ADDvantage Technologies Group, Inc.

Please stand by, we're about to begin. Good day and welcome to the Advantage Technologies Fiscal 2022 First Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Brett Moss, Hayden IR. Please go ahead.

Thank you, Operator. We are joined today by Joe Hart, President and CEO, as well as Michael Rutledge, the Company's Chief Financial Officer. Before we begin today's call, I'd like to remind you that this conference call may contain forward-looking statements which are 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 Advantage Technologies and its subsidiaries to maintain strategic relationships and agreements with certain original equipment manufacturers and multiple system operators, as well as the 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 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 the information as the company will only provide guidance at certain points during the year. Such information speaks only as of the date of this call. During the call, we may also prevent 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'll find a reconciliation of these non-GAAP financial measures with the closest GAAP financials and the 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 and not instead of GAAP measures. I'd like to now turn the call to Joe Hart, President and Chief Executive Officer for Advanced Technology. Joe, please go ahead.

Thank you, Brett, and thank you to everyone joining us on the call today. We continued our strong revenue momentum in the first quarter with significant growth in both our wireless and telco segments. leading to 47% consolidated growth on a year-over-year basis for the quarter. This growth and the accelerating 5G rollout give us significant confidence in continued revenue ramps during the balance of this fiscal year. As we have been saying, the 5G rollout has finally begun in earnest, leading to significant activities from multiple customers in several states, and we expect our wireless revenue to continue to grow from the $7 million range in the second fiscal quarter, with further expansion in the second half of the fiscal year. Our focus now turns to improving our operating efficiency and properly aligning our resources for future demand, enabling us to expand gross and operating margins while we deliver exceptional service to our customers. The rampant resources during the last two quarters and expansion into new markets has adversely affected margins for Q1 and into our Q2 of this fiscal year. Action has been taken to improve margins, and we will be reducing operating and general and administrative expenses to drive margin expansions over the next two quarters. Our entire wireless team is hard at work at managing this rapid acceleration, working closely with our customers to make sure we have crews in place to deliver on work orders as permits are approved. Investors should expect not just revenue growth, but margin expansion as we move through the year, likely peaking in our fourth fiscal quarter. While wireless revenue related to tower work and other aspects of the 5G rollout has already increased by 36% year over year, We expect that it will continue to grow throughout this fiscal year. Our recent growth has been broad-based, involving several carriers, including both long-standing customers and new entrants to the market. The work touches all the regions we service, spread across the center of the United States and touching many large metropolitan markets. Our pipeline of new projects, meaning work we have been awarded, where we are waiting for purchase orders as permitting is completed, gives us significant confidence that the long-awaited 5G surge will continue to accelerate for us in the near term. As I mentioned last quarter, we already have purchase orders in hand for fiscal year 2022 construction that exceed the total value of our fiscal year 2021 total wireless revenues. Over the last few months, we have won site awards to upgrade technology to 5G for over 700 cell sites, and we have increased our staffing to meet this growing demand. In fact, staffing is the most challenging part of this growth in this tight labor market. Currently, we are running at 45 crews and will be ramping up from there in subsequent quarters. The 5G opportunity represents a multi-year secular trend. not just for tower work, but for data centers, technology providers, handset manufacturers, and wireless carriers. Each of the wireless carriers are investing hundreds of millions of dollars in the expansion, and the CapEx plans of the carriers are public information and widely discussed. We are fortunate that as this wireless segment quickly expands, we are simultaneously benefiting from other trends that are driving strong results in our telco segment. The office dynamic has changed and people are working from home, requiring an expansion of the telco infrastructure to facilitate a remote workforce. Simultaneously, the well-documented chip shortage and supply chain issues have elongated the delivery cycle for new telco equipment AND IMPORT PRICE INCREASES HAVE MADE NEW EQUIPMENT MORE EXPENSIVE. ALL OF THESE FACTORS MAKE OUR REFURBISHED EQUIPMENT SOLD BY NAVE AND TRITON A MORE COMPELLING AND VIABLE OPTION. YOU CAN SEE THE RESULT IN THE FINANCIAL PERFORMANCE OF OUR TELCO SEGMENT WHICH FINISHED ITS THIRD CONSECUTIVE QUARTER OVER $11 MILLION IN REVENUE WITH AN INCREASE OF 54% COMPARED TO THE QUARTER OF LAST YEAR. We continue to anticipate a leveling off of demand at some point in future quarters, albeit at a somewhat elevated level relative to the recent past. Overall, we delivered a 45% revenue growth in the quarter. Our margins and overall profitability were impacted by the increased spending to ramp up crews and capabilities as we expanded into new markets in advance of the coming demand. BUT WE BELIEVE THAT MARGINS WILL BEGIN TO IMPROVE LATE IN THE CURRENT QUARTER WITH FURTHER MARGIN EXPANSION AS WE MOVE THROUGH THE YEAR. AND OUR BUSINESS REACHES THE NECESSARY INFLECTION POINTS WHERE VOLUME IS ABLE TO OFFSET FIXED COSTS. WE ALSO BEGIN REDUCING GNA AND OPERATING EXPENSES AS OUR NEW MARKETS MATURE AND WE ENTER THE SECOND HALF OF THE FISCAL YEAR. I'll now turn the call over to Michael Rutledge, our CFO, to provide a more detailed review of our financial results. Michael, please go ahead.