DALLAS, Nov. 15, 2021 /PRNewswire/ -- COMSovereign
Holding Corp. (NASDAQ: COMS and COMSP) ("COMSovereign" or the
"Company"), a U.S.-based developer of 4G LTE Advanced and 5G
communication systems and solutions today reported financial
results for the third quarter ended September 30, 2021.
- For the three months ended September 30,
2021, total revenues were approximately $4.1 million, an increase of approximately 103%
compared to approximately $2.0
million for the three months ended September 30, 2020, driven largely by sales at
the Company's Fastback and Sovereign Plastics business units.
Sequentially, quarterly revenues in the third quarter of 2021
increased over 14% versus revenue for the second quarter of 2021.
For the nine months ended September 30,
2021, revenues were approximately $9.8 million compared to approximately
$7.5 million, representing an
increase of approximately 31%.
- Revenue growth in the third quarter of 2021 continued to be
impacted by the global shortage of key components and tight supply
chain conditions as well as the delay in the awarding of several
government contracts. The Company is currently taking steps to
mitigate the impact of supply chain and parts shortages through
additional component sourcing and the internal redesign of certain
radio subsystems.
- Gross profit for the three months ended September 30, 2021, was approximately
$2.3 million, representing a gross
margin of 55%, an improvement from a gross profit of approximately
$1.2 million or 48% reported for the
three months ended September 30,
2020. Gross margins in the third quarter of 2021 also
continued to sequentially improve from the 50% reported in the
second quarter of 2021.
- For the three months ended September 30,
2021, total operating expenses increased to approximately
$12.7 million compared to
approximately $7.9 million for the
three months ended September 30,
2020, due to the expanded size of the business, increases in
professional services including accounting and legal, and staffing
levels across the organization. As part of ongoing integration
activities at its three core business units – Global Telecom,
Sky Sovereign and Power Supplies –
it has implemented several business process improvements, staff
re-alignment and cost cutting programs it believes will reduce
total operating expenses in the fourth quarter of 2021 and
throughout 2022.
- As of September 30, 2021, the
Company ended the quarter with approximately $2.9 million in cash and approximately
$10.8 million invested in inventory
and $6.7 million in pre-paid
expenses. This significant increase was planned and reflects
inventory builds anticipated to meet customer demands, primarily
for radios and related hardware, for the remainder of the year and
into 2022. In October, the Company completed an offering of 9.25%
Series A Preferred Stock raising $8.0
million in gross proceeds. Following this transaction, the
Company has paid down approximately $2.75
million in outstanding debt.
- Investors can view the complete 10-Q filing at www.sec.gov or
on the Company's website at
https://investors.comsovereign.com/SEC-Filings
"Third quarter results reflect continued progress across the
business highlighted by the initial resumption of increased
production at Fastback. The ability to scale-up radio production
while addressing constraints caused by chip shortages and supply
chain disruptions, is a significant achievement and one that
demonstrates the unique value we have built in our domestic
production and supply chain business model. Although revenue in the
quarter was below expectations, our team continues to adapt to the
challenges by leveraging our internal design and production
capabilities to meet customer needs," said Dan Hodges, Chairman and CEO of COMSovereign
Holding Corp.
Third Quarter Business Highlights:
- Fastback resumed the volume production of its Intelligent
Backhaul Radios ("IBRs") enabling it to begin fulfilling
$8.7 million in open orders with a
tier one network operator. As a result of improved postproduction
testing and component sourcing, the Company is currently ahead of
schedule and is expected to complete delivery against these open
orders this month.
- DragonWave expanded its sales and distribution activities with
the introduction of the "Extend"-line of Ultra high-capacity and
long-range mmWave radios designed to reliably deliver multi-gigabit
connections up to 6 miles (10km) or more with fiber-equivalent
reliability of 99.999%. Extend combines the robust and highest
power packet microwave technology of DragonWave's Harmony product
line with market-leading performance of Siklu's EtherHaul™ E-Band
(70/80 GHz) radios. This single solution is designed to address the
need for long-range, ultra-high capacity, cost-effective and
ultra-reliable wireless connectivity by mobile network operators,
rural broadband, and wireless internet service providers (WISPs),
public safety organizations, as well as city, state, and local
municipalities.
