Genasys Inc.

Good afternoon and welcome to the Genesis Incorporated's fiscal third quarter 2020 financial results conference call. All lines have been placed on a listen-only mode and the floor will be open for your questions following the presentation. If you should require assistance throughout the conference, please press star then zero on your telephone keypad to reach a live operator. At this time, it is my pleasure to turn the floor over to Satya Cholara, Investor Relations for Genesis. Sir, the floor is yours.

Thank you, Jess. Good afternoon, everyone, and welcome to Genesis Fiscal Third Quarter 2020 Financial Results Conference Call. I'm Satya Chilara, Investor Relations for Genesis. With me on the call today are Richard Danforth, Chief Executive Officer, and Dennis Klan, Chief Financial Officer of Genesis. 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 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 companies' plans, expectations, outlook, or forecast for future performance. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation the failure of the proposed Amica mobile transaction to close on the expected timeline or at all. The effect of Amica mobile announcement of the transaction on customer relationships and operating results. The ability to meet all closing conditions to the Amica mobile transaction. the consequences of the COVID-19 outbreak, other pandemics, and other risks and uncertainties, many of which involve factors or circumstances that are beyond the company's control. These forward-looking statements are based on information and management expectations as of today. Future results may differ materially from our current expectations. For more information regarding potential risks and uncertainties, please refer to the risk factor 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. They 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 this metrics to support production planning. Bookings is an internal operational metric that measures the total dollar value of the 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. Finally, a replay of this call will be available in approximately four hours through the investor relations page on our website. At this time, it is my pleasure to turn the floor over to Genesis CFO, Dennis Clark. Dennis?

Thank you, Satya, and welcome, everyone. I will open today's call with a recap of the fiscal third quarter 2020 financial results. Richard will then provide an update on the business. Afterward, we will open the call for questions. Revenues for the third quarter of fiscal year 2020 were $12 million, the highest revenue for any third quarter in the company's history. This compares with revenues of $8.9 million in the third fiscal quarter of 2019. The 35% increase in revenues was due to a larger backlog at March 31, 2020, as compared to March 31, 2019, and strong acoustic hailing device revenues in the current year period. Gross profit was $6.5 million, or 54.1% of revenue. The increase in gross profit margin compared to last year was largely due to the additional leverage of fixed overhead costs gained on the higher revenues. Operating expenses in fiscal Q3 were $4.5 million, an increase from $3.9 million in the same period a year ago. The increase is primarily due to higher selling general and administrative expenses to support our higher revenue and future revenue growth opportunities. With higher revenues and gross margin, we generated net income of $1.5 million, or 4 cents per diluted share, in the fiscal third quarter. This compares with net income of $600,000, or 2 cents per diluted share, in the same quarter last year. Cash generated from operating activities in the quarter was $5.8 million. Our balance sheet remains strong. Cash and cash equivalents totaled $20.7 million on June 30, 2020, up from $16.4 million on March 31, 2020, and $18.8 million on September 30, 2019. The $4.3 million increase in cash and cash equivalents from the last quarter was due to cash provided by operating activities. Working capital increased by $1.4 million to $26.9 million at June 30, 2020, compared to $24.8 million at September 30, 2019. The increase in working capital was primarily due to the net income from operations and cash received from the exercise of stock options in the first nine months of fiscal year 2020. I would like to turn the call over to Richard.