Thank you, operator, and good afternoon, everyone. Casa released results for the fourth quarter and full year 2019 ended December 31, 2019, this afternoon after the market close.

If you did not receive a copy of our earnings press release, you may obtain it from the Investor Relations section of our website at investors.casa-systems.com. With me on today's call are Jerry Guo, Chief Executive Officer; and Scott Bruckner, Interim Chief Financial Officer and Senior Vice President.

This call is being webcast and will be archived on the Investor Relations section of our website. Before I turn the call over to Jerry, I'd like to note that today's discussion will contain forward-looking statements based on the business environment as we currently see it, and as such, does include certain risks and uncertainties.

Please refer to our press release and our SEC filings for more information on the specific risk factors that could cause our actual results to differ materially from the projections described in today's discussion. Any forward-looking statements that we make on this call or in the earnings release are based upon information that we believe as of today, and we undertake no obligation to update these statements as a result of new information or future events.

In addition to U.S. GAAP reporting, we report certain financial measures that do not conform to generally accepted accounting principles.

During the call, we may use non-GAAP measures if we believe it is useful to investors or we believe it will help investors better understand our performance or business trends. And with that, I'd like to turn the call over to Jerry.

Good afternoon everyone and thanks for joining us today. As you may have already seen in our earnings pre-release, I am pleased to report that our results for the fourth quarter and full year 2019 came in above our revised guidance range.

We are encouraged by the volume positive developments. First, total fourth quarter revenue was $112.9 million versus $67.8 million in Q4 of 2018.

Q4 revenue excluding contributions from our Netcomm acquisition was $71.7 million, a 5.7% year-over-year organic growth. Second in our cable segment we saw higher revenue for the fourth quarter than we initially anticipated.

During our third quarter earnings call we noted that timing foreclose in certain large orders was more protracted than what we have seen previously. As a result a handful of larger deals that were very close to closing slipped out of the third quarter as we had hoped some of these orders materialized in the fourth quarter.

Fourth quarter cable revenue was $54.5 million, a sequential growth of 27% from the third quarter. Well, this is lower than what we have historically seen in the fourth quarter from our MSL customers and lower compared to Q4 of last year.

We are encouraged by the sequential increase in revenue which indicates that our MSL customers have a continuing need to invest to meet the growth in downstream and upstream capacity demand they are seeing from their subscribers. Third, in wireless we saw increased revenue recognition on our wireless backlog, following a delay that was related to additional features we added to a product from one of our larger orders.

Wireless revenues for the quarter was $36.9 million including $20 million from Netcomm fixed wireless access products. Full year wireless revenue was [$60] million including $36.4 million from Netcomm.

Scott Bruckner will discuss these results in greater detail in his remarks later on during this call. Before that I would like to highlight a few points about our business during the fourth quarter and then briefly comment on our outlook for the fiscal year 2020.

In the fourth quarter our overall business contributed to become more diversified as a result of our acquisition of Netcomm and continued progress in wireless and a fixed telco. In terms of revenue during the quarter with approximately 48% of revenue came from our cable business compared to 52% in the third quarter, 33% of revenue came from our wireless business, up from 26% in the third quarter and 19% of revenue came from our fixed telco segment.

In terms of customers during the fourth quarter we had a full 10% or greater customers including 1 tier 1 North American mobile network operator. Together these customers accounted for 53% of our revenue versus 76% for our 10% or greater customers during the same period in 2018.

For the full year 10% or greater customers accounted for only 27% of revenue versus 64% for fiscal year 2018. Turning now to our product areas.

In cable we believe that the improvement we saw during the fourth quarter was related to our customers needs to meet demand or capacity prior to any large-scale DAA and then virtual core deployments. As in previous quarters we do see some revenue from new people products including our DAA solutions.

However, cable revenue for that period continued to be overwhelmingly from integrated CCAP hardware and software capacity upgrades. Moving to wireless.

As I noted earlier during the fourth quarter we made material progress on recognizing revenue from our backlog. At the end of the fourth quarter our wireless backlog stood at around $22 million and included our 4G and 5G outdoor radios, endorsement sales, fixed wireless access devices and our Virtual EPC and 5G core products.

