Vislink Technologies Inc

to this link's first quarter 2024 earnings conference call. My name is Marlise, and I will be your operator for today's call. Joining us today for today's presentation are the company's CEO, Mickey Miller, and CFO, Mike Bond, who will report results for the first quarter ended March 31st, 2024. A copy of the press release is available on the company's website. Before we begin the call, I would like to provide this link's safe harbor statement, which 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, including without limitation our examination of operating trends and financial expectations are based upon the company's current estimates and various assumptions. The statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not rely on these statements for a list of the 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 financial projections or forward-looking statements, whether because of 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, 2024. And now, I would like to turn the call over to this link's CEO, Mr. Mickey Miller. Mr. Miller, please go ahead.

Thank you, Operator, and thank you, everyone, for joining us today. This morning, we filed our 10K with the SEC and issued a press release that provided our financial results for the first quarter ended March 31st, 2024, along with key business accomplishments. As a brief overview for today's call, I'll start by discussing our first quarter performance and highlighting our progress towards our three-year financial goals. I'll then pass the call to Mike to discuss our financial results. Afterward, I'll come back to discuss recent updates within our key target markets, product developments, and updates on our go-to-market strategies. With that, let me begin by expressing our enthusiasm about the strides we've made and our optimism for VizLink. The first quarter of 2024 has further solidified VizLink's foundation, demonstrating substantial financial and operational gains directly resulting from the strategic initiatives that we implemented two years ago to increase operating leverage. In Q1, we achieved a 20% year-over-year revenue increase, reaching $8.6 million. This growth was primarily driven by robust sales to MilGov customers, fueled by the adoption of our Aerolink platform and opportunities opened by the BMS assets acquisition. These factors, combined with increased governmental investment given the current geopolitical landscape have reinforced our market presence. Our continuous focus on innovation has led to recent product rollouts like Qlik and LiveLink. VizLink's newer products are strategically designed to serve the military, government, sports, and media sectors. Both Qlik and LiveLink have been met with strong early interest, and we expect that these higher margin products will enhance both our top and bottom line financial results as sales ramp up. We are demonstrating continued progress in developing Link Matrix to fit the needs and preferences of customers in our target market. Our efforts to promote services and integrate our Link Matrix software into our hardware offerings are proving successful, as demonstrated by service and software revenue growing to represent 16% of total revenue in the first quarter, up from 13% in 2023. Additionally, our Air to Anywhere AVDS platform and the introduction of Dragonfly 5 are poise to drive further growth. We are intensifying our sales and marketing initiatives, which are showing traction as evidenced by our newer products becoming an increasing part of our total revenue. We anticipate that the products we introduced over the last will approach nearly 70% of total revenue this year. This strategy not only enhances our value proposition across various use cases, but also unlocks higher margin revenue channels through our device management ecosystem link matrix. Looking ahead, we are optimistic about our trajectory as we are working with our largest weighted sales pipeline since the pandemic, valued at 48 million entering the second quarter. Additionally, we are actively engaging in opportunities to leverage our existing solutions to expand our involvement in new markets such as Drone Command and Control or Drone C2. We are invigorated by the momentum we've built and are continuing to ramp up our sales and marketing efforts to support our recent product launches. As we proceed, we are on track to achieve cash flow neutrality by the end of 2024 in our aim to be cash flow positive by 2025. We are continuously evolving our operations, and we are proactively identifying areas for operational enhancements and cost-saving measures. These ongoing efforts are crucial as we work to drive further revenue growth and enhance profitability. Before I go further, I'll pass the call over to our CFO, Mike Bond, to provide a detailed overview of our financial results for the first quarter. Mike?

Thank you, Mickey, and good morning, everyone. Looking at our financial results for the first quarter, our total revenue increased to $8.6 million, up from $7.2 million in the prior year period, and a sequential increase from $8.1 million in Q4 2023. The increase in revenue was primarily driven by a jump in income. scales to military and government markets. Gross profit increased to 4.8 million, up from 3.7 million in the prior year period. Gross profit margin for the quarter was 59%, up from 54% in the prior year period. The year-over-year improvement in gross margin reflects greater operating efficiency and a higher mix of software and services revenue. Total expenses were $10.2 million compared to $9.5 million in the prior year period. This change is due to our increased focus on sales and marketing as we push to expand our reach and support our new product lines. Turning now to our profitability measures. Operating loss improved to $1.6 million down from a loss of $2.3 million in the prior year period. This improvement is a direct result of our increased revenue and higher margins demonstrating the effectiveness of our strategic focus on more profitable product categories. Net loss attributable to common shareholders improved to $1 million or $0.39 per share from a loss of $1.8 million or $0.80 per share in the prior year period. This improvement underscores our strategic cost management and ongoing efforts to enhance our operational efficiency. Moving now to our balance sheet. As of March 31st, 2024, our cash and short-term investments stood at $13.8 million compared to $14.2 million at December 31st, 2023. Improving cash performance remains a top priority for us, and we have shown clear improvements in cash usage in Q1. We maintain a robust working capital of 31.2 million at the end of the first quarter, compared to 31.8 million at December 31st, 2023. We expect to see continued improvements in our working capital terms in the coming quarters. Our strong balance sheet supports our operational flexibility, enabling us to actively pursue strategic acquisitions and partnerships especially in the defense and public safety sectors. These moves aim to expand our capabilities and market reach within the MilGov markets. In summary, our efforts over the past two years to restructure our cost base, redesign our product line, integrate two key acquisitions, and rejuvenate our sales channels have begun to bear fruit, making a significant improvement in our profitability results. As we progress into 2024, these initiatives are expected to further solidify our positive growth trajectory. This concludes my prepared remarks. I'll now turn it back to Mickey.