Genasys Inc.
(NASDAQ:
GNSS), the
leader in Protective Communications, today announced financial
results for the Company’s fiscal fourth quarter and full year ended
September 30, 2023.
Richard S. Danforth, Chief Executive Officer of
Genasys, Inc., commented, “As we announced in mid- September, our
pipeline of hardware and software business continues to grow
rapidly. This week’s announcements include some of the business
that we had expected in the September quarter. We expect that we
will book each of the forecasted hardware orders that shifted out
of our fiscal 2023. In the fourth quarter of fiscal 2023, recurring
revenues in our software business were up 43% year over year and
21% sequentially. Based on current contracting activity, the
addition of Evertel Technologies, and partnerships with Tablet
Command and Ladris, we now expect fiscal 2024 software revenue
growth in excess of 100% year over year.”
Mr. Danforth continued, “The steady growth and
expansion of our recurring software revenue is gaining momentum.
Evertel, now branded Genasys Protect CONNECT, is already delivering
strong synergies across our existing customer base. The integration
with Tablet Command and added performance and functionality of
Ladris expands the use cases and value of the Genasys Protect
platform. Combined with our category-defining ACOUSTICS offerings,
Genasys is rapidly expanding the differentiation of Protective
Communications versus legacy mass notification solutions. The
differentiation of Genasys Protect continues to displace incumbents
and win the business that is already generating a rapidly growing
Annual Recurring Revenue (ARR).”
Fiscal 4Q 2023 Financial Summary
- Revenue of $10.7 million, versus $16.0 million in 4Q 2022
- GAAP operating loss of ($2.6) million, versus ($12.8) million
in 4Q 2022.
- Adjusted EBITDA of ($1.7) million, versus $1.6 million in 4Q
2022.
- GAAP net loss of ($10.1) million versus ($13.8) million in 4Q
2022. GAAP net loss per share ($0.27) versus ($0.38) in 4Q
2022.
- Adjusted net loss of ($2.7) million vs. ($0.7) million in 4Q
2022. Adjusted net loss per share of ($0.07) vs. ($0.02) per share
in 4Q 2022
Fiscal 2023 Financial Summary
- Revenue of $46.7 million, versus $54.0 million in fiscal
2022
- GAAP operating loss of ($11.0) million, versus ($15.5) million
in fiscal 2022.
- Adjusted EBITDA of ($6.8) million, versus $2.4 million in
fiscal 2022.
- GAAP net loss of ($18.4) million versus a ($16.2) million in
fiscal 2022. GAAP net loss per share of ($0.50) versus ($0.44) in
fiscal 2022.
- Adjusted net loss of ($11.0) million vs. ($3.1) million in
fiscal 2022. Adjusted net loss per share of ($0.30) vs. a loss of
($0.08) per share in fiscal 2022
Business Highlights
- Fortified the balance sheet with $10.6 Million of cash through
follow-on offering of 5.75 million shares of common stock that
closed shortly after quarter end
- Completed the acquisition of Evertel Technologies, LLC. and
subsequently rebranded its offering as Genasys Protect CONNECT
- Announced key partnerships with Tablet Command and Ladris, each
of which further differentiates Genasys Protect from mass
notification solutions
- Genasys named a Strong Performer in The Forrester Wave™:
Critical Event Management Platforms, Q4 2023 report
- Announced a Foreign Military Sales (FMS) order of LRAD
equipment for middle eastern military defense force
- Won $1M prototype order from US Army for CROWS-AHD
development
Business Outlook
Software pipeline and bookings continue to see
robust growth. Recent competitive wins, the addition of Evertel and
newly forged partnerships provide added sales pipeline and market
differentiation. While our hardware pipeline continues to grow
beyond the delayed orders from last fiscal year, lack of budgetary
certainty is again expected to skew hardware revenues significantly
toward the second half of our fiscal year. In fiscal 2024, Genasys
now expects software revenues to more than double year over year,
and hardware revenues to approach fiscal 2022 levels. Adjusted
EBITDA for the full fiscal year is expected to improve versus
fiscal 2023.
Fiscal 4Q 2023 Financial
Review
Fiscal fourth quarter revenue was $10.7 million,
a decrease of 33.3% from the record $16.0 million in the prior
year's quarter. Software revenue decreased 3.2% and hardware
revenue decreased 35.6%, compared with the fiscal 2022 fourth
quarter. Within Software, quarterly recurring revenue increased
43.1% year over year. As the company discussed in its September
18th press release, several hardware opportunities that were
expected to be booked and recognized for revenue in the period have
been delayed until fiscal 2024.
Gross profit margin was 49.6%, compared with
49.5% in the fourth quarter of fiscal 2022.