I'm pleased to report that during Q1 we are continuing to make progress on building this backlog which now includes a sizable 5G fixed wireless access order form a tier 1 North American service provider. The number of our wireless customers today stands at 16 service providers globally including three customers from our Netcomm acquisition.

In fixed telco which includes our optical virtual BNG and the fiber to the distribution point products revenue for the fourth quarter was just under 20% of sales. We are starting our 2020 fiscal year with a fixed telco backlog of over $24 million, mostly driven by our sales of fiber to the distribution point products.

As a network continued to virtualize and coverage at the core end of the edge we anticipate that demand for our fixed telco products in general and our virtual BNG router in particular will increase this year. I will like now to update you on our trial activity.

On our last call, I noted that we were supporting 87 trials with the 52 unique customers during the third quarter. These included 20 in wireless, 8 in fixed telco and 59 cable.

During the fourth quarter we supported 80 trials with 52 unique customers. Of the 80 trials in Q4, 20 are in wireless, 9 in fixed telco and 51 in cable of which more than 75% are in new cable products including our DAA and the virtual CCAP solutions.

During the quarter, the most notable order conversion was for the large 5G fixed wireless access solution that as I mentioned earlier was placed by a tier 1 North America service provider. Additionally, we booked an order for our virtual BNG solution from the service provider in A-Pac.

Turning now to our outlook for 2020. We are already seeing good traction in the first quarter and are starting the year with total backlog of approximately $80 million including approximately $25 million of deferred revenue.

We see this as a promise start to year with opportunities for the full range of products we offer but particularly for products in our wireless portfolio. We think that 2020 will be key for 5G network rollouts.

As a result we expect wireless to be a material component of our revenue during the year. I would note however, that wireless revenue will mostly likely be concentrated in the second half of the year.

In the cable market we continue to be cautious about MSL spend particularly during the first half of the year which we believe will be characterized by cable customers continuing to add capacity with purchases of additional hardware and software licenses for existing integrated CCAP chassis. With this respect to new cable architectures an important catalyst to watch for later this year will be the impact of potentially increased company share from 5G mobile and fixed wireless access rollouts and the increased growth in subsequent demand for bandwidth particularly for upstream channels.

As seen in our fixed telco segment as I mentioned earlier network virtualization and core and edge convergence create material opportunities for our virtual BNG and multi-service router products. With that said, we expect our 2020 full year revenue will range from $340 million to $360 million.

While we are already seeing good momentum in Q1 our guidance reflects our initially cautious view on cable. And our expectations of wireless as our key growth driver for the year both for our organic products and those for our acquired Netcomm business.

We think that the second half of the year will be particularly active for wireless as 5G networks continue to be rolled out. Before moving onto our financial results I would like to provide you some detail on changes we have made to our finance team following Maurizio Nicolelli's departure.

As we announced Scott Bruckner has been appointed interim CFO by the board. We are very grateful to Scott for agreeing to step into this role while we search for permanent replacement.

In the meantime, I think Scott will do a great job given his expertise in our industry and in our company and his extensive experience in corporate finance after more than two decades of experience as an investment banker. Supporting Scott, Matt Slepian, our corporate controller with over 30 years of accounting and finance experience will serve as principal accounting officer.

I am confident that our financial management is in very good hands. With that I will ask Scott to comment on our financial results in more detail.

Thank you Jerry and good afternoon everyone. I will start by reviewing our full year 2019 financial results and then I will turn to our fourth quarter results before providing details on our guidance for 2020.

For the full year 2019 we achieved revenue of $282.3 million, a decrease of approximately 5% compared to 2018. Revenue from the acquired Netcomm business was $75.8 million during 2019 and as a reminder we closed our Netcomm acquisition on July 1 of last year.

So there are only six months of Netcomm revenue in our 2019 full-year results. Excluding revenue from the acquired Netcomm business revenue decreased 30.5% year-over-year.

