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Edited Transcript of BYL.TO earnings conference call or presentation 13-Aug-20 12:00pm GMT

Q2 2020 Baylin Technologies Inc Earnings Call

TORONTO Sep 1, 2020 (Thomson StreetEvents) -- Edited Transcript of Baylin Technologies Inc earnings conference call or presentation Thursday, August 13, 2020 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Michael A. Wolfe

Baylin Technologies Inc. - CFO

* Randy L. Dewey

Baylin Technologies Inc. - President, CEO & Director

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Conference Call Participants

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* Daniel Rosenberg

Paradigm Capital Inc., Research Division - Analyst

* David Kwan

PI Financial Corp., Research Division - Technology Analyst

* Gavin Fairweather

Cormark Securities Inc., Research Division - Analyst of Institutional Equity Research

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by, and welcome to the Second Quarter 2020 Earnings Conference Call for Baylin Technologies, Inc. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions) I'll now turn the call over to Mr. Randy Dewey, President and Chief Executive Officer of Baylin Technologies. Please go ahead.

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [2]

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Hello, and welcome, everyone. Thank you for joining us this morning for the Second Quarter 2020 Earnings Conference Call for Baylin Technologies. Joining me is our Chief Financial Officer, Michael Wolfe. We will both be available for questions at the end of the presentation.

Before we begin our report, let me make it clear that our comments today will include statements, answers to questions that could imply future events, such as our 2020 prospects and financial performance and could include the use of non-GAAP and non-IFRS measures, so it is obvious these statements are subject to risks, uncertainties and assumptions. Accordingly, actual performance could differ materially from statements made today, so do not place undue reliance upon them. We also disclaim any obligation to update forward-looking statements, except as required by law. I ask that you read our legal disclaimers and refer you to the risks and assumptions outlined in our public disclosures, in particular, the section entitled Forward-looking Statements and Risk Factors in our Annual Information Form for the year ended December 31, 2019, and our other filings, which are available on SEDAR.

Q2 results were released after market yesterday. The press release, audited financial statements as well as the MD&A are available on SEDAR and on our website at baylintech.com.

The first half of 2020 was challenging with issues that hit us and our end markets due to COVID-19 and the economic impact of the global lockdown on so many countries that we, our customers and our suppliers operate in. Mobile markets were impacted by worldwide commercial store closures and the lockdown of key manufacturing countries, in particular, Vietnam and India. As a result, Asia Pacific's revenue fell below expectations in both Q1 and Q2 and our gross margins were lower than historically achieved during the lower volumes -- sorry, due to lower volumes and one of our Asia Pacific's major customers postponed manufacturing of its high-end LDS platforms in Q1 and most of Q2.

Our embedded product line was impacted in Q1 and Q2 due to the impact of the virus on the Wuxi District, which our manufacturing facility is located. The local government extended Chinese New Year. And though we were authorized to restart operations early in the process, it took about 4 weeks to see the supply chain return to pre-COVID throughput.

Infrastructure was more durable in first half with many deployments needed and some related to emergency services upgrades. However, site approval for small cell deployments took longer than normal due to the slowdown from COVID-19. Build-outs, of course, by some of our wireless carriers customers.

Satcom's revenue was impacted in Q1 and Q2 due to financial difficulties faced by our customers and other satcom companies. The commercial satcom segment is impacted by the airline and marine industries having declined bandwidth needs. We currently do not have significant exposure to any of the companies with known financial issues. However, we monitor this very closely. While military and government programs have increased, the sales cycle is longer. We have won several key programs that will commence in late Q3. The shift away from commercial to military is good for the business long term.

As we previously reported, the Massive MIMO unit factory construction in Vietnam was delayed due to travel restrictions, airport closure and lockdown. Critical equipment suppliers have not been able to finalize installations and information -- sorry, equipment calibrations. And as a result, customers' final manufacturing certification audit continues to be postponed. The impact has pushed our expectations for revenue to the second half of the fourth quarter of this year, which is contingent upon the current timing for the completion of installation and equipment calibrations. We are presently working to get these experts into Vietnam in September. And with 2 weeks of quarantine, it would keep us on track to start revenue in the second half of Q4.