Operating expenses of $7.9 million increased
from $7.5 million in fiscal 4Q 2022, excluding last year’s
one-time, non-cash goodwill impairment of $13.2 million. Selling,
general and administrative expenses increased 5.8% from $5.8
million in the prior year to $6.2 million in the quarter ended
September 30, 2023. Research and development expenses increased
4.4% year-over-year from the addition of 13.3% more engineers over
the prior year to increase the features and functionality of our
software offerings.
GAAP net loss in the quarter was ($10.1)
million, or ($0.27) per share, compared with a GAAP net loss of
($13.8) million, or ($0.38) per share, in the fourth quarter of
fiscal 2022. Excluding the $7.4 million deferred tax expense in
fiscal 2023 and the $13.2 goodwill impairment in 4Q 2022, 2023
fiscal fourth quarter adjusted net loss was ($2.7) million, or
($0.07) per share, compared with an adjusted net loss of ($0.7)
million, or ($0.02) per share in the prior year period. The
increase in adjusted net loss was primarily due to lower hardware
revenues and increased operating expenses resulting from additional
engineering, sales and marketing employees.
Adjusted EBITDA was ($1.7) million for the
fourth quarter of fiscal 2023, compared with $1.6 million for the
prior fiscal year period.
Fiscal 2023 Financial
Review
Revenue for fiscal 2023 was $46.7 million,
compared with $54.0 million in the same period last year. Software
revenue increased 22.7% and hardware revenue decreased 15.8%,
compared with fiscal 2022. As the company discussed in its
September 18th press release, several hardware opportunities that
were expected to be booked and recognized for revenue in the period
have been delayed until fiscal 2024.
Gross profit margin was 46.6%, compared with
50.5% in the prior fiscal year. The decrease in gross profit margin
was due primarily to the higher cost of components costs in fiscal
2023 shipments that were booked prior to inflationary component
cost increases being realized, and lower overall sales volume.
Excluding last year’s one-time, non-cash
Goodwill Impairment of $13.2 million, fiscal 2022 operating
expenses of $29.6 million increased to $32.7 million in fiscal year
2023. Selling, general and administrative expenses increased 8.8%
from $22.6 million in the prior year to $24.6 million in fiscal
2023. Research and development expenses increased 15.9%
year-over-year due to intentional investment to increase the
features and functionality of our software offerings.
GAAP net loss for the fiscal year was ($18.4)
million, or ($0.50) per share, compared with a GAAP net loss of
($16.2) million, or ($0.44) per share, in fiscal 2022. Excluding
the $7.4 million deferred tax expense in fiscal 2023 and the $13.2
million goodwill impairment in fiscal 2022, 2023 fiscal year
adjusted net loss was ($11.0) million, or ($0.30) per share,
compared with an adjusted net loss of ($3.1) million, or ($0.08)
per share in the prior year period. The increase in adjusted net
loss was primarily due to lower hardware revenues and increased
operating expenses resulting from additional engineering, sales and
marketing employees.
Adjusted EBITDA was ($6.8) million in fiscal
2023, compared with $2.4 million in fiscal 2022.
Cash, cash equivalents and marketable securities
totaled $10.1 million as of September 30, 2023, compared with $19.9
million as of September 30, 2022. Accounts receivable at quarter
end totaled $6.0 million versus $6.7 million as of September 30,
2022. Since the quarter end, the Company completed the acquisition
of Evertel Technologies LLC as well as a follow-on offering of 5.75
million shares of common stock. Combined the two actions resulted
in the addition of approximately $9.6 million in net proceeds to
the balance sheet.
We include in this press release Non-GAAP
operational metrics of adjusted EBITDA, adjusted net loss, and
adjusted net loss per share, which we believe provide helpful
information to investors with respect to evaluating the Company’s
performance. Adjusted EBITDA represents our net income before other
income, 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 fourth quarter of fiscal year
