Duos Technologies (US:DUOT)2021-03-25 21:52Financial Data and Key Metrics Changes - Total revenue for Q4 2020 decreased 34% to $3.78 million from $5.75 million in Q4 2019, driven by fewer systems deployed [8][9] - For the full year 2020, total revenue decreased 41% to $8.04 million from $13.64 million in 2019, primarily due to delays in new orders caused by the COVID-19 pandemic [9][10] - Gross profit in Q4 was $1.65 million, or 44% of total revenue, a decrease of 48% from $3.15 million, or 55% of total revenue in Q4 2019 [11] - Net loss for Q4 was $426,000, or $0.12 loss per share, compared to a net income of $592,000, or $0.33 per share in Q4 2019 [16] - For the full year 2020, net loss totaled $6.75 million, or $2.03 loss per share, compared to a net loss of $2.47 million, or $1.39 loss per share in 2019 [16] Business Line Data and Key Metrics Changes - Operating expenses decreased 18% in Q4 2020 to $2.06 million from $2.52 million in Q4 2019, primarily due to lower engineering and software development costs [14] - Operating expenses for the full year 2020 increased 6% to $9.42 million from $8.89 million in 2019, but excluding a one-time payment related to the former CEO's retirement, expenses would have decreased by 24% [15] Market Data and Key Metrics Changes - The company received no cancellations of current contracts or expected orders, with order flow starting to recover in Q4 2020 [10] - The company expects total revenue for the fiscal year ending December 31, 2021, to be approximately $18 million, based on contracted backlog and near-term pending orders [20] Company Strategy and Development Direction - The company is focused on operational excellence and has made improvements across all divisions, with a new COO positively impacting operations [25] - The strategy includes enhancing collaboration between commercial and operational teams, improving customer service, and implementing proactive maintenance programs [32][34] - The company plans to consolidate revenue segments to simplify reporting and showcase recurring revenue opportunities [22] Management's Comments on Operating Environment and Future Outlook - Management is optimistic about 2021, expecting a stronger financial performance and aiming for breakeven or profitability [21][43] - The company acknowledges uncertainties in the macroeconomic climate but believes it will return to growth as it builds for scale and sustains profitability [52] Other Important Information - The company ended Q4 2020 with approximately $4 million in cash and cash equivalents and net receivables of $1.19 million [17] - A securities purchase agreement with existing shareholders raised $4.5 million, improving the balance sheet for expected growth [18][19] Q&A Session Summary Question: Discussion on the pending acquisition of Kansas City Southern by Canadian Pacific - Management believes the merger could be beneficial as it may introduce the company to Canadian Pacific, expanding market opportunities [55][56] Question: Perception of the current administration's position on the XL pipeline and future business - Management indicated that the pipeline's status has not significantly impacted rail operators, and the new administration may positively influence technology investments in the rail industry [59][60][61] Question: Revenue dip due to accounting changes and updates on MTA and commuter rails - The revenue dip was primarily due to delays in contracts and execution, with expectations for increased recurring revenues in the future [66] - Management confirmed ongoing projects with Chicago Metro and anticipates more activity from transit rail systems as the year progresses [71]