ADDvantage Technologies Group, Inc.

Good day, and welcome to the Advantage Technologies Fiscal 2021 Second Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Brett Moss, Hayden IR. Please go ahead, sir.

Thank you, Operator. We're joined today by Joe Hart, President and CEO, as well as Donna Guy, the company's Comptroller. Before we begin today's call, I'd like to remind you this conference call may contain forward-looking statements, which are subject to safe harbor provisions of the Private Securities Allegation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events, such as the ability of Advantage Technologies and its subsidiaries to maintain strategic relationships and agreements with certain original equipment manufacturers and multiple system operators, as well as future financial performance of Advantage 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 actual future events or results due to a variety of factors, such as those contained in Advantage Technologies' most recent report on Form 10-K on file with the Securities and Exchange Commission. Financial information presented on this conference call should be considered in conjunction with the consolidated financial statements and notes included in the company's press release issued earlier today and included in Advantage Technologies' most recent report on Form 10-K. The guidance regarding anticipated future results on this call are based on limited information, certainly 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 the information, as the company will only provide guidance at certain points during the year. Such information speaks as only of the date of this call. During this call, we may also present certain non-GAAP financial measures, such as non-GAAP net income and certain ratios that are used with these measures. In our press release and in the financial tables issued earlier today, which are located on our website at advantagetechnologies.com, you will find a reconciliation of these non-GAAP financial measures with the closest GAAP financials and a discussion about why we believe these non-GAAP financial measures are relevant. These financial measures are included for the benefit of investors and should be considered in addition to, not instead of, GAAP measures. I would now like to turn the call over 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 are finally seeing the long awaited acceleration in 4G and 5G tower work by all of the wireless carriers. Over the last few weeks, we have received a significant increase in site awards and initial purchase orders. In the aggregate, the awards received today indicate that wireless revenue in the second half of calendar 2021 The period encompassing our fourth fiscal quarter of this year and first fiscal quarter of next year will be double the levels we will report in the first half of calendar 2021. There are additional sites still to be awarded. In fact, the initial awards are just a small part of the overall scope of work. So we have quite a bit of upside in our future. The initial awards are from multiple carriers in several markets. We expect additional markets to be awarded over the next few months. Some of these markets are new regions for us and others are markets where we have an established presence, but all are in the greater Midwest and Southwest regions. Some of the awards involve decommissioning and removing older technologies on a tower or rooftop to make room for new 5G installations to follow later. Other awards are for either installing additional 4G frequencies at the site or installing new 5G radios and antennas. The work is from multiple carriers, sometimes direct and sometimes through large integrators or OEMs. In summary, this is what we have been waiting for. The pandemic impacted the timing of this rollout, but the budgets have finally loosened, and the 5G rollout will soon be underway. We are strategically positioned to benefit with established relationships and experienced crews in key markets across the center of the United States. We already have multi-year service agreements in place with all of the major wireless carriers, the integrators, and the OEMs, needed to pursue this 5G-driven wave of work over the coming years. To be clear, this notable uptick in activity is not reflected in the results we are reporting today for Q2. We expect to see the commencement of new site activity late in our current third quarter and anticipate a substantial increase in wireless revenue in the fourth quarter. the period ending September 30th. This activity will also give us momentum carrying into our fiscal 2022, which starts in October. I am encouraged by what this all suggests for our second half of the calendar year. Jimmy Taylor and his wireless team are benefiting from improved operational efficiency and with a higher volume of work driven by all four carriers building out their networks at the same time to compete in 5G, we are well positioned for success from Q4 forward into 2022 and beyond. In the telco side of our business, led by Reggie Jaramillo and his team, revenue is up $1 million year over year, reflecting the progress new leadership has made and the new customers and partners our NAVE and Triton DataCom businesses have added. These new customers expand our addressable market and add a much higher level of consignment-based inventory to offer our customers. This is translating to better use of cash, lower operating costs, and reduced inventory. Our Triton business, however, continues to be impacted by the nationwide shutdown of most offices and the move to remote work. Despite COVID closing many clients' offices this past year, our team has added new offerings and new clients to offset a great deal of that impact felt throughout the second half of last year. We remain hopeful that increased vaccinations will lead to a return to the office for most US workers and have a positive impact on the sale of our enterprise network products. With that, I will now turn the call over to Donna Guy, our controller, to provide a more detailed review of our financial results. Donna, please go ahead.