Genasys Inc.
(NASDAQ:
GNSS), the
leader in Protective Communications solutions, today announced
financial results for the Company’s fiscal third quarter ended June
30, 2023.
Richard S. Danforth, Chief Executive Officer of
Genasys, Inc., commented, “As expected, revenues for the June
quarter improved versus the second quarter and were in line with
the year-ago quarter. Adjusted EBITDA improved sequentially but was
lower year over year, reflecting the ongoing investment in Genasys
Protect. With recurring revenue up 47% year over year, and
year-to-date software bookings up 180%, I am more confident than
ever in our strategic investment in diversifying our
business.”
Mr. Danforth continued, “The steady growth and
expansion of our recurring software revenue footprint is
gaining momentum. Recent competitive wins in Colorado, Texas, and
the East Coast of the United States further demonstrate the value
we are delivering with Genasys Protect™. Based on existing orders
and orders currently in contracting, we have secured over $5
million of ARR, up 100% year over year. We anticipate that the
rebranding launch commenced earlier this week, combined with the
rollout of new Genasys Protect sales and marketing initiatives this
fall, will further accelerate software ARR and revenue growth next
fiscal year.”
Fiscal 3Q 2023 Financial Highlights
- Revenue of $14.3 million, versus $14.2 million in 3Q 2022
- GAAP operating loss of ($1.5) million, versus, ($0.6) million
in 3Q 2022.
- Adjusted EBITDA loss of ($0.4) million, versus profit of $0.4
million in 3Q 2022.
- GAAP net loss per share of ($0.04) versus ($0.02) in 3Q
2022.
Business Highlights
- Executed branding relaunch, with an updated website, go to
market, and product UI.
- Expanded coverage to 16% of Colorado with Boulder County’s
adoption of Genasys Protect.
- Selected for first statewide contract for Genasys Protect.
- Awarded protective communications contract in a large East
Coast city, displacing a keycompetitor
- Received $10.7 million follow-on AHD program of record order
from U.S. Army
Business Outlook
Software bookings are tracking ahead of internal
expectations. Recent competitive wins and our brand relaunch
earlier this week provide added confidence in our solutions and
go-to-market approach. While our hardware pipeline continues to
grow, delays in closing associated orders continue to challenge
this year’s revenues. As a result, we are realigning our resources
accordingly. Genasys expects Fiscal 2023 to be down from Fiscal
2022 with fourth quarter revenues approximately 5% below the prior
quarter.
Fiscal 3Q 2023 Financial
Summary
Fiscal Third quarter revenue was $14.3 million,
an increase of 0.8% from $14.2 million in the prior year's quarter.
Software revenue increased 27.9% and hardware revenue decreased
0.7%, compared with the fiscal 2022 third quarter.
Gross profit margin was 46.9%, compared with
48.5% in the third quarter of fiscal 2022. The improvement comes
from hardware pricing beginning to reflect higher component costs
and the somewhat higher mix of software revenues, which carry
higher gross margins.
Operating expenses were $8.1 million, compared
with $7.5 million in the same period a year ago. Selling, general
and administrative expenses increased 3.8% from $5.8 million in the
prior year to $6.0 million in the quarter ended June 30, 2023.
Research and development expenses increased 25.4% year-over-year
from the addition of 12% more engineers over the prior year to
increase the features and functionality of our software
offerings.
GAAP net loss in the quarter was $1.4 million,
or ($0.04) per share, compared with a GAAP net loss of $0.6
million, or ($0.02) per share, in the third quarter of fiscal 2022.
The increase in net loss was primarily due to the increased
operating expenses resulting from additional engineering, sales and
marketing employees.
Adjusted EBITDA was ($0.4) million for the third
quarter of fiscal 2023, compared with $0.4 million for the prior
fiscal year period.
Year To Date Fiscal 2023 Financial
Summary
Revenue for the first nine months of fiscal 2023
was $36.0 million, compared with $38.0 million in the same period
last year.
Gross profit margin was 45.7%, compared with
50.9% in the first nine months of fiscal 2022. The decrease in
gross profit margin was due primarily to the higher cost of
components costs in fiscal 2023 orders that were booked prior to
inflationary component cost increases being realized, and lower
overall sales volume.
Operating expenses were $24.8 million, compared
with $22.1 million in the same period a year ago. The increase was
largely due to a 9.8% increase in selling, general and
administrative expenses, primarily related to strategic growth
spending to accelerate SaaS revenue, and a 19.6% increase in
research and development expenses related to the hiring of
additional software engineers.
GAAP net loss was $8.3 million, or $(0.23) per
diluted share, compared with a net loss of $2.4 million, or $(0.07)
per share, in the prior year period. The increase in net loss was
primarily attributable to the increased cost of sales due to higher
component costs and higher operating expenses, which resulted from
hiring additional software engineering, sales, and marketing
employees.
Adjusted EBITDA was $(5.1) million for the first
nine months of fiscal 2023, compared with $0.8 million in the first
nine months of fiscal 2022.
Cash, cash equivalents and marketable securities
totaled $6.9 million on June 30, 2023, compared with $19.9 million
on September 30, 2022. Accounts Receivable at quarter end totaled
$10.4 million versus $6.7 million on September 30, 2022. Since
quarter end, significant collections have been made and as of last
Friday, August 4th, our Cash, cash equivalents and marketable
securities balance was approximately $9 million.
