ADDvantage Technologies Group, Inc.

Thank you for standing by. This is the conference operator. Welcome to Advantage Technologies Fiscal 2020 Fourth Quarter Financial Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. She did need assistance during the conference call. You may signal an operator by pressing star and zero. I would now like to turn the conference over to Brett Maas with Hayden Investor Relations. Please go ahead, sir.

Thank you, operator. We are joined today by Joe Hart, President and CEO, and Jared Watson, Chief Financial Officer. Before we begin today's call, I'd like to remind everyone that this conference call may contain forward-looking statements which are made subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events, such as the ability of abandoned technologies and its subsidiaries to maintain strategic relationships, agreements with certain original equipment manufacturers and multiple system upgraders, as well as the future financial performance of abandoned technologies. These statements involve a number of risks and uncertainties, Participants are cautioned that these forward-looking statements are only predictions and may materially differ from the actual results or results due to varying factors, such as those contained in Advantage Technologies' most recent report on Form 10-K and Form 10-Q on file with the Securities and Exchange Commission. Financial information provided on this call should be considered in conjunction with the consolidated financial statements and notes included in the company's press release issued earlier today included in Advantage Technologies' most recent reports on Form 10-Q and 10-K, The guidance regarding anticipated future results on this call is based on limited information currently available on Advantage Technologies, which is subject to change. Although any such guidance and factors influencing it may change, Advantage Technologies will not necessarily update this information, and the company will only provide guidance at certain points during the year. Such information speaks only as of the date of this call. During this call, we may also present certain non-GAAP financial measures, such as net income, non-GAAP net income, certain ratios that are used with these measures. In our press release and in the financial tables issued actually yesterday, which are located on our website at advantagetechnologies.com, you'll find reconciliations of the non-GAAP financial measures with the closest GAAP financials and as discussed as to why we believe those non-GAAP financial measures are relevant. These financial measures are included for the benefit of investors and should be considered in addition to and not instead of GAAP measures. I'd like to now turn the call to Joe Hart, President and Chief Executive Officer of Advantage Technologies. Joe, please go ahead.

