Vislink Technologies(VISL) - 2020 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues for Q2 2020 were $6 million, an increase of 11% from Q1 2020's $5.4 million, but a decrease from $7.4 million in Q2 2019 [10] - Gross margins improved to 59.6% in Q2 2020 from 47% in Q1 2020 and 52.1% in Q2 2019 [10] - Net loss narrowed to $778,000 or $0.05 per share in Q2 2020, compared to a net loss of $4.4 million or $0.09 per share in Q1 2020 and $3.6 million or $10.07 per share in Q2 2019 [11] - EBITDA improved to a negative $421,000 in Q2 2020 from negative $3.9 million in Q1 2020 and negative $1.9 million in Q2 2019 [13] - Cash balance increased to $5.1 million at the end of Q2 2020 from $2.5 million at the end of Q1 2020 [13] Business Line Data and Key Metrics Changes - The company focused on four key areas: live production, military government, satellite, and managed services, which represent significant growth opportunities [6] - The Satcom business was revitalized with new leadership and a product roadmap, resulting in eight product modifications [6] - The service business is expected to grow significantly, particularly in extended warranty and preventive maintenance [24] Market Data and Key Metrics Changes - The broadcast live production market faced challenges due to reduced live sporting events, impacting spending by broadcasters [22] - Increased quoting activity was noted in motorsport product offerings as racing series resumed [22] - The MilGov market saw increased sales focus on OEMs, with several large orders shifting from Q2 to Q3 due to COVID-19 uncertainty [23] - The current sales funnel for the Satcom business exceeds $70 million with several multiyear deals [23] Company Strategy and Development Direction - The company is in Phase II of its turnaround strategy, focusing on fiscal discipline, cost management, and cash conservation [15] - Plans include streamlining operations, improving supply chain responsiveness, and enhancing customer engagement [16][19] - The company aims to explore inorganic growth opportunities while complementing organic growth in traditional sectors [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by COVID-19 but expressed optimism about the company's improved position for growth and profitability [14] - The company is focused on maintaining operations and ensuring employee safety during the pandemic [34] - Management sees opportunities in the broadcast market and expects growth in the service business, particularly with existing customers [32][45] Other Important Information - The company reported no long-term debt, indicating improved financial stability [8] - A new trade-in and trade-up sales campaign generated over $5 million in opportunities within two and a half weeks [17] Q&A Session Summary Question: How has the pandemic affected the recent quarter? - Management noted that many customers were shut down or in quarantine, leading to halted or shifted activities, but activity began to pick up in June [27][28] Question: What is the focus for the second phase of the turnaround? - The focus is on maintaining financial discipline, managing costs, and increasing R&D to meet customer needs [38] Question: Is Vislink positioned to benefit from increased defense spending in Europe? - Management confirmed that there are growth opportunities in NATO countries and emphasized the potential in RF communication for military applications [40] Question: How has over-the-top affected the business? - Over-the-top is seen as a long-term tailwind, but COVID-19 has limited live events, impacting expected growth [42] Question: What marketing strategies are in place to increase revenue? - The company is focusing on re-engaging its existing customer base of over 9,000 and has seen positive responses from outreach programs [45]