Earnings call transcript: Vislink Technologies Q4 2024 sees restructuring

Vislink Technologies Inc. (VISL) reported its fourth-quarter 2024 earnings, highlighting significant restructuring efforts amid a challenging financial landscape. The company posted a quarterly revenue of $3.4 million, a sharp decline from the previous quarter’s $7.1 million. Despite a full-year revenue increase to $27.7 million from $27.5 million in 2023, Vislink recorded a net loss of $20.5 million for the year. The company’s stock price fell 6.84% to $2.45, reflecting investor concerns over its financial performance and future outlook. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation, though investors should note the company’s high price volatility and rapid cash burn rate.

Key Takeaways

• Vislink’s Q4 revenue dropped significantly from the previous quarter.
• The company implemented major cost-cutting measures, including delisting from NASDAQ.
• Vislink launched new products aimed at expanding its market presence.
• The company aims for positive cash flow by the end of 2025.
• Stock price decreased by 6.84% following the earnings announcement.

Company Performance

Vislink Technologies faced a challenging fourth quarter, with revenue dropping to $3.4 million from $7.1 million in Q3 2024. The full-year revenue showed a slight increase to $27.7 million, compared to $27.5 million in 2023. Despite these figures, the company incurred a net loss of $20.5 million, signaling ongoing financial difficulties. InvestingPro data reveals a strong balance sheet position with a current ratio of 4.56 and more cash than debt, though the company’s market capitalization has contracted to just $6.05 million. Vislink’s strategic focus on restructuring and cost-cutting measures, including delisting from NASDAQ, aims to streamline operations and improve profitability.

Financial Highlights

• Revenue: $3.4 million in Q4 2024, down from $7.1 million in Q3 2024.
• Full Year Revenue: $27.7 million, up slightly from $27.5 million in 2023.
• Net Loss: $20.5 million for 2024, equating to $8.35 per share.
• Gross Profit: $300,000 in Q4 2024, representing an 8.8% margin.
• Cash and Short-Term Investments: $6.5 million, down from $9.2 million in Q3 2024.

Outlook & Guidance

Vislink is targeting a return to positive cash flow by the end of 2025, with a strategic shift towards service-based income. The company is expanding its opportunities in unmanned aerial vehicles (UAV) and helicopter transmission sectors, aiming to leverage its technological strengths in video, RF, and IP technologies. Despite the current financial setbacks, Vislink remains confident in its revenue potential for the upcoming quarters. InvestingPro subscribers can access 8 additional key insights about Vislink’s financial health and market position, along with detailed analysis in the Pro Research Report, helping investors make more informed decisions about this developing turnaround story.

Executive Commentary

CEO Mickey Miller expressed optimism about the company’s future, stating, "We are confident that we are well positioned to tell a far different and more positive story in 2025." He highlighted the company’s transformation into a service-centric organization, noting, "Our transformation into a service-centric organization is well underway." Miller also pointed out the company’s success in securing recurring revenue, adding, "We received over $900,000 in recurring revenue through new service level agreements."

Risks and Challenges

• Continued financial losses may impact investor confidence and stock performance.
• The success of new product launches and market expansion is uncertain.
• Economic pressures and market competition could hinder growth.
• The transition to a service-based model presents operational challenges.
• Potential disruptions in supply chain and production due to facility closures.

Vislink Technologies is navigating a complex financial landscape, with a focus on restructuring and innovation. While the company’s recent performance has raised concerns, its strategic initiatives and market expansion efforts aim to position it for future growth.

Full transcript - Vislink Technologies Inc (VISL) Q4 2024:

Drew, Operator/Conference Call Moderator, VisLink: Good morning. Welcome to VisLink’s Fourth Quarter and Full Year twenty twenty four 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 12/31/2024. A copy of the press release is available on the company’s website.

Before we begin the call, I would like to provide VisLink’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. VisLink 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, 05/02/2025. Now, I would like to turn the call over to VisLink’s CEO, Mr.

Mickey Miller. Sir, please proceed.

Mickey Miller, CEO, VisLink: Thank you, operator, and thank you everyone for joining us today. This morning, we filed our Form 10 ks with the SEC and issued a press release that provided our financial results for the full year and fourth quarter ended 12/31/2024, 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. Afterwards, 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 Mill 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 weather the downturn. Among the steps we took were the following.

Complete the rationalization of our product lines. This allowed us to eliminate unused and unneeded inventory and better align our product offerings in 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.

We believe the implementation of our new ERP system, which will provide us a streamlined better integrated platform, enhance order fulfillment processes, greater control of the business and reduced operational complexity. Voluntary has been listed from the NASDAQ exchange. This action will deliver upwards of $2,000,000 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 the restructuring are expected to yield roughly $10,000,000 in yearly savings with a substantial portion already achieved. This will help lower our breakeven 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 EBITDA. The measures taken also allow us to build for the future where we’re expanding opportunities in the MoDev 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’ve received 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 our financial results for the fourth quarter and full year 2024. Mike?

Mike Bond, CFO, VisLink: 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 twenty twenty four was $3,400,000 compared to $7,100,000 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 $27,700,000 compared to $27,500,000 in 2023.

Gross profit for the fourth quarter of twenty twenty four 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 $3,600,000 and a 51% gross profit margin in the third quarter of twenty twenty four. 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 $13,800,000 compared to $14,100,000 in the prior year. Our gross profit margin for 2024, excluding one time inventory write offs and impairment was 49.7 percent compared to 51% in 2023.

