Oblong, Inc. (OBLG) CEO Peter Holst on Q2 2022 Results - Earnings Call Transcript

Oblong, Inc. (NASDAQ:OBLG) Q2 2022 Earnings Conference Call August 9, 2022 4:30 PM ET

Company Participants

David Clark - CFO, Treasurer & Corporate Secretary

Peter Holst - President, CEO & Director

Conference Call Participants

Operator

[Starts Abruptly] President and CEO, Peter Holst; and CFO, David Clark.

Please be aware, some of the comments made during today’s call may contain forward-looking statements within the meaning of Federal Securities Laws. Statements about our beliefs and expectations containing words such as may, could, would, will, should, believe, expect, anticipate and similar expressions constitute forward-looking statements. These statements involve risks and uncertainties regarding our operations and our future results that could cause actual results to differ materially from management's current expectations.

In addition, today's call includes non-GAAP financial measures, a reconciliation of such measures to GAAP measures is contained in the press release issued today. We encourage you to review the safe harbor statement and risk factors contained in the company's earnings release and filings the SEC including without limitation, our most recent annual report on Form 10-K and other periodic reports that identify specific risk factors that may also cause actual results or events to differ materially from those described in the forward-looking statements.

Copies of the company's most recent reports on Form 10-K and 10-Q may be obtained on the company's website oblong.com or the SEC website sec.gov. The company does not undertake to publicly update or revise any forward-looking statements after the call or date of this call. I'd also like to remind everyone this will available for replay through August 23. A link to the website replay of the call is also provided in the earnings release and is available on the company's website oblong.com.

I'll now turn the call over to the CFO of Oblong, David Clark.

David Clark

Thank you, Nate. Good afternoon, everyone. Our revenue for the second quarter of 2022 was $1.3 million compared to $2 million for the second quarter of last year. This decrease in revenue from last year is mainly because of the effects of the ongoing global pandemic, our existing and potential customers as they have deferred IT buying decisions, while evaluating how and when to reopen their commercial office space.

Net loss for the second quarter of 2022 was $9 million compared to a net loss of $2.2 million for the second quarter of 2021. Net loss for the second quarter of this year included non-cash impairment charges on goodwill and other assets of $6.4 million. Our adjusted EBITDA loss was $1.5 million in the second quarter of 2022 compared to an adjusted EBITDA loss of $1.6 million for the same period last year.

Turning to our balance sheet. At the end of the second quarter of 2022, we had total cash with $5.1 million, zero debt and working capital of $5.5 million. Based on our current projections, we believe we have liquidity into Q2 of 2023.

I will now turn the call over to our CEO, Pete Holst.

Peter Holst

Thanks, Dave. Good afternoon, and thanks to everyone for joining today's call. As I've acknowledged in recent quarters, our growth objectives remain tempered by the lingering effects of the pandemic, and in particular buying behaviors of IT and facilities leaders trying to better understand technology needs for a rapidly evolving workforce.

Our products have often been purchased by IT leaders looking to push the boundaries of conventional collaboration by exploring spatial and gestural interaction with information. And while we continue to see an array of investments into third generation web products, it's also clear larger macro influences of inflation and a lack of visibility into how and when staff office space opens remain headwinds for near term growth.

In the spirit of getting to the points and with a goal to provide our shareholders a clearer picture of our objectives for the rest of 2022, I'll highlight three key areas we believe provide the best opportunity for value creation in the near term.

Number one, we are -- as mentioned in the last call, we are evaluating the sale and/or merger of the company. And the company has undertaken a substantial and thorough review of its operations and intellectual property in that regard. Since our last earnings call, we've explored a number of potential alternatives received a number of inbound calls and will continue to evaluate transactions that provide long term value for our shareholders. Of note, we've seen a substantial pickup in activity in the last 30 days.

The second area is optimizing our product and price combinations our existing channel partners and our end customers. As previously mentioned, our products tend to be purchased and used by early adopters, who are looking to amplify traditional interaction and office spaces. We have approached a number of key partners and customers throughout Q2 to better understand how we could better scale within the channel and optimize our current inventory levels.

And lastly number three, stay operationally disciplined. As everyone has witnessed in recent months, there have been mass layoffs across the entire technology sector as growth has slowed. In anticipation of looming headwinds across the entire market, the company has taken major steps to extend our liquidity into the second quarter of ‘23, as Dave mentioned earlier.

Going forward, and as Bill Gross once said, execution matters a lot, but timing might matter even more. Prior to March 2020, we had a number of positive market signals suggesting mezzanine was poised to expand its footprint across our entire customer base, and then things changed. So while timing hasn't been great the last couple of years, we have weathered the storm and remain committed to finding new paths for growth and value creation. In short, ultimately, timing will come back towards this sector and whether it's augmented reality or gestural spatial interaction, or next-gen web 3 products, we believe Oblong remains poised to take advantage of a very, very large and growing market opportunity in the future.

Thanks for joining the call today. And again, I look forward to providing more updates as they arise.

Question-and-Answer Session

Q -

Operator

This concludes today's call. As previously stated, a link to the website replay of the call is also provided in the earnings release and available on the company's website, oblong.com.