TESS - Earnings call transcript Q1 2022 | Tessco Technologies, Inc.

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Operator

Good day and thank you for standing by. Welcome to the Q1 2022 TESSCO Technologies Incorporated Earnings Conference Call. At this time all participants are in listen-only mode. After the speaker's presentation there will be a question-and-answer session. [Operator instructions]. today's being that advised be conference recorded. is Please instructions]. [Operator hand over to I would speaker conference to like now your the today, Mr. David Calusdian. ahead. go Please

David Calusdian

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

and today are future today prospects. results Please President Executive company's Mukerjee, Joining forward-looking Aric management's statements me the discussions Sandip Spitulnik, that and contain and TESSCO's Chief Officer; will note anticipated CFO. about

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

Sandip Mukerjee

everyone. past have confirmed, for and months David, you joining results. Thank are you, our yielding on done the This us. the that initiatives positive strategic good past Thank over XX results the works morning, quarter we

Our and revenue Furthermore, market. and commercial and grew XX% up growth gains carrier year-over-year, robust even This for year-over-year, services. our quarter was sales stronger, the in bookings business. record past our markets for our showing XX% in both products a with demand sequentially carrier X% our was

customers to continue share customers portfolio. grow adding with our to we new existing As our while

refining increasing business, both to same developing continue saw our also strong time, in the sequentially and software Tessco.com, offering. while progress We and At website Ventev industrializing our make growth year-over-year. on revenue utilization and our we

loss to adjusted revenue, and compared in million million. $X.X give pandemic $XXX is loss year. achieving industry-wide year million $X.X highlights new This in and to a full adoption implementation over to like our results this Number and achieving XX% million, These our of and net $X.X growth of X% between to I last last representing full of strong million $XXX markets, through between technology $X.X walk year million compares coupled million now $XX.X in the million loss that across of Our year-over-year. year. of recovery a confidence plan $XX.X in format. a following; with would to of and EBITDA the last operating you post the past of an This execution year. $XX.X results following improvement to two, between the us between the million breakeven quarter and

carrier commercial. First, I markets, and will two speak our about

business, we of remainder of this progress and Second, year stick Ventev three help this elements the more everyone year. fiscal the Software, will our Distribution, finally and performance format for to our of the Tessco.com. easily, To through follow the

me carrier start business. the Let with

in market highest quarter revenue TESSCO's first carrier marked The the fiscal history.

revenue and our year-over-year, strength successful continued logistics $XX business the is overall XX% XX% market bookings and ecosystem Our engineering carrier capabilities were to expertise, development management XX% our grew AT&T supply ecosystem execution our was year-over-year. year-over-year. Carrier revenue our market grew chain our efforts. production Notably, up while XX% million, Verizon year-over-year. revenue up proprietary due and of The

AT&T and by AT&T customers existing customers, solidifying the achieve Within our new growth we added offer. ecosystem, overall with

existing to market in expertise new contractors working share. share some market that our turf once mainly result, this the projects the we and share C-band again, XXXX, We're Also increase our ecosystem expect develop on our we execution. our during As demand second customers the calendar builds. with relationships. half been ecosystem, And ecosystem. increase the further market with driven have by of Verizon increased a and we increased that factors new can planning this Key resonated reliable our within demand

X% grew business owners tower Our year-over-year.

customers were up owner continue Although remember, our that's pandemic they ease. as installations now to last to access, closures related down with year, limited are you due picking and will significantly tower limitations building of one

Our business of Verizon development outside efforts producing the also AT&T channels and are results.

another U.S. the the contract of And for largest in carriers business have been We cell equipment awarded the one the have in largest wireless we new to small U.S. for of the broadband one companies with sites provide

expect current from two these We the the year. second of revenues customers half in fiscal

our targeted is the in measure implemented in our get efforts focused success Our adjustments those on key our spent solutions market improve, see carrier right year Furthermore, to demand strategic represents spend. development this approximately that our carrier to and driver currently focused XG services. last are having chain XG we supply yielding growing on results. will estimate product, of continue XX% the space. large results in initiatives. And people conditions and overall a We of for the business market be business We now

