Genasys Inc.

Thank you for holding, ladies and gentlemen. You're online for this Genesys Inc. fiscal year 2020 conference call. At this time, we are still gathering additional participants and we'll get started momentarily. We thank you for your patience and ask that you please continue to hold. Good day, ladies and gentlemen, and welcome to the Genesis, Inc. Fiscal Year 2020 conference call. All lines have been placed on a listen-only mode, and the floor will be open for your questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to your host, Mr. Satya Cholara. Sir, the floor is yours.

Thank you, Jess. Good afternoon, everyone, and welcome to Genesis Fiscal Year 2020 Financial Results Conference Call. I'm Satya Cholara, Investor Relations for Genesis. With me on the call today are Richard Danforth, Chief Executive Officer, and Dennis Klon, 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 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 number of risks, and uncertainties including the consequences of 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 the 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 factors section of the company's Form 10-K for the fiscal year ended September 30, 2020. Genesys disclaims any intent or obligation to update those forward-looking statements except as otherwise specifically stated. We may also discuss non-GAAP operational metrics such as bookings and backlog, which we believe provide helpful information to investors with respect to evaluating companies' performance. We consider bookings and backlog leading indicators of future revenues and use this matrix to support production planning. Bookings is an internal operational metric that measures the total dollar value of customer purchase order 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's my pleasure to turn the floor over to Genesis Chief Financial Officer, Dennis Clark. Dennis?

Thank you, Satya, and welcome, everyone. I will open today's call with a recap of the fiscal fourth quarter and fiscal 2020 financial results. Richard will then provide an update on the business. Afterward, we'll open the call for questions. Revenues for the fourth quarter of fiscal 2020 were a record $14 million, the highest revenue for any fourth quarter in the company's history. This compares with revenues of $7.7 million in the fourth fiscal quarter of 2019. The 80% increase in revenues was primarily due to higher backlog entering the fourth quarter of fiscal 2020 compared to the prior year period. Gross profit was $7.6 million, or 54% 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 higher revenues. Operating expenses in fiscal Q4 were $4.5 million, an increase from $3.9 million in the same period a year ago. The increase was primarily due to higher selling general and administrative expenses to support our higher revenue and future revenue growth opportunities. In the quarter ended September 30, 2020, we had a non-cash income tax benefit of $6.5 million, which resulted from the $7.1 million release of a portion of the valuation allowance against deferred tax assets. The non-cash benefit and higher revenue generated net income of $9.5 million, or 27 cents per diluted share, in the fiscal fourth quarter. This compares with a net loss of $100,000, or zero cents per diluted share, in the same quarter last year. Cash generated from operating activities in the quarter was $3.2 million. Revenues for fiscal year 2020 were a record $43 million. This compares with revenues of $37 million in fiscal 2019. The 16% increase in revenues was primarily due to higher backlog entering fiscal 2020 compared to the prior year. Gross profit was $22.6 million, or 52.6% 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 higher revenues. Operating expenses in fiscal 2020 were $16.6 million, an 8% increase from the same period a year ago. The increase was primarily due to higher selling, general, and administrative expenses to support our higher revenue and future revenue growth opportunities. We had a non-cash income tax benefit of $5.7 million during the fiscal year ended September 30, 2020, which resulted from the $7.1 million release of a portion of the valuation allowance against deferred tax assets. The non-cash benefit and higher revenue generated net income of $11.9 million, or 35 cents per diluted share, in fiscal 2020. This compares with net income of $2.8 million or $0.08 per diluted share in fiscal 2019. Our balance sheet remains strong. Cash and cash equivalents totaled $23.3 million on September 30, 2020, up from $18.8 million at the end of the prior fiscal year. The $4.5 million increase in cash and cash equivalents from last year was due to cash provided by operating activities. Working capital increased by $5 million to $29.8 million at September 30, 2020, compared with $24.8 million at the end of the prior fiscal year. The increase in working capital was primarily due to the net income from operations and cash received from the exercise of stock options in fiscal year 2020. With that, I would like to turn the call over to Richard.