Thank you, Brett, and thank you to everyone joining us on the call today. We're having a brief conversation before the call started this morning, and I was thinking back to about this time last year, probably more in the February timeframe, March. You know, news of the pandemic was really coming to the forefront You know, things were getting very concerning. And, you know, as we went through the last nine months, you know, businesses around the world have been in quite a tumultuous situation. We've seen businesses that have gone belly up. We've seen businesses that have been, you know, cut back to 25, 50% levels. You know, we've seen... a lot of negative things that have happened. At Advantage, we were looking at things and saying, look, we've got to do something to build up our cash reserves. We don't know how long this pandemic is going to last. We don't know how deeply it may hurt us. You know, we've really got to stock up on dry powder and find a way to weather the storm and really get ourselves in a a good, protective, stable situation. At the same time, a lot of our business is based on wireless growth. And as we've looked at some of the, you know, growth opportunities related to 5G, you know, there's a lot of confusion out there in the marketplace for investors. All of the major carriers are advertising that they've got 5G. They've got 5G. 5G ultra capacity, 5G ultra wideband, 5GE, 5G plus, you know, et cetera, et cetera, et cetera. By and large, those are all variations and enhancements to 4G. There are some, I'll call them pilot programs, where they've installed millimeter wavelength 5G in downtown New York City or downtown Philly or, you know, L.A. or some other major areas. But by and large, those are still relatively experimental. No carrier has actually gone on a full bore construction program to convert their entire network of cell sites, both existing and new ones that they'll need, and convert those to 5G radios. It just hasn't really truly taken place yet. You know, we haven't missed the window. You know, we're not laggards in respect to what's happening in the industry. You know, we believe that where we've come out of this, both the, you know, the COVID-19 environment as well as, you know, the 5G ramp plan, you know, we feel that we've ended the year in a good place as we go into 2021. Results for 2020, we're in sterling. We've done a lot to clean up our balance sheet. We have improved our cash position and working capital situation. And we feel we're in a good place to actually take advantage of when 5G is really going to kick in here in calendar 2021. So at the end of the day, I would say, you know, we've been very both blessed and fortunate that none of our employees have been personally affected or, you know, put on the sideline due to COVID-19. All of the families are intact. So at the end of the day, you know, we've really come out in a decent place considering all the trouble that's going on in the world. So with that, I'll get to my formal remarks, and thanks for bearing with me. We successfully navigated a challenging global business environment during 2020. I'm encouraged that we exited the year better positioned for sustainable success than where we were when the year began. Advantage Technologies Group was identified as an essential service by Homeland Security as we provide critical infrastructure in building and supporting communication services. This designation allowed us to continue working during the pandemic-related shutdowns. We have been resilient in our cost and cash management, and this discipline helped us weather challenges in both our telco and wireless businesses during fiscal year 2020. The shift to remote work as offices shut down had a significant impact on our telco business. And closure of special outdoor summer events impacted our wireless business in the Midwest. The pandemic continues and we have no more clarity than you on when things will return to normal or what normal will ultimately look like. But we view these challenges as temporary. As we navigated this business environment, we wanted to accomplish three strategic imperatives in strengthening our balance sheet for sustainable growth. First, we wanted to increase our overall cash position. We achieved this by increasing our cash holdings to over $8 million while maintaining working capital at over 11 million. Second, We wanted to use this environment to reshape our telco and wireless businesses for expanded growth, plus drive a more nimble and leaner business model by reducing overhead and direct expenses. In our telco business, we took approximately $11 million in write downs of goodwill, intangibles, and inventory earlier this year. This action made our telco business nimble and more competitive in both a COVID and a post-COVID business environment. For growth, we invested in our wireless business by increasing our revenue coverage model by adding resources in sales and back office in supporting the increased and coming 5G build opportunities. For telco growth, we completed our investment for a new facility for our Triton business in Fort Lauderdale, which improves both our efficiency and our employee work environment while allowing for expansion. Third, we wanted to continue to attract and retain great people to support our long-term growth. In fiscal year 2020, we rewarded key functional team members with restricted stock awards, which are tied to the financial goals of the company and shareholder returns. We added new talent within our executive leadership team, and these executives bring the experience and know-how to scale through growth while working within a lean operation. Overall, our people drive our business and continue to excel during these challenging times. As a result of these strategic imperatives, we continue to transform our business model by streamlining our expenses, improving our operational efficiency and positioning the company for growth and profitability as the 5G transformation accelerates. I'm encouraged that we successfully improved gross margins by more than 1,500 basis points, even with lower revenue. In addition, we eliminated approximately half a million dollars in quarterly operating expenses, resulting in a significant narrowing of our loss from operations. We're seeing clear signs that the 5G transformation will finally begin in earnest in 2021. We are well positioned to capture a meaningful share of the telework related to this important project in the geographic areas we currently serve. I'm sure many of you saw that Apple recently released the new 5G capable handset, providing the clearest indication yet of the impending 5G opportunity. All of the carriers are now advertising 5G services, signaling that the trend will accelerate due to consumer demand. Industry analysts project that the actual long-term upgrade of the networks is just about to begin in 2021. These 3G, 4G, and now 5G cycles typically last 7 to 10 years and require major capex spend by every carrier. principally in the first five years of each of these cycles. Turning to our telco business, we delivered the strongest quarter of the fiscal year in Q4, as customer spending started to return to normal after pandemic cutbacks. This momentum gives us optimism as we head into our new fiscal year. We anticipate double-digit revenue growth for our business in fiscal 2021. and we anticipate reaching positive net income on a quarterly basis by the end of the year. Overall, we enter 2021 with several tailwinds. First, we have a lean and efficient organization positioned for improved profitability as we grow. Second, we are strategically positioned throughout the middle of the country with strong relationships with the leading wireless carriers and telco clients. Third, we have significantly improved our liquidity to execute our growth strategy. Fourth, we are at the beginning of a multi-year secular spending cycle, and we are already starting to see wireless activity picking up in our southwest region, another positive indicator. Finally, we have the right team in place to help us scale efficiently. With that, I'll now turn the call over to our Chief Financial Officer, Jared Watson. for a more detailed review of our financial results. Jared, please go ahead.

