ADDvantage Technologies (AEYGQ) 14 Aug 232023 Q2 Earnings call transcript

Greetings, and welcome to the ADDvantage Technologies Group Fiscal 2023 Second Quarter Financial Results. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Siegel. Brian you and proceed, may you, sir. Thank

Claudia. you, Thank

and Joining Rutledge, Mike President me is Joe today CEO; company's and Hart, Chief Officer. Financial

equipment variety conference begin safe the system we the Act you future as predictions of most well forward-looking only today's in of events, include, that as involve I'd performance. and the which call on those contained are as reports recent this a file are statements, like certain may XX-Q Reform subject harbor forward-looking ability and the Securities these to statements provisions financial Before and are of with with such strategic risks contain Litigation which due agreements and may to the call, number Private that uncertainties. to remind things, cautioned Participants relationships multiple factors, other a XXXX. among Forms These results future manufacturers of materially certain are original on XX-K, to statements X-K differ operators statements forward-looking future statements SEC. These actual or the and from events maintain regarding of

based regarding included release change. future the its on Financial in which is the with should limited and anticipated this reports to conference on currently consolidated on recent is most subject issued information XX-Q. press in notes guidance financial results and be this conjunction company's The earlier today statements included available considered to call information presented and call XX-K management, Form on

certain beginning this update the at only it such is year. company change, factors not Although provide points necessarily of the the Such the will guidance only information it may as during found and call. any guidance at influencing information will

release may website on and ratios press During also at as measures. in net issued earlier are financial are non-GAAP certain located the our income which such today, In tables that used certain our these and financial present this non-GAAP in measures, we call, addvantagetechnologies.com.

why reconciliation these financials a financial with measures. for be measures are financial and of should closest measures find we included of and investors believe these of non-GAAP financial measures the GAAP in instead to about not non-GAAP addition are These benefit the GAAP You'll discussion a and considered relevant.

I turn to Executive and Joe, Officer the to would now Hart, please like President over ADDvantage ahead. Joe call of Chief go Technologies.

joining Thank today. the everyone you, and to us Brian, call you thank on

were headwinds continue the days laying to while challenging better we We during for a we for the segments our our for today both navigate future. quarter. Telco Wireless in our the The wireless especially reporting macro envisioned, environment impacted groundwork by not our business results Both business. and of segments, what are are

slowing been investments, As carriers widely deployment of reported, has upgrades. have XG the several CapEx paused

a offerings address wider are broadening We of managing and expenses by our to carefully range projects. responding

to late segment up industry climb build by by increasing is in pick was second customers and the the continues network national wireless couple later of the by a downturn in XXXX data Our back this and hit a and activity wireless at overall wireless slowdown to quarter carriers. wireless sudden an in expected Construction and XG-related as demand consumption year an rate. large

in last XX in well significant for months. large in the partners, providers over key capture reliable CapEx we Others we to the of near-term has large served a meaningful are This opportunities geographies. industry services positioned failed Several many share are and companies struggling. have that wireless believe spend of the industry, created country greenfield have change. The construction the carriers faces areas

Officer. our leadership Chief Our And Revenue new of Brian efforts our in to accelerating. addressable segment expand wireless market the are Davidson, the under

additional that few next the quarters. wireless projects optimistic from can are over We we secure carriers

wireless the revenue program and for progress on source with diversity years carrier announced of recently encouraging will a its partnership Fulton create many and Technical aid Solutions Walker spend Our program significant come. in is The to making Technologies new space. significantly strategic multiyear a a increasing to

We lead years. wireless the initiative. important investment have and by also billion government's rural with encouraged federal next as Fund, several of funding the very known provide BEAD Both of programs industry the in few added RDOF. this Digital the deep We're experience over broadband personnel and network to funding key program, Opportunity will hundred fiber Rural a fixed

multiple We design for in regions. demand pursuing continued segment. fiber wireless our segment our conditions aggressively Compounding are challenging to build and Telco the depressed refurbished across opportunities networks is through solutions

few XXXX of for supply supply last rapid discussed inventory have last sometime equipment we they resuming the significantly chip refurbished our drastically no inventory Companies overstocking in chain to and before the And off longer Orders quarter, used to purchases. forced providers off by need by later that slowed reduced been work our have Telco and build account customers the optical chain and have has wait customers challenges excess business. significant many this over As year. the our shortages. months the to in that for want in-house normalization the we done of Telco due to for network burn to for segment been demand inventory

