LRAD Corporation (NASDAQ: LRAD), a global leader
in long range voice broadcast systems, advanced mass notification
systems, and distributed recipient software solutions, today
announced financial results for its fiscal year ended September 30,
2018.
“Revenues in fiscal year 2018 increased 29% from
fiscal 2017 to $26.3 million,” remarked Richard S. Danforth, Chief
Executive Officer of LRAD Corporation. “The revenues came in under
our expectations when $4.7 million in scheduled September shipments
were delayed due to unexpected government funding issues primarily
in one Asia Pacific country. We expect the government funding
issues will be resolved and the orders to ship in fiscal Q2 and Q3
of 2019.”
Fiscal Year 2018 Financial
Summary
• Revenues: Fiscal year 2018
revenues totaled $26.3 million, compared to $20.3 million in fiscal
year 2017.
- The 29% increase in revenues was primarily driven by increases
of 24% and 16% in the acoustic hailing device (“AHD”) and mass
notification (“MN”) business segments, respectively, and a $1.5
million partial-year contribution from Genasys Holdings S.L.
(“Genasys”).
- Domestic revenues increased 102% while international revenues
decreased 11% due to the aforementioned shipment delays caused by
unexpected government funding issues primarily in one Asia Pacific
country.
• Net Loss: The Company reported a net
loss of $3.7 million, or $0.12 per share, for fiscal 2018, compared
with a net loss of $877,000, or $0.03 per share, in fiscal
2017.
- Net loss was higher in fiscal 2018 due largely to the
previously announced $2.4 million non-cash income tax expense
related to a reduction in the value of the Company’s deferred tax
asset, which resulted from the reduction to the U.S. corporate
income tax rate for the calendar year ended December 31, 2018.
- Gross profit margin was 48.4%,
compared to 50.6% in the prior fiscal year, largely due to higher
manufacturing facility expenses associated with overlapping lease
payments at two facilities.
- Operating expenses increased $3.1
million, or 28%, from fiscal 2017, primarily due to $1.2 million of
Genasys’ operations, acquisition related costs of $371,000,
$352,000 of computer systems related expenses, and $239,000 of
facility expenses due to the Company’s relocation to a larger
facility and the overlap of leases.
• Balance Sheet: Cash and cash equivalents
totaled $11.1 million at September 30, 2018, down from $12.8
million at September 30, 2017.
- Lower cash and cash equivalents
were primarily due to $2.4 million of cash outlays to acquire
Genasys Holdings in January 2018, $1.2 million to pay down Genasys’
promissory notes, and $725,000 used for Company stock repurchases,
partially offset by $2.4 million of proceeds from the exercise of
stock options.
- Working capital totaled $21.1
million at September 30, 2018, compared to $25.4 million at
September 30, 2017. The reduction in working capital was primarily
due to the acquisition of Genasys.
“Fiscal 2018 was a year of investment and
transition for the Company as we made our first acquisition by
purchasing Genasys, a leading distributed recipient software
solutions provider, we relocated to a facility with more
engineering and manufacturing space to support current and expected
business growth, and we implemented a new ERP system to streamline
our business processes,” Danforth added. “While making these
investments, we grew bookings to a record $36.5 million, up 29%
compared to last fiscal year, resulting in a record backlog of
$23.6 million at September 30, 2018, almost double last fiscal
year’s backlog.”
Select Fiscal Year 2018 Operating and
Business Highlights
- Announced our largest domestic
order to date, an $11.0 million U.S. Army Program of Record order
that is part of a larger AHD requirement.
- Acquired Genasys, a leading
software provider of advanced location-based mass messaging
solutions for emergency warning systems and workforce
management.
- Received $5.4 million in AHD orders
from Southeast Asia for public safety, law enforcement, defense,
border, and maritime security applications.
- Announced $5.3 million in other
U.S. Military and Government AHD, spares, and accessories orders
for the U.S. Army, Navy, Air Force, Marine Corps, and State
Department.
