Genasys (US:GNSS)2020-08-11 04:29Financial Data and Key Metrics Changes - Revenues for Q3 2020 were $12 million, a 35% increase from $8.9 million in Q3 2019, marking the highest revenue for any third quarter in the company's history [10] - Gross profit was $6.5 million, representing a gross margin of 54.1%, an increase attributed to higher revenues and fixed overhead cost leverage [11] - Net income for the quarter was $1.5 million or $0.04 per diluted share, compared to $600,000 or $0.02 per diluted share in the same quarter last year [11] - Cash generated from operating activities was $5.8 million, with cash and cash equivalents totaling $20.7 million as of June 30, 2020, up from $16.4 million on March 31, 2020 [12] Business Line Data and Key Metrics Changes - Fiscal Q3 bookings were $22.7 million, up 118% from the same period last year, driven by U.S. Army and Navy orders as well as domestic and international defense orders [15] - Backlog at June 30, 2020, was $26.4 million, a 26% increase from the same period a year ago [15] Market Data and Key Metrics Changes - The demand for Genasys products has increased due to ongoing civil unrest and COVID-19 communication applications, with over 450 U.S. cities deploying LRAD systems for public safety [16] - In Australia, the National Emergency Warning System (NEWS) delivered over 150 million emergency SMS texts during the severe 2019-2020 fire season [20] Company Strategy and Development Direction - The acquisition of Amika Mobile is aimed at expanding the SaaS business into large vertical markets, enhancing the critical communication platform [18] - The company is pursuing additional acquisitions to expand revenue, supported by a $100 million shelf registration to facilitate M&A efforts [19] - Genasys is focused on enhancing its critical communication platform, which includes various services like NEWS and PSS, to provide reliable emergency alerts [24] Management's Comments on Operating Environment and Future Outlook - Management noted that the second half of fiscal 2020 is expected to be much stronger than the first half, with a robust backlog and business pipeline [25] - The company anticipates continued growth in demand for its products and services, despite some short-term slowdowns in bookings due to COVID-19 [30][51] Other Important Information - Genasys has established a partnership with Esri to enhance its GIS platforms, which is expected to generate potential revenue [48][49] - The company is open to both domestic and international M&A opportunities, focusing on synergies rather than geographical limitations [41][44] Q&A Session Summary Question: Can the company take on additional acquisitions after Amika? - Management confirmed that they can pursue multiple initiatives simultaneously and are not halting further acquisitions [29] Question: Has COVID-19 impacted the business? - Management acknowledged an increase in order volume but noted that the size of orders has been smaller, leading to slower RFP processes [30] Question: How will the Amika acquisition expand the addressable market? - Management stated that the acquisition will enhance their sales force and provide credentials in the enterprise market, significantly accelerating growth [32][35] Question: Is the Amika acquisition a cash deal? - Management indicated that the terms have not been disclosed yet, but it will be paid for out of cash without borrowing [37] Question: What is the focus for future M&A activity? - Management expressed a preference for software-based acquisitions but remains open to all opportunities [41] Question: What is the current status of interest from Homeland Security? - Management reported increased interest and demand from the Department of Homeland Security, indicating a positive shift [47]