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spk_0: welcome to the pc tell fourth quarter and four year twenty twenty two earnings conference call at this time all participants are now listen only mode at the conclusion of are prepared remarks we will conduct the question and answer session as a reminder this conference is being recorded i will now turn the call of the kevin mcgowan the company cfl
spk_1: thank you for joining up and today's carpets cloudless got people he tells fourth quarter and fiscal year twenty twenty two financial it up with me to they had david newman the company ceo please note that a webcast replay of this car will be available on our website before we begin let me remind you that this call may contain forward looking statements and projections based upon current circumstances while these forward looking statements and projections reflect pc tell that current judgment they are subject to risks and uncertainties particularly related to global supply chain and logistics challenges global political and economic circumstances including a potential recession ability to generate sale of are innovative new product success of our expansion average in europe in the belly to leverage or distribution channel that could cause actual results to differ materially from these forward looking statements and projections risk factors that could cut pc tell actual results to differ materially from it's projections i discussed in the earnings press release which was issued today and the company and or court upon ten k the companies and no obligation to update any for the thing statements or information which because of their respective date additionally our commentary will include reference to the following not get measures nine get gross margin percentage nine get operating expense non gaap earnings per share an adjusted ebitda we believe it now get measures facilitate compare ability every doctor were and period couple reconciliation of these nine get measures to gap is included are quarterly earnings press release that was issued earlier today and now please botanical over to david limit thank you karen good afternoon and thank you for joining us it's a call will provide a summary of our fourth quarter of fiscal year twenty twenty two performance and sure outlook for the first quarter twenty twenty three we will also discuss our views on fiscal year twenty twenty three and highlight are key priorities consistent with our three pronged growth strategy i'll begin with a few highlights and then capital discuss her financials and greater detail overall we are pleased with our copies performance and twenty twenty two as we delivered ninety nine point four million in revenue for the year which is a thirteen point two percent increase year over year the success was driven by growth and our european it and a business and strong customer demand for just a measurement products the company also maintain strong gross margins of forty six percent for the year supported by improving market conditions continued execution and financial discipline throughout the year pc tell deliver on our commitments to our customers while providing high level customer service i am particularly proud of our team as a continue to successfully navigate today's challenging operating environment including inflationary pressures and supply chain disruptions both of which have eased from peak levels we have been extremely diligence and mitigating these challenges lol other continues to be headlines in a broader macro environment where sorry to see a rebound a logistics in the supply chain with availability of parts and transportation time frames returning to near pre pandemic levels we provide our products the customers throughout the world and we remain close contact with her shippers and suppliers to assure on time delivery of our products to our customers
spk_2: throughout the fourth quarter year our progress was driven by executing on hundred three core growth strategy
spk_1: as a reminder these include launching innovative wireless products expanding and leveraging or distribution channels and increasing marketshare by providing more components of the overall systems we have made exciting strides through new product launches new and market penetration and leveraging our global distribution channels all of which i will detail later in today's call with that altair the call over kevin for a closer look at fourth quarter and fiscal twenty twenty two results cabin
spk_3: thank you david
spk_1: during twenty twenty two we develop many new products and further diversified or and market exposure this led double digit top one growth and significant improvement in the bottom line i came for executing well mitigating money the headland our industrial space or play for the company performance in the quarter and funnier i'd like not a detail or fourth quarter of fiscal twenty twenty results for the fourth quarter of twenty twenty two total revenue for twenty five point nine million in line with our guidance range and essentially flat compared to the fourth quarter twenty twenty one revenues for antennas and industrial aoki devices was sixteen point four million in a period a decrease of roughly fourteen percent or two point seven million compared to the fourth or twenty twenty one negatively impacted by higher customer inventory level despite the or be your decline we expect organic growth thing and segment test the measurement revenue nine point nine million for the fourth quarter twenty twenty to thirty seven point seven percent higher compared the fourth quarter twenty twenty one primarily did a stronger sales for five ci products in the us we delivered an all time record revenue quarter for it has the measurement business and ended for twenty twenty with a strong backlog for twenty twenty three fourth quarter twenty twenty gross margin gross profit margin and and get basis was fifty point six percent which exceeded our expectations and represents an increase of four hundred basis points over the year ago period the increasingly gross profit margin or due to the larger maps of test the measurement production a quarter compared to the fourth quarter of fiscal twenty twenty one nine get gross profit margin for customers measurement products was seventy three point one percent a decline from seventy seven point seven percent and comparable prior year period the decline and gross margin percentage was primarily game to i mix of revenues from our young customers any impact of