Genasys Inc.
(NASDAQ:
GNSS), the
leader in Protective Communications, today announced financial
results for the Company’s fiscal first quarter ended December 31,
2023.
Richard S. Danforth, Chief Executive Officer of
Genasys, Inc., commented, “The vision of Genasys Protect is
beginning to be realized. Yesterday’s announcement describing the
integrated use of Genasys’ cloud-based software and hardware for 37
dams in Puerto Rico is only the most recent example of our
differentiated approach to Protective Communications.”
Mr. Danforth continued, “Thus far in fiscal
2024, we have been selected for multi-year engagements with Los
Angeles County, the State of Utah, and most recently, the island of
Puerto Rico. Coming into this year, we had exceptionally low
backlog and as we communicated in early December, we expect
financial results to be heavily weighted towards the end of the
fiscal year. Recent wins and the continuing deal activity and
pipeline expansion give us greater confidence in our second half
2024 and fiscal 2025 outlook. Genasys’ differentiated Protective
Communications offering continues to displace incumbents and win
the business that is already generating a rapidly growing Annual
Recurring Revenue (ARR).”
Fiscal 1Q 2024 Financial Summary
- Revenue of $4.4 million, versus
$10.5 million in 1Q 2023
- GAAP operating loss of ($7.2)
million, versus ($3.5) million in 1Q 2023.
- GAAP net loss of ($6.7) million
versus ($3.5) million in 1Q 2023. GAAP net loss per share ($0.15)
versus ($0.10) in 1Q 2023.
- Adjusted EBITDA of ($6.1) million,
versus ($2.4) million in 1Q 2023.
Business Highlights
- Selected to provide comprehensive
Early Warning System (EWS) for 37 dams on the island of Puerto
Rico. The $60 million to $70 million solution includes both Genasys
Protect software and ACOUSTICS, integrated with sensors and
communication equipment.
- Chosen for multi-year statewide
CONNECT contract with the Utah Department of Corrections
- Won 5-year Genasys Protect EVAC
contract with Los Angeles County, the nation’s most populous county
spanning more than 4,000 square miles.
- Expanded contracts with Marin and
San Mateo counties in California to include Traffic AI, powered by
Ladris.
- Genasys named a Strong Performer in
The Forrester Wave™: Critical Event Management Platforms, Q4 2023
report.
Business Outlook
Given the low backlog entering fiscal 2024 and
the continuing uncertainty surrounding the US Federal budget and
other budget cycles, we continue to expect a very back-end loaded
fiscal year with the significant majority of our hardware revenues
coming in the second half of fiscal 2024. Sequentially, we expect
continued growth in our software revenues, and on the full year, we
continue to believe that hardware revenues will approach fiscal
2022 levels.
Fiscal 1Q 2024 Financial
Review
Fiscal first quarter revenue was $4.4 million, a
decrease of 58.4% from $10.5 million in the prior year's quarter.
Software revenue increased 56.6% while hardware revenue decreased
69.3%, compared with the fiscal 2023 first quarter. Within
software, quarterly recurring revenue increased 84.9% year over
year.
Gross profit margin was 33.9%, compared with
46.1% in the first quarter of fiscal 2023. The drop in gross profit
is attributable to lower hardware revenue in this year’s quarter
and the related reduction in overhead absorption. Software gross
margins improved nearly 15 percentage points year over year.
Operating expenses of $8.7 million increased
from $8.3 million in fiscal 1Q 2023. Selling, general and
administrative expenses increased 2.1% from $6.4 million in the
prior year to $6.5 million in the quarter ended December 31, 2023.
Research and development expenses increased 13.2% year over year
primarily related to efforts to increase the features and
functionality of our software offerings.
GAAP net loss in the quarter was ($6.7) million,
or ($0.15) per share, compared with a GAAP net loss of ($3.5)
million, or ($0.10) per share, in the first quarter of fiscal
2023.
Excluding other income and expense, net income
tax expense (benefit), depreciation, stock-based compensation and
amortization of intangibles, Adjusted EBITDA was ($6.1) million for
the first quarter of fiscal 2024, compared with ($2.4) million for
the prior fiscal year period.
