Release Date: September 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: It's good to see the margins bumping up against that 30% level. Do you expect margins to stay at or around this 29%-plus level, or could they continue to expand? A: (Robert Dawson, CEO) We feel comfortable at the current margin level and aim to reach our 30% target. The mix of higher-margin products in our backlog supports this, and we expect sequential sales growth in Q4 to further aid margin expansion.
Q: Can you provide more color on the backlog and its composition in terms of higher-margin versus lower-margin offerings? A: (Robert Dawson, CEO) The backlog is stable around $20 million, with newer, higher-margin products replacing older items. This should support higher sales and margin improvements in the coming quarters.
Q: Do you expect the backlog to remain around $19 million to $20 million, or could it increase significantly with continued large orders? A: (Robert Dawson, CEO) While maintaining a $20 million backlog would be ideal, a slight decrease wouldn't be concerning. We expect orders to continue flowing in, potentially increasing the backlog, but its more about maintaining a healthy level to support future sales.
Q: What are your expectations for fiscal Q4 sales, considering the seasonal patterns and recent trends? A: (Robert Dawson, CEO) We expect sequential sales growth in Q4. The timing of customer orders and material supply will influence the magnitude of this increase. We anticipate a more normalized build pattern in 2025, which should help smooth out seasonal impacts.
Q: When do you expect to see profitability accelerating significantly? A: (Robert Dawson, CEO) We believe reaching $18 million in quarterly sales will significantly impact profitability. Once we cover our fixed costs, additional sales will drive substantial leverage, especially if we can push sales to $20 million per quarter.
Q: Can you provide an update on your facility consolidations? A: (Robert Dawson, CEO) We have four main facilities: our headquarters in San Diego, a facility in New Jersey for RF passives and DAC products, and two custom assembly facilities in Milford, Connecticut, and Yaphank, New York.
Q: What are your thoughts on the current state of the venue market and its impact on your business? A: (Robert Dawson, CEO) The venue market has been slow, but we see potential for improvement. Factors like rural carrier spending, data center expansions, and wireless densification are positive indicators. Interest rate cuts and normalized spending patterns in 2025 should also help.
Q: How do you view the overall ecosystem and its impact on your business? A: (Robert Dawson, CEO) We monitor key indicators like CommScope and fiber deployments. The ecosystem is improving, and we expect better market conditions in 2025. Interest rate cuts and normalized spending patterns should support growth in our product areas.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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