- In August, the Company announced the initial closing of its
acquisition of Saguna and its innovative 5G mobile edge computing
(MEC) software. As a critical enabling technology for 5G, Saguna is
already powering the fastest 5G network in the world and has
advanced a series of development deployments with major enterprises
and operators. These efforts include a new partnership announcement
from Hewlett Packard Enterprise (HPE) and StarHub who have teamed
up to help enterprises and government clients move time-critical
workloads such as artificial intelligence (AI), automation, data
analytics, machine learning (ML), and mission critical
communications closer to wherever customers require ultra-low
latency performance.
Hodges concluded, "We remain optimistic about the many
opportunities which lay ahead of COMSovereign. Unlike many in our
industry, we are very fortunate to have the unique ability to tap
internal resources like Sovereign Plastics and Silver Bullet
Technologies and our own domestic supply chain to design-out or
eliminate difficult to find componentry and secure alternative
sources of production. This capability will continue to be a
valuable competitive advantage as we introduce a number of new
communication products across our businesses later this year which
we expect will contribute to strong growth throughout 2022."
Third Quarter 2021 Results Conference Call
COMSovereign Holding Corp. Chairman and CEO Dan Hodges Chief Financial Officer Fran Jandjel will host the conference call,
followed by a question-and-answer period.
To access the call, please use the following
information:
Date:
|
Monday, November 15,
2021
|
Time:
|
4:30 p.m. Eastern
time, 1:30 p.m. Pacific time
|
Toll-free dial-in
number:
|
1-844-826-3035
|
International dial-in
number:
|
1-412-317-5195
|
Conference
ID:
|
10161917
|
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization.
The conference call will be broadcast live and available for
replay at
https://viavid.webcasts.com/starthere.jsp?ei=1511710&tp_key=17fc2f10e4
and via the investor relations section of the Company's website at
www.comsovereign.com.
A replay of the conference call will be available after
7:30 p.m. Eastern time through
November 22, 2021.
Toll-free replay
number:
|
1-844-512-2921
|
International replay
number:
|
1-412-317-6671
|
Replay ID:
|
10161917
|
For more information about COMSovereign, please visit
www.COMSovereign.com and connect with us on Facebook and
Twitter.
About COMSovereign Holding Corp.
COMSovereign Holding
Corp. (Nasdaq: COMS) has assembled a portfolio of communications
technology companies that enhance connectivity across the entire
network. By combining strategic acquisitions with organic research
and development efforts, COMSovereign has built a U.S.-based
communications solution provider able to deliver end-to-end 4G LTE
Advanced and 5G-NR telecom solutions to network operators,
enterprises, and governments. For more information about
COMSovereign, please visit www.COMSovereign.com.
Forward-Looking Statements
Certain statements in this
press release that are not historical facts are forward-looking
statements that reflect management's current expectations,
assumptions, and estimates of future performance and economic
conditions, and involve risks and uncertainties that could cause
actual results to differ materially from those anticipated by the
statements made herein. Forward-looking statements are generally
identifiable by the use of forward-looking terminology such as
"believe," "expects," "may," "looks to," "will," "should," "plan,"
"intend," "on condition," "target," "see," "potential,"
"estimates," "preliminary," or "anticipates" or the negative
thereof or comparable terminology, or by discussion of strategy or
goals or other future events, circumstances, or effects. Moreover,
forward-looking statements in this release include, but are not
limited to, the impact of the current COVID-19 pandemic, which may
limit access to the Company's facilities, customers, management,
support staff, and professional advisors, and to develop and
deliver advanced voice and data communications systems, demand for
the Company's products and services, the availability of parts and
components for the manufacture of products, economic conditions in
the U.S. and worldwide, and the Company's ability to recruit and
retain management, technical, and sales personnel. Further
information relating to factors that may impact the Company's
results and forward-looking statements are disclosed in the
Company's filings with the SEC. The forward-looking statements
contained in this press release are made as of the date of this
press release, and the Company disclaims any intention or
obligation, other than imposed by law, to update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
Contacts:
Steve Gersten, Director of
Investor Relations
COMSovereign Holding Corp.
813-334-9745
investors@comsovereign.com
External Investor Relations:
Chris Tyson, Executive Vice
President
MZ Group - MZ North America
949-491-8235
COMS@mzgroup.us
www.mzgroup.us
and
Media Relations for COMSovereign Holding Corp.:
Michael Glickman
MWGCO, Inc.
917-397-2272
mike@mwgco.net
View original content to download
multimedia:https://www.prnewswire.com/news-releases/comsovereign-reports-third-quarter-2021-financial-results-301424558.html
SOURCE COMSovereign Holding Corp.