Thank you, Joe. Sales for the fourth quarter 2020 decreased to $12.2 million from $17.9 million in the prior year. $5.3 million of this decrease came from our wireless segment. As the group felt the impact of COVID-19 on its business, and 5G delays in infrastructure spending from the major US carriers. Traditionally, our wireless group earns between $4 and $5 million in revenue from the construction and deployment of temporary cell sites during the summer months at large public gatherings such as county fairs, air shows, the Democratic National Convention, the World Series, and other similar events, most of which were either rescheduled, canceled, or lacked spectators in 2020. We also experienced a decline in sales in our telco segment of $0.4 million as equipment sales at Triton dropped. Triton sells office telephone and IP equipment for enterprise networks, and most large offices were closed during the quarter, also as a result of the COVID-19 pandemic. However, even with a $5.7 million sales decrease, gross profit increased by $0.7 million to $4.4 million compared with a gross profit of $3.7 million for the same quarter last year. The increase was primarily due to the telco segment profit margin improving by $1.2 million, partially offset by the wireless segment profit margin decreasing $.5 million as a result of lower revenue. Gross profit margin improved to 36% up from 21% for the prior year fourth quarter as wireless margins improved 2,000 basis points and telco margins improved 1,700 basis points. As Joe mentioned, operating expenses decreased a half million dollars to $1.9 million for the quarter ended September 30, 2020, compared with $2.4 million for the same quarter last year, which was the result of cost reductions in our wireless segment. Selling, general, and administrative expenses for the quarter increased $0.6 million to $3.2 million, compared with $2.6 million for the same quarter last year. This increase was due to an investment in building out the sales team for our wireless group. Net loss for the quarter was $1 million, or a loss of 9 cents per diluted share, an improvement of $0.6 million, compared with a net loss of $1.6 million, or a loss of $0.15 per diluted share for the same quarter last year. Adjusted EBITDA loss narrowed $0.8 million for the quarter to $0.1 million, compared with an adjusted EBITDA loss of $0.9 million for the same quarter last year. Taking a look at full year results, overall sales decreased 9% to $50.2 million, compared with $55.1 million last year. The decrease in sales was driven principally by the global 19 pandemic, and investment delays in 5G network build-outs. Sales for the wireless segment decreased $1.6 million to $21.4 million for the year, compared with $23 million in the prior year. Wireless was significantly impacted during the summer months by crowd safety restrictions due to COVID-19. As I previously mentioned, Bolton traditionally has earned significant revenues for the construction and deployment of large, complex temporary cell sites for summer and fall festivals, county fairs, air shows, and large events like the Democratic National Convention in Milwaukee, the Indy 500, the World Series, and others, which were canceled or rescheduled this year. Sales for our telco segment decreased 10% or $3.4 million to $28.8 million for the year, compared with $32.2 million last year. The decrease in sales resulted primarily from telecom and IP office equipment as customers delayed build outs of new office space and upgrades of office space communications equipment as employees were sent home to work during 2020. Annual gross profit decreased $1.8 million to $11.7 million compared with $13.5 million for the prior year. Primarily related to the telco segment for which gross profit decreased $2 million as a result of an increase in our reserve for inventory obsolescence in fiscal quarter Q2. partially offset by an increase in gross profit of $0.2 million from our wireless group. Operating expenses for the year increased $1.8 million to $8.2 million compared with $6.4 million last year. The increase is attributable to having a four full quarters of wireless expense in 2020 versus three quarters in 2019, as the Fulton acquisition concluded in the second quarter of 2019. Additionally, The company incurred one-time facility costs as a result of moving into a new facility at Triton in the first quarter of 2020 and additional operating personnel costs. Selling general and administrative expenses increased $1.3 million to $11.2 million for the year, compared with $10 million last year. Of this increase, $0.9 million is attributable to having four full quarters of wireless expense in 2020 versus three quarters in 2019. again due to the Fulton acquisition, which concluded in the second quarter of 2019. This increase is partially offset by a decrease of $0.4 million in general and administrative personnel costs in the telco segment. Impairment of intangibles, including goodwill, was $8.7 million in the telco segment in the second fiscal quarter. The company determined that changes in the economy related to the COVID-19 pandemic and the continued losses experienced in the telco segment had caused the intangible asset carrying amounts on the books to exceed their fair values. Therefore, after performing the appropriate valuations, the company recorded a $3.9 million impairment charge for intangible assets and a $4.8 million charge for goodwill in the telco segment. Net loss for the year was $17.3 million, or a loss of $1.55 per diluted share compared with a net loss of $5.3 million or 51 cents per diluted share for the prior year. However, it should be noted that net loss included the previously mentioned $8.7 million write-off of intangible assets. It also included $.7 million impairment charge related to a facility that we no longer use and inventory obsolescence adjustments of $1.8 million for the year. compared to $0.7 million for the prior year, all of which were in the telco segment. The company recognized a $1.2 million tax benefit for the year ended in 2020 compared to almost no tax in the prior year. Additionally, the prior year included approximately $1.3 million in losses from discontinued operations. Adjusted EBITDA for the year was a loss of $7 million compared with a loss of $2.3 million for the same period of 2019. Moving on to the balance sheet, as Joe mentioned, cash and cash equivalents were $8.4 million as of September 30, 2020, compared with $1.6 million as of September 30, 2019, or an increase of $6.8 million of cash. As of September 30, 2020, the company had inventories of $5.8 million, down from $7.6 million at September 30, 2019. Outstanding debt was $8 million at fiscal year end, comprised of $2.8 million of a revolving line of credit, $4.1 million of notes payable, and $1.1 million of financing lease obligations, compared to no debt as of September 30, 2019. At September 30, 2019, notes payable were comprised of $1.2 million from our primary banker, which correlates to payments that we received from a $3.8 million promissory note, and $2.9 million of a PPP loan for which we have applied for forgiveness. Subsequent to year-end, we have renewed our revolving line of credit for one more year to a maturity of December 17, 2021, and we have paid off $1.2 million note payable to our primary banker. We continue to believe we are sufficiently capitalized with appropriate backstops to support near-term business conditions until more normalized business conditions return. This concludes the financial overview segment of our remarks. I will now turn the call over to the operator to facilitate any questions.

Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. Our first question is from Georgia Gaspar, a shareholder. Please go ahead.

Yes, good morning to everyone. Can you hear me? Yeah, we can hear you.

Good morning.

Okay, first question is relative to the changes overall that you made at Teleco. In your new facility, can you describe the expansion and repair services and the expansion and distribution of product line? that you can experience on a more positive basis going forward?

Hi, George. It looks like Joe may have got disconnected. Reggie, are you on the line? Can you take that question or would you like me to take it?

Yeah, absolutely. Yeah, I can take it. So good morning, George. Good morning. Relating to our expansion at our Fort Lauderdale Triton facility, we were fortunate to locate a real estate space where we could design a facility where the workflow process would be able to allow us to refurbish the equipment we refurbish and sell in the market. We are working on expanding our product line there as well. And then at our other telco company, NAVE, We're continuously upgrading our repair capabilities there as well to better serve our customers in the market. So hopefully that answers your question, George. If you have any additional questions, let me know.

Just one. The scope of the telco base, scoping your capacity to expand nationally from that base, I mean, how do you view that?

I think with the distributions that we have and the FedEx, UPS, other carriers as well, the web presence that we have, the in-person presence that we have with our multiple large carriers, we're positioned to grow and to deliver across the country. And we do do a little bit of business internationally, as indicated in our 10K. So I think we're positioned to handle any growth across the country, George.

Okay. Okay. All right. Is there any, how are your cost structure, your acquiring product line in Teleco, how have you, can you give us some thought about the cost structure on a per unit basis, how it's going now versus, say, a year ago? to acquire product?

Yeah, very good question, George. So with the COVID environment, we've, uh, had some opportunities because business is slow to acquire product at, you know, prices that were more favorable than a year ago. We're continuously searching the market and looking for different, uh, avenues to acquire equipment, uh, so that we can be more competitive and increase our margins. So there's great opportunity and, uh, we're always looking for different avenues to acquire equipment and, uh, You know, it's been pretty good this year versus last, despite the headwinds we're facing on COVID.

