Genasys Inc.

Good day, ladies and gentlemen, and welcome to the Genesis Incorporated Fiscal Second Quarter 2021 Conference Call. All lines have been placed on a listen-only mode, and the floor will be open for questions and comments 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 your host, Sasha Cholera. Sir, the floor is yours.

Thank you, Kat. Good afternoon, everyone. Welcome to Genesis fiscal second quarter 2021 financial results conference call. I'm Satya Chalara, 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'd like to take this opportunity to remind you that during the course of this call, management will be making 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 a number of risks, and uncertainties, including without limitation the business impact of epidemics or pandemics and other risks and uncertainties, many of which involve factors or circumstances that are beyond 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, 2020. 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 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 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 Klon. Dennis?

Thank you, Sacha, and welcome everyone. I will open today's call with a recap of the fiscal second quarter 2021 financial results. Richard will then provide an update on the business. Afterward, we will open the call for questions. Revenues for the second quarter of fiscal 2021 were $11.3 million, up 37% from the prior year quarter. As compared to the same prior year period, LRAD AHD revenue was $9.8 million, up 34%. Integrated mass notification systems revenue was $826,000, up 45%. And software revenue was $678,000, up 64%. The increase in software revenue was primarily from professional services on new software contracts. Gross profit margin was 47.2%. compared with 48.5% in the second quarter of fiscal 2020. Gross profit as a percentage of revenue was lower in the fiscal 2021 second quarter due to a 56% increase in engineering personnel, primarily software related. Higher software expenses were due primarily to the recent addition of our Genesis Communication Canada subsidiary and additional employees to support the Australia European Union and enterprise software initiatives. Operating expenses were $4.8 million up from $3.7 million in the same period a year ago. The increase was largely due to a 67 percent increase in sales and marketing personnel over the prior year to support future revenue growth opportunities, including opening sales offices in Singapore and the United Arab Emirates. Net income for the quarter was $0.3 million or a penny per share. Net income per share was unchanged from the fiscal 2020 second quarter. Cash provided by operating activities for the year to date was $363,000 due to ordinary course of business non-cash charges offset by an increase in inventory and the year to date net loss. Our balance sheet remains strong. Cash, cash equivalents, and marketable securities totaled $26.4 million on March 31, 2021, compared with $31.4 million on September 30, 2020. Working capital totaled $26.5 million on March 31, 2021, compared with $29.8 million on September 30, 2020. The decrease in working capital was primarily due to cash used to complete the purchase of Amica mobile assets. in the first quarter of fiscal 2021. With that, I'd like to turn the call over to Richard.