SG&A returns levels return our we we again as construction that We our lower and light revenues Simultaneously, lowered XXXX the can division year normalize believe to methodically of as in been normal. inventory profitability have expenses, and later reducing this in improve, we wireless to conditions telco demand.

and the a I'll CFO, call ahead. review that, Michael, to our detailed provide our over more With Michael Rutledge, turn of results. now go financial to please

of million Telco $XX.X or period for or announced June $X.X XX, months XX% primarily cost X ended sales for year. Consolidated initiatives reflecting decrease decreased the was wireless million in XXXX. was second in or gross to for and gross $X.X $X.X decrease due last in same the million profit XXXX. $XX.X expenses XX% gross XX% taking compared previously the million to to $X.X The decreased the a reduction of Thank XX% profit a million million, from a quarter you, a million margin or Gross XX% $XX.X place or decrease to revenue. Operating of Joe. or margin million XX% $XX.X revenue

Consolidated net the million professional quarter for basic and selling, consists insurance, services, include last expenses decreased cost or or $X.X $X.XX same compared period million other for XX% -- the $X.X was $X.XX of year. share from loss million for categories diluted general a per income for loss basic to SG&A, basic and Net same administrative, last year. million the $X.X or X per to million communication share and quarter XX, share diluted and overhead, which or ended the $X.X of and $X.X XXXX, personnel, months June

stock common the the April, entered commitment our Cash $X.X Turning issuing of the well as shares XX of into million, amount to of the agreement $X.X to was equivalents into $X of proceeds purchase stock up aggregate company, warrants securities convertible senior of purchase as common June to XX, promissory of and fee a million. as we up compared principal for a issuance raising of shares and XXX,XXX balance company. to to of December sheet. secured notes stock the up cash net at of $X.X at XX% XXXX. common XX,XXX shares In in million million

exposure from in December an of our net the focus in company $X.X at XX, XXXX. had been down As for of XX, area Reducing business XXXX, million, $X.X our inventory million has inventories us. million $X.X March June Telco of and XX

outstanding $X.X XX at June Our debt was million.

financial of questions. facilitate to the remarks. concludes call will any the I overview This to turn over segment our now the operator

investor. Please Gasco, The private first George comes proceed from question Instructions] [Operator question. your with

in-house with And versus about quarter quarter in you're you Questions wireless that what second and at now the using Can crews of in you identify Can area. the operating had you're crews beginning the crews third that the quarter? that. you outside the identify at the you're that -- now?

fine I group can George. a June. year the in wireless of it month doing fashion, broad this until The fairly address was

XX II So and the dropped quite of build-out customers, the days Phase a big our Phase last X one bit that their DISH launched as is June. they in finished network of and have

action third start get required Phase phase, for real next or it their before they've X, probably bigger III. in before a estate X permissions will So pause back for taken and be months they get and they the them

it's really, that going So reason. similar -- They're widely been in through they've a down. announced been a a AT&T slowed has got slowdown. AT&T, situation, different And but for

the crews as we have have in-house haven't haven't our reduced them. same remain I we crews they in-house So for -- enough been. because the work

use of We during the have a lot central and reduced crews the year. manage we so and lows we through why subcontractors can of the that number our construction highs region subcontracted and

year the peak. had at through So months crew I about currently first count in X X of months, the say to in running year we're XX% of a most of XX% we total would the in that probably last and

So it's down right now.