We include in this press release Non-GAAP
operational metrics of adjusted EBITDA and bookings, 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. We consider bookings as leading indicators
of future revenues and use these metrics to support production
planning. Bookings is an internal, operational metric that measures
the total dollar value of customer purchase orders executed in a
period, regardless of the timing of the related revenue
recognition.
Webcast and Conference Call
Details
Management will host a conference call to
discuss the financial results for the third 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/1375/48683
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,
2022. 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) |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
2023 |
|
September 30, |
|
(unaudited) |
|
2022 |
|
|
|
|
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
2,971 |
|
|
$ |
12,736 |
|
Short-term marketable securities |
|
3,549 |
|
|
|
6,397 |
|
Restricted cash |
|
755 |
|
|
|
100 |
|
Accounts receivable, net |
|
10,353 |
|
|
|
6,744 |
|
Inventories, net |
|
7,950 |
|
|
|
6,008 |
|
Prepaid expenses and other |
|
1,683 |
|
|
|
3,577 |
|
Total current
assets |
|
27,261 |
|
|
|
35,562 |
|
Long-term marketable
securities |
|
392 |
|
|
|
781 |
|
Long-term restricted
cash |
|
96 |
|
|
|
823 |
|
Deferred tax assets,
net |
|
7,399 |
|
|
|
7,373 |
|
Property and
equipment, net |
|
1,666 |
|
|
|
1,757 |
|
Goodwill |
|
10,348 |
|
|
|
10,118 |
|
Intangible assets,
net |
|
8,958 |
|
|
|
10,505 |
|
Operating lease right
of use asset |
|
4,094 |
|
|
|
4,541 |
|
Prepaid expenses and
other - noncurrent |
|
547 |
|
|
|
394 |
|
Total
assets |
$ |
60,761 |
|
|
$ |
71,854 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
3,324 |
|
|
$ |
2,334 |
|
Accrued liabilities |
|
8,182 |
|
|
|
12,083 |
|
Operating lease liabilities,
current portion |
|
998 |
|
|
|
948 |
|
Total current
liabilities |
|
12,504 |
|
|
|
15,365 |
|
|
|
|
|
Other liabilities,
noncurrent |
|
116 |
|
|
|
907 |
|
Operating lease liabilities,
noncurrent |
|
4,551 |
|
|
|
5,189 |
|
Total
liabilities |
|
17,171 |
|
|
|
21,461 |
|
|
|
|
|
Total stockholders'
equity |
|
43,590 |
|
|
|
50,393 |
|
Total liabilities and
stockholders' equity |
$ |
60,761 |
|
|
$ |
71,854 |
|
|
|
|
|
|
|
|
|
Genasys Inc. |
Condensed Consolidated Statements of
Operations |
(Unaudited - in thousands except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
June 30, |
|
June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
Revenues |
$ |
14,262 |
|
|
$ |
14,152 |
|
|
$ |
35,962 |
|
|
$ |
37,997 |
|
Cost of revenues |
|
7,567 |
|
|
|
7,289 |
|
|
|
19,510 |
|
|
|
18,654 |
|
Gross profit |
|
6,695 |
|
|
|
6,863 |
|
|
|
16,452 |
|
|
|
19,343 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative |
|
6,004 |
|
|
|
5,785 |
|
|
|
18,443 |
|
|
|
16,794 |
|
Research and development |
|
2,141 |
|
|
|
1,707 |
|
|
|
6,357 |
|
|
|
5,314 |
|
Total operating expenses |
|
8,145 |
|
|
|
7,492 |
|
|
|
24,800 |
|
|
|
22,108 |
|
|
|
|
|
|
|
|
|
Loss from operations |
|
(1,450 |
) |
|
|
(629 |
) |
|
|
(8,348 |
) |
|
|
(2,765 |
) |
Other income and expense, net |
|
1 |
|
|
|
9 |
|
|
|
(4 |
) |
|
|
12 |
|
Loss before income taxes |
|
(1,449 |
) |
|
|
(620 |
) |
|
|
(8,352 |
) |
|
|
(2,753 |
) |
Income tax benefit |
|
(26 |
) |
|
|
(31 |
) |
|
|
(18 |
) |
|
|
(367 |
) |
Net loss |
$ |
(1,423 |
) |
|
$ |
(589 |
) |
|
$ |
(8,334 |
) |
|
$ |
(2,386 |
) |
|
|
|
|
|
|
|
|
Net loss per common share: |
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.04 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
Basic and diluted |
|
37,053 |
|
|
|
36,567 |
|
|
|
36,855 |
|
|
|
36,459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP measures to non-GAAP
measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(1,423 |
) |
|
$ |
(589 |
) |
|
$ |
(8,334 |
) |
|
$ |
(2,386 |
) |
Other income and expense, net |
|
(1 |
) |
|
|
(9 |
) |
|
|
4 |
|
|
|
(12 |
) |
Income tax benefit |
|
(26 |
) |
|
|
(31 |
) |
|
|
(18 |
) |
|
|
(367 |
) |
Depreciation and amortization |
|
636 |
|
|
|
638 |
|
|
|
1,918 |
|
|
|
1,920 |
|
Stock based compensation |
|
396 |
|
|
|
355 |
|
|
|
1,329 |
|
|
|
1,650 |
|
Adjusted EBITDA |
$ |
(418 |
) |
|
$ |
364 |
|
|
$ |
(5,101 |
) |
|
$ |
805 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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