Vislink Technologies Inc

Good morning and thank you for holding. Welcome to VizLink's third quarter 2024 earnings results conference call. My name is Chris and I will be your operator for today's call. Joining us for today's presentation are the company's CEO, Mickey Miller, and CFO, Mike Bond, who will report results for the second quarter ended September 30, 2024. A copy of the press release is available on the company's website. Before we begin today's call, I would like to provide VizLink's safe harbor statement, which includes cautions regarding forward-looking statements made during this call. Management will make statements during the call that includes 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. These 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 these risks and uncertainties associated with the company's business, please see the company's filings with the Securities and Exchange Commission. VizLink 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, November 14, 2024. At this time, I would like to turn the call over to VizLink's CEO, Mickey Miller. Please proceed, sir.

Thank you, operator, and thank you, everyone, for joining us today. This morning, we filed our Form 10-Q with the SEC and issued a press release that provided our financial results for the third quarter ended September 30th, 2024, along with key business accomplishments. As a brief overview for today's call, I'll start by discussing our third quarter performance and highlighting our progress toward our three-year financial goals. I'll then pass the call to Mike to discuss our financial results. Afterward, I'll return to discuss recent updates within our key target markets, product developments, and our go-to-market strategies. I'd like to begin by reaffirming our three-year financial and operational goals, which are central to our overall strategy. These objectives include maintaining our strong position in live production while accelerating growth in the MilGov sector in our recurring revenue services business. with the intent to achieve cash flow positivity in 2025. We are pleased to report that our year-to-date revenue has increased over 26 percent compared to the prior year. The results recorded in the third quarter alone reflected a temporary decline in revenues compared to the prior year, primarily caused by unusually high seasonal softness in the live production sector. We believe this is primarily driven by broadcasters focusing on the 2024 Summer Olympics, which led to several non-Olympics projects being put on hold. We also experienced some delays in procurement activities for new programs in the Middle East region due to heightened alert status caused by regional geopolitical tensions. We expect these activities to return to their usual pace in the coming months. This quarter brought several encouraging developments signaling strong growth opportunities ahead. Bookings within the MilGov sector continue to gain momentum, fueled by increased demand for our solutions. We currently have numerous field product evaluations underway across local, national, and international law enforcement and defense agencies. This reflects our strategic commitment to ensuring public safety and maintaining a taxable edge. Our airborne video downlink systems, powered by the industry-leading AerLink transceiver and the Air to Anywhere solution, continue to set the benchmark for unparalleled reliability, efficiency, and performance in surveillance and emergency response. We take pride in having our downlink solutions deployed in some of the most demanding and high-profile environments around the world. Recently, we initiated the deployment of our systems with the U.S. Department of Homeland Security. We also secured an order from the D.C. Metro Police Department, and our technology is set to play a key role in supporting law enforcement at the 2025 G7 Summit in Alberta, Canada. Additionally, we received a major order in Brazil for our downlink solution, which will be used for police and surveillance operations utilizing our bonded cellular technology. With expanding opportunities across global MilGov markets, including the U.S., Europe, the Middle East, and Africa, we are well positioned to build on this momentum and drive significant revenue growth in the coming months and years. In the third quarter, we launched a new ERP system to unify and optimize our core operations, driving greater efficiency across the organization. This system enables us to initiate a restructuring program to reduce significant costs, delivering annualized savings of over $6 million starting in Q4. While we are pleased with our year-to-date revenue growth, we've proactively responded to signs of near-term revenue softness by consolidating operations and strategically positioning ourselves for continued growth in the MilGov sector. As part of this effort, we are consolidating our manufacturing facilities into a single location. and streamline our organization to better support our target markets. These actions are designed to eliminate underperforming product lines, optimize staffing, and align our resources with the company's long-term objectives. We remain committed to identifying additional opportunities for cost reduction. Before I proceed with further updates, I'll pass the call over to our CFO, Mike Bond, to provide a detailed overview of our financial results for the third quarter. Mike?

Thank you, Mickey, and good morning, everyone. Looking at our financial results for the third quarter, revenue in the third quarter was $7.1 million compared to $7.2 million in the third quarter of 2023. Revenue for the nine months ended September 30th, 2024, was $24.4 million, an increase of 26% over the prior period. Gross margin was 51%. That's down from 54 percent in the prior year period. Net loss for the quarter was $3 million or a negative $1.22 per share. That compares to a loss of $2 million or a negative $0.83 per share in the prior year period. This was a result of lower than expected revenue in the quarter and higher fixed costs across the organization. Total expenses were $10.3 million, compared to $9.5 million in the prior year period. Our Q3 expenses reflected an increase in costs associated with personnel required for the ERP implementation, which ramped up during the quarter, as well as higher expenditures for strategic R&D investments. Turning to our profitability measures, Operating loss was a negative 3.3 million compared to a loss of 2.3 million in the prior year period. Net loss attributable to common shareholders was a negative 3 million or a negative $1.22 per share compared to a loss of 2 million or a negative 83 cents per share in the prior year period. Moving to our balance sheet. As of September 30th, 2024, Our cash and short-term investments stood at $9.2 million, compared to $11.5 million at June 30, 2024. Working capital was $27.1 million at the end of third quarter, compared to $31.8 million at June 30, 2024. The company expects to see improving working capital performance in the coming periods, primarily due to better vendor terms through consolidated purchasing, shorter installation and customer acceptance periods for large systems implementations, and better inventory management, all driven by the new ERP system implemented in the third quarter. That concludes my prepared remarks. I'll now turn it back to Mickey.