the coming work we we that don't see, hand have more can it at but moment. there's Now in

we're the to think and maybe to at build going a but at I quarter. through and still back we've already into Verizon a continue more not great pace. T-Mobile up picks the before So going work couple a experienced pace, steady X go fourth months

capital XXXX. their their that is pick and indication get as done. into up then get they CapEx up will they back they funding year merger go every they Phase III into as that next the So EchoStar, will with And go build of the DISH of pick AT&T back

have we going number a very is initiatives a that So working in I to think we're of year on. year, and next place strong be

analysts the earnings saying. So looking temporary at I a what are and all that's think OEM carrier the reports this slowdown, that are and is both

I'm going that's -- what stick So with. to

there's a bit doing tower to have do a on now. on in you're past? And work more Or the where you little more is you've about still can you towers, it then are any you steady of you what been what in yourself if getting could opposed trend a as what changes identify to up a in doing position been installing

do we at all work mean top asking towers. are tower technology only currently I thing business, do of is a of erecting really of actually steel nature of tower. radio integration as on a we not customers new in of the the We're and The And those well don't stacking upgrades, mean, on as do that base we we for towers. do the perform networks. we both activity Well, much I

been doing already, for few we've for do we So could it a a -- decades. most everything tower that we ask and anyone on

in any very about fiber management the federal for see don't million terms I in in talked optic above of XX% about XX% large X I matching and through excited to and and matching or project of money recently go with along funding change networks is amounts as What to the cable And we to come that into there. $XXX billion to our So closer XX push remarks, billion. construction available has my of that of into that $XXX $XX funds there next in funds are billion up take years so. are that

So we're about excited really that.

good a we don't working base. stranded to its very with construction to of have similar in states team so subcontractors from work going we're sense similar that wireless our the management, We our where home geographies on and program away focus working it's management, get XX and

Right.

could And Okay. additional I please? question, an ask

wants yes, If one, George, don't to else a question. it's quick want I a as everybody

like have you to you're so I'd future and to indications amount to the of going that you're to have you requirement you capacity can here term do near now, that something about your around relative financing what know the to to start as that? far have flexibility finances do available handle released going going your you turning to financial volume that your to as forward do some broaden

think period bridge a XXXX. kind I we to X Well, is view to X next months of the

continue our sure and we're our more comments that we make get stay at XXXX CFO, So that healthy Michael, might looking bills have regard. to Michael in alternatives Rutledge, to you and multiple and to some pay

Yes.

certainly coming needs was We daily, evaluating basis. our I Sorry, on a weekly you. if are off not on

will So as sheet, we it. our address bolster see to opportunity balance an we

So your level the at activity flexibility least you feel got now going handle forward? to you've

-- on pick up June, we're starting up. out see and wireless wireless where that work expect we sort we're start in at given and bottomed of we've it's so say to the we're what July, that picking I'd back to

I we're regard. going that to we're think going be be to fine in

continues activity at order the level. reduced side, Telco the flat the remain to On

always profitable So [Indiscernible] contributor. has been a

the So this into year. get to and be period got get I bridge fine, to us just think we're we to capital through new going

over floor further Hart There I'd at are no to the sir. like Thank time. remarks. this now questions you, turn for Joe Mr. to closing

Yes.

that growth few year, are product year quite So by last a a we those business across have like say years. XX%, I'd the company both to for us all in both we level today the it XXXX, the that optic drop to new feel will But XX% appreciate most fine. been entities. it the grew as burn going excess earlier, with that invested the This get once had happened who so levels. all that year think it I to We surprise big well demand a to likely fiber was quickly off won't return the and We in aspects in it's XXXX in be normal Telco as inventory it described a to providers that back did. that

team. The company has strong a management

sometimes strong decade a have the a that us been years, with that investors of most a company. or supportive of that's importantly, have more. we of Board Directors We number for And feel

it's it's customers. uncertain because dependent always So that going that we go to feel upon And through this. you path an we're get

place. So very partnership future. be good, that us the We we good very in lead Solutions going partnerships a and think strong to good Walker have Technical to some a help is

support. our So trying reduce to you the and for down, keep attending costs we've for thank call, got low, inventories you get And business around. heads turned thank this and

and for joining very very Thank gentlemen, us. conclude sir. Ladies Thank today's much, does conference. you much that you

may disconnect now your You lines.