One Stop Systems(US:OSS)2021-03-26 02:48Financial Data and Key Metrics Changes - In Q4 2020, revenue was $13.9 million, up 7% from Q3 but down 24% year-over-year due to pandemic impacts [13][15] - Full-year revenue totaled $51.9 million, a decrease of $6.4 million or 11% compared to the previous year [15] - Gross profit for Q4 was $4.8 million with a gross margin of 34.5%, down from $6.5 million and 35% in the same quarter last year [19] - Full-year gross profit was $16.4 million or 31.7% of revenue, compared to $19.4 million or 33.3% in 2019 [21] - Net income on a GAAP basis for Q4 was $244,000 or $0.01 per share, down from $1.1 million or $0.06 per share in the same period last year [24] Business Line Data and Key Metrics Changes - OSS business contributed $8.9 million in Q4, down from $13.9 million year-over-year, while Bressner contributed $5 million, up from $4.5 million [18] - For the full year, OSS business revenue was $33.7 million compared to $40.1 million last year, while Bressner remained flat at $18.2 million [18] Market Data and Key Metrics Changes - The largest customer in the media and entertainment industry accounted for over half of the $14 million in lost or delayed business due to COVID [8] - Encouraging signs of recovery were noted from this customer in Q4, particularly with their 3D virtual product line [9] Company Strategy and Development Direction - The company has implemented a multi-year strategic plan focusing on enhancing its product roadmap and market position, particularly in the fast-growing Edge computing space [37][38] - The strategic focus is on AI transportables, which are high-performance computing solutions for mobile applications in harsh environments [41][42] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued impacts from COVID in 2021 but sees early signs of recovery and improvement in customer demand [8][45] - The company expects Q1 2021 revenue to be approximately $13 million, indicating a strong rebound from the previous year [45] Other Important Information - The company has a cash position of approximately $19 million, bolstered by a recent direct offering and improved operational cash flow [11][28] - Operating expenses decreased by 16% for the full year, attributed to cost reduction initiatives [22] Q&A Session Summary Question: Clarification on Disguise's performance and recovery - Management noted a $4.3 million year-over-year decline for Disguise in Q4 but observed growth in new 3D virtual products, expecting further recovery in 2021 [48][49] Question: Component availability and its impact on gross margins - Management acknowledged supply chain challenges but stated that they have managed to avoid significant revenue impacts and do not expect margin deterioration [51] Question: Pipeline of opportunities and market strategy for AI transportables - The company reported 24 active opportunities, with over half related to AI transportables, and emphasized a careful approach to investment in growth initiatives [53][54] Question: Strategic shift towards Edge computing and project details - Management confirmed ongoing projects with Raytheon and Lyft, focusing on AI transportables, and indicated a potential market size of $200 million to $400 million, with long-term growth prospects [59][60] Question: Outlook for Disguise and inventory management - Management expects positive results from virtual products and anticipates a rebound in traditional revenue streams in the second half of 2021 [63]