I'd like to turn the call over to Michael to provide you with some commentary and details on our financial results. Michael?

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Michael A. Wolfe, Baylin Technologies Inc. - CFO [3]

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Thank you, Randy. Revenue in the second quarter of 2020 was $30.6 million, an increase of 13.7% compared to the first quarter of this year.

Similar to the first quarter of 2019, in the second quarter of 2019, Asia Pacific was awarded several onetime platforms from a major customer that were not expected to be repeated in the second quarter of 2020. The expected lower Asia Pacific revenue in the second quarter of this year compared to the prior year accounted for approximately 55% of the total revenue variance in the second quarter of this year compared to the prior year. Excluding that portion of the revenue decrease, most of the remaining revenue variance was due to COVID-19. Randy has already discussed the impact that has had on revenue for each of our product lines.

Adjusted EBITDA for the second quarter of 2020 was $2.7 million, which was the highest adjusted EBITDA in the last 4 quarters. The decrease in adjusted EBITDA compared to the second quarter of 2019 was primarily due to lower revenue combined with sales mix. Asia Pacific's margin was negatively affected by product mix.

Lower gross profit compared to the prior year quarter was somewhat offset by lower operating expenses.

Operating costs before depreciation and items included in EBITDA adjustments were $8.2 million in the second quarter of 2020, $4.6 million lower than Q2 2019. The decrease is primarily due to the expense reductions implemented in the third and fourth quarters of last year and the further expense reductions implemented in March.

Operating costs were also lower due to government stimulus received in Q2 relating to COVID-19 relief in the United States under the Paycheck Protection Program, in Canada under the Canada Emergency Wage Subsidy, and in China through reduced corporate social insurance premiums. This was offset by additional costs relating to personal protection equipment for employees and safety measures implemented in all of our facilities to reduce the risk of employees contracting COVID-19. In addition, the wage subsidies and forgivable loans allowed us to reduce some of the leaves of absences that were implemented, to rehire certain employees that have been terminated and prevent additional terminations that may have been required. We're expecting only a small benefit from the Canada Emergency Wage Subsidy in the third quarter of this year. And at this point, we are not expecting any benefit from this program in the fourth quarter. The reduced corporate social insurance premiums in China are expected to continue until October.

We reported in June that our credit agreement with RBC and HSBC was amended. Accordingly, as at June 30, we have reclassified a portion of the term loan from current liabilities to long-term liabilities. We had the option to defer the term loan principal repayment on June 30, and we elected to do so. At June 30, we had a cash balance of $15.9 million and access to approximately $24 million of revolving credit facilities, of which $16 million was utilized. Our cash flow forecast shows strong cash balances and sufficient liquidity going forward.

I'll now turn the call back to Randy.

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [4]

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Thank you, Michael. The COVID-19 outbreak continues to impact our end markets to some degree, reduced and delayed spending by our customers resulting in somewhat lower-than-expected revenue. However, we are continuing to see a gradual improvement across all of our business lines, and we expect this to continue through the remainder of the year as governments continue to lift restrictions and commercial activity continues to pick up. All of the company's business lines have seen an increase in sales orders and expected revenue to be higher in the second half of this year compared to the first half. We are disappointed with the first half's results, but in light of the global pandemic and the havoc it wreaked on worldwide markets, we have been quite fortunate to be an essential service and many of our products to have helped government, emergency services and militaries around the world to fight -- the response to -- this virus.

We are bullish about our second half but realize the virus isn't eradicated and could pose more threats to the global economy and its actual recovery.

We are holding our Annual General Meeting today at 10 a.m. While we would certainly like to greet you in person, we recognize that you may be limiting your attendance at public gatherings. We are prepared here to comply with all regulations and recommendations from the health authorities. If you will not be attending in person, then you can dial in by phone using this exact same number for the earnings call and listen in to the AGM. The call-in details and the actual AGM presentation for the meeting are available on our website at baylintech.com.

That concludes my formal remarks. And operator, could I open up the line for questions?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from Daniel Rosenberg of Paradigm Capital.

