Genasys Inc. Reports Fiscal Second Quarter 2021 Financial Results

Rhea-AI Summary

Genasys Inc. (NASDAQ: GNSS) reports a 37% year-over-year revenue increase to $11.3 million for Q2 FY2021, driven by significant growth in the Genasys Emergency Management (GEM), Integrated Mass Notification Systems (IMNS), and LRAD® Acoustic Hailing Devices segments. Net income was $0.3 million or $0.01 per share, a slight decrease from the previous year. Gross profit margin fell to 47.2% due to increasing personnel costs. First half revenues reached $19.3 million, up 13% YoY, yet operating expenses rose by 21%. Cash reserves stood at $26.4 million. Genasys anticipates continued growth in the second half of fiscal 2021.

Positive

• 37% year-over-year revenue increase to $11.3 million in Q2.
• GEM, IMNS, and AHD revenues grew by 64%, 45%, and 34%, respectively.
• Record fiscal year bookings and backlog anticipated.
• Opened international sales offices in Dubai and Singapore.

Negative

• Net income decreased from $0.9 million to $0.3 million YoY.
• Gross profit margin decreased from 48.5% to 47.2%.
• Operating expenses increased to $4.8 million, up from $3.7 million YoY.

Revenues Increase 37% YOY to $11.3 Million

SAN DIEGO, May 13, 2021 (GLOBE NEWSWIRE) -- Genasys Inc. (NASDAQ: GNSS), the global leader in critical communications systems and solutions, today announced financial results for the Company's fiscal second quarter ended March 31, 2021.

“Strong performances from our Genasys Emergency Management (GEM) software, Integrated Mass Notification Systems (IMNS) and LRAD^® Acoustic Hailing Devices (AHD), business segments fueled the 37% rise in year-over-year revenue,” said Richard S. Danforth, Chief Executive Officer of Genasys Inc. “As compared with fiscal Q2 2020, GEM, IMNS and AHD revenues were up 64%, 45% and 34%, respectively.”

Fiscal Second Quarter 2021 Financial Summary

Fiscal second quarter revenues were $11.3 million, an increase of 37% from prior year quarter.

Gross profit margin was 47.2%, compared with 48.5% in the second quarter of fiscal 2020. The decrease as a percentage of revenue was attributable to a 56% increase in engineering personnel, primarily software- related.

Operating expenses were $4.8 million, up from $3.7 million in the same period a year ago. The increase was largely due to a 67% increase in sales and marketing personnel over the prior year to support future revenue growth opportunities, including opening sales offices in Singapore and the United Arab Emirates.

Net income for the quarter was $0.3 million, or $0.01 per share, a slight decrease from the fiscal 2020 second quarter.

“Revenue growth in our GEM, IMNS and AHD business segments is expected to continue through the second half of fiscal 2021 and into fiscal 2022,” Mr. Danforth added. “With bookings off to a strong start in the fiscal second half, Genasys is on track for record fiscal year bookings, backlog and revenue.”

First Six Months Financial Summary

Revenues for the first six months of fiscal 2021 were $19.3 million, up 13% from $17.1 million in the same period last year.

Gross profit margin was 46.8%, compared with 50.5% in the first six months of fiscal 2020. Gross profit as a percentage of revenue was lower compared to the prior year period primarily due to higher software expenses from the recent addition of the Genasys Communications Canada subsidiary, and additional employees to support the Australia, EU, and enterprise software initiatives.

Operating expenses were $9.2 million, up from $7.6 million in the same period last year largely due to a 67% increase in sales and marketing personnel over the prior year to support future revenue growth opportunities.

Net loss for the first six months was $0.4 million, or $(0.01) per diluted share, compared with net income of $0.9 million, or $0.03 per diluted share, in the first six months of fiscal 2020. The decrease was primarily due to the higher operating expenses, partially offset by the higher revenue, in the current year period.

Cash, cash equivalents and marketable securities totaled $26.4 million on March 31, 2021, compared with $31.4 million on September 30, 2020.

Working capital totaled $26.5 million on March 31, 2021, compared with $29.8 million on September 30, 2020. The decrease in working capital was primarily due to the use of cash to complete the Amika Mobile asset purchase in the first quarter of fiscal 2021.

“Revenues increased globally,” continued Mr. Danforth. “In Europe, the Middle East and Africa; the Asia Pacific; and the Americas, revenues were up 69%, 46% and 4%, respectively, as compared to the first half of fiscal 2020. We expect revenue growth in all our major geographic business areas this fiscal year and in fiscal 2022.”

Select Fiscal Second Quarter 2021 Operating and Business Highlights

• Opened international offices in Dubai and Singapore as part of planned regional expansion
  
  
• Awarded software services contract from Spain's Ministry of the Interior
  
  
• Announced Government of Canada COVID vaccination tracking software project
  
  
• Received multi-year enterprise software services contract from global automobile manufacturer for its operations in North America
  
  
• Signed a $10 million revolving line of credit with MUFG Union Bank, N.A.

“Our European business development and engineering teams are very active responding to EU Article 110 public warning system requests for proposal from EU member states,” said Mr. Danforth. “The GEM contracts recently received from Riverside County, CA and a global automaker are opening doors to large emergency management and enterprise safety sales opportunities.

