Vislink Technologies(VISL) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for the first half of 2023 was $12.2 million, down from $13.6 million in the prior year period [14] - Revenue for Q2 2023 decreased to $5 million from $6.8 million in Q2 2022, primarily due to the discontinuation of several product lines [15] - Gross profit for the first half of 2023 was $6.6 million, compared to $7 million in the first half of 2022, with a gross profit margin improvement to 54% from 52% [16] - Net loss attributable to common shareholders for the first half of 2023 totaled $4.8 million or $2.02 per share, an improvement from a net loss of $5.3 million or $2.30 per share in the first half of 2022 [20] Business Line Data and Key Metrics Changes - The MilGov segment experienced a 91% year-over-year revenue growth, reaching $1.2 million for Q2 and $2.1 million in the first half of 2023 [8] - Total expenses in the first half of 2023 were $18 million, a 7% decrease from $19.3 million for the same period in 2022 [17] - The company implemented a 5% price increase on all new quotes starting at the end of Q2 [12] Market Data and Key Metrics Changes - Revenue in the APAC region increased by nearly 50% year-over-year in the first half of 2023 [57] - The company is seeing strong traction in the public safety market, particularly with federal funding increasing buying power [58] Company Strategy and Development Direction - The company is focusing on the public safety growth market and adapting to elongated sales cycles and budget cycles [9] - A significant component of the transformation includes integrating three ERP systems into a single, more modern system to enhance operational efficiency [13] - The company aims for a 90-10 split between hardware and software sales by the end of 2023 [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sales pipeline, particularly in public safety and sports and entertainment areas, with the most $1 million plus opportunities in several years [10] - The company is optimistic about the potential for growth in the second half of 2023 and beyond, driven by strong leadership and well-defined growth strategies [41] Other Important Information - The company has a strong balance sheet with cash and cash equivalents of $11 million as of June 30, 2023, down from $14 million at the end of Q1 [23] - The company is exploring M&A opportunities but prioritizes achieving breakeven operations before making acquisitions [70] Q&A Session Summary Question: Revenue impact from discontinued products - Management indicated that the discontinued products generated less than $0.5 million in 2022 and had a nominal impact on revenue [66] Question: Live production market outlook - Management noted that while there is strong demand for live content, some customers are pulling back on CapEx due to budget constraints, but overall, the outlook remains positive [67] Question: MilGov revenue recognition - Management confirmed that approximately 15% of the revenue from AeroLink installations would be recurring, with significant opportunities expected in the APAC region [69] Question: M&A strategy and cash conservation - Management stated that while they are exploring M&A opportunities, the priority is to ensure operations are breakeven or cash-producing before pursuing acquisitions [71]