Aviat Networks, Inc.

Good afternoon. Welcome to Eviat Network's first quarter fiscal 2022 earnings call. At this time, our participants are in a listen-only mode. A question and answer session will follow the former presentation. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Keith Vannaren, Vice President of Global Finance and Investor Relations. Thank you. You may begin.

Thank you, and welcome to Aviat Network's first quarter fiscal 2022 results conference call and webcast. You can find our Form 10-2 press release and updated investor presentation in the IR section of our website at www.aviatnetworks.com, along with a replay of today's call in approximately two hours. With me today are Pete Smith, Aviat's President and CEO, who will begin with opening remarks on the company's first fiscal quarter. followed by David Gray, our CFO, who will review the financial results for the first fiscal quarter. He will then provide closing remarks on Aviat's strategy and outlook, followed by Q&A. As a reminder, during today's call and webcast, management may make forward-looking statements regarding Aviat's business, including but not limited to statements relating to financial projections, business drivers, new products and expansions, the impact of COVID-19, and economic activity in different regions. These and other forward-looking statements reflect the company's opinions only as of the date of this call and webcast and involve assumptions, risks, and uncertainties that could cause actual results to differ material from those statements. Additional information on factors that could cause actual results to differ material from the statements made on this call can be found in our annual report on Form 10-K, filed with the SEC on August 25, 2021. The company undertakes no obligation to revise or make public any revision of these forward-looking statements in light of new information or future events. Additionally, during today's call and webcast, management will reference both GAAP and non-GAAP financial measures. Please refer to our press release, which is available in the IR section of our website at www.aviatnetworks.com and financial tables therein, which include a GAAP to non-GAAP reconciliation and other supplemental financial information. At this time, I'd like to turn the call over to AVIAT's President and CEO, Pete Smith. Pete?

Thanks, Keith, and good afternoon, everyone. Thanks for joining us to review a successful quarter. The company continued to execute on our key long-term focus areas of growth, margin expansion, and meaningful bottom line improvements. The Aviat team commitment resulted in first quarter revenue of $73.2 million, growth of 10.4% from the first quarter of fiscal year 2021. First quarter adjusted EBITDA margins of 13.0% compared to 12.7% for the first quarter of fiscal year 2021. And a solid balance sheet and liquidity position with net cash at $47.3 million. North American first quarter revenue increased 12.0% or $5.4 million year-over-year. International first quarter revenue increased 6.9% or $1.4 million year-over-year. Adjusted EBITDA was $9.6 million for the first quarter, representing an improvement of $1.2 million versus the same period last year. The improvement in revenue and adjusted EBITDA for the first quarter was primarily due to higher volume of private network business, increased sales through our Aviat store, which serves primarily rural broadband space, improved international business driven by multi-man wins, and an increase in software and license sales. To achieve these results, we must recognize our suppliers and the Aviat supply chain team. The current supply environment is incredibly challenging, and we thank our suppliers and our team for continued performance. On our last call, I outlined the differentiation in our radio products, specifically the WTM 4000 platform, which has played a significant role in our recent growth in 5G and rural broadband. In today's call, I will reiterate some of the key points and subsequently highlight some of the wins that this platform has delivered this quarter. The Aviat WTM4000 leads the industry in system gain, enabling radio links to go further in distance, have greater ability to overcome weather effects like rain, and use smaller antennas, which is an important element in Aviat's total cost of ownership value propositions. and our WTM4000 portfolio includes the industry's only single box multi-band radio for 10 gigabits per second capacity. Along with our software and e-commerce differentiation, this product has led to some positive developments in the market this quarter. We have seen strong growth in our North American rural broadband segment. We now supply to 15 of the top 30 Rural Digital Opportunity Fund, or RDOF, winners and are in advanced discussions with five others of the top 30. This business is based on our WTM4000 platform and is going strong for us. Internationally, AVIAD has had one of the best quarters in our history with regards to winning new accounts. Many are share gains impacting revenue in future quarters, including a large Ministry of Defense network in Northern Africa. Two new Tier 2 operator wins in Africa, one in Chad and another in Angola, which included a hosted frequency assurance software recurring revenue win, our first fast win in Africa. Two new operator wins in Southeastern Europe, and in APAC this quarter, we penetrated one of the largest mobile operators, a Tier 1 operator, achieving first ever sales for Aviat based on our multi-band solution. We are extremely excited about this development as well as all the other new accounts mentioned here. On top of all these market successes, in the quarter Aviat announced a significant new product for operators, high availability routing software running on our CTR 8740 router platform. This new high availability routing software is a compelling choice for operators seeking an affordable routing solution that is reliable, scalable, and secure. Aviata is now one of only a few router vendors on the market to support high availability software. While this software was designed for North American mission critical private networks, we are starting to see demand in 5G networks worldwide as they evolve to meet the needs of critical use cases. such as connected cars, industrial IoT, machine-to-machine communications, and public safety applications. As 5G transport networks work to become more reliable, this offering, along with our proven portfolio of highly reliable, high system gain radios, gives Avia a strong value proposition. With that, let me introduce David Gray, CFO, and then turn the call over to him to review our financials before coming back for some final comments. David came to Aviat from Superior Essex, where he was CFO of the approximately $2.6 billion multinational company with a significant telecom equipment presence. Prior to his seven-plus years with Superior Essex, David held financial leadership positions of increasing responsibility at a number of prominent companies, including Cooper Eaton, Newell Brands, and Phillips Electronics. We're thrilled to have him on board as we continue to focus on corporate growth and margin expansion.