two, the first quarter. was baseline kind the into said think here of next than as we today, it deeper that's we for little

expect quarter second representative business that here, the picks a half fully carrier the probably more the over up hopefully, of I little think is bit we the first as happen. to year

quarter opportunity we're about pieces, invested which On something including big the out going we which this And margins heavily business, excited a VAR Ventev moving saw for of growth to we continue in. very that's piece the business, that we've infrastructure And there. of business. clearly the bigger to think grow I and lot Ventev, that be a of and a think us is results help there's will

mentioned margins VAR for as driver a business. on tessco.com also significant We the growth

things certainly So should positive those have impact. a two

I we're margins So are we is the seeing a probably business space, that that it the the of continues think the and the today Ventev still think – business. grow. strong to or short VAR the carrier business see up the either continue will going if decline in probably small stay in But VAR long carrier even to potentially go business

Sandip Mukerjee

a Maggie, to just Yes, things thanks. And call. the I highlight Aric, said just perspective, from strategy a few during

growth. On don't I share focused on mean, will we the to exclusively we margin very the grow are and strategy business. improve our revenue contribution absolute improve to the as Aric is margin market said, but side, public believe, points, carrier We

So that's point one.

then with and margins services, getting past, On a favorable than recent we Ventev, believe to mix. that there. we with the finally, be that said, Getting tessco.com we side, have will to more the more channel. has VAR higher grow product we And contributing it been industry when in it's as sell-through Aric margins be

Maggie Nolan

there's dynamics COVID. to related Understood. lot different of And then a

the in the what September, November. business. are to up midst making that the now the you you're of in the back changes public starting approaching that how of we projects, way anticipating but Something wondering I'm the VAR of in close maybe of in the can things to market timing other kind in all down carrier of hints some manage open in again starting you're as

Sandip Mukerjee

Maggie, It's we the was the impact. a during the of and very pandemic dynamic like it has Early New the much That for as country. Northeast might the you most where one not every and expect, York situation, shifted geography answer saw pandemic, in has.

So carriers tessco.com terms showing obviously long of catch the improving our that of and to tail results. preparation, is in are we

on We're industries, product perspective, on margins. from the are and other And VAR and intelligence in bolster what beginning segmented to have the and sites, attacking construction, sales in a We our we see data the and specifically we country gives is have this XG is public focused construction that our mostly then customers success, the carrier based have. we sequentially. confidence the across market to carrier revenue we VAR grow new expect space, outdoor and a combined of which will tower et and on awards saying From cetera. mix us

in up into to expect half that year We and the carrier expect intensity latter that that our calendar to of our will early business. We going XXXX. fiscal the pick still happen of boost

Maggie Nolan

Thank revisit that obviously the your formally growth then recent do you've How past to of you. and three And environment, year? to kind you strategy. more for refining been the forward the often intend pillars put adapting you've in strategy that's that

Sandip Mukerjee

management we reviews, checkpoints Maggie, in the internal as have through you place, cetera. within might imagine, both team, routine operations, QBRs, et

We have regular checkpoints in place with our Board of Directors.

very, will continue we very to So we carefully, that. do measure watch, manage, it's and something

Maggie Nolan

me. from all That’s you. Thank

Aric Spitulnik

you, Maggie. Thank

Operator

next Dezellem Tieton is from Will with Instructions] comes question [Operator Our Capital.

open. is line Your

Will Dezellem

led margin in you remarks, you gross your Would opening missed I the if increasing? it. to VAR it And what discuss mentioned

Aric Spitulnik

growth the which tessco.com, the VAR assigned in I space. business, higher tend in two from Aric. if will. things then thing just than Yes, second The really customer it's very the quarter, the would increase revenues portfolio, be which a had in Bill, That's our the there. to primarily normal Ventev strong have And a the gross you mentioned margin

gross So VAR primarily reasons was higher. those profit two the the that were things

Will Dezellem

one-off Or on that, Is you a this of success of there a continuing And of degree that recurring throughout times all couple were success number factor there Ventev items? that call that mentioned is Aric, some something this morning. been has there? the see

Sandip Mukerjee

take is good that Sandip. one. I Hey will Bill. morning This

our talked of for Ventev business. the I've strategy matter a to is fully down it us first, on few So last that quarters. double about on

do that proof that. a seeing but at We're that. results seeing of the we definitively strategy. small We continue where It's are point are we points, to

This and public to product call a participate I new is deployments the recent carrier overall call to which Ventev have this some us. from the gets in solutions in across innovative in tower CBRS companies, we continue. the mix first, expect the So with TESSCO. I carrier earlier perspective for for that described earlier

talked orders in In fact, multipliers earlier purchase and towers many across I of exist call some today. the projects that the country has in the that about many,

expect proof So that I and that's to in initial grow space. points the carrier

For the industries, to the with are Ventev better products. industrialization of job now VAR mix and a of influence we doing

enclosures. We adding are

that to Cisco, to talked of the a Cisco we We expect continue So purchase quarter, provide multiply. orders the I Ventev our that back and builder partnership had from some things partner partnership. saw on calls, of about first Rajant, first second we couple that is had this We – where that machine with to draw the enclosures. with the expect XXXX, program. result earlier I to quarter we Last fiscal purchase a partnership Rajant of talked orders the that saw of multiply. partnership. with about as

gives just down Ventev Ventev sales, more we around expect other giving us and are margin that, product in therefore, and we result expect us a this, the Beyond one-offs drive to industrialization favorable going and to performance. a of this to mix double platform basically on These wrap forward. not

