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Vislink Technologies, Inc. (VISL)·Q1 2019 Earnings Summary

Executive Summary

  • Q1 2019 revenue was $8.206M, down from $9.733M in Q1 2018, with operating loss of $2.666M and net loss of $3.090M; cash fell to $0.324M and working capital was ~$6.7M .
  • Management did not issue a Q1 2019 earnings press release or hold a Q1 call; financials come from the 10-Q. Prior-quarter commentary indicated bookings in Q1 2019 were above Q1 2018 and backlog into Q2 was stronger than prior year .
  • No formal quarterly guidance; company adopted ASC 606 with no revenue recognition impact and continued cost rationalization from 2018 (total ~$9.5M annualized) .
  • Consensus estimates from S&P Global were unavailable; attempted retrieval failed due to service limits. As a result, we cannot quantify beats/misses for revenue/EPS (values would be from S&P Global).

What Went Well and What Went Wrong

What Went Well

  • Bookings/backlog momentum: “Bookings…in Q1 2019 are above those of Q1 2018” and “backlog…going into Q2 is much stronger than Q2 of 2018,” supporting forward activity despite lack of formal guidance .
  • North America growth YoY: North America revenue rose to $3.919M from $3.272M in Q1 2018; equipment sales remained the core driver at $7.561M .
  • Cost discipline carried forward: 2018 program removed ~$9.5M in annual costs via facility consolidation and workforce actions; management reiterated operational stability and focus on profitable growth .

What Went Wrong

  • Top-line decline: Q1 2019 revenue fell to $8.206M from $9.733M YoY as the company exited xMax and Federal divisions, reducing contribution despite new contracts .
  • Liquidity tightened: Cash decreased to $0.324M; net cash used in operations was $1.564M in Q1 2019, elevating financing risk despite working capital of ~$6.7M .
  • Higher financing burden and market compliance: Interest expense increased to $0.350M in Q1 2019, reflecting convertible notes; Nasdaq minimum bid-price compliance required a 1-for-10 reverse split effected May 7, 2019 .

Financial Results

MetricQ3 2018Q4 2018Q1 2019
Revenue ($USD Millions)$8.325 $10.812 $8.206
Operating Income (EBIT) ($USD Millions)$(2.699) $(2.274) $(2.666)
Net Income ($USD Millions)$(2.207) $(2.954) $(3.090)
Diluted EPS ($USD)$(0.13) N/A (not disclosed in Q4 press release)$(1.62)
EBIT Margin % (computed)−32.4% (−2.699/8.325) −21.0% (−2.274/10.812) −32.5% (−2.666/8.206)

Segment/geographic and revenue-type breakdown:

CategoryQ1 2018Q1 2019
North America Revenue ($USD)$3,272,000 $3,919,000
South America Revenue ($USD)$309,000 $19,000
Europe Revenue ($USD)$4,290,000 $2,350,000
Asia Revenue ($USD)$1,392,000 $1,390,000
Rest of World Revenue ($USD)$470,000 $528,000
Equipment Sales ($USD)$8,903,000 $7,561,000
Installation/Integration/Repairs ($USD)$795,000 $601,000
Warranties ($USD)$35,000 $44,000

Selected KPIs / cash metrics:

KPIQ1 2019
Cash ($USD)$324,000
Working Capital ($USD)~$6,700,000
Inventory ($USD)$12,716,000
Net Cash Used in Operating Activities ($USD)$(1,564,000)
Bookings vs Q1 2018Above prior year (qualitative)
Backlog going into Q2 2019 vs Q2 2018Stronger (qualitative)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ1 2019None providedNone providedMaintained (no guidance)
EPSQ1 2019None providedNone providedMaintained (no guidance)
Bookings/Backlog CommentaryQ1 2019/Q2 2019 entryNot previously stated“Bookings…above Q1 2018; backlog…much stronger than Q2 2018”Positive qualitative update
Cost Structure2019~$8.2M savings + targeted $1.3M~$9.5M annualized cost removedMaintained/confirmed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2018)Previous Mentions (Q4 2018)Current Period (Q1 2019)Trend
Cost reduction/operational streamlining~$8.2M labor/non-labor savings; further $1.3M targeted; breakeven lowered Total ~$9.5M removed; facility consolidations detailed Ongoing benefits reflected in lower G&A/R&D; liquidity caution Continued execution
Product innovation (HCAM/Ultra Receiver; downlink systems)New products/partnerships (Cogent, Advent, Panasonic) 4K UHD single-frame latency upgrade; sports deployments No new Q1 PRs; core portfolio supports sales mix Steady platform focus
Market segments focusLive production, satellite, military/government Same emphasis and M&A exploration Disaggregation shows mixed regional trends (EU down, NA up) Mixed geography; segment continuity
Financing/convertible notesDebt and working capital commentary Debt including short-term obligations $6.3M Convertible notes modified/extinguished; interest expense up $0.350M Financing burden elevated
Nasdaq complianceN/AN/A1-for-10 reverse split effected May 7, 2019 Compliance action taken
Revenue recognition (ASC 606)N/AN/AAdopted ASC 606 with no cumulative impact Accounting transition complete

Management Commentary

  • “Bookings…in Q1 2019 are above those of Q1 2018. Our backlog…going into Q2 is much stronger than Q2 of 2018.”
  • “We are pleased to report that in Q4 2018 we reached our goal of achieving profitability…we have turned our attention to growing the business.”
  • “Our focus for 2019 will be generating sustainable organic growth on a profitable basis.”

Q&A Highlights

  • xMax patents: Management confirmed the xMax division was shut down in 2018, but the patent portfolio remains extensive (50–70 patents) and is being licensed (e.g., JC3 Solutions), with flexibility to resurrect with partners if opportunities arise .
  • Capital structure priorities: Management aims to secure longer-term institutional financing and address warrant overhang to improve equity/capital structure .

Estimates Context

  • Attempts to retrieve Wall Street consensus (Primary EPS Consensus Mean, Revenue Consensus Mean, # of estimates) for Q1 2019 via S&P Global failed due to service limits. As such, estimate comparisons are unavailable; we cannot assess beats/misses for revenue/EPS. Values would be retrieved from S&P Global if available.

Key Takeaways for Investors

  • Trajectory shows disciplined cost execution but uneven demand: revenue softened YoY with EBIT margin reverting to ~−33% after a stronger Q4; monitor conversion of bookings/backlog to revenue in Q2/Q3 .
  • Liquidity tightness and financing burden are central risks near term (cash $0.324M; higher interest expense); any equity/debt raises or refinancing will be catalysts for stock and solvency perception .
  • Geographic mix shifted toward North America while Europe declined; sales execution and regional pipeline diversification are key to stabilizing top-line .
  • No quarterly guidance; rely on operational indicators (orders/backlog) and upcoming filings/events to calibrate expectations; absence of consensus estimates limits near-term beat/miss trading setups .
  • Accounting/structural changes (ASC 606 adoption, reverse split) are complete; focus shifts to operational cash generation and margin improvement .
  • Watch for product/partnership wins in live production, satellite, and military/government to drive equipment sales (core revenue source) .
  • Any progress on refinancing convertible notes or addressing derivative liabilities could reduce P&L drag and de-risk equity over the medium term .