- Announced $2.5 million in mass
notification orders for LRAD 360-XT systems integrated with a gas
detection alarm and LRAD’s solar power option, and a Federal
Emergency Management Agency (“FEMA”) funded critical infrastructure
project.
- Moved into a facility with expanded
engineering and manufacturing capacity to support current and
expected future business growth.
- Repurchased 286,746 shares of LRAD
common stock for $725,445, or $2.53 per share. $3.2 million remains
on the buyback program as of September 30, 2018.
The Company’s Board of Directors recently
authorized a new share repurchase program, under which the Company
may repurchase up to $5 million of its outstanding shares of common
stock through December 31, 2020. The new program will take effect
when the current repurchase program expires.
“Since joining the Company two years ago, we
have grown revenues 24% in fiscal 2017, 29% in fiscal 2018, and we
expect revenue growth to accelerate in fiscal 2019,” concluded
Danforth. “Based on our $23.6 million backlog at September 30,
2018, the strength of the current bookings forecast, and our
substantial business pipeline, we expect positive cash flow,
profitability, and record fiscal year revenues in 2019.”
We include in this press release Non-GAAP
operational metrics of bookings and backlog, which we believe
provide helpful information to investors with respect to evaluating
the Company’s performance. We consider bookings and backlog 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. Backlog is a measure of purchase
orders received that have not been shipped, but are planned to ship
within the next 12 months.
The Company may repurchase shares in open market
transactions or under Rule 10b5-1 trading plans from time to time
in its discretion, based on ongoing assessments of the Company’s
capital needs, the market price of its common stock and general
market conditions. Share repurchases may be made by the Company
from time to time in open market transactions at prevailing market
prices or under one or more trading plans adopted to comply with
Rule 10b5-1 under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). The Company will carry out all such
repurchase transactions in compliance with Rule 10b-18 under the
Exchange Act and other applicable laws, rules and regulations.
Webcast and Conference Call
DetailsManagement will host a conference call to discuss
fiscal year 2018 financial results this afternoon at 4:30 p.m. E.T.
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/1375/28649.
A replay of the call will be available
approximately four hours after the call concludes and remain
available for 90 days at the aforementioned webcast link. Questions
to management may be submitted before or during the call by
emailing them to: investor@lrad.com.
About LRAD CorporationThe
Company's proprietary Long Range Acoustic Devices® and advanced
Genasys™ mass notification systems and mobile alert solutions are
designed to enable users to safely hail and warn, inform and
direct, prevent misunderstandings, determine intent, establish
large safety zones, resolve uncertain situations, and save
lives.
LRAD systems are in service in 72 countries
around the world in diverse applications including mass
notification, defense, law enforcement, public safety, homeland and
border security, critical infrastructure protection, fire rescue,
incident management, maritime and port security, and wildlife
control and preservation. For more information, please visit
LRAD.com.
Forward Looking
Statements Except for historical information
contained herein, the matters discussed are forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934. 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. These statements
involve risks and uncertainties that could cause actual results to
differ materially from those suggested in the forward-looking
statements. These 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, 2017. LRAD Corporation
disclaims any intent or obligation to update those forward-looking
statements, except as otherwise specifically stated.