Okay, thank you. The question is... George?

Yes? Sorry, it's Joe. Yeah, I would balance that with, you know, Reggie's been working very hard to make sure that, you know, we're not growing the inventory to a level that we can't support with sales. And historically... that has always been a challenge. And as you have seen over the years, you know, we'll have a good year with our equipment business, you know, a pretty good to good year, and then it'll be offset with some inventory right down because of either stale, aged, or inventory and disrepair that was purchased, you know, in some kind of bulk fashion. So, you know, Reddy's got a very – sort of delicate balancing act between buying products that's at good prices and yet keeping inventory at a very manageable level. So, you know, he's been doing a really nice job since he's taken over.

Wonderful, wonderful. Okay, and now I'm going to extend this questioning to the 5G expansion team. probabilities and opportunities. You explained basically in early comments here the impact of COVID and the slowdown, but you're also suggesting that 5G breakout going forward could be considerable and I'm sure very opportunistic for your company. How are you prepared now? Can you give us some commentary on your crew count and how it's compared from, say, a year ago? And I know that it's probably tough to keep crews together when your business is down. But if you're going into a better period going forward, obviously you need the crews to accomplish the effort. And can you talk more geographical also about how you view your activities going forward through the calendar year 2021? Sure.

So if we look at the carriers, you know, Verizon, Verizon has historically been kind of a steady eddy. They build out, spend their CapEx on a pretty regular fashion year after year, and they expand their networks and upgrade to new technologies on a steady, ongoing, annual basis. AT&T tends to be a little more bulky, a lot of four or five years up front, big spend, and then it starts to sort of average out at a little lower level. There's a couple things going on here. They've all had pilot programs with millimeter wavelength, high band, low band, et cetera. But the FCC has got a big auction going on right now for C-band, which puts 300 megahertz of new spectrum out there for all the carriers. I think the bidding is up into about $7, $8 billion at the moment on that spectrum. So it's very active. The other thing is DISH must start building its new network. And they've ordered radios from Fujitsu and from CPI out of Taiwan. We expect DISH will start construction about the middle of 2021. So probably about that June, July timeframe, we'll see DISH starting to build. And they've only got about three years to cover half of the US population. So that's gonna be a fairly rapid buildup as they start their construction. From our perspective, you've heard me say on the prior couple quarters, our business, almost dried up here during the summer in the southwest. Well, we're very active, very busy. You know, we little under 20 crews working in the back in the southwest. So we're encouraged that our building our businesses rebuilding itself in the southwest region. We are essentially an up the middle country company. So southwest from Texas all the way up to the Canadian border, Illinois, Wisconsin, the Great Lakes area, as well as the plain states of Iowa, Nebraska, Minnesota, et cetera. So our bread and butter is up the middle of the country, and that's where we want to stay focused and not be chasing business, you know, all corners of the country anymore. without a good plan and the ability to supervise it. So hopefully I've answered your question. I think it's building, but, you know, I always throw that caution that, you know, if you watch the news, the Northeast is getting hit by tremendous blizzards and ice and snow. That can happen at any time in the Midwest, as we know, and we're entering winter. So, you know, I just feel good about 2021 overall. It is finally happening. I know some investors have kind of cast a wary eye and say, you know, this guy keeps promising 5G, but it hasn't happened yet. Right? So we're almost there, George.

Right. And could you comment on the revenue stream on the wireless market? If you were to divide it up as to the type of business, say, tower work, tower install, not the tower install itself, but maybe the accomplishing the equipment on towers, and relative to, let's say, the work that's necessary away from the towers. Can you identify it in terms of percentages of how much is done on towers directly versus away from towers? And can you comment on how much is necessary to accomplish for effective 5G away from the towers?