short term increases and component cause nine get gross profit margin for antennas an industrial out a devices improved by one hundred and seventy basis points in the fourth quarter twenty twenty two the thirty six point two percent or model because of lower freight cause operating expenses and nine get basis or ten million an increase of freshly hundred thousand compare the fourth quarter twenty twenty one the your of your entries on and i'm gap operating expenses whether a lot of higher expenses for in front of compensation program an employee seventh expensive upsetting lower product development adjusted ebitda increased by twenty one point seven percent to three point seven million in the fourth quarter claim twenty compared to three point one million in the year ago period i just leave it as a percentage of revenue was fourteen point four percent in the fourth quarter twenty twenty two compared to eleven point eight percent in the fourth quarter twenty twenty one the improvement in a just ripped out primarily due to higher gross profit these results demonstrate the happening leverage built into our business model as a ravenous have outpaced overall i bring central despite continued inflation or challenges nine get delighted going for share was sixteen cents in the fourth quarter twenty twenty two i your by for cents compared the fourth quarter twenty twenty one a knowledge turn to artist or twenty twenty results we're pleased please report their total revenues were ninety nine point four million an increase of thirteen point two percent compared to eighty seven point eight million in fiscal twenty twenty one revenue for entire the middle child he devices with sixty nine point seven million in the period and increase abruptly ten point five percent compared to fiscal twenty twenty one driven by persistent strength and the infrastructure of agriculture automotive market segments which a record tenth amendment revenues of thirty point six million for fiscal twenty twenty two eighteen point nine percent higher compared to fiscal twenty twenty one are merely do a stronger fields for party price million customers the school twenty two gross profit margin and and get bases with forty six point three percent of seventy basis point decline from fiscal twenty twenty one the decrease in fiscal twenty twenty nine gap gross profit margin was primarily get a less terrible customer and product mix within the product line non get gross profit margin for antennas and industrial out you devices and fiscal twenty twenty two with thirty three point eight percent a sixty pages point decrease of fiscal twenty twenty one nine get grossed out margin protect the measurement was seventy four point three percent a two hundred fifty boosts point decrease comparable with twenty twenty one the declining birth mark market percent for year was also primarily due to i met the revenues from oil and customers and the impact of short term increases and component cause now get proper inch buttons or fiscal twenty twenty two or thirty eight point one million an increase of two point two million compared to fiscal twenty twenty one europe a year increase will do to a full year of expenses for spark tech about higher expenses for of compensation program and play severance expensive and travel expenses are setting lower part about that sponsors adjusted ebitda increased by twenty six point eight percent to ten point seven million in fiscal twenty twenty two compared to a point five million a year ago period i just leave it as a percent of revenue was ten point eight percent interest or twenty twenty compared to nine point six plant and fiscal twenty twenty one higher operating income from higher revenues contributed to the improvement in adjusted ebitda now get delayed earnings per share with boy one san francisco twenty twenty two or twenty seven cents and fiscal twenty twenty one cation investments were thirty million as of december thirty one twenty twenty two a decrease of approach late point eight million compared to december thirty one twenty twenty one i will generate a try a bit down twenty twenty two we're working capital for inventories in both but client and we better quarterly dividend we closely monitor him a toy levels and are taking the necessary actions to ensure that we're not hamper by supply chain constraints and are well positioned to continue on time deliveries for our customers although of the tide make investments to maintain higher than normal them into a levels we've been experiencing a modest normalization and or supply chains particularly and logistics and we expect that normalization to continue and the coming quarters which may allow us to ease the amateur level turning to our first quarter twenty twenty bird outlook could expect her to revenues in the range of point two million to twenty three million the summer anticipate a product next week's by turned on gap gross profit margin percentage to be entering the forty seven percent to forty percent and we expect or non gaap earnings per share to be in a range of five cents per cent them we continue to see significant opportunities for approach in a market research and are excited about our progress and growing a european market present other isn't uncertainty around the global operating environment and twenty twenty three are confident in our ability to grow a product offerings and ensure we have the cash generated by the business and a creative and value enhancing ways for shareholders with that i will now can call back to david they could gavin now like to provide an update our growth strategies which have been the cornerstone for pc tell success lodging innovative wireless products expanding and leveraging distribution channels and interesting marketshare by providing more components of the overall systems i will begin with our first strategy of launching innovative products our products sweet privately includes wireless i have devices antennas and are of touch a measurement equipment used across a variety of wireless technologies including five g y five six e p twenty five laura and others over the course of twenty twenty two we launch many exciting products to further build out our portfolio and diversify your offerings most notably or g flex scanning receivers and out in september twenty twenty one or delivered a quantity beginning in early twenty twenty two the demand for this product isn't strong due to it's support for the deployment of five g wireless networks and june twenty twenty two we receive