its as had lessening which VAR sequentially growth commercial we Let were this over the sector. infrastructure and The sales impact points The previously focus greater our were and pandemic X% was these fiscal and year-over-year. to driven quarter year-over-year all XX.X%. earlier, our VAR's, improved Integrator. with Bookings inventory described availability and Revenues market, was the revenue XXX me the turn XX% largest customers, market related XX% VAR this quarter ecosystem, of includes of wireless commercial to targeted the up we which basis year-over-year. XX% of the best on by since gross growth up fourth and continued business margins quarter carrier sector XXXX. to our This referred year our outside for up

as the are private projects broadband. TESSCO technology microwave solutions they develop. in new investments, the and neared our business being including these with as commercial also relationships, The aggressively Customers currently utility to with opportunities is new new development is support market. and well we prepared demonstrated market carrier Our had expertise LTE, a have quarter of tepid success in investigation vendor in business pursued phase existing completion.

share, lead Ventev and sales, an to I will sales, revenue we our emphasis to partners. of win performance. business, includes continue Starting to focus and turn our now increase customer OEM and business, profit this key the and gross three will business, and the Distribution, we commercial on elements develop Tessco.com expect new market relationships, Ventev continued namely new add the For which distribution Software. with

infrastructure project, business making our progress efficiencies provide much which will do we're and with modernization IT with. to cost Additionally, make TESSCO easier

identifying private We adding to wireless, as new on and focused have in mature. manufacturing card, our line partners thought particularly who XG leaders are LTE those

growing which demand and allows small products services. Partner We well to a to solutions Program, us carrier customers Nokia of range support utilities. cell expect Global We joined wide distribute the as both as for recently Nokia's

of added we one and comprehensive conjunction now critical range including result, from the market, most solutions. our offer value a the turnkey robust portfolios communications with everything services in a of This in As including wireless development Like their and keeping the and most to industries, experience to deployment challenges. design, continues our logistics, supply manage help and minimize solution costs chain challenges. total to size project customers industry for

convert lead for that by create products. and short inventory, more For revenues. mitigating has we'll our also healthy create detailed planning backlog overall TESSCO, with in demand swings term, this will times this for certain resulted TESSCO eventually will forward-looking this to in longer Aric customers, detail. discuss But then some We're we'll in and in a the

will in improve turn driving profitability. we efficiencies will focus which to ahead, continue business, on creating help throughout growth distribution us and Looking our

Ventev's card major the grew a company, the XX technology for credit business, company. home grew search highest company, largest has million. world's sales had Ventev base Regarding were a among year-over-year XX% several a Ventev of ever of In year-over-year, provider and Ventev X% totaling customer one companies. including QX, Booking new engines, of now and business fitness major $X achieved. Fortune and large wins, the XXX growing fiber we infrastructure, large multinational includes our a leading

Ventev femto panel antennas, and products, and several DART including Indoor launched BTRM antennas, quarter Cisco and directional floor Omni, enabled patch enclosures. This XXX, lead antennas, new X X CBRS state

Our focus differentiated able customer and to When along these with attachments Ventev products cell improve safety margins it solutions. together, we small satisfaction. ensure sell get two-way, solutions is are LMR, DART with to public our of

with partnership Cisco, national Program. established program bars. and providers Cisco additional may attractive via we Cisco recall, revenues with are opportunities you the yielded service the customers. there Additionally, has a and large several in as This new pipeline business with Design-In Moreover,

service quarter, and this favorable. the software to our monitor This customers monitoring have general initial our to business, milestone engage and the platform service called providing companies with interface we quarter, very on now production, device alerting our availability met in or reviews and Turning is GA new what disparate devices. been the last single of a network is

our from service attach card. resell with product are customers We part a to This include of to reseller to offerings. our their as to presenting and they will provide products procure them this product to line

as Over this few features the remote software management add updates. and we quarters, to such next new to continue will platform,

fiscal this believe we begin XXXX. in area be revenue Although year will will significant to year, fiscal ramp in this not it

Our strong new is customers and with target list. new we devices to the immediate relationships leveraging reseller on focus VARs add our have

to sales our longer included to service of order are expect benefits directly channels, via both and term customer sells a ongoing TESSCO improvements processing, our of Tessco.com benefits terms online has in The our IT and to-date Improvements our to a Lastly, and profitability. part Tessco.com. transformation. we

increased million. Research increased Tessco.com and Engagements cost qX over by Buyer BXB efficient totaling notification to sales page platform in-stock are adding XX% completed a views process. margins more quarter past XXX% and year-over-year. come this include Enhancements revenue Our with higher $XX In product measured in year-over-year, launching emails.

