Omniq Corp

Good morning, and thank you for joining us for the OmniQ Corporate Update Call for the second quarter and six months, ending in June 30, 2022. At this time, all participants are on a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Joining us today, we have Shai Lesgarden, CEO of OmniQ, who will provide an operational overview, and Neve Niesensen, Chief Financial Officer, who will discuss the financial results. I will now take a brief moment to read the Safe Harbor Statement. During the course of this conference call, we will make certain forward-looking statements. All statements that address expectations, opinions, or predictions about the future are forward-looking statements. Although they reflect our current expectations and are based on our best view of the industry and our current expectations and our business as we see them today, they are not guarantees of future performance. These statements involve a number of risks and uncertainties, and since these elements can change and in certain cases are not within our control, we would ask that you consider that and interpret them in that light. We urge you to review the company's Form 10-K and other SEC filings for a discussion of the principal risk. and uncertainties that affect the company's business and performance factors that could cause actual results to differ materially. OmniQ undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law. I will now turn the call over to Shai Lustgarten. Please go ahead.

Thank you, operator. and thanks to everyone joining us on the call today. We're