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Daniel Rosenberg, Paradigm Capital Inc., Research Division - Analyst [2]

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I was just curious to hear about the outlook. We've seen some industry indicators showing a bottoming of electronic sales and cellphone sales, smartphone sales going into -- since May, basically. So I was wondering, what is the lag time for you guys? Or what do orders look like as companies build up their inventories?

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [3]

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So obviously, the sales throughput that took place when the stores and commercial stores reopened, cellphone stores reopened across North America and particularly into Europe. Obviously, there was a pent-up demand from people looking for the next-generation phone or having broken phones or whatever. That pickup, obviously, was quite notable for us. That's why in the second half of Q2 we had a stark increase in our mobile throughput. Of course, in advance of the second half of the year, there's certainly volumes and which -- it's what's giving us some of our more bullish comments earlier just because we've won programs and we've got programs in manufacturing and ready to roll out for the fall market.

So though, of course, the economic impact around the world certainly has us being cautious here, but we do see with the back orders that we have today that there is more of a bullish impact on -- or bullish outlook on the second half of the year, particularly versus the first half.

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Daniel Rosenberg, Paradigm Capital Inc., Research Division - Analyst [4]

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Okay. And so when you say bullish -- I mean, I'm trying to read a little bit into your tone here. So maybe could you quantify something or maybe give some color on what the underlying assumptions are that give you confidence that second half will be quite a bit better than the first half?

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [5]

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Sure. Well, it's always in the back orders, right? So we've been working on several engineering projects, and we've won those platforms. Those platforms have been earmarked with start times that are in the second half of the year. Of course, those are somewhat dictated by the sell-through at the end markets. So if the end markets are contracting financially because of a second wave or something like that, that could have a ripple effect back towards us. But if the volumes that are anticipated by our end customers come through, that would certainly be an increase -- a significant increase from the first half of the year's volumes to the second half of the year's volumes. So we're just trying to be a little cautious because things look promising in mobile, but there's been impacts, of course, as it relates to store closures. So things look reasonable at this point in time, and we're just cautiously optimistic about what's in store here.

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Daniel Rosenberg, Paradigm Capital Inc., Research Division - Analyst [6]

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Okay. And for the Vietnam facility, so has your view changed since last quarter? Or is it on track? Or has it been pushed back slightly based on your expectations from last quarter?

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [7]

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Yes. So last quarter's call, I was mentioning that the Vietnam airport was scheduled to reopen the 1st of September. That was more for sort of tourist traffic. That is under question. However, the Vietnamese government on the 1st of July has opened up several countries or dozens of countries, I should say, to be allowed in for business reasons. And so for specific specialties or expertise or business reasons, you can get an application in and get approval for travel to Vietnam. So we are in the throes of that, finalizing that. And we're expecting that to come through and for those engineers to get into our operation in early September. And of course, they're required to have 14 days of quarantine. So that will put it towards the second half of September before the work begins. And then we have about a month's worth of work, month to 6 weeks, and that's what's giving us the outlook that we would start revenue in the second half of Q4.

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Daniel Rosenberg, Paradigm Capital Inc., Research Division - Analyst [8]

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Okay. Okay. Perfect. And then just an accounting question. The fair value adjustment expense, how should I be thinking about that? It's -- so what drove that number this quarter?

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Michael A. Wolfe, Baylin Technologies Inc. - CFO [9]

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We fair value our convertible debentures. So the principal on those is $17.25 million, but the accounting treatment requires fair value calculation of that at each quarter end, and that just depends on the price that it's trading at the end of the quarter on TSX. So in the first quarter, it declined significantly, the price of the debentures, but then it recovered in Q2. So when it declines, we report a gain. And when it increases back again, we have a loss on that. But it's an accounting noncash loss or gain.

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Daniel Rosenberg, Paradigm Capital Inc., Research Division - Analyst [10]

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I see. Okay. Yes, simple enough. Perfect. And then last question for me, so in terms of the balance sheet, I mean, you guys are working through a lot of variables here in a challenging environment. So I was wondering what -- any priorities of use of capital or any indications on potential targets for your debt leverage going forward. And I understand that there's a lot of uncertainties here, but just any color there would be helpful.