Total expenses in the fourth quarter of twenty twenty four were $17,400,000 compared to $10,300,000 in the third quarter of twenty twenty four. For the full year, our total expenses were $49,200,000 compared to $38,100,000 in 2023. Turning to profitability measures. We recorded an operating loss of $14,100,000 in the fourth quarter compared to $3,300,000 that is a $3,300,000 loss in the prior quarter. For the full year 2024, our operating loss was $21,500,000 compared to a $10,600,000 loss in the prior year.

Net loss attributable to common shareholders in the fourth quarter of twenty twenty four was $14,300,000 or $5.82 per share compared to a loss of $3,000,000 or a negative $1.22 per share in the third quarter. For the full year, net loss attributable to common shareholders was $20,500,000 or $8.35 per share compared to a loss of $9,100,000 or $3.83 per share in the prior year. We want to reiterate that $6,800,000 of the loss was attributable to impairment of inventory and right of use assets. EBITDA for the full year 2024 was a loss of $19,800,000 compared to a loss of $9,000,000 in the prior year period. Adjusted EBITDA, a non GAAP metric for the year was a loss of $11,900,000 compared to a loss of $6,400,000 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 12/31/2024, our cash and short term investments stood at $6,500,000 compared to $9,200,000 at 09/30/2024. Working capital was $13,000,000 at the end of the fourth quarter compared to $27,100,000 at 09/30/2024. That concludes my prepared remarks.

I’ll now turn it back to Mickey.

Mickey Miller, CEO, VisLink: Thanks, Mike. Now returning to operational updates. I like to reiterate our three year financial and operational goals, which are fundamental to our strategic blueprint. These goals center on solidifying our leadership in live production, while simultaneously expanding our Mill Gov business and accelerating our recurring revenues through services, all with the aim of achieving positive cash flow in 2025. We are seeing strong momentum in our Mill Gov business with over 70% growth in bookings.

This is highlighted by multimillion dollar orders and product shipments for our airborne video downlink systems. We’re particularly encouraged by our deliveries in support of expanding use cases in cutting edge drone applications, which represent a compelling opportunity for us. The wins we recorded in 2024 reinforce the position of our Aerolink and cellular based Aero five systems as trusted solutions in the mission critical environments. The widespread adoption of these systems by multiple agencies across North America and Europe underscores the reliability and demanding environments, positioning us strongly for continued growth and new contract wins in 2025. Our transformation into a service centric organization is also well underway.

Last year, we received over $900,000 in recurring revenue through new service level agreements. This validates our strategy to deliver long term value through predictable high margin income streams. The build out of our global service platform will be a key enabler as we scale the business. Within the live production market, we continue to experience a healthy demand for innovative solutions that deliver premium quality with greater flexibility. This is demonstrated by our role as key technology provider for marquee global events, including Super Bowl twenty twenty five, the Summer Olympics in Paris, NFL, NHL, Premier League, MotoGP, Formula One, Academy Awards, the Emmys and more.

We’re proud to announce that we were awarded the best innovation project at the Broadcast Tech Innovation Awards twenty twenty four, recognizing our technology contribution to a groundbreaking autonomous racing project with Focal Point Doctor and Aspire in The Middle East. We’re also maintaining our pace of technological innovations and have debuted a wide range of new products over the past year, including the Aero five, five gs, HEVC four ks UHD airborne downlink system, the DragonFly five five gs miniature transmitter, the InCam GV wireless system, as well as key updates to existing solutions, all designed to meet the evolving needs of our customers. Notably, our recently released Dragonfly V five gs miniature transmitter allows us to address a range of POV drone and body worn applications and evolving production workflows across a range of broadcast and public safety environments, receiving substantial interest from many sectors. Our evolving market strategies are yielding positive results across our key sectors, live video connectivity, video data transport, AVDS and the burgeoning drone command and control. We’re particularly excited about the rapid strides we’re making in both bonded and proprietary RF downlink systems where our technologies offer unique advantages.

We recently attended Verticon twenty twenty five, the world’s largest trade show dedicated to the helicopter industry where we engage with many leading players to discuss how our innovations can help fuel their growth. As an example, Leonardo, the category leader announced significant growth plans driven by helicopter sales into key use cases like ISR, emergency response and military. We see significant potential in areas like border security and the demand for domestically produced defense solutions. Our bonded cellular technology remains a linchpin and is being incorporated across our product portfolio and is growing use cases notably for public safety. We’re also deepening strategic alliance with OEM partners, ensuring our technological evolution stays in lockstep with their evolving needs, solidifying our market leadership.

This includes flexible public private five gs solutions, an area where we are the only player in our markets to offer a complete hybrid portfolio and cloud based remote production platforms. Looking ahead, we remain committed to the financial and operational goals we have laid out in our three year strategy. Over the past year, we took necessary and decisive steps to align our cost base with current operational realities. We are confident that our robust pipeline of opportunities, innovative product roadmap, strengthening presence in high growth sectors and sharpened operational focus gives us a platform to deliver sustainable, profitable growth in the year ahead, while creating value for shareholders. We appreciate your continued support and confidence in VisLink.

We look forward to keeping you updated on our progress in the coming quarters. Back to you, operator.

Drew, Operator/Conference Call Moderator, VisLink: Thank you for joining us today for VizLink’s fourth quarter and full year twenty twenty four earnings conference call. You may now disconnect.

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