Cash, cash equivalents and marketable securities
totaled $13.6 million as of December 31, 2023, compared with $10.1
million as of September 30, 2023. Accounts receivable at quarter
end totaled $4.4 million versus $6.0 million as of September 30,
2023.
We include in this press release the non-GAAP
operational metrics of adjusted EBITDA, which we believe provide
helpful information to investors with respect to evaluating the
Company’s performance. Adjusted EBITDA represents our net loss
before other income and expense, net, income tax expense (benefit),
depreciation and amortization expense and stock-based compensation.
We do not consider these items to be indicative of our core
operating performance. The items that are non-cash include
depreciation and amortization expense and stock-based compensation.
Adjusted EBITDA is a measure used by management to understand and
evaluate our core operating performance and trends and to generate
future operating plans, make strategic decisions regarding
allocation of capital and invest in initiatives that are focused on
cultivating new markets for our solutions. In particular, the
exclusion of certain expenses in calculating Adjusted EBITDA
facilitates comparisons of our operating performance on a
period-to-period basis.
Webcast and Conference Call
Details
Management will host a conference call to
discuss the financial results for the first quarter of fiscal year
2024 this afternoon at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific
Time. To access the conference call, dial toll-free (888) 390-3967,
or international at (862) 298-0702. A webcast will also be
available at the following link:
https://www.webcaster4.com/Webcast/Page/1375/49779
Questions to management may be submitted before
the call by emailing them to: ir@genasys.com. A replay of the
webcast will be available approximately four hours after the
presentation on the page of the Company’s website.
About Genasys Inc.
Genasys Inc. (NASDAQ: GNSS) is the global leader
in Protective Communications Solutions and Systems, designed around
one premise: ensuring organizations and public safety agencies are
“Ready when it matters™”. The Company provides the Genasys Protect
platform, the most comprehensive portfolio of preparedness,
response, and analytics software and systems, as well as Genasys
Long Range Acoustic Devices® (LRAD®) that deliver directed, audible
voice messages with exceptional vocal clarity from close range to
5,500 meters. Genasys serves state and local governmental agencies,
and education (SLED); enterprise organizations in critical sectors
such as oil and gas, utilities, manufacturing, and automotive; and
federal governments and the military. Genasys Protective
Communications Solutions have diverse applications, including
emergency warning and mass notification for public safety, critical
event management for enterprise companies, de-escalation for
defense and law enforcement, and automated detection of real-time
threats like active shooters and severe weather. Today, Genasys
protects over 70 million people globally and is used in more than
100 countries, including more than 500 cities, counties, and states
in the U.S. For more information, visit genasys.com.
Forward-Looking Statements
Except for historical information contained
herein, the matters discussed are forward-looking statements within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995. You should not place
undue reliance on these statements. We base these statements on
particular assumptions that we have made in light of our industry
experience, the stage of product and market development as well as
our perception of historical trends, current market conditions,
current economic data, expected future developments and other
factors that we believe are appropriate under the circumstances.
Forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those
suggested in any forward-looking statement. The risks and
uncertainties in these forward-looking statements include without
limitation the business impact of geopolitical conflict, epidemics
or pandemics, and other causes that may affect our supply chain,
and other risks and uncertainties, many of which involve factors or
circumstances that are beyond the Company's control. Risks and
uncertainties are identified and discussed in our filings with the
Securities and Exchange Commission. These forward-looking
statements are based on information and management's expectations
as of the date hereof. Future results may differ materially from
our current expectations. For more information regarding other
potential risks and uncertainties, see the "Risk Factors" section
of the Company's Form 10-K for the fiscal year ended September 30,
2023. Genasys Inc. disclaims any intent or obligation to publicly
update or revise forward-looking statements, except as otherwise
specifically stated.
