One Stop Systems, Inc. (NASDAQ:OSS) Q1 2019 Earnings Conference Call Transcript

May 09, 2019 • 05:00 pm ET

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One Stop Systems, Inc. (NASDAQ:OSS) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon, and thank you for joining us today to discuss One Stop Systems' first quarter results ended March 31, 2019. With us today are the Company's President and Chief Executive Officer, Steve Cooper, and its Chief Financial Officer, John Morrison.

Following their remarks, we will open the call to your questions. Before we conclude today's call, I will provide some important cautions regarding the forward-looking statements made by management during the call. I would also like to remind everyone that today's call will be recorded and will be made available for replay via instructions in today's press release in the Investors section of the Company's website.

Now, I'd like turn the call over to OSS President and CEO, Steve Cooper. Sir, please go ahead.

Executive
Steve Cooper

Thank you, Gwen, and good afternoon, everyone. Let me start with a discussion of our revenue for the first quarter of 2019. Our revenue increased 41% to $10.1 million. This was below our expectations with customer delayed shipments slipping out of the first quarter and into the second. There were two specific delayed shipments that totaled $3.2 million. One was for our primary military flash array customer, which was delayed due to customer-requested postponement of the shipment and these products were subsequently shipped in April. The second delayed shipment was for our largest in-flight entertainment systems customer, which was delayed due to late-arriving materials that did not meet our specifications. The issues that delayed this second shipment have also been resolved, and these products are expected to ship later this month.

These two delays effectively shifted revenue from the first to our second quarter. This reduction in revenue in Q1 was partially offset by about $1 million in shipments to other customers that exceeded our expectations.

Other than these delays, it was actually a strong first quarter in many respects. We're encouraged by several positive developments. The broader segments of our business are exceeding our expectations. Our major OEM customers are scaling up, we're winning new OEM design wins and our technology and architectural leadership with PCI Express Gen 4 and AI on the Fly are really resonating in the marketplace.

At this point, I'd like turn the call over to our CFO, John Morrison, who'll take us through the financial results for the quarter. John?

Executive
John Morrison

Thank you, Steve, and good afternoon, everyone. Thank you for joining us today. Earlier today, we issued a press release with our first quarter results for the period ended March 31, 2019. The earnings release is available in the Investor Relations section of our website at onestopsystems.com.

Starting with our statement of operations, consolidated revenue in the first quarter of 2019 increased 41% to $10.1 million from $7.1 million in the same year ago quarter. The increase was primarily driven by revenues from acquisitions, which contributed $4.8 million in the quarter. This was partially offset by $1.9 million decrease in organic revenue.

Q1 was the first quarter that included three months of revenue from our Bressner business unit, which contributed