multimillion dollar orders from major oh yum customers or best in class by just scanning receivers required for network rollouts validation and benchmarking the getting or see yours are capable of measuring for g and five g networks across all isis bans using only one unit to measure low medium and high or millimeter wave frequency bands the scanning receivers and future generations will be used in styler public safety and federal government testing applications that require portability ability to scale advanced features like base pair level data collection are also pleased to expand our testament product offering the release of the crt monitor in august twenty twenty two this product automatically monitor spectrum for a p twenty five public safety radio and other critical communication networks it's capabilities include continuous monitoring of spectrum for noise interference detailed spectrum analysis in real time or in bed replay modes an automatic testing on the uplink signal during and building coverage testing
spk_2: brighton or portfolio the c m t a and ten or product line like in june of twenty twenty two it desire for hazardous environments and sports ten in one motor been configurations for rail applications the said ten a portfolio unable to connectivity necessary for rail networks to identify where
spk_1: rail support vehicles are on the tracks ensuring that they stay within their designated track we also launched the new medallion low profile five chance at a platform for does ryoji applications and in september we launched them the types and seventy one it and which offers robust our performance of flexibility and a low profile shark fin design also and twenty twenty two we received fcc regulatory certification for a rugged industrial iraqi radio module with and industry lady performance to increase efficiency and reliability in summary we're very busy twenty twenty two and new product launches showcasing our commitment about innovation that and the evolution of a product lines as cabin previously mentioned we enjoyed record revenue for it touched a measurement product line of the fourth quarter and enter twenty twenty three with our songs backlog today we just concluded the first full year of sales for g flex can receive a great success seok central which is our cloud based data management product is gain traction as a standard cloud based platform to manage report in store in building p twenty five collection data for the entire public safety network the seok monitor previously mentioned which is or fix scanner product also continues to join notable momentum with numerous product trials on the way our first order from an operator in canada with respect to a tennis we have witnessed continued momentum in a rail agriculture utilities logistics and vehicular market segments we have made great progress providing a rugged eyes iraqi devices in offered applications and for rail antenna networks railways are transitioning the solar networks and thus need to support for g and five g wireless networks for critical communications at such will be providing a rail customers other critical applications and as and cats are measured products to support this upcoming system why upgrade weird we have also seen strong traction with antennas for electric vehicle was he be charging stations and vehicle specific applications worldwide with a noble presence of pc told abs and have sold in european markets where well well prepared to execute er exciting it's and opportunities with the support of our strong distribution channels moving to our second growth strategy we continue to see expansion in or global sales channels as mentioned earlier we have a strong foundation in europe with the automotive an electric vehicles markets were gaining traction in this industry and viewed as an exciting opportunity to supply it tenants were both the charging stations and be echoes themselves also as discussed last quarter we have secured our first large european stock in distributor and added a new distribution sales leader to streamline and driver european sales efforts this leads us into art third quarter growth strategy of increasing market share with existing customers fried providing integrate solutions we continue to unique industrial i have t censor radio and a are opportunities for critical communication applications across various and markets such as agriculture heavy machinery mining we are supporting multiple trials and these markets to support rugged eyes and reliable wireless connections and harsh environments these three growth strategies that we have review today continue to serve as peace still foundation for growth and expansion before i turned today's call to the operator for questions i'll make a few closing remarks our strategic priority for twenty twenty three growth we have one the strongest antenna i'll device and test mesmer portfolios and the industry will continue to make investments a new products and leverage our sales reach globally through selected distributors and resellers to grow organically and capture a greater share the market focusing a critical communications are strong balance sheet also supports inorganic grow up as we evaluate strategic acquisitions to expand our presence and us and europe we remained cabinet in our ability to execute on our court three pronged good strategies delivering best in class products and customer service and drive shareholder value as we progress into an exciting twenty twenty three were well prepared to succeed even a challenging economic environment and look forward to continuing growth
spk_0: for pc tell with that kevin and i are available to take questions operated at this time will be conducting a question and answer session if you would like to ask a question please press or one on your telephone keypad a confirmation turn will indicate your lines in the question que you may press start to if you would like to remove your question from the que for participants using speaker equipment it may be necessary to pick up your and said before pressing the star keys one moment please why we pull for questions once again that star wanted to the question or comment first question comes from jason schmidt with lake street please proceed
spk_1: they get thinks you you take my questions and corrupt on a strong finish to the year you know wanna start with your comments on the supply chain i know you mentioned some of the prayed and logistics dynamics easing are you also seeing an easing and component sourcing as well
