Genasys Inc.

Good day, ladies and gentlemen, and welcome to the Genesis Inc. Fiscal First Quarter 2022 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, Kim Rogers, Hayden IR, Investor Relations for Genesis. Ma'am, the floor is yours.

Thank you, Dagma. Good afternoon, and welcome to Genesis Incorporated's fiscal first quarter 2022 financial results conference call. I'm Kim Rogers with Hayden IR, the investor relations firm for Genesis. On the call with me today from Genesis are Richard Danforth, chief executive officer, and Dennis Klon, chief financial officer. During today's call, management will make forward-looking statements regarding the company's plans, expectations, outlook and future financial performance that involve certain risks and uncertainties. The company's results may differ materially from the projections described in these forward-looking statements. Factors that might cause such differences and other potential risks and uncertainties can be found in the risk factor section of the company's Form 10-K for the fiscal year ended September 30th, 2021. Other than statements of historical facts, forward-looking statements made on this call are based only on information and management's expectations as of today. We explicitly disclaim any intent or obligation to update those forward-looking statements, except as otherwise specifically stated. We will also discuss non-GAAP financial measures and operational metrics, including adjusted EBITDA, bookings, and backlog, which we believe provide helpful information to investors with respect to evaluating the company's performance. For reconciliation of adjusted EBITDA to GAAP financial metrics, please see the table in the press release issued by the company at the close of the market today. 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 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 the company's website. At this time, it's my pleasure to turn the call over to Genesis Chief Executive Officer, Richard Danforth. Please go ahead, Richard.

Thank you, Kim, and welcome, everyone. Fiscal 2022 is off to a solid start with another quarter of strong revenue, solid execution, and new business developments. First quarter revenues increased 33% year over year, despite external supply chain challenges that are disrupting businesses globally. We are managing our supply chain challenges primarily through reengineering our hardware components and developing alternative channels for sourcing our materials. We are taking proactive measures, including managing for longer lead times by building inventory and crucial components to fulfill our customer orders and meet our fiscal 2022 growth objectives. The year has started with good contract award activity with bookings totaling seven million and progress towards accelerating our software as a service or SaaS business. We recently announced new SaaS contracts with key wins in Texas, California and our first European Union public warning system win in the country of Slovenia. Our unified solutions are now on track to help protect more than 40 million lives globally. Said another way, lives covered globally by Genesis software increased by over 30% in the fiscal first quarter, demonstrating the global expansion which we are capable of. We grew our Genesis Emergency Management, or GEM, software service business in Texas with new contracts that replace competitors' emergency notification services in Madison County and in the town of Little Elm. In addition to renewing our GEM contract with the Texas Office of the Attorney General, new GEM software services were added to the Port of Houston to enhance worker and visitor safety. We had previously installed an integrated mass notification system at the port. The synergies of our suite of software and hardware systems offer key competitive advantages that are spurring new and follow-on orders and increasing pipeline growth. The synergies of our software and hardware systems enable Genesis to expand its engagement within Alameda County with a new mass notification and emergency warning system contract with the city of Berkeley. Alameda County launched Zone Haven emergency evacuation software and public safety resources in June 2021, which helped facilitate the new contract to install an integrated mass notification system network that will enable the city to broadcast voice notification with exceptional clarity and coverage. With our GEM software, IM&S outdoor speaker arrays can perform as a network or individually for citywide or hyperlocal notifications. A key differentiator of this configuration is its ability to continue operating when power or telecommunications infrastructure goes down. These unique features are examples of additional key competitive differentiating helping Genesys win new awards. In addition to our expansion in Alameda County, we recently signed Los Angeles County and four additional California counties to Zone Haven SAS multi-year contracts. Our critical evacuation planning, alerting, and access to real-time life safety information are now available to first responders, emergency service agencies, and more than 8.7 million California residents under annual recurring revenue contracts. These contracts have also opened the door to additional business opportunities with these and other counties and communities in California and in other states. In Europe, the country of Slovenia selected a National Emergency Warning System, or NEWS, to help keep more than 2 million residents and 3 million annual visitors safe and informed during emergencies and critical events. Genesis News was selected for several reasons, including the platform's advanced architecture and the ability for the Public Safety Agency to send geospecific alerts to any mobile phone in near real time. I'd like to congratulate our European team for this excellent work and this great award. EU activities for compliance to the mandate has picked up. We continue to anticipate that the mandated June of 2022 deadline will be extended primarily due to the impact of COVID in Europe. Our ongoing investment in resources to support our growing SaaS business will expand our emergency management platform by enhancing and integrating ZoneHaven with GEM and IM&S. ZoneHaven, an early-stage startup when we acquired them last June, realized they needed a larger partner to fulfill their vision of a nationwide and eventually global buildup. Genesis is making the investments to accelerate and augment Zonehaven's unique value proposition. We look in today's world and see opportunities for Zonehaven software to help safely manage evacuations and repopulations. As a part of our unified multi-channel platform, Zonehaven is an important growth catalyst for our SaaS offering. To benefit from larger GEM, IM&S, and Zonehaven SaaS contributions, will be a shift in our revenue mix towards higher margin recurring revenues and an expected increase in the company's market valuation. GEM Enterprise SaaS contracts opportunities, including major corporations, have been identified and are key targets for us in 2022. Additionally, we have identified opportunities in the United States and internationally with governments, cities, counties, and enterprise as areas of SaaS business growth. Importantly, we are successfully competing against other solution providers. Almost all of our multi-year GEM contract awards were announced replaced an incumbent. We believe we will continue to be successful in winning new enterprise and government businesses as competitive contracts come up for renewal. Our LWRAD hardware business remains strong, even as we continue to manage supply chain challenges. Our engineering and manufacturing teams have done great work in coming up with alternative solutions to meet LRAD product demand. In the first fiscal quarter, LRAD revenues were up 6%, and we also announced international defense, wildlife preservation, and US Navy orders totaling 3.7 million. Demand for critical communication remains robust as government and private enterprise are highly motivated to procure solutions that are readily implemented to help keep their constituencies safe and informed. We are enthusiastic about the growing market opportunities, given the strength of our integrated platform and the unique advantages, compatibility, and capabilities of our offerings, and our levels of active dialogue with an increasing number of potential customers. Our team is growing, providing more sales and technical capabilities to deliver on our strategy to increase SaaS-based revenue. We are reaffirming our fiscal 2022 outlook for another year of record revenue. While revenue expectation remains unchanged from a prior earnings release, we remain cautious regarding the ongoing supply chain disruptions. Our expectations are primarily based on our current backlog, which was nearly 31 million as of December 31st, 2021. With our backlog, business pipeline, and proactive measures we are taking to mitigate supply chain challenges, we are optimistic on delivering another record year of revenue. With that, I'll turn the call over to Dennis.