2023 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/1375/49520
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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30, |
|
|
2023 |
|
2022 |
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
8,665 |
|
|
$ |
12,736 |
|
Short-term marketable securities |
|
|
1,481 |
|
|
|
6,397 |
|
Restricted cash |
|
|
758 |
|
|
|
100 |
|
Accounts receivable, net |
|
|
5,952 |
|
|
|
6,744 |
|
Inventories, net |
|
|
6,501 |
|
|
|
6,008 |
|
Prepaid expenses and other |
|
|
1,851 |
|
|
|
3,577 |
|
Total current assets |
|
|
25,208 |
|
|
|
35,562 |
|
Long-term marketable securities |
|
|
- |
|
|
|
781 |
|
Long-term restricted cash |
|
|
96 |
|
|
|
823 |
|
Deferred tax assets, net |
|
|
- |
|
|
|
7,373 |
|
Property and equipment, net |
|
|
1,551 |
|
|
|
1,757 |
|
Goodwill |
|
|
10,282 |
|
|
|
10,118 |
|
Intangible assets, net |
|
|
8,427 |
|
|
|
10,505 |
|
Operating lease right of use asset |
|
|
3,886 |
|
|
|
4,541 |
|
Prepaid expenses and other - noncurrent |
|
|
455 |
|
|
|
394 |
|
Total assets |
|
$ |
49,905 |
|
|
$ |
71,854 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
2,785 |
|
|
$ |
2,334 |
|
Accrued liabilities |
|
|
7,466 |
|
|
|
12,083 |
|
Operating
lease liabilities, current portion |
|
|
1,008 |
|
|
|
948 |
|
Total current liabilities |
|
|
11,259 |
|
|
|
15,365 |
|
|
|
|
|
|
Other
liabilities, noncurrent |
|
|
551 |
|
|
|
907 |
|
Operating
lease liabilities, noncurrent |
|
|
4,283 |
|
|
|
5,189 |
|
Total liabilities |
|
|
16,093 |
|
|
|
21,461 |
|
|
|
|
|
|
Total stockholders' equity |
|
|
33,812 |
|
|
|
50,393 |
|
Total liabilities and stockholders' equity |
|
$ |
49,905 |
|
|
$ |
71,854 |
|
|
|
|
|
|
Genasys
Inc. |
Condensed
Consolidated Statements of Operations |
(Unaudited -
in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
Years
ended |
|
September
30, |
|
September
30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
Revenues |
$ |
10,700 |
|
|
$ |
16,038 |
|
|
$ |
46,663 |
|
|
$ |
54,035 |
|
Cost
of revenues |
|
5,391 |
|
|
|
8,105 |
|
|
|
24,901 |
|
|
|
26,759 |
|
Gross profit |
|
5,309 |
|
|
|
7,933 |
|
|
|
21,762 |
|
|
|
27,276 |
|
|
|
49.6 |
% |
|
|
49.5 |
% |
|
|
46.6 |
% |
|
|
50.5 |
% |
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative |
|
6,178 |
|
|
|
5,841 |
|
|
|
24,621 |
|
|
|
22,635 |
|
Impairment of goodwill |
|
- |
|
|
|
13,162 |
|
|
|
- |
|
|
|
13,162 |
|
Research and development |
|
1,770 |
|
|
|
1,696 |
|
|
|
8,127 |
|
|
|
7,010 |
|
Total
operating expenses |
|
7,948 |
|
|
|
20,699 |
|
|
|
32,748 |
|
|
|
42,807 |
|
|
|
|
|
|
|
|
|
(Loss)
income from operations |
|
(2,639 |
) |
|
|
(12,766 |
) |
|
|
(10,986 |
) |
|
|
(15,531 |
) |
Other income
and expense, net |
|
(6 |
) |
|
|
48 |
|
|
|
(10 |
) |
|
|
60 |
|
(Loss)
income before income taxes |
|
(2,645 |
) |
|
|
(12,718 |
) |
|
|
(10,996 |
) |
|
|
(15,471 |
) |
Income tax
(benefit) expense |
|
7,417 |
|
|
|
1,108 |
|
|
|
7,400 |
|
|
|
741 |
|
Net
(loss) income |
$ |
(10,062 |
) |
|
$ |
(13,826 |
) |
|
$ |
(18,396 |
) |
|
$ |
(16,212 |
) |
|
|
|
|
|
|
|
|
Net
(loss) income per common share: |
|
|
|
|
|
|
|
Basic |
$ |
(0.27 |
) |
|
$ |
(0.38 |
) |
|
$ |
(0.50 |
) |
|
$ |
(0.44 |
) |
Diluted |
$ |
(0.27 |
) |
|
$ |
(0.38 |
) |
|
$ |
(0.50 |
) |
|
$ |
(0.44 |
) |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
37,190 |
|
|
|
36,599 |
|
|
|
36,939 |
|
|
|
36,495 |
|
Diluted |
|
37,190 |
|
|
|
36,599 |
|
|
|
36,939 |
|
|
|
36,495 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP measures to non-GAAP
measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income |
$ |
(10,062 |
) |
|
$ |
(13,826 |
) |
|
$ |
(18,396 |
) |
|
$ |
(16,212 |
) |
Other income
and expense, net |
|
6 |
|
|
|
(48 |
) |
|
|
10 |
|
|
|
(60 |
) |
Income tax
(benefit) expense |
|
7,417 |
|
|
|
1,108 |
|
|
|
7,400 |
|
|
|
741 |
|
Impairment
of goodwill |
|
- |
|
|
|
13,162 |
|
|
|
- |
|
|
|
13,162 |
|
Depreciation
and amortization |
|
640 |
|
|
|
636 |
|
|
|
2,558 |
|
|
|
2,556 |
|
Stock based
compensation |
|
313 |
|
|
|
577 |
|
|
|
1,642 |
|
|
|
2,227 |
|
Adjusted EBITDA |
$ |
(1,686 |
) |
|
$ |
1,609 |
|
|
$ |
(6,786 |
) |
|
$ |
2,414 |
|
|
|
|
|
|
|
|
|
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