Total product revenue was $241.6 million in 2019 of which a $164.7 million or 68% was from hardware and $76.9 million or 32% was from software. This compares to $257 million of total product revenue in 2018 with $133.4 million or 52% from hardware and $123.6 million or 48% from software.

The higher percentage of hardware revenue in 2019 was due to the inclusion of revenue from Netcomm which was a 100% hardware as well as increased wireless revenue in the fourth quarter from Casa which consisted predominantly of our radio products. Total service revenue for the year was $40.7 million in 2019 versus $40.1 million in 2018.

Breaking down our revenue by product for the full year 2019 $182.9 million or 65% of total revenue came from cable. $59.9 million or 21% of total revenue including $36.4 million from Netcomm came from wireless and $39.5 million or 14% of total revenue came from fixed telecom.

This compares to full year 2018 when almost 100% of our revenue was from cable. GAAP gross margin for the full year 2019 was 57.6% compared to 73.4% in 2018 and this was largely due to the higher percentage of hardware sales in 2019.

Hardware revenue included our wireless radio products, fixed wireless access products and chassis and line cards in cable. Total GAAP operating expenses for the full year 2019 were $171.7 million or 61% of revenue compared to $139 million or 47% of revenue in 2018.

The year-over-year increase in GAAP operating expenses was primarily related to increased headcount from our acquisition of Netcomm also included acquisition related costs and stock based compensation expenses. On a GAAP basis we booked a net loss for the full year of $48.2 million but this was primarily due to evaluation allowance that we recorded against our U.S.

deferred tax assets balance of $35.2 million. Although we were in a three year cumulative net profit position as of December 31, 2019 and while we do expect to be profitable for the full year of 2020 we also expect to be in a three year cumulative tax loss position this year.

So as a result based on accounting guidance we felt it appropriate to book a tax valuation allowance. Adjusted EBITDA for the full year 2019 was $24 million compared to $98.1 million in 2018.

Non-GAAP net income for the full year 2019 was $2.6 million or $0.04 per diluted share compared to $81.5 million or $0.88 per diluted share for the full year 2018. Now turning to our fourth quarter results.

Total revenue in the fourth quarter of 2019 was a $112.9 million which compares to $67.8 million in the fourth quarter of 2018 and $81.8 million in the third quarter of 2019. Revenue from the acquired Netcomm business was $41.2 million during the fourth quarter and as Jerry mentioned excluding revenue from the acquired Netcomm business revenue increased 5.7% year-over-year.

Total product revenue was $101.4 million in the fourth quarter of which $75.2 million or 74% was from hardware and $26.2 million or 26% was from software. This compares to $57.4 million of total product revenue in the fourth quarter of last year with $24.6 million or 43% from hardware and $32.8 million or 57% from software.

Hardware sales during the fourth quarter accounted for 67% of total revenue compared to 36% in the prior year quarter and again the increase in hardware revenue during the fourth quarter was primarily driven by the acquisition of the Netcomm business as well as increased wireless revenue for core Casa during the quarter that consisted mostly of our radio products. As Jerry mentioned from an end market perspective our business became more diversified in Q4 as we continue to make progress in the wireless and fixed telecom markets.

During Q4 approximately 48% of our revenue or $54.5 million came from cable 33% or $36.9 million came from wireless and 19% or $21.5 million was from fixed telecom up materially from Q4 when we had no revenue from fixed telecom. Our Q4, 2019 wireless revenue included approximately $20 million for Netcomm and $17 million from core Casa products.

Our consolidated GAAP gross margin for the fourth quarter of 2019 was 52.7% compared to 73.2% in the fourth quarter of 2018. The year-on-year decrease in our gross margin was primarily driven by the higher mix of hardware revenue during the quarter including revenue from our wireless radio products and the acquisition of Netcomm which has lower gross margins.

If we exclude Netcomm core Casa gross margins were 66.6% during the fourth quarter of 2019. Turning to expenses.

