Vislink Technologies Inc

Good morning. Welcome to VizLink's fourth quarter and full year 2024 earnings conference call. My name is Drew 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 full year and fourth quarter ended December 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 VizLink'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 fact 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 the 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, May 2, 2025. Now, I would like to turn the call over to VizLink CEO, Mr. Mickey Miller. Sir, please proceed.

Thank you, Operator, and thank you, everyone, for joining us today. This morning, we filed our Form 10-K with the SEC and issued a press release that provided our financial results for the full year and fourth quarter ended December 31, 2024, along with key business accomplishments. As a brief overview for today's call, I'll start by discussing our recent performance and highlighting our progress toward our three-year financial goals. I'll then pass the call to Mike Bond 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. Looking back at 2024, the year didn't develop in the way we had planned. We had a strong first half, then began to see indications that the business would slow toward the end of the year. These concerns were realized as our Q4 numbers were negatively impacted by revenue timing challenges that included softness in the live production market, lower than expected revenue in our growing mil-gov market, and output delays as a result of our facility consolidation. In response, we took a wide range of strong, proactive actions to significantly reduce expenses to make our operations more efficient as we weathered the downturn. Among the steps we took were the following. Completely rationalization of our product lines. This allowed us to eliminate unused and unneeded inventory and better align our product offerings to the most lucrative opportunity areas. We did take a significant charge associated with the inventory right now. Substantially reduced organization headcount Consolidated our worldwide real estate and overall footprint. This included closing offices and facilities with the goal of transferring all production from the Netherlands to the UK and New Jersey. Completed the implementation of our new ERP system, which will provide us a streamlined, better integrated platform, enhanced order fulfillment processes, greater control of the business, and reduced operational complexity. Voluntary listed from the NASDAQ exchange. This action will deliver upwards of $2 million in cost savings associated with being a publicly listed company. The delisting made sense for us because we found that the ability to raise capital in an ultra non-dilutive way was not available to us. Essentially the delisting will allow us to save money, time and resource. and allow us to focus on managing the business rather than the regulatory and reporting requirements. Collectively, the cost control measures taken as a part of their structuring are expected to yield roughly $10 million in yearly savings, with a substantial portion already achieved. This will help lower our break-even point and reduce complexity and redundancy. It will also provide us with a leaner, more efficient operating model to support long-term growth and enhance working capital management. We should mention that the restructuring activities resulted in a significant impact to our Q4 EVA. The measures taken also allow us to build for the future, where we're expanding opportunities in the MoGov sector, particularly around UAVs and helicopter-based transmission solutions as well as ongoing growth in the live production area. We are confident that we have unique and compelling capabilities around video, RF, and IP technologies, as well as next generation of AI and UAVs. With our newly refreshed product line, vibrant market, and growing service-based income, we foresee better revenue potential over the upcoming quarters than we achieved over the last part of 2024. We are confident that we are well positioned to tell a far different and more positive story in 2025 than what transpired in 2024, allowing us to get cash flow positivity by the end of the year. Before I proceed with the operational updates, I'd like to pass the call over to our CFO, Mike Bond, to provide a detailed overview of financial results for the fourth quarter and full year 2024. Mike?

Thank you, Mickey, and good morning, everyone. Looking at our financial results for the fourth quarter and full year. Our total revenue for the fourth quarter of 2024 was 3.4 million compared to 7.1 million in the prior quarter. The revenue decrease was primarily due to a decline in the live production business sector and the delayed execution of large-scale projects. For the full year, revenue was 27.7 million compared to $27.5 million in 2023. Gross profit for the fourth quarter of 2024 was $300,000, with our gross profit margin excluding one-time inventory write-off and impairment for the quarter at 8.8%. This was compared to a gross profit of $3.6 million and a 51% gross profit margin in the third quarter of 2024. Material margins remained strong in the fourth quarter, while unabsorbed production overhead caused a significant decrease in the gross margin. For the full year, gross profit was $13.8 million compared to $14.1 million in the prior year. Our gross profit margin for 2024, excluding one-time inventory write-off and impairment, was 49.7%. compared to 51% in 2023. Total expenses in the fourth quarter of 2024 were $17.4 million compared to $10.3 million in the third quarter of 2024. For the full year, our total expenses were $49.2 million compared to $38.1 million in 2023. Turning to profitability measures, we recorded an operating loss of $14.1 million in the fourth quarter compared to $3.3 million, that is a $3.3 million loss, in the prior quarter. For the full year, 2024, our operating loss was $21.5 million compared to a $10.6 million loss in the prior year. Net loss attributable to common shareholders in the fourth quarter of 2024 was $14.3 million or $5.82 per share, compared to a loss of $3 million or a negative $1.22 per share in the third quarter. For the full year, net loss attributable to common shareholders was $20.5 million or $8.35 per share. compared to a loss of $9.1 million or $3.83 per share in the prior year. We want to reiterate that $6.8 million of the loss was attributable to impairment of inventory and right of use assets. EBITDA for the full year 2024 was a loss of $19.8 million compared to a loss of $9 million in the prior year period. Adjusted EBITDA, a non-GAAP metric for the year, was a loss of $11.9 million compared to a loss of $6.4 million in 2023. A reconciliation of EBITDA to GAAP measures is contained in our earnings release issued earlier today. Moving to the balance sheet. As of December 31st, 2024, our cash and short-term investments stood at $6.5 million compared to $9.2 million at September 30, 2024. Working capital was $13 million at the end of the fourth quarter, compared to $27.1 million at September 30, 2024. That concludes my prepared remarks. I'll now turn it back to Mickey.