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [11]

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Sure. Well, obviously, capital and cash is critical and most important certainly during uncertain times. We will be just basically finishing off the factory, which we have a couple of million dollars left to complete that build-out. Other than that, we are keeping a very close tightness on cash over this period of time and continuing to grind down expenses. So there's no major capital outlays other than finishing the Vietnam plant that's in store for us for 2020.

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Daniel Rosenberg, Paradigm Capital Inc., Research Division - Analyst [12]

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Okay. And in terms of working capital swings, nothing -- no significant swing factors there in terms of receivables or payables that we should expect?

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [13]

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No. In fact, there will be a little bit of working capital uptick because of the extra volume that we're anticipating for the second half of the year. That would be the only issue there. Our payables and receivables and our cash conversion cycle is in line with historic performance. So I don't -- we don't expect to see any issues there, just a little uptick in working capital due to extra volume, which is good thing.

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Operator [14]

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(Operator Instructions) Your next question comes from David Kwan of PI Financial.

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David Kwan, PI Financial Corp., Research Division - Technology Analyst [15]

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I was wondering, can you provide maybe a little more color? I'm just trying to get a sense of the mix between your different end markets this quarter. You talked about, I guess, the Asia Pacific market being below your expectations. The satcom, I know there was a lot of press releases in the quarter, particularly for Alga in terms of customer wins. So it seemed like that business had held in reasonably well versus maybe some of your other end markets, but any additional color would be great.

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [16]

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Sure. So in the second quarter, we've seen, I would say, a single-digit sort of uptick in mobile and embedded. The other 2 business units, infrastructure and satcom, were up double digits in the quarter.

To some of the things that you pointed out, Alga has done a great job, Michael Perelshtein, on winning some programs. And we've press released that. Some of those programs don't start till the second half of the year, but he certainly did see a stark improvement in Q2. So that -- so it was low double-digits percentage for those 2 business units. It's in single digits for the other one. So a good uptick and certainly notable in both those cases.

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David Kwan, PI Financial Corp., Research Division - Technology Analyst [17]

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And just to confirm, that's quarter-over-quarter?

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [18]

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Yes. Sorry. Higher relative to Q1, yes.

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David Kwan, PI Financial Corp., Research Division - Technology Analyst [19]

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Yes. Okay. And when you talk about the optimism for the second half of this year. Obviously, that's nice to see. And hopefully, that continues, assuming we don't go into another lockdown here. But typically, there is -- I guess, the second half is seasonally stronger for you, particularly in the Asia Pacific market. Are you expecting to see a greater seasonal uptick in the second half of this year?

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [20]

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I wouldn't say that, no. Like, obviously, the broader economic impact is certainly still prevalent, and this is just generally speaking. So we are comparing the first half of the year to the second half of the year, and the second half of the year looks much more promising than the first half of the year was actually.

So as you say, we're a bit cautious just because we've got good back orders and a healthy outlook here for the second half of the year versus the first half, but just being a little cautious because of the general economic impacts of COVID-19.

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David Kwan, PI Financial Corp., Research Division - Technology Analyst [21]

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Okay. And how about in the Asia Pacific market? That's typically much stronger and driving that kind of second half seasonality historically. I think, outside of last year, which obviously had that huge benefit in the first half of the year, revenue, I think, have been hovering around, call it, $50 million for the year. Do you expect that's kind of what you -- we should be -- should potentially play out here in fiscal '20?

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [22]

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Well, your point about the fact that it's -- Asia is certainly stronger in the second half of the year, that technically is true, but the end market is North America and Europe. So the 2 have to certainly work together. So despite the fact that the numbers that are in China for COVID and Vietnam are very contained and much lower than they are in North America and Europe, it's still the end markets here that really do drive the drumbeat. So those markets are right now recovering quite obviously. But yes, anyways, as I said before, we're just a little cautious, but outlook is still promising, back orders are healthy, and our view of the second half is more promising than the first half.