Total GAAP operating expenses in the fourth quarter of 2019 was $49.5 million compared to $32.8 million in the fourth quarter of 2018. The increase in total operating expenses was primarily due to the inclusion of operating expenses from Netcomm from July 01 of 2019.

Headcount at December 31, 2019 totaled 997 employees compared to 1066 employees as of September 30, 2019. The reduction in headcount was related to eliminating overlapping functions following our acquisition of Netcomm, some voluntary attrition as a result of the acquisition and a rebalancing of R&D and sales resources during Q4 to address the higher growth that we anticipate in a wireless and fixed telecom markets during 2020.

Our adjusted EBITDA in the fourth quarter of 2019 was $18.2 million compared to $21.6 million in the fourth quarter of 2018. We recorded a tax expense for full year of $23.8 million which includes the tax valuation allowance we recorded in Q4 of $35.2 million.

Non-GAAP net income for the fourth quarter of 2019 was off the $13.1 million compared to non-GAAP net income of $17.3 million in the fourth quarter of 2018. Non-GAAP diluted net income per share was $0.15 for the fourth quarter of 2019 compared to non-GAAP diluted net income per share of $0.20 in the fourth quarter of 2018.

Free cash flow for the quarter was negative $7.8 million compared to a positive $2.7 million in the fourth quarter of 2018. We ended the fourth quarter with cash and cash equivalents of a $114.7 million and total debt of $293.2 million.

As of December 31 receivables were approximately $94 million a good portion of which we expect to collect during Q1. The aging of receivables also remains very good with less than 2% at greater than 90 days.

During the quarter we were purchased 495,000 shares for $1.8 million under our share repurchase program and as we've done in the past we will continue to review current business developments to determine the best use of our capital for the coming year. We've also made very good progress on our integration of Netcomm this year.

To date on an annualized basis we have achieved $6.4 million of cost synergies and continue to be on track to recognize total annualized cost savings of around $7 million this year. We also continue to expect accretion of approximately $0.07 and $0.08 per share on a non-GAAP basis in 2020.

Speaking of 2020 I would now like to turn to our guidance. For the full year of 2020 as Jerry already mentioned we expect total revenue to be between $340 million and $360 million.

We expect our full-year gross margin to be in the range of 50% and 60% which includes our lower margin access device products from Netcomm and a higher mix of hardware revenue that we anticipate achieving in our wireless business. Adjusted EBITDA is expected to be in the range of $33 million and $43 million.

We anticipate non-GAAP diluted EPS to be in the range of $0.0 and $0.12. On a GAAP basis we expect a loss per share in the range of $0.04 and $0.16.

Stock based compensation is expected to be approximately $10 million in 2020. Overall 2019 was a transition year for the company with cables still in a digestion phase, the completion and integration of our Netcomm acquisition and the increasing contribution from our wireless and fixed telecom products.

Looking ahead we anticipate that momentum in wireless will continue and for all the reasons that Jerry noted we expect to see significant business opportunities in wireless for 2020. In terms of our revenue cadence for the year we believe that we are likely to see a return to our normal pattern with roughly 35% to 40% of revenue achieved in the first half and the remainder in the second half of the year and we also anticipate that as we've seen in the past our first quarter revenue will be higher than revenues in the second quarter.

With that I will now turn the call back to the operator to start the Q&A session.

Thank you. Excuse me.

Two questions if I could, maybe just on the cable front, could you just talked a little bit about the visibility there? It sounds like you're being a little conservative but sounds like some of the commentary from the MSOs and PHYs all those spending might be tucked it might be a little bit more of an equipment bent this year.

So if you could touch on that? And then secondly on the 5G side it sounds like a fixed wireless win.

Could you talk a little bit about what you're seeing your business for kind of just more cellular 5G outdoor as well as indoor? And how that looks in the pipeline into 2020?

Thank you.

Tim let me answer this question. This is Jerry here.

As you know that the cable spending is notoriously difficult to forecast. We take a cautious approach in forecasting our 2020 revenue from the cable space but we do see that MSOs are continuing to spend and we are selling different types of solutions including the traditional integrity CCAP as well as DAA solutions.