Investor Relations Contacts
Brian Alger, CFASVP, IR and Corporate
Developmentir@genasys.com(858) 676-0582
|
|
Genasys Inc. |
Condensed Consolidated Balance Sheets |
(Unaudited - in thousands) |
|
|
|
|
|
|
|
December 31, |
|
September 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
4,780 |
|
|
$ |
8,665 |
|
Short-term marketable
securities |
|
|
8,777 |
|
|
|
1,481 |
|
Restricted cash |
|
|
- |
|
|
|
758 |
|
Accounts receivable,
net |
|
|
4,435 |
|
|
|
5,952 |
|
Inventories, net |
|
|
6,890 |
|
|
|
6,501 |
|
Prepaid expenses and
other |
|
|
2,100 |
|
|
|
1,851 |
|
Total current assets |
|
|
26,982 |
|
|
|
25,208 |
|
Long-term restricted cash |
|
|
346 |
|
|
|
96 |
|
Property and equipment, net |
|
|
1,587 |
|
|
|
1,551 |
|
Goodwill |
|
|
13,151 |
|
|
|
10,282 |
|
Intangible assets, net |
|
|
10,366 |
|
|
|
8,427 |
|
Operating lease right of use asset |
|
|
3,712 |
|
|
|
3,886 |
|
Prepaid expenses and other - noncurrent |
|
|
494 |
|
|
|
455 |
|
Total assets |
|
$ |
56,638 |
|
|
$ |
49,905 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
1,897 |
|
|
$ |
2,785 |
|
Accrued liabilities |
|
|
8,618 |
|
|
|
7,466 |
|
Operating lease liabilities, current portion |
|
|
1,031 |
|
|
|
1,008 |
|
Total current liabilities |
|
|
11,546 |
|
|
|
11,259 |
|
|
|
|
|
|
Other liabilities, noncurrent |
|
|
509 |
|
|
|
551 |
|
Operating lease liabilities, noncurrent |
|
|
4,030 |
|
|
|
4,283 |
|
Total liabilities |
|
|
16,085 |
|
|
|
16,093 |
|
|
|
|
|
|
Total stockholders' equity |
|
|
40,553 |
|
|
|
33,812 |
|
Total liabilities and stockholders' equity |
|
$ |
56,638 |
|
|
$ |
49,905 |
|
Genasys Inc. |
Condensed Consolidated Statements of
Operations |
(Unaudited - in thousands, except per share
amounts) |
|
|
Three months ended |
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
Revenues |
$ |
4,361 |
|
|
$ |
10,487 |
|
Cost of revenues |
|
2,882 |
|
|
|
5,655 |
|
Gross profit |
|
1,479 |
|
|
|
4,832 |
|
|
|
33.9 |
% |
|
|
46.1 |
% |
Operating expenses: |
|
|
|
Selling, general and administrative |
|
6,518 |
|
|
|
6,384 |
|
Research and development |
|
2,191 |
|
|
|
1,935 |
|
Total operating expenses |
|
8,709 |
|
|
|
8,319 |
|
|
|
|
|
Loss from operations |
|
(7,230 |
) |
|
|
(3,487 |
) |
Other income and expense, net |
|
77 |
|
|
|
(20 |
) |
Loss before income taxes |
|
(7,153 |
) |
|
|
(3,507 |
) |
Income tax benefit |
|
(429 |
) |
|
|
- |
|
Net loss |
$ |
(6,724 |
) |
|
$ |
(3,507 |
) |
|
|
|
|
Net loss per common share: |
|
|
|
Basic |
$ |
(0.15 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
Basic |
|
43,729 |
|
|
|
36,696 |
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP measures to non-GAAP
measures |
|
|
|
|
|
|
Net loss |
$ |
(6,724 |
) |
|
$ |
(3,507 |
) |
Other income and expense, net |
|
(77 |
) |
|
|
20 |
|
Income tax benefit |
|
(429 |
) |
|
|
- |
|
Depreciation and amortization |
|
729 |
|
|
|
643 |
|
Stock based compensation |
|
446 |
|
|
|
420 |
|
Adjusted EBITDA |
$ |
(6,055 |
) |
|
$ |
(2,424 |
) |
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