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David Kwan, PI Financial Corp., Research Division - Technology Analyst [23]

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Okay. I guess you kind of talked about your business in other countries. Obviously, Vietnam and China are key ones for you from a manufacturing standpoint. We've obviously seen some pickup in cases in those countries. Have they had any impact on your business at this point?

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [24]

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No. Other than, as I mentioned before, that we had a slight delay in getting restarted after Chinese New Year in February and then we had some issues with the supply chain recovering, which took about 4 weeks to finally get to what was pre-COVID sort of throughput on the supply chain, since then we have not had any impact. The manufacturing has been fine. The employees, we've not had one case of COVID in Asia. We've learned a lot because we were sort of early in from our manufacturing folks in China. And we learned a lot about employee protection. We adopted those in Montreal and our facilities here in North America, in Ottawa as well as in Phoenix. And we've -- we were able to really provide sort of good, safe and consistent environment. So we haven't had any manufacturing impact other than that small one in Q1, so to speak.

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David Kwan, PI Financial Corp., Research Division - Technology Analyst [25]

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Okay. And then for the Vietnam facility, I think, looking through the notes, it looks like there's about $3.3 million left to spend. Can you confirm that's the case? And when we should expect to see that go out the door?

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [26]

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So it is $2 million to $2.5 million. It would -- it really depends on the timing of all the completion work. We have to finish the actual installation of those equipment and the calibration before those payments would become due. So you see a slowdown in our capital spending just as related directly to that situation. So if we are on the timing that I had suggested earlier, then you would see in the fourth quarter that those payments would be made.

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David Kwan, PI Financial Corp., Research Division - Technology Analyst [27]

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Okay. And did the costs go up just given the delays?

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [28]

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No. The cost didn't go up, just the delay has some operating expense impact. It's not significant on a monthly basis. It's rent and a smaller team because we haven't hired the larger workforce to help us with manufacturing and assembly. So costs are contained. But the only delay is just would be some operating expense delays as a result of it. It hasn't increased the actual build-out or the completion of the factory at this point in time. If it does, it could be small, but people being in quarantine for a couple of weeks could have an extra surcharge or so, but it's not going to move the needle significantly.

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David Kwan, PI Financial Corp., Research Division - Technology Analyst [29]

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And I think when you guys had announced a contract that you expected to generate a positive ROI within the first 2 years of production, is that still the case?

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [30]

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Well, certainly, the global impact of COVID has impacted some of the deployments, as we pointed out, with where we are with small cell and some of the end markets and some of the delays in infrastructure. However, things have notably recovered in -- from the first half of the year into the second half of the year. We are expecting -- we haven't lost any contracts. The customer relationship is very well intact, and they're quite anxious for us to complete the project. So we're not expecting anything to change when we get out of the gate. Obviously, as we get closer to our launch, we can probably provide more context on the next call in November, obviously, because we'll be, hopefully, at that point in time, into production.

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David Kwan, PI Financial Corp., Research Division - Technology Analyst [31]

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Perfect. Just a couple of more quick questions here. Just on the various government aid programs that you guys access, can you quantify how much you received in Q2? And it sounds like you might -- it's a little bit more expected in Q3.

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [32]

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Well, as Michael said, it was somewhat offset by the increased cost to decontaminate the factory and some of the personal protective equipment and things. So we haven't given guidance on the specific number, but it did offset costs that we had to incur as a result of protecting our people.

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Operator [33]

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Your next question comes from Gavin Fairweather of Cormark.

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Gavin Fairweather, Cormark Securities Inc., Research Division - Analyst of Institutional Equity Research [34]

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So just to start out on mobile. You called out the mix in terms of feature phone versus some kind of lower-priced models. How are you thinking about that mix over the second half of the year? And have you seen kind of an improvement thus far in Q3 and in the order book in terms of moving towards the higher-margin model?

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [35]

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Yes. So as you know, historically, we've been on some of the higher runners, higher premium products. That mix is what's healthier in the second half of the year versus the first half of the year. So we have already seen in Q3 a mix benefit, no doubt. And that looks like it will extend right through to the balance of the year. So the unfortunate part is certain things got canceled in the first half of the year when the virus hit, and those were, unfortunately, at the higher end. So that hit our margins more directly in that business unit. But the second half and even quarter-to-date, we're much, much better. And we're anticipating, with the wins that we've got in the order book, that margin improvement should continue for the balance of the year in that business unit.