spk_2: as of supply chain in packs and and customers
spk_1: i think we've done a good job and i'm talking specifically of within an incentive
spk_4: oh damn good job
spk_1: trying to get ahead of this and and building some safety stock and in our high runners to make sure we're a products to get customers and had the same time i think of the last couple years or our customers have have built a that of stock as well to make sure that they had product
spk_5: fun
spk_1: getting am components for the pc tell products and getting on the customers i think we're pretty good shape the shell and drag against the second half of the challenge at we see is our antennas are part of a larger system
spk_6: and they're still constraints with with tips and and other components for for the and customers
spk_1: and some of those components for their systems have been delayed grey market is getting more expensive and in some cases and we've seen yes some shift of deliveries of of antennas even though we can we can deliver ship them some delivery requested to the delay those until it that the customer it's a wrestler that their systems so i think there's get to areas will will will work out throughout the rest the your one is a working on getting our or inventories down on on the antenna side because we are able to get the components said logistics or are improving
spk_5: but we're off can't be it a bit patient with and customers
spk_1: typically in a year
spk_2: our revenue is in more ways to the second half of the year at the go pry be that the same this year
spk_7: so we see a bit of a shift but i think it is kevin mention and and his comments or do we do expect to see a year over year growth
spk_2: okay now that's really helpful color and then just following up on that day mean do think customers are sitting on significant antenna inventory that they need to work through or is this just gonna normal course of business given the supply chain backdrop that we've been dealing with for the past couple of quarters
spk_1: i think it's the at the mix across customers and we have more visibility with with some customers than than others so we can infer that they have a more him into a the maybe that that they shared by just their their historical order rates on so i think we we we do see that there isn't a bit of in the toilet as be worked through but it's not across down on across our customers oh care and you guys have seen a great her action in the he be any be charging station market just curious if you think most of that momentum says being turban by the crowd that space or you guys taking share there and i guess her and laid and lay i know it's coming from i'm a smaller base but you should we expect revenue from those applications to outpace overall antenna growth
spk_2: i don't know the antenna spaces is pretty large but with the the the eve the charging stations and and and i would even go as far as he the cars
spk_1: some or eat electric vehicles the the i'm if the team and and and she's done and smart like acquisition that we did have gone almost on on two years they is that you didn't have a great job a getting into the tv charging space and in the nordic countries so they ever established dumb markets there and up and many of those vendors there are a developing those systems for for the nordic countries in for europe or the summer same banners at are are developing developing them or for the us market so over the last year so spent quite a bit of time a working on a product portfolio is from pc tell that would be very applicable a in europe that we can sell to that the smart team and by versa a smart tech antennas and and products at is on the us and the eating spaces is definitely an an exciting area of but with that like like any product as go through an introduction trials do before you see it at the and market
spk_2: i think it's gonna be a contributor for sure it and in engrossed in the at tennis face i don't necessarily think it'll it'll outpace some the other areas were your very strong and and and agriculture very strong in outer space and public safety but it by think it could be
spk_7: oh you're one of the top drivers
spk_1: okay and then just the last one for me and i'll jump back and you serve going out that last comment when you're when you look at this year what and market do you feel most confident about and what and market presents the largest her ask care
spk_2: i ask a question jason
spk_6: i think the market that we feel most comfortable and is proudly agriculture a historically we've been strong and that that them in that space for last couple years and and some a forecasts for for this year are just a strong
spk_1: i o t base the not on the at tennis but also that the iraqi devices i think will be an emerging market for some on the etc front of got a couple interesting trials going on that that shit up produce some some some early wins that's interesting another area they like fine very exciting and that such a measure of sides public safety or we've been in that space doing the and in building a data collection for for a couple years now the now we have that the seahawks central which is or cloud based sas system for or sas product for for collecting and and providing reports know it just watch the monitor your product for public safety though you have a portfolio products from for public safety more devlin that the number one spot there i'm in the area that the most challenging
spk_7: i would say probably and in the enterprise face or that seems to be more competitive at the games games are applying a a bigger role in there and in that market so if if we had a challenge at think that would be a
spk_8: okay got it really appreciate all the collar thanks guys
spk_0: they say some extent if there are any remaining questions please indicate so now by pressing star one on your touchstone phone once again that star one to him a question or comment
spk_1: we appear to have no further questions and q i'd now like to turn a call back over the management for any closing remarks thank you operator and now thank you all for from joining us is the factory new we're grateful for the dedicated team we have a place which is them supporting our customers through
spk_0: and these the challenging and environments and we look forward to growing or a business that through twenty twenty three i would like to thank you for your support pc tell and also thank you for your your time said and thanks
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