for summary let quarter. for about results excited me that, the achieved. very With this and progress are Aric financial over we his our past turn it We Aric? to have

Aric Spitulnik

update you, I an Sandip will results. everyone. good financial and provide our Thank now morning on

As significantly and statement exclude all these retail business. are then the from from a activity continuing income operations amounts diminished our exited reminder,

totaled quarter XXXX. for $XXX with compared the revenues quarter million first $XX.X of million First fiscal

As carrier growing macro-economic share, result market in particularly improving and market. conditions a of the

XXXX, our this million product Gross markets. vendors up As of the quarter improved revenues $XX.X the an XX.X% of $XX.X XXXX. customer was to of first first customers were in compared despite from Gross the with receipt year. In fiscal in fiscal compared first carrier the markets. of These with mentioned a both accomplished XX.X% for growth profit quarter quarter the global was the in were results in mix. record chain the ability XXXX, of a inventory quarter quarter. ship result for each Gross last to same disruptions delayed fiscal that for million was margin impacted our supply industry-wide carrier of was of of revenue Sandip margin

helped QX margins year. adjustments account the In for However, expected. commercial for from to costs we the changes quarter. in the pricing and somewhat highs margins believe this product be customer higher market margins Due climb fiscal offset mix, this the lower as will in of did expected increasing remainder to freight mix

cost as health sales quarter, focus our well, XX.X%. from is higher higher Our working expenses despite commissions freight expenses variable associated a insurance, increased to overall on SG&A and management this to due primarily of XX.X% percentage revenues dropped revenues, with

decreased We are expenses, corporate this carefully managing IT which significantly our and quarter. both

major wide both initiative, past further. IT we to expenses As our get expect decrease other support and we company IT

fiscal fiscal quarter the first net quarter XXXX. $X.X EBITDA First XXXX. was quarter XXXX million adjusted and and XXXX. for $X.X EBITDA for with loss and This $X.X $X.XX adjusted share a compared of and in respectively, were the respectively, $X.XX EBITDA a of the of million Adjusted of loss a of loss compares $X.X per of loss share fiscal adjusted EBITDA net million million fiscal of first first with quarter per

us the disruption, you chain supply million sheet, constrained that non-constrained this by Sandip a waiting discussed, This hold inventory inventories increased arrive. inventory will to for caused for of to result $XX which notice balance longer was while periods, Turning is the to quarter. complimentary

sales. some investments inventory, made which such grow help us as areas also in We two-way did strategic

next and supply million backlog the our being also million. $X customer by in $XX This be strategy the confidence capital by driven working quarter. receive results, refund credit improving an However, significantly With end payables by other did the will corner increase our a back be we've that, on the fiscal line amounts. $X the by $X will of of increase over us positively number in lower slightly of visibility gives million chain the are tax confidence better Sandip. were and changes especially in to The this so IT balance results. line, increases, based The amount. our income our bookings execution partially and in inventory on receipt. that healthy million financial July, did our increases We increase less beginning a to demand operating that From of increased perspective, into market increase by much that XXXX help and in The but drive call the turned will investments revenue in turn of gives by I also the us quarter some up conditions remaining the impacted this offset QX. was cash deliver

Sandip Mukerjee

progress our across apparent. in challenges each with In January improved our in now the you, pandemic of had metrics revenue to a XXXX. pillars And Thank share, easing, of that on are Aric. new over the of market I related market record appear We've highest year. progress our discussed we in indicators closing, you the commercial carrier website Tessco.com our made more and business OEM the three We're turnaround board. customers be our of and new revenue And has demonstrated the that partners. first in we're adding gaining

expect stronger we Operator, overall the demand, our our both will carrier call questions. cost growth turnaround healthy in focused this backlog we significant remain commercial and With controls profitability same improvement year. to and in fiscal a and open the At strong that, on of the time, go execution expect the the lead continued We ahead. year-over-year please strategy markets. for

Operator

[Operator instructions].

of is question Nolan William first the Maggie Blair. Your line from with

Maggie Nolan

you. Thank

how to of expectations, supply baked what kind the does the of supply chain your compared into what ago the are shortages, remainder is and year? three pace for On of outlook the your or months