Well, that's a lot to identify. But, you know, I would say this, that of all the CapEx, the CapEx is predicted, the CapEx spent for the next four or five years is predicted to be about $30 to $35 billion a year. They expect that by 2025, about $30 350 million mobile subscriptions will be on 5G compared to about 1 million today. So in that $30-plus billion a year cap expense, probably half of that is spent on fiber optics technology to get signals to and from cell sites, within the public switch network across town, across state, across country. Half of it's on wireless. And of that wireless spend, you know, about 30% is probably on the equipment itself. Probably another 50 plus percent is on the services needed to actually upgrade the technology on an existing site. You know, so there's about 400,000 existing cell sites out there. They all have to be upgraded to 5G. So, you know, the opportunity is pretty immense. I would say services for 5G, probably about – 20% will be on adding new sites, 20% to 25% could be on small cell, and then the remaining will be on upgrading to 5G on the existing cell site.

I see. Okay. And, well, that's pretty, when you describe some of these numbers, it looks like there's room for considerable expansion. once maybe you get along here in a couple of quarters. Finally, I'd like to just ask that you're nearly through your first quarter now, being that this is the 17th of December. Is there any comments that you could make for us on how this quarter has gone?

That's a bit of a tricky one because we usually don't comment on forward business. But as I said, I think the wireless activity is picking up. The telco activity, Reggie's got a good operation, got a good team. So telco is producing at sort of budgeted level. You know, the We're not out of the COVID situation. There's great hope and expectations around the vaccine. It's not widely available yet. We still have, I'll say, the momentary week or two-week quarantine situations with employees. Our people are out working in the network and with the public every day. We do hit moments in time where You know, a crew or a few crews get shut down for a bit as they, you know, somebody, they're exposed to somebody who's positive tested. So, you know, it's not perfect and we're heading into the holidays. So this is never our best quarter of the year, George. So, you know, but I think it's going to be a strong year.

Okay. Okay. All right, I'll go back into queue at this point and let someone else ask questions. I've got a couple more, but I'll wait.

All right, thanks. Once again, if you have a question, please press Start Then 1 on your telephone. Our next question is from Bob Jensen, a shareholder. Please go ahead.

Yeah, you guys did a presentation this last summer where your goal was to grow revenues from $50 to $250 million. Can you comment on where you stand as far as is that still billable and basically how will you get there? Would it be through acquisition or organic growth?

Bob, it's some percentage of organic growth. I mean, we're still bullish on the ability to grow our existing operations, which are basically Dallas and Chicago centric, to grow that business. I've seen this in through the 3G and the 4G cycles before with other companies where we've been able to grow the business from you know, 50, 60 million a year to 600, 700 million in, you know, over a six, seven-year period. So it's quite possible to do it organically, but it's also slower. And as I mentioned, the bulk of the CapEx in the 5G cycle will be spent in the first five years of that 10-year cycle. So we believe that... On top of the organic growth, we need to be fairly aggressive about an M&A program. So we're positioning ourselves to begin working with potential investors and go on a capital raise program that allows us to look at really good target companies that have both a cultural fit as well as the technical capability and reputation to allow us to expand our geographic footprint while we're growing the business pretty dramatically. I feel the $50 million a year to the $250 million a year is actually quite doable and something I've personally done a number of times in my career. You just got to have good targets and you got to have good customers and We have both of those. So I'm feeling very confident and bullish about our ability to grow the business.

Do you currently have any acquisitions in sight?

Sure. I mean, there's always targets on the radar. There are a few out there that, you know, we like a lot. And so, you know, we're working our way towards that. trying to make some progress in that regard.

Okay. Would those acquisitions be financed through sales of stock? I know you guys did a registration for a shelf offering, I believe.

Right, right. The shelf offering has been out there for a number of months. It was capped at just a little bit under $14 million in the registration documents. We've sold about $2.5 million worth of shares over the last, well, since June. You know, not a big amount. There are some daily limits. So you're never going to see a big swath of shares that comes through the S3. And so we're looking at our options, whether it might be a capital raise through an S1. It might be through attracting investors. large investors or private equity money to come in. There's a lot of options about how to raise the money, whether it's debt or whether it's equity. So I would say we're just in the sort of fact-finding, exploratory phase of that right now.

Yeah, okay. Well, hopefully you won't raise money when the stock price is too low. Anyway, thank you.

