LONGWOOD, Fla., Aug. 14, 2019 (GLOBE NEWSWIRE) -- Spectrum Global Solutions, Inc. (the "Company" or "Spectrum") (OTCQB: SGSI), a leading single-source provider of next-generation communications network infrastructure and maintenance solutions, has reported financial results for the fiscal period ended June 30, 2019.
Company Highlights:
- Received $3.7 million in new contract awards in the second quarter of 2019 supporting network infrastructure upgrades and demand for professional services.
- Entered into a definitive agreement to acquire 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.
- Reduced ongoing interest expense by $0.3 million annually through the elimination of debt.
- Converted approximately $3.7 million in debt at a 75% premium to the market.
- Engaged IR specialists MZ Group to implement a comprehensive strategic investor relations and financial communications program across all key markets.
Management Commentary
“The second quarter of 2019 was highlighted by our definitive agreement to acquire WaveTech GmbH, an innovative energy management technology company that we believe will allow us to better monetize our existing customer base throughout North America and the Caribbean,” said Roger Ponder, Chief Executive Officer of Spectrum Global Solutions. “This acquisition, which we expect to close sometime in the fourth quarter of this year, will be transformational for our platform, enabling us to more easily scale our operations to other tier-1 customers in key international markets. “
“While we saw strong revenue growth of 29% to $19.7 million in the first half of the year, the second quarter saw some significant projects pushed into the third and fourth quarter as a result of delayed customer deployments. We expect that this work will resume in the third quarter and fourth quarter of 2019, and into early 2020. These major network infrastructure projects are focused to support high bandwidth next generation wireless technology with hyper-speed 5G services. These 5G services will provide numerous enhancement from engineering to real estate, Virtual Reality (VR) applications, streaming services, health care and telemedicine for real-time data streams from devices, networked self-driving vehicles to connecting homes, utilities and energy management of the energy grid.”
“We fortified our balance sheet in the second quarter of 2019, removing $3.7 million in debt and accrued interest through conversions by noteholders at a substantial premium to the market. We expect this to result in $.3 million in annual interest expense savings, expediting our path to sustainably generate cash flow from operations.”
“Taken together, we look forward to leveraging our strong foundation to execute on our significant backlog, win new contacts, and expand into several key international markets over the next twelve months. Ultimately, we expect these strategic steps to create long-term value for our shareholders," concluded Ponder.
Second Quarter 2019 Financial Summary
Revenue for the second quarter of 2019 was $8.3 million, compared to $11.0 million in the second quarter of 2018. As mentioned above, saw some significant projects pushed into the third and fourth quarter as a result of delayed customer deployments. We expect that this work will resume in the third quarter and fourth quarter of 2019, and into early 2020.
Gross profit in the second quarter of 2019 was $1.2 million, or 13.9% of revenues, compared to $1.6 million, or 14.5% of revenues in the second 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 second quarter of 2019 decreased 38% to $0.9 million, compared to $1.5 million in the second quarter of 2018. This decrease is primarily due to a decrease in legal fees.
Operating loss for the second quarter of 2019 decreased 21% to $1.0 million, compared to an operating loss of $1.3 million in the second quarter of 2018.
Net loss attributable to common stockholders in the second quarter of 2019 totaled $0.1 million, or $(0.00) per share, compared to net loss of $3.0 million, or $(1.90) per share, in the second quarter of 2018. This improvement was primarily attributable to a gain on change in fair value of derivatives of $1,840,317 for the three months ended June 30, 2019.
Cash and cash equivalents and short-term deposits were $0.6 million as of June 30, 2019, compared with $0.6 million as of as of December 31, 2018.
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/.
Forward-Looking Statements
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.
Investor Relations:
Greg Falesnik or Luke Zimmerman
MZ Group – MZ North America
Main: 949-259-4987
SGSI@mzgroup.us
Our operating results for the Period ended June 30, 2019 and 2018 are summarized in the below tables.: For complete financial statements, please refer to the Company’s SEC filings.
| Three Months Ended June 30, 2019 | Three Months Ended June 30,2018 | |||||||
| Statement of Operations Data: | ||||||||
| Revenues | $ | 8,317,402 | $ | 10,964,122 | ||||
| Gross profit | 1,152,157 | 1,592,133 | ||||||
| Operating expenses | 2,165,456 | 2,874,742 | ||||||
| Income (loss) from operations | (1,012,389 | ) | (1,282,609 | ) | ||||
| Total other income (expense) | 924,409 | (2,888,684 | ) | |||||
| Net (loss) attributable to common stockholders | (98,581 | ) | (3,042,215 | ) | ||||
| Six Months Ended June 30, 2019 | Six Months Ended June 30,2018 | |||||||
| Statement of Operations Data: | ||||||||
| Revenues | $ | 19,653,134 | $ | 15,291,886 | ||||
| Gross profit | 3,663,724 | 2,135,377 | ||||||
| Operating expenses | 4,661,412 | 4,161,447 | ||||||
| Income (loss) from operations | (997,688 | ) | (2,026,100 | ) | ||||
| Total other income (expense) | (413,279 | ) | (783,088 | ) | ||||
| Net Income (loss) attributable to common stockholders | (1,431,168 | ) | (2,907,946 | ) | ||||
| Balance sheet data for period ended June 30, 2019 and December 31, 2018: | June 30, 2019 | December 31, 2018 | ||||||
| Cash | $ | 606,901 | $ | 620,593 | ||||
| Accounts receivable, net | 6,499,760 | 6,562,182 | ||||||
| Total current assets | 8,321,917 | 9,067,352 | ||||||
| Goodwill and intangible assets, net | 6,368,792 | 3,771,900 | ||||||
| Total assets | 15,018,668 | 12,930,396 | ||||||
| Total current liabilities | 15,207,248 | 14,365,435 | ||||||
| Derivative liabilities | 1,223,675 | 3,166,886 | ||||||
| Stockholders' (deficit) equity | (2,501,662 | ) | (5,691,332 | ) | ||||