Sandip Mukerjee

live about for roughly our the times performance, lead the for we Thanks year, thinking rest the they're and don't improvement, morning, have same see believe we rest Maggie. about has to And increased, the question. of of with We much the the expect the same. year. this Good we'll

As as see first doing I things we they the have the with said to mitigate. pain our are because that And longer several we range planning on the customers, well. is call,

their getting the way pain what in is to focusing So terms future project that's ahead mitigate on. of future we're business and

Maggie Nolan

you. COVID provide around in of of an of well thank impact the to bit year? access, you the expectations get then, aspect And site and more the Okay, that as remainder of for on the for as terms can the site little a environment there ability update the

Sandip Mukerjee

Thanks, Maggie. Good question.

I the couple think discussion. of comments I part I underscore during the will made first a of

access as permits, environment performance our of we the carrier market, the much to as see markets, site, So up. projects market within commercial well improved both relative opening to

is one driver our that think excited And so are even results, we very we're seeing for that that. I about into this quarter, continue.

Maggie Nolan

know to you the you. that give color you. that But thank I to magnitude related of little more timing a initiative Thank Okay, that you forward? then the there expect the IT of And going decrease. spend around is

Sandip Mukerjee

Aric, do you to want take that.

Aric Spitulnik

Hi sure. Yes, Maggie.

to cash next also some of across have the overall slow organization second to year well We the in expect entire project reduction here IT start in significant the as efficiencies, that benefits that doing to then with as business the definitely, half and TESSCO. by down of ease we And on expect outlay a year, expenses. for significant

So project that an end we're about later this year. coming to excited fiscal

Maggie Nolan

all you thank update. the for Alright,

Aric Spitulnik

Thanks Maggie.

Sandip Mukerjee

Thanks, Maggie.

Operator

from comes with the question Corporation. next line Capital Tim the of Your Management Call

Tim Call

new It's warehouse? good be the positive With have we're retail do business that you and new using? will to to improving your Nokia in see the inventory outlook. add space Or that formal business, using

Sandip Mukerjee

as more utilities, of excited microwave, plus transportation, portfolio commercial that it's parts focus new small very the on are of not of we're cells, carrier we're commercial do as the So business, its and existing describe, of Nokia, broadband. equivalent focus around we planning Nokia, today, about portfolio specifically, the carrier Tim, segment, the their much operations warehouses we on adding is like and the this

a to we're So continuing add will use we're verticals that us this warehouses, trust will anticipating to not our in just I excited we that Nokia, and mentioned. the having operations support give

Tim Call

use convert that space, to uses? The used that inventory other warehouses. in and your able that to been you retail Have space for take

Sandip Mukerjee

Absolutely.

Our activity Aric mean much that I retail is… diminished. inventory as said

Aric Spitulnik

Essentially all gone.

Sandip Mukerjee

carrier and at commercial that business. to gone point we've our all been it repurpose Essentially use and for this and able inventory

Tim Call

outlining a for you future. bright thank Well,

more Looking forward to seeing of it.

Sandip Mukerjee

for Thanks Tim. And joining thanks your for Thanks. the call comment.

Operator

[Operator instructions].

the Your Tieton comes question Dezellem from Bill with Capital. next

Bill Dezellem

I significantly with had you we start inventory Or like than correctly I else? end a the $XX referencing to expecting hear of you, just Thank to and lower clarification. a at year? the questions Did that group are the point of be were you million of something

Aric Spitulnik

expect significantly work and sheet be of the quarter. next end the where little of think that Yes, And expect It it that the in them number to point we of supply the through inventory end the increased it that from year, that's we a expect a little balance to some and at end with to year the customers. low, But fourth end we the was was of we somewhere bit the of quarter. bit was tighter till these it currently at reduced the chain where reduce, not quarter some artificially was where of the issues on I now. at this inventory of the we but run between significantly

Bill Dezellem

Great, thank you.

