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.