Vislink Technologies Inc

Good morning, everyone. Welcome to Vislink's first quarter 2023 earnings conference call. My name is Jamie, and I'll be your operator for today's conference. Joining us for today's presentation are the company's CEO, Nikki Miller, and CFO, Paul Norridge. Following their remarks, we will open the call for questions. Earlier today, Vislink released results for the first quarter ended March 31st, 2023, A copy of the press release is available on the company's website. Before we begin the call, I would like to provide BizLink's safe harbor statement that includes cautions regarding forward-looking statements made during this call. Management will make statements during the call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements include, without limitation, our examination of operating trends and financial expectations are based on the company's current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results to differ materially from those anticipated or implied by these forward-looking statements. Accordingly, you should not rely on these statements. For a list of risks and uncertainties associated with the company's business, please see the company's filings with the Securities and Exchange Commission. This link disclaims any intention or obligation except as required by law to update or revise any forward projections or forward-looking statements, whether based on new information, future events, or otherwise. This conference call contains time-sensitive information that is accurate only as of the live broadcast this morning, May 15, 2023. I'd now like to turn the floor over to this link's CEO, Mr. Mickey Miller. Sir, please proceed.

Thank you, operator, and thank you, everyone, for joining us today. This morning, we filed our 10-Q with the SEC and issued a press release that provided our financial results for the first quarter ended March 31st, 2023, along with highlighted business accomplishments. As a brief overview for today's call, I'll begin by providing highlights for the first quarter of 2023 and summarizing some of our recent business developments before passing the call over to Paul to discuss our financial results in more detail. I'll then come back on to discuss progress on our go-to-market strategy, product updates, and updates within our key target markets before moving to Q&A. And with that, let's begin. Highlights and recent business updates. We are beginning to see the benefits of the strategic actions we have taken over the last several quarters to transform our business and expand our growth opportunities. In the first quarter, we delivered strong profitability improvements including a 26% improvement to EBITDA or approximately $700,000 on an absolute basis year-over-year, which were driven by our effective cost management along with 50% growth in our MilGov segment. Our go-to-market motions are gaining traction, validated by our robust sales funnel that includes the most million-dollar opportunities in several years. We are continuing to improve operations as we increase alignment among our teams. And though these larger opportunities typically have longer sales cycles, we are confident that we will capitalize on many of these potential deals in the coming quarters. From a new product standpoint, Q1 was highlighted by the delivery of our first six Aerolink units to the field. Based on our current visibility, we anticipate doubling Aerolink delivery volume in the second quarter and continue a strong trajectory going forward based on the positive initial feedback we have received from our law enforcement customers. This momentum we're building in public safety is a cornerstone of our strategy, as it is a growth market being fueled by increased government funding. While accessing the funding usually stretches out the timeline for securing contract agreements, it is opening the door to significantly larger purchases. In an effort to offset the timing, We're aiming to book and ship new orders as much as possible in the same quarter. Our sales and operations team have done a phenomenal job of rising to the channel and are working in lockstep through the entire process to make sure we are ready to ship when a deal closes. Additionally, we've added members to our inside sales team to further support smaller orders that we receive in order to allow our sales leaders to focus on increasing the number of large opportunities. With recent product rollouts, like our Qlik OFDM mobile transmitter and the upgraded Quantum Receiver, we are confident we have the right products in place to take advantage of the market opportunity ahead of us. As we continue to drive these new sales, we are simultaneously driving our integrated software, the Link Matrix management platform, and value added services that will increase recurring revenue and provide additional revenue streams over the long term. With that, I will turn the call over to Paul to discuss our financial results for the quarter in greater detail. Paul?

Thank you, Mickey, and good morning, everyone. Before I move into our financials, I'd like to thank Mickey and the board for the opportunity to join the leadership team as Chief Financial Officer. In my more than 15 years at VisLink, I have seen our company expand our global reach into new markets, introducing innovative technologies that help enhance performance, mobility, and efficiency for our customers across an array of industries along the way. I am confident that we have the right strategy in place to optimize the potential of our exceptional solutions, and I look forward to working with Mickey and our teams to streamline our operations to achieve our goals in 2023 and beyond. Now, moving into our financial results for the first quarter. Our total revenue for the first quarter of 2023 increased 5% year-over-year to £7.2 million, from £6.9 million of revenue in Q1 2022. As Nicky noted, our revenue growth was driven by solid expansion in our MilGov segments. However, due to external timing issues, two projects were postponed to Q2, slightly muting our Q1 results. Our gross profit for the first quarter of 2023 increased to 3.9 million from 3.4 million in the prior year period. Gross profit margin for the first quarter of 2023 was 54%, an improvement from 50% in the prior year period. The increase in gross margin was the result of revenue increases previously noted and cost savings on components. Total expenses were 6.2 million, a 5% decrease from 6.6 million in 2022. Now turning to our profitability measures. For the first quarter of 2023, we recorded an operating loss of 2.3 million, an improvement from 3.1 million loss in the prior year period. Net loss attributable to common shareholders for the first quarter of 2023 totaled 1.8 million, 80 cents per share. This was a 1 million improvement from the net loss of 2.8 million, which is $1.20 per share diluted in the first quarter of 2022. EBITDA for the first quarter of 2023 improved 0.7 million or 26% to a loss of 1.7 million from 2.4 million in the prior year period. Adjusted EBITDA and non-GAAP metrics for the first quarter of 2023 improved to 0.5 million loss from 1.3 million loss in the first quarter of 2022. The improvement in EBITDA was the result of revenue improvements and continued expense management. A reconciliation of EBITDA to GAAP measure is contained in our earnings release. Finally, to our balance sheet. As of March 31, 2023, we had cash and cash equivalents of $14 million, compared to $25.6 million at the end of the fourth quarter. We invested $10.8 million in federal bonds intended to be held to maturity. We have maintained a strong balance sheet, and from a working capital standpoint, at the end of the first quarter, we had $38.2 million in working capital, a decrease from $38.6 million at the end of Q4. Our strong debt-free balance sheet provides us with significant resources to weather any macro pressures, while at the same time affording us with the optimal flexibility to allocate capital towards opportunities with high return on investment potential to align with our long-term growth potential. To that end, we're seeing an increase in activity on both the buy and sell side, and we continue to evaluate strategic opportunities that will enable us to drive scale as an organisation and maximise shareholder values. That concludes my prepared remarks. I'll now turn it back to Mickey.