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Gavin Fairweather, Cormark Securities Inc., Research Division - Analyst of Institutional Equity Research [36]

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Okay. Great. And then on satcom, I'm trying to wrap my head around the kind of different moving pieces there. I mean, as mentioned earlier, you've announced a number of good wins on Alga. There was the Summit II program with Advantech that you've announced. I know it's a high-price-point model for you. But then at the same time, it sounds like you're seeing softness on the commercial side. So how should we be thinking about that business? And maybe if you could just provide some more details on the Summit II program that was announced during the quarter.

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [37]

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Sure. So thanks for the question. The commercial side, so there's a lot of the end customers were related to air travel, bandwidth and providing airplanes with connectivity as well as ships and -- not just tourist ships but -- or cruise ships, but also with general sort of shipping and transportation on water. So in any one given day, there, typically, historically, it was 100,000 vessels on the water. Well, that's obviously not the same number today. That's much lower. And of course, air travel is down dramatically as we've seen some of the commentaries from some of the airlines over the second quarter. So when there's not as much bandwidth needs in the airspace from that, then the commercial satcom has -- just that slice of the segment. It's not all of commercial, but it is a good portion of the commercial segment for us. With that being down, then that had a direct impact on Advantech.

On the positive side, which you pointed out, we've made a major investment in the Summit Series II that we received our first purchase order, and that project is going to be delivered in the -- towards the end of the year, first of 2021. That shift for us is an important shift because it brings us more up stack in a sense into more systems level. We've always played well in the high-powered side of SSPAs, but the knitting together of these systems into a full solution has been meaningful progress on our part over the last couple of years with a significant amount of investment and focus to do that. Of course, it's also in a sense of a pretty serious shift in the industry going to LEO and MEO constellations. As those rockets are being -- and satellites are being put up every week over the next couple of years, that's going to evolve a brand-new network constellation for the industry, so -- in the midst of that sort of transition. So we're seeing a good uptick. Advantech had a very reputable name in the industry for years. Moving in this direction and moving up in solutions is, we think, an important step. Plus, we've also mentioned that that's also preparing us to move into the radar market, which we will make in -- make that progress. We've also won in that segment as well. So good work on the Advantech engineering side, and we're looking bullish.

The only thing that I mentioned on the call earlier was the sales cycle on those military and government programs is a little longer than some of the commercial side. The commercial side is smaller orders, but more frequent. The military and the government are much bigger with -- but a little bit longer sales cycle. So we're kind of caught at the moment between a little bit of that transition, and that was the only sort of outlook -- the outlook that we're providing or context that we are providing.

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Gavin Fairweather, Cormark Securities Inc., Research Division - Analyst of Institutional Equity Research [38]

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Got it. That makes sense. And then maybe for Michael, just in terms of the term loan and the deferral, can you just run us through kind of how that works and whether you have flexibility kind of at the payments kind of beyond the June 30 one?

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Michael A. Wolfe, Baylin Technologies Inc. - CFO [39]

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Yes. So as part of the amendment, we were given the option to defer both the June 30 payment and the September 30 payment and then the quarterly repayments to start commencing again in December. And both of those, we'll still decide on the September one. But as I mentioned, we did defer the June one. And that just gets added to the end, to the -- I mean, it's a 3-year term loan. So it just gets added to the amount that's due at the end of the loan. It's not made up over the term, and it's the same for the September payment.

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Operator [40]

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There are no further questions at this time. I will now return the call to our presenters.

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Randy L. Dewey, Baylin Technologies Inc. - President, CEO & Director [41]

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Well, thank you very much for your support and the following and the good questions. And we look forward, hopefully, some of you can participate with the AGM at least online. If not, you're certainly welcome to come to the AGM. We'd be certainly here to greet you and present the information. Thank you very much.

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Operator [42]

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Ladies and gentlemen, this concludes today's earnings conference call. Thank you for participating. You may now disconnect.