Genasys Inc.

Good afternoon and welcome to Genesis Incorporated's fourth quarter fiscal 2019 financial results call. All lines have been placed in a listen-only mode and the floor will be opened for questions following the presentation. If you should require assistance throughout the conference, please press star zero on your telephone keypad to reach a live operator. At this time, it is my pleasure to turn the floor over to Satya Chalara, investor relations for Genesis. Sir, the floor is yours.

Thank you, Christy. Good afternoon, everyone, and welcome to Genesys' fourth quarter and fiscal 2019 financial results conference call. I'm Satya Chellara, investor relations for Genesys. With me on the call are Richard Danforth, chief executive officer, and Dennis Klan, chief financial officer of Genesys. Before we begin, I would like to take this opportunity to remind you that during the course of this call, management will make forward-looking statements. Other than the statements of historical facts, statements made during this call that are forward-looking statements are based on our current expectations. During this call, we may discuss the company's plans, expectations, outlook, or forecast for future performance. These forward-looking statements are subject to risks and uncertainties, and the actual results could differ materially from the views expressed today. For more information regarding potential risks and uncertainties, please refer to the risk factors section of the company's Form 10-K for the fiscal year ended September 30, 2019. Genesis disclaims any intent or obligation to update those forward-looking statements except as otherwise specifically stated. We may also discuss 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 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 given period, regardless of the timing of the related revenue recognition. Backlog is a measure of purchase orders received that are scheduled to ship in the next 12 months. At this time, it's my pleasure to turn over the floor to Genesis Chief Financial Officer, Dennis Klan. Dennis?

Thank you, Satya. I'll open today's call with a recap of our fiscal fourth quarter and fiscal year 2019 financial results. Mr. Danforth will then provide an update on the business. Afterwards, we will open the call for questions. Genesis revenues for the fourth quarter of fiscal year 2019 were $7.7 million. an increase of 135% compared with $3.3 million in the prior year fourth quarter. Gross profit was $3.6 million or 46% of revenue in this year's quarter. This is a 241% increase over the gross profit in the prior year quarter. Operating expenses in the fiscal fourth quarter of 2019 were $3.9 million, essentially unchanged compared to the same period in the prior year. The company reported a small net loss of $78,000 or zero cents per share in the fiscal fourth quarter of this year compared with the net loss of $2.4 million or seven cents per share in the prior year's fiscal fourth quarter. We move now to fiscal year 2019 results. Genesis revenue for fiscal year 2019 was a record $37 million. a 41% increase over the $23.6 million in the prior year. Gross profit for fiscal year 2019 was $18.5 million or 50% of revenue, an increase of $5.7 million or 45% over the prior fiscal year. Operating expenses for fiscal year 2019 increased 8% to $15.3 million from $14.2 million in 2018. This was largely due to increased investment in software development this year. Fiscal 2019 had $572,000 of income tax expense. Fiscal 2018 had income tax expense of $2.4 million due to a change in the deferred tax asset resulting from the reduction to U.S. corporation income tax rates. For fiscal year 2019, the company reported net income of $2.8 million or 9 cents per share, 8 cents per diluted share, compared with the net loss of $3.7 million or 12 cents per share in fiscal year 2018. Cash flow provided by operating activities in fiscal 2019 was $9.9 million, a record for any year in our history. In fiscal year 2018, cash flow provided by operating activities was $1.3 million. This year's increase was the result of a higher level of customer advances, net income, and non-cash charges. Our balance sheet remains strong. Cash and cash equivalents at September 30, 2019 were $18.8 million compared with $11.1 million at the end of the prior fiscal year. The $7.7 million increase in cash and cash equivalents was primarily due to the $9.9 million of cash provided by operating activities offset by $2.2 million of stock repurchases. Working capital increased by $3.7 million to $24.8 million at September 30, 2019, compared with $21.1 million at the end of the prior fiscal year. This is primarily the result of the fiscal year 19 net income. In fiscal 2019, We used $2.2 million to repurchase 788,425 shares of our stock. Last year, the Board authorized a $5 million repurchase program beginning January 1 of 2019 through December 31, 2020. Of this, $4.5 million is still available. With that, I'd like to turn the call over to Richard.