So in be you the cash be the with quarter? implication generating then will that second

Aric Spitulnik

to that hope would We happen. see

payables same a through also be paying working now, lot still also time. side the will inventory are so are lot we for of that of higher right on at the We - a

amount cash have So quarter. will to they expect we some especially in payment this offset, from positive but somewhat with tax flow the coming that cash

Bill Dezellem

not Thank have XX%, if imply is Does thinking fully had just not a some issues? supply understanding chain XX% would up a we're that in you. the Or there you here. bookings there then of been increase And point that friction about? sales

Sandip Mukerjee

morning the morning, question. you. good for to Thanks good early Bill,

where it's smaller much, much backlog usually are than today. always there's So we we have, that

also the but think shipping growth, it's not about growth is that just I consider. the So bookings you should the it way

growth So two numbers, growth, X%. those described we as bookings XX% was of shipping

pay more that have So in between shipped, number but how it's somewhat would would we and those arbitrary to try be two. somewhere much likely

So Absolutely. out of created. Will we Could shipped absence I think the ship we've of math. do more healthy you we Absolutely. that we'll have issues? in can supply backlog the chain flush more the be

Bill Dezellem

made press booking demand comment here? from stronger And ahead the reference you Does of Thank suggested you. that release, us. strengthen strength will in to

Sandip Mukerjee

we And America, year-over-year, when three just for view optimistic, are said. of reopening future. We favorable Bill I the is, that compare a One right. you very reasons, of have

seeing are increasing projects. we Second,

give think Aric are well, as we into that color did where from. and I I seeing demand

So that customers - should seeing positive demand. XX% infrastructure we're about don't of that the continue, take and and our We're about be A the our win launch our that. revenue, outs lot from well. for the it's of new marketing, technologies technology strategy. positive earlier will bullish immediately. But the we're fact about or customers as then XG, specific their up they pick own bullish build about we're not spend And plans, to the away so XG

few terms of results many In they ago, are and months months launched bear we going the seeing that. of to fruit, ago, you're a efforts

Bill Dezellem

onto just carrier That's helpful. jump comment. that And

the the You had if record at revenues and have in that a to correct, the relative industry is assessment the do the is you not spend carrier that data the business. at Is is peak? prior where spending industry correct it carrier record

Sandip Mukerjee

and project. So carrier CapEx, sure see you the same ADI that in what of other reports do and we budgets analysts terms Bill, I'm

really increased up just has both customers, customers better but share our leading view And new absolutely quarters we CapEx not results. that before, seeing these then logos are the this market through have one increased substantially, within quarter, had we to not is new performance. and So we what

but year. have half included be not sense our a of also this to carrier, nationwide another revenues, forward, them, bookings wireless announced customer, quarter, nationwide. provider in them plus in large of broadband business optimism us to also for a we this we our naming going the not cable second new a we're Those We is additive were expect

Bill Dezellem

should What And turning commercial looking be a today I that that. at the moment. are metrics with segment is we you. business the corner? are commercial appreciate or share can you this to that Thank that jumping demonstrating the that for us

Sandip Mukerjee

of it's Yes, at. large the so think of goes though growth, details, perspective, commercial it's reiterate three I the from our which this that the year-over-year it's channel. same from business to we said, things, look you metrics, use a bookings Ventev that And carrier sub mean, what, growth to was through pretty the we want if revenue quarter, you ledger much if

Tessco.com. the sales, And commercial is growth, indicator. there Ventev online So much again, growth the it segment, an of bookings Ventev early revenue so margins plus our the from comes and

Bill Dezellem

net and would your in Does year else. should quarter of then turn the I'll imply over positive case? positive one And the you. of ask it to fiscal the the this have Thank confidence adjusted Or lastly, will maybe you EBITDA someone be that question sense that income? I what's

Aric Spitulnik

it - core give I Yeah, going try we chain obviously I mean necessarily, that doesn't the don't on. that avoid release kind with issues of we to didn't all But - don't detail. the we supply

we're going possible? on a be it Yes. Is uncertainty say us it or no something is to yes to to for that able quarter-to-quarter no, question? there's to definitively too much say So

Bill Dezellem

All and all right. of questions. my Thank taking for thanks you,

Aric Spitulnik

you, Thank Bill.

Operator

no management There call would the I to for like closing over remarks. questions. are to turn additional

Sandip Mukerjee

support call. appreciate for you that Have This thanks TESSCO's concludes made dedication, also to everyone, members, and you, has TESSCO. our all their for operator a joining work, earnings quarters your several the results us last thank the team We possible. today. nice through of day. Thank And these

Operator

This concludes conference call. today's

may now You disconnect.

Tessco (TESS) 28 Jul 212022 Q1 Earnings call transcript