As to the second question on the wireless side we reported a large fixed wireless [win] in 5G and we also have several deals in the traditional mobile wireless space we are working on and that includes both the core side of the wireless as well as the indoor and outdoor radio for wireless products.

Yes Tim, it's Scott. If I could just add a couple of things.

I mean if I look at our backlog so orders that we received in the fourth order that we were not talking about obviously in our last earnings call it's actually pretty evenly distributed across what Jerry was talking about. There's a lot of fixed wireless interest this year.

Our outdoor strand products and our 5G radio product is in our backlog now. They're components of core both in the core of the network and radio cores and that includes indoor and outdoor radio.

So I think you'll see not only in addition to an increased contribution of wireless across the full range of products for this year but a nice mix of those products across the portfolio.

Okay. Thank you, that's helpful.

Yes, hi. This is Khan on for Meta.

Thanks for taking our question. Just a quick one.

As you look to the wireless business, do you think that business has become more predictable as you've gotten more certifications or is it still difficult to forecast. Thank you.

Well, this the wireless business is still at their early stage even though we see the growth and we see it as a growth driver. And we still feel its early stages to have a really long-term visibility.

But we do see that as a more, it has a better visibility than the cable space.

Okay, thank you. And if I could just follow-up.

Where does the gross margin leverage come from in 2020? Just a little bit more color there would be helpful.

Thank you.

Yes. So by gross margin leverage, I guess I would point out that the gross margin that we're forecasting is very similar to what we saw in 2019.

So we still think we're going to be in a range of about 50% to 60% and that's largely driven by hardware in the product mix for revenues. So for that gross margin to go up, we have to see more software.

Now there's a tradeoff there because if we go out and we size the market particularly in wireless, it's our view and I think the industry view in general that the bulk of revenue particularly in the initial rollout phase is going to come from radios. And there's a lot of deploying that has to happen for diversification in 5G.

But if for some reason we're more successful in selling our software cores, then I think you'll see that gross margin increase. And for right now we're being fairly consistent with what we saw in the fourth quarter, what we see in our backlog and then this is also based on our trial activity advanced trials and conversations that we're having with our customers that make us believe that wireless lease for us this year will be more hardware heavy.

And so we feel pretty comfortable with the gross margin range that we guided for.

Okay, thank you very much.

Hi, thank you. This is Nate Hitchcock on for Rich.

First question for Jerry. So Jerry, in the prepared remarks you mentioned that some revenue recognized in the quarter from distributed access, can you provide any color on this regarding any quarter-over-quarter improvements in the business.

And then, you also mentioned some additional trials within the virtual CCAPs space. And I’m just wondering if you could provide any additional color on this trails as well as potential expectation for initial deployments from virtual and then maybe any color on the competitive outlook in this space.

Thank you.

Yes. We have seen interest across the globe for distributed products used in either a chassis-based core or using a virtual CCAP core combined with our DAA nodes.

So we have trials in all in North America, in Europe, and in Asia Pacific and we have converted some into revenue. We'd not disclose a specifics on those the size of those yet but do believe that we're going to see a continuing conversion from trials into revenue throughout 2020.

Okay, great, thank you. And then just a follow-up regarding net counts.

So I know Scott mentioned a 6.4 million in synergies recognized this far, I mean, and I think the initial range was 7 million to 8 million within the first 12 months. But I was wondering as you've already made reduction and headcount, some realignment of sales thus far.

Where are the additional efforts in terms of synergies will come as well as if you could provide any color on cross-selling and those mentioned I think in a recent conference Jerry's. And any color there would be really appreciated.

Thanks for taking the questions.

Sure. So let me start on the synergy side.

You have a very good memory and in fact we are tracking towards exactly that level. So, the 6.5 I think was realized a lot more quickly than we anticipated.

And we and most of it is you've correctly noted has come from headcount reductions where we saw redundant functions. And also, as Jerry mentioned our strategy for the year which is focusing on wireless.

So we made sure that we are adequately resourced for the large wireless opportunities that we see ahead of us. The other large and synergy items will come from software integration.

