Genasys (US:GNSS)2019-05-11 00:52Financial Data and Key Metrics Changes - LRAD Corporation reported revenue of $10.2 million for Q2 2019, a 30% increase from $7.9 million in Q2 2018 [9] - Gross profit for Q2 2019 was $5.2 million, maintaining a gross margin of 51%, consistent with the previous year [9] - Operating expenses increased by 9% to $3.8 million, primarily due to higher R&D expenditures [10] - Pretax income rose to $1.5 million, a 135% increase from $619,000 in the prior year [10] - Net income for Q2 2019 was $1.2 million, or $0.04 per share, compared to $461,000 or $0.01 per share in Q2 2018 [11] - Cash provided by operations was $4.2 million, up from $1.1 million in the prior year [11] - Cash and cash equivalents decreased to $7.7 million from $11.1 million at the end of FY 2018 [12] Business Line Data and Key Metrics Changes - Revenues from the Americas region increased by 60% to $17.8 million, driven by strong domestic defense orders [16] - Fiscal first half bookings were $10.7 million, down about $1 million from the same period a year ago, impacted by a significant international Navy order expected to book in Q3 [18] Market Data and Key Metrics Changes - Backlog at the end of March 2019 was $14 million, up 51% year-over-year [16] - The company is reallocating $4.7 million of delayed shipments to Southeast Asia, with expectations to complete deliveries by the end of the year [17] Company Strategy and Development Direction - The company is focusing on integrating Genasys systems, which combine voice broadcast and siren systems for emergency notifications [20] - LRAD is actively pursuing opportunities with the Department of Homeland Security and U.S. Customs and Border Patrol [24] - The strategy includes leveraging U.S. Army and National Guard business with international armed forces [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining gross margins around 50% for the remainder of the year [34] - The company anticipates record bookings for the fiscal year, despite a slight decline in bookings in the first half [18] - Management noted strong demand for defense, law enforcement, and public safety systems, expecting continued growth [20] Other Important Information - The company repurchased 788,000 shares for $2.2 million under a $5 million share buyback plan initiated in January 2019 [19] - The first phase of a FEMA-funded public safety notification order is scheduled for installation this fiscal year [22] Q&A Session Summary Question: Can you provide more details on the Genasys opportunity with the Californian city? - The order includes both hardware and software, providing immediate revenue and recurring revenue streams from maintenance fees [32] Question: Is the Southeast Asia contract going away or just delayed? - The contract is not going away; deliveries are expected to begin before the end of the year [33] Question: Can you maintain gross margins above 50%? - Management believes maintaining gross margins around 50% is achievable [34] Question: What is the current focus of R&D? - The focus is on software development, with new functionalities planned for release over the next several quarters [51] Question: What kind of responses are being received for Genasys systems? - Responses have been very positive, with strong interest from various sectors [75]