Appreciate it. You're welcome. You're welcome.

Our next question is a follow-up from George Gaspar, a shareholder. Please go ahead.

Okay. Thank you. Joe, the follow-up here is when you complete work on a tower, and how far away from the tower can your work go from a specific tower. I think maybe back a couple, three, four quarters ago, we were talking a little bit about this opportunity away from towers getting on individual highways or streets or whatever. Exactly what is the opportunity away from the tower in terms of distance to complete let's say, a single project in a specific area for you. Can you describe that?

Well, typically for something like a 5G expansion or upgrade or technology, you not only have the work that's at the base of the tower and up the tower and the top, but you often have to bring additional fiber optic cable to that tower and you know you've all driven around both your neighborhoods as well as you know to and from other cities so in the city towers are close to the main street so maybe it's 50 feet 100 feet 200 feet to get to the street and you know you're going to take a fiber cable out to that street and it will be connected by the phone company or the wide band carrier who will slice it into the network If you're out in more rural areas, those access roads to the sites could be a quarter mile, half mile, something like that from the main road. So it's a fairly controlled environment, and it's not like you're building out in the middle of a national forest or in a mountain range or something like that.

I see. Okay. Okay. All right, and there is so much discussion about the opportunity on a daily basis, hearing investment commentaries about the opportunity to find companies that are associated with 5G in terms of what they're doing, but most of it, at this point, has been concentrated on the equipment side from the commentaries in Wall Street. And it looks like there's a pretty interesting potential coming from the install side, equipment install side, and that's where you come into the picture. It's going to be interesting to see how this unfolds, the commentary that you've made here shows a pretty dramatic opportunity going forward. And if you are able to accomplish a decent amount of the potential out there, it should give you opportunity to look for some types of acquisitions to run your revenue stream on an annual basis upside by hopefully what will be a very significant margin. Any comment on that?

Well, I think we agree. I mean, there are very few companies in the publicly traded space that are in this business. There are a few multi-billion dollar companies, Moss Tech, Dicom, Quanta, to name the top three, but there are barely any in the sort of small to medium sized companies. In other words, in the sort of 30 million to 500 million, you don't find many. Most of them stay private or they're one owner companies that, you know, work their way up the ladder and eventually they sell off, um, But so we feel that we're in a good place. We have both the experience team, the credentials, you know, we've got a core support group that has done this before. And that's, that's kind of critical, right? From an overhead perspective, we have a back office spine of core services provided by folks who have done this and have scaled this business up before. And, That's critical to us being able to, you know, rapidly grow our business, you know, from that $50 million to the $250 million, right? You've got to have people who know how to do it and have done it before. And, you know, we've got those functional leaders in project controls, contracts, subcontracts, you know, back office, all the different services, as well as construction. And, you know, we feel we're in a good place. You know, as long as we pick good targets and remain disciplined, we're going to do well in this growth curve.

All right. Okay. And in a closing comment, I would have an observation. Also, your large substance of being in the Southwest looks very attractive from the standpoint that, more companies are moving out of California and the West Coast generally, and they're moving into Texas and Arizona, and I don't know about New Mexico potentially there too, but there's some pretty sizable transfers taking place from San Francisco South and through California to this Texas area, which would seemingly put you in a pretty dynamic position to take advantage of what is going to be a better market in the Southwest.

We feel we're in a good place. We agree, George.

Okay. All right. Good luck to you guys. Thanks very much.

Thanks, George. Thanks, Max.

There are no further questions registered at this time. I would like to turn the conference back over to management for any closing remarks.

Well, I just want to thank everybody again for joining us on the call today. You know, we all wish that results were better than they had been in 2020. But given what's taken place around the world and both in the technology space as well as, you know, with COVID-19, we feel fortunate to be where we are. high percentage of businesses that haven't made it through this pandemic, and I don't want to overplay that, but we feel that we've made a lot of prudent moves, trimming the fat, getting ourselves with the best people in the right positions, and being able to really leapfrog from where we've been to where we want to get to in 2023. So thank you for your continued interest and investment in advantage technology.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.