Will Dezellem

activity But the number you from difficult And there? hearing the you. one's question to out given is really their that level them around what and the represent wrap relative Great, then a economic of just VARs of environment that to this thank that category. of may arms be view business are

Sandip Mukerjee

the So cord, top Bill. everybody level, at is the cutting

private There's technologies coming LTE There's CBRS wireless. new like around new the into excitement there's around the excitement So mix. spectrum.

mood you favorable, is will. the very So if

the And very I It's Point no COVID difficult I Maggie it. on about has This what impacted construction, the based doubt been two, day intensity won't across the month difficult one. point it. predict. it's is belabor to to country, predict. different about. of asked mean that's So

look VARs through economically all and industries vertical if them serve, through of the the significantly However, benefit cord. that you at our automation, cutting

intensity innovation dip not that that. So continuing. of We're is seeing a in

Will Dezellem

that you the would Great. And made, relevant I'm then part centers, just Thank and you. and of it's a why explain understand to to I well. you sorry, please comment TESSCO? business jumping that data what EDGE is The this don't

Sandip Mukerjee

standardization is discussions. dynamic that talked that. the Bill. Happy about do This XG to Yes, a was during architecture

POs. and projects being realized seeing We actual this are now in

a around it's So very high at latency. level,

of sub times to the massive reality, applications real required by some the IoT For applications, response be reality virtual these millisecond. augmented is or

So latency to close to as close need as tower as you the if or the subscriber the to get important can. you is processing

articles in owners companies. the looking this. real purchase the see I've orders at or like also press, we a lot seen business discussion, the that articles in service postal is of not So U.S. tower press estate the

to high centers. anybody provide So estate now small owners centers, latency perspective containerized, storage, low an processing with real to data can deploy These applications. data from a opportunity offering has compute, use that application capacity are

the We of It's do. similar business are beginnings rest seeing very the we the to of this.

We expect are the focusing on over months. coming it and trend become real this we to

Will Dezellem

more and to sort just applications quarters, not reality of essentially something of that's Is those that for more see going presumably then but saying? years of as So there. that you're that become what opportunity you're

Sandip Mukerjee

Bill. That I’m Thank you. saying is what

Will Dezellem

And out of term, quarters. whatever. from plan. or next their carriers Okay. versus referring build-out the or carrier just weekly the say the impact All are and level their their two, around impacting, big I speaking, in sick you more – might to and something that because terms how commentary differentiating could. just the strategic but hearing let's day-to-day, shift I'm on to are And is really build-out not that ought be not three is plans to them longer people right, broadly that COVID when over I What we longer-term a here; careful I'm if

Sandip Mukerjee

has build-out, the XG resultant a terms from of are and in Bill, hearing. around we So longer-term changed what excitement nothing

COVID our people one. down, pushed the shut projects out. projects need So point is in-building is the impact for that's places, to If venues, access. the business, get mostly where relegated Point venue two,

These our It's From the we big. XG, are So seeing. a are that fairly lot of new We are we build-out perspective, that in essentially this of seeing business see not customers. dynamic upgrades a X.XG lots That's sites. to of the issue. build-out DAS the primary point to XG. is are XG with XG now from our

XG, of So not from these revenue upgrades still we to coming XX% are construction. see new XG. site XX% to our But

construction half the said our we calendar as site second of We the in XXXX. expect and part fiscal new year happen, the to of have before, first

Will Dezellem

that or the Or decision-makers you is think and office I in the still and is And then lastly, that problematic work last improving To this being call on bottleneck? Great. a Thank what through some process? mentioned permitting at this of permitting large least degree way the aspect. morning, you. very with finding permitting the to municipalities a

Sandip Mukerjee

It are but there points anecdotal, all lessening, has the definitely data It's still lessening, but there. are impacted projects. I would say right? it's –

Will Dezellem

you. thank Great,

Will Dezellem

Will. Thanks

Operator

I'll for turn further remarks. closing at this We call to have questions the management time. any back no

Aric Spitulnik

Thank Chris. you,

progress encouraged very we've the operating strategy our on results. by and are made We

in on our We financial profit the quarter and improvement impact meaningful have plan a a second place in made efforts results. solid our

will to take We to bold gains. near-term continue drive actions

smooth focused ahead Commercial growth from improvement half the will look year, after the successfully are of the a continue having we to of and that exit business As drive second off to and divested on we ongoing Retail in business. profitability we

making inspiring is to to opportunity an place like thank our dedication the industry amazing to this strategy This reporting to fiscal progress thus the half right an Commercial the macroeconomic beyond. current of remainder of has year in and TESSCO's up their easing it from time calendar pillar have in while would coming The I you. transform of to the outlook resultant in progress our improving forward Thank growth truly delays job is we have the the and Their additional continued of each capitalize on growth, driven our us look all been the TESSCO for the project three-pillar strategy. with setting complexity and our business XXXX year, realize that at the a in XXXX we course performance, drive Given progress commitment remarkable change people and technological determination on and our same far. of second XG and the we've for in you. year expect has stated we will team opportunity. anticipate the to made doing near-term in set. I the excellent

Operator

this concludes participating gentlemen, and and may Ladies today’s conference now disconnect. call. Thank your for you you

Tessco (TESS) 31 Oct 202021 Q2 Earnings call transcript