Company ContactE. Brian
HarveyDirector, Investor Relations and Capital
Markets858.753.8974 ebharvey@lrad.com
LRAD Corporation and Subsidiary |
Condensed Consolidated Balance
Sheets |
(000's omitted) |
|
|
|
|
|
|
|
September 30, |
|
|
(unaudited) |
|
|
|
|
2018 |
|
2017 |
|
|
|
|
|
ASSETS |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
11,063 |
|
$ |
12,764 |
Short-term marketable securities |
|
|
3,592 |
|
|
4,360 |
Restricted cash |
|
|
404 |
|
|
- |
Accounts
receivable, net |
|
|
2,786 |
|
|
5,682 |
Inventories, net |
|
|
6,734 |
|
|
5,257 |
Prepaid
expenses and other |
|
|
3,091 |
|
|
983 |
Total current
assets |
|
|
27,670 |
|
|
29,046 |
Long-term
marketable securities |
|
|
1,201 |
|
|
711 |
Long-term
restricted cash |
|
|
340 |
|
|
40 |
Deferred tax
assets, net |
|
|
5,957 |
|
|
8,331 |
Property and
equipment, net |
|
|
2,449 |
|
|
510 |
Goodwill |
|
|
2,446 |
|
|
- |
Intangible
assets, net |
|
|
1,557 |
|
|
56 |
Prepaid
expenses and other - noncurrent |
|
|
241 |
|
|
164 |
Total
assets |
|
$ |
41,861 |
|
$ |
38,858 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
3,083 |
|
$ |
1,112 |
Accrued
liabilities |
|
|
3,200 |
|
|
2,562 |
Notes
payable, current portion |
|
|
297 |
|
|
- |
Total current
liabilities |
|
|
6,580 |
|
|
3,674 |
|
|
|
|
|
Notes payable, less
current portion |
|
|
53 |
|
|
- |
Other liabilities,
noncurrent |
|
|
1,739 |
|
|
- |
Total
liabilities |
|
|
8,372 |
|
|
3,674 |
|
|
|
|
|
Total
stockholders' equity |
|
|
33,489 |
|
|
35,184 |
Total
liabilities and stockholders' equity |
|
$ |
41,861 |
|
$ |
38,858 |
|
|
|
|
|
LRAD Corporation and Subsidiary |
Condensed Consolidated Statements of
Operations |
(000's omitted except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
Three months ended |
|
Years ended |
|
September 30, |
|
September 30, |
|
|
2018 |
|
|
|
2017 |
|
|
2018 |
|
|
|
2017 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
3,296 |
|
|
$ |
7,501 |
|
$ |
26,307 |
|
|
$ |
20,314 |
|
Cost of
revenues |
|
2,248 |
|
|
|
3,090 |
|
|
13,567 |
|
|
|
10,036 |
|
Gross
profit |
|
1,048 |
|
|
|
4,411 |
|
|
12,740 |
|
|
|
10,278 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Selling,
general and administrative |
|
3,082 |
|
|
|
2,687 |
|
|
10,693 |
|
|
|
8,586 |
|
Research
and development |
|
859 |
|
|
|
641 |
|
|
3,523 |
|
|
|
2,500 |
|
Total operating
expenses |
|
3,941 |
|
|
|
3,328 |
|
|
14,216 |
|
|
|
11,086 |
|
|
|
|
|
|
|
|
|
(Loss) income from
operations |
|
(2,893 |
) |
|
|
1,083 |
|
|
(1,476 |
) |
|
|
(808 |
) |
Other income and
expense, net |
|
33 |
|
|
|
34 |
|
|
107 |
|
|
|
129 |
|
(Loss) income before
income taxes |
|
(2,860 |
) |
|
|
1,117 |
|
|
(1,369 |
) |
|
|
(679 |
) |
Income tax (benefit)
expense |
|
(418 |
) |
|
|
951 |
|
|
2,376 |
|
|
|
198 |
|
Net (loss)
income |
$ |
(2,442 |
) |
|
$ |
166 |
|
$ |
(3,745 |
) |
|
$ |
(877 |
) |
|
|
|
|
|
|
|
|
Net (loss)
income per common share - basic and diluted |
$ |
(0.07 |
) |
|
$ |
0.01 |
|
$ |
(0.12 |
) |
|
$ |
(0.03 |
) |
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
Basic and diluted |
|
33,020,947 |
|
|
|
31,955,209 |
|
|
32,492,645 |
|
|
|
31,855,430 |
|
|
|
|
|
|
|
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