That's a tougher thing to accomplish and we've always understood that our timeline for that would be 12 months maybe it slips to 18 months but that's still underway. And we haven’t completed it, so we haven’t realized the savings from that yet.

And then there is real-estate issue. It's not an issue, it's just an area of cost savings that we're in the process of working through right now.

So we've moved personnel from that particular office and now we're working through what we do with that office that would comprise also a significant part of the remaining million, million and a half.

Great. Thank you, very much.

Yes. As to that revenue synergy at that cross-selling, we are in advanced trials on several products both on the Casa side and the next NetComm side.

We expect some of that converted into revenue opportunities in this year.

Hi, good afternoon. And question on the wireless front.

I guess, can you say whether I think you mentioned you had a North American Tier 1 Wireless Operator as a 10% customer in the quarter in Q4. And I guess my question is, is that the same operator that you've indicated be it of kind of 5G Fixed Wireless Access or is that an another North American Tier 1?

Tim, we -- different but we cannot disclose the names.

Didn’t ask the names but --. That's fair enough.

And maybe I can relate when that you've discussed back to the TechTalk you recently had, should we assume that millimeter wave 5G access that in terms of the new when you discussed?

Well, we are bullish on both the millimeter wave as well as the sub 6. We believe both are going to be a positive contribution set to our revenue this year as well as mix, a very big booted to the industry.

Okay. Maybe probably can't say much here but maybe can try and relate that new 5G work to kind of what you saw on the wireless side of Casa.

Obviously you shipped a bunch of backlog in Q4 but is in terms of the size of that opportunity would you size it similarly to kind of what you saw in 2019 on your wireless side, we're able to talk to a 10% customer on the wireless side before?

Yes Tim, it's a little bit early to talk about it. We would not have mentioned it if we didn’t think it was a sizeable opportunity.

So without giving any specific details when this materializes, it would be our expectation that that customer would certainly be in the Top 10 list.

Great. I'll move on from that and follow-up on just kind of the overall outlook for '20.

I mean, and are making a few assumptions here. It looks like you're being awfully cautious on cable.

I mean, you had obviously a tough year in '19, are you guiding down 15% to 20% from there or is that your baseline or I mean you've got a couple of moving pieces, we've seen peers and competitors of your including this morning talking about cable network spending maybe ticking up next year. Realize after 2019, cautioned being causes of a good thing but I'm wondering if you could kind of set our baseline expectations for you cable business next year.

I imagine, at this point with what you got it to, you expect it to decline if not decline material?

Well Tim, cautious is correct. I think our outlook on cable is cautious based on what has been pretty unpredictable in that industry for the bulk of the last two year, probably about 18 months.

What we know is what we've seen over the past 12 months over the past four quarters which is that on average the cable operators have been spending at least with us 40 million to 50 million a quarter. So with that mind we created our internal budget and our forecast for the year.

But importantly I want to reemphasize what Jerry said and read into this what you will, this is a very important year for wireless for us. And wireless will be a growth driver across all of our products.

Got it. I'll pass it on.

Hey guys, thanks for taking my question. I understand you don’t guide by quarter.

I just want to see if you could comment on the overall impact of Corona virus on the APAC business if you're seeing any?

So it's not just on our APAC business, I mean I think it's everybody has been saying that Corona virus is going to have some global impact. So there are few things to observe.

We have not seen the impact yet and well we are preparing ourselves for disruptions that we may see from quarter-to-quarter. We do not at this point expect it to have an impact for the full-year.

I had also mentioned something else which I think is very important to observe because certain of our customers have been calling to ensure that we're not going to have supply issues. And in fact they have taken comfort as do we in the inventory that we have built up across all of our products.

So it's not just in cable and only components in our table products but also in wireless and in advanced cable. So DAA and virtual and then also our fixed telco products.

So we at this point feel pretty comfortable that while there may be some supply disruptions, we've kind of built a moat around that for the better part of this year.

Great. Thank you, I appreciate it.

Thank you to everyone for joining us today. We look forward to updating you on our progress next quarter.