Spectrum Global Solutions Reports Third Quarter 2019 Financial Results
Nationwide 5G Network Deployment Drives New Contract Wins with Tier-1 Clients
LONGWOOD, Fla., Nov. 20, 2019 (GLOBE NEWSWIRE) — Spectrum Global Solutions, Inc. (the “Company” or “Spectrum”) (OTCQB: SGSI), a leading single-source provider of next-generation communications network, technology, infrastructure and maintenance solutions, reported financial results for the third quarter ended September 30, 2019.Key Third Quarter 2019 and Subsequent Highlights:
Announced the closing of the acquisition of WaveTech GmbH, an innovative energy management technology company, which will enable Spectrum to better monetize its existing customer base while expanding into new global markets through WaveTech’s current relationships.
Expanded ADEX subsidiary into Canada alongside established tier-1 customers to service the emerging network infrastructure services market in the region in advance of a wider rollout of the 5G network in the regionAnnounced receipt of an aggregate of $6.9 million in new contract awards across all operating subsidiaries, composed of work orders from both new and existing clients These new contract awards are in addition to any revenue derived from existing master services agreements already in place with tier-1 carriers and infrastructure aggregatorsAwarded key 3-year, nationwide contract renewal with tier-1 U.S. telecommunications company for outside plant labor, construction and maintenance services through the Company’s ADEX subsidiary.Announced contract wins with tier-1 infrastructure aggregator in support of 5G network deployment in a major U.S. metropolitan area through the Company’s AW Solutions subsidiary.Reduced ongoing interest expense by $0.3 million annually through the elimination of approximately $4.7 million in debtEngaged IR specialists MZ Group to implement a comprehensive strategic investor relations and financial communications program across all key markets.Management Commentary“The third quarter of 2019 was highlighted by our transformational acquisition of WaveTech, additionally marked by our continued aggregation of new contract wins in the race to deploy 5G networks nationwide,” said Roger Ponder, Chief Executive Officer of Spectrum Global Solutions. “In addition to the announcement of $6.9 million in new contract awards, we signed key master service agreements with tier-1 telecommunications firms and infrastructure aggregators to support their growing infrastructure investments.“Our recent expansion into the Canadian market alongside tier-1 clients is particularly exciting as well, further expanding our reach and allowing us to better service our multinational clients across borders. The Canadian expansion of our ADEX Subsidiary presents exciting cross selling opportunities across our various businesses as well.“We continued to strengthen our balance sheet in the third quarter, eliminating $4.7 million in debt and accrued interest through conversions by noteholders at a substantial premium to market. We expect these conversions to result in $0.3 million in annual interest expense savings, further expediting our path to sustainable positive cash flows from operations.“We expect to see encouraging growth through the remainder of the fourth quarter and into 2020, chiefly driven by growing investments in 5G networks across the United States by all major carriers. We are better positioned to seize the immense opportunities facing us today than at any time in our history now that we have closed on the acquisition of WaveTech and their incredible technology – I look forward to continuing operational execution and creating long-term value for our shareholders,” concluded Ponder.Third Quarter 2019 Financial Summary
Revenue for the third quarter of 2019 was $7.5 million, compared to $9.7 million in the third quarter of 2018. The decrease was primarily attributable to delayed customer deployment of work orders to the Company’s AWS subsidiary.Gross profit in the third quarter of 2019 was $1.3 million, or 18% of revenues, compared to $1.6 million, or 16.6% of revenues in the third quarter of 2018. This change in gross margins is primarily attributable to minor fluctuations of margins in our existing contracts.General and administrative expenses for the third quarter of 2019 decreased to $1.2 million, compared to $1.3 million in the third quarter of 2018.Operating loss for the third quarter of 2019 was $1.2 million, compared to an operating loss of $0.3 million in the third quarter of 2018.Net loss attributable to common stockholders in the third quarter of 2019 totaled $1.8 million, or $(0.04) per share, compared to net loss of $0.4 million, or $(0.27) per share, in the third quarter of 2018.Cash and cash equivalents and short-term deposits were $0.3 million as of September 30, 2019, compared with $0.6 million as of as of December 31, 2018. Subsequent to the close of the third quarter, the Company received $1.3 million in cash from escrow as a result of the closing of the WaveTech acquisition.About Spectrum Global Solutions
Spectrum Global Solutions (OTCQB: SGSI) is a leading single-source provider of next-generation communications network infrastructure and maintenance solutions. Spectrum’s highly scalable platform model, proven out through engagements with tier-1 network operators in the United States, Canada and the Caribbean, uniquely allows for the bundling of disparate services with a single provider, simplifying network deployment and maintenance with a comprehensive, cost-competitive one-stop-shop solution. To learn more, visit the Company’s website at https://spectrumglobalsolutions.com/.
The above news release contains forward-looking statements. The statements contained in this document that are not statements of historical fact, including but not limited to, statements identified by the use of terms such as “anticipate,” “appear,” “believe,” “could,” “estimate,” “expect,” “hope,” “indicate,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “project,” “seek,” “should,” “will,” “would,” and other variations or negative expressions of these terms, including statements related to expected market trends and the Company’s performance, are all “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. These statements are based on assumptions that management believes are reasonable based on currently available information, and include statements regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performances and are subject to a wide range of external factors, uncertainties, business risks, and other risks identified in filings made by the company with the Securities and Exchange Commission. Actual results may differ materially from those indicated by such forward-looking statements. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company’s expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based except as required by applicable law and regulations.
Greg Falesnik or Luke Zimmerman
MZ Group – MZ North America
SGSI@mzgroup.usOur operating results for the Period ended September 30, 2019 and 2018 are summarized in the below tables. For complete financial statements, please refer to the Company’s SEC filings.