“The culmination of key business initiatives to further augment Genasys' technology and product offerings and extend the Company's market reach are anticipated this fiscal year,” Mr. Danforth concluded. “On the strength of the recently announced U.S. Army and Riverside County, CA, awards, as well as other expected GEM, IMNS and AHD orders, Genasys is well-positioned for record fiscal year bookings, backlog and revenue, and poised for long-term business growth.”

We include in this press release Non-GAAP operational metrics of bookings, which we believe provide helpful information to investors with respect to evaluating the Company’s performance. 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 fiscal second quarter 2021 financial results 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 (U.S. and Canada), or international at (862) 298-0702. A webcast will also be available at the following link: https://www.webcaster4.com/Webcast/Page/1375/41032

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 Events & Presentations page of the Company’s website.

About Genasys Inc.
Genasys^™ is a global provider of critical communications systems and solutions to help keep people safe. Genasys provides a multi-channel approach to deliver geo-targeted alerts, notifications, instructions, and information before, during and after public safety threats and critical business events. The Company’s unified critical communications platform includes Genasys Emergency Management (GEM) applications, National Emergency Warning Systems (NEWS), LRAD^® long-range voice broadcast systems, and more.

Genasys systems are in service in 72 countries and in more than 500 U.S. cities in diverse applications, including public safety, emergency warning, mass notification, critical event management, defense, law enforcement, homeland security, and other applications. 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 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 forward-looking statements are subject to a number of risks and uncertainties, including without limitation the business impact of health crises or outbreaks of disease, such as epidemics or pandemics and how they 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, 2020. Genasys Inc. disclaims any intent or obligation to update those forward-looking statements, except as otherwise specifically stated.

Investor Relations Contacts

Jim Fanucchi and Satya Chillara
Darrow Associates, Inc.
ir@genasys.com

 

Genasys Inc.
Condensed Consolidated Balance Sheets
(Unaudited - in thousands)
	March 31,
	2021			September 30,
	(unaudited)			2020
ASSETS
Current assets:
Cash and cash equivalents	$	18,455		$	23,319
Short-term marketable securities		5,474			4,265
Restricted cash		282			282
Accounts receivable, net		5,445			5,442
Inventories, net		6,451			5,949
Prepaid expenses and other		1,082			860
Total current assets		37,189			40,117
Long-term marketable securities		2,450			3,805
Long-term restricted cash		1,190			395
Deferred tax assets, net		10,817			11,095
Property and equipment, net		1,901			1,930
Goodwill		8,380			2,472
Intangible assets, net		3,570			943
Operating lease right of use asset		5,216			5,285
Prepaid expenses and other - noncurrent		195			125
Total assets	$	70,908		$	66,167
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	2,555		$	1,370
Accrued liabilities		6,994			7,880
Notes payable, current portion		300			300
Operating lease liabilities, current portion		859			771
Total current liabilities		10,708			10,321
Notes payable, less current portion		-			18
Other liabilities, noncurrent		884			293
Operating lease liabilities, noncurrent		6,172			6,395
Total liabilities		17,764			17,027
Total stockholders' equity		53,144			49,140
Total liabilities and stockholders' equity	$	70,908		$	66,167

 

Genasys Inc.
Condensed Consolidated Statements of Operations
(Unaudited - in thousands, except per share amounts)
	Three months ended							Six months ended
	March 31,							March 31.
		2021			2020				2021			2020
	(unaudited)				(unaudited)			(unaudited)				(unaudited)
Revenues	$	11,301			$	8,276		$	19,329			$	17,058
Cost of revenues		5,964				4,266			10,288				8,446
Gross profit		5,337				4,010			9,041				8,612
Operating expenses:
Selling, general and administrative		3,824				2,732			7,155				5,554
Research and development		960				949			2,026				2,033
Total operating expenses		4,784				3,681			9,181				7,587
Income (loss) from operations		553				329			(140	)			1,025
Other income and expense, net		(8	)			70			61				166
Income (loss) before income taxes		545				399			(79	)			1,191
Income tax expense		283				97			278				269
Net income (loss)	$	262			$	302		$	(357	)		$	922
Net income (loss) per common share:
Basic and diluted	$	0.01			$	0.01		$	(0.01	)		$	0.03
Weighted average common shares outstanding:
Basic		33,683				33,095			33,629				33,037
Diluted		34,779				33,733			33,629				33,709

FAQ

What were the fiscal Q2 2021 earnings results for Genasys Inc.?

Genasys Inc. reported Q2 FY2021 revenues of $11.3 million, a 37% increase year-over-year, with net income at $0.3 million or $0.01 per share.

How did Genasys perform in the first half of fiscal 2021?

In the first half of fiscal 2021, Genasys recorded revenues of $19.3 million, up 13% from $17.1 million in the same period last year.

What are the future growth expectations for Genasys Inc.?

Genasys anticipates continued revenue growth throughout the second half of fiscal 2021 and into fiscal 2022.

What operational highlights were announced by Genasys in Q2 2021?

Genasys opened new international offices in Dubai and Singapore and received multiple significant contracts, including a software services contract from Spain's Ministry of the Interior.

What is Genasys's current cash position?

As of March 31, 2021, Genasys reported cash, cash equivalents, and marketable securities totaling $26.4 million.