When you trade on the pink sheets, plenty of times things don't make a lot of sense. Management at telecommunications engineering and infrastructure services company Spectrum Global Solutions (OTCPK:SGSI) is likely thinking that lately.
The Longwood, Florida-based company is sporting a market capitalization of $1.93 million and reported this morning that it has recently hauled in over $1.5 million in new contract awards. About two weeks earlier, Spectrum said it landed $1.9 million in new contracts. (Apropos, on April 25, the company said it locked down another $1.5 million in orders.)
The market cap is based upon 247.1 million shares outstanding per OTC Markets (as of May 2) and the 5.6% pop in shares to $0.0078 as of noon in New York City on Thursday.
The new work - part of the $1.5 million in orders that is - is being carried out by Spectrum subsidiaries AW Solutions and ADEX Corp. and includes network audit and deployment services to support next generation wireless and wireline services across the U.S. The company expects to realize the revenue during the third and fourth quarters of this year.
As for the $1.9 million disclosed earlier in May, AW Solutions and ADEX are performing work that includes the inspection and analysis of towers and subsequent repair of the structures to bring them into compliance, continued small cell, and DAS and wireline deployment services. These revenues are expected to be realized during the current quarter and third quarter.
Roger Ponder, chief executive at Spectrum, says that the company's backlog now is more than $12 million and contracts that they are bidding on exceed $125 million. Ponder says that changes in the tax code have freed up spending by major telecoms to build out infrastructure.
"This increase in revenue and earnings should translate into value for our shareholders near and long term," said Ponder in today's news on the new work. In 2017, Spectrum reported revenue of $5.87 million, although, it's worth noting that Spectrum didn't realize a full calendar year of revenue in 2017 as it transitioned into a new fiscal year, nor did it realize the $20 million that newly acquired ADEX did in revenue.
So, knocking out some of the backlog, realizing a full year of sales and securing a few more contracts could put the company on track for a banner year. Time will tell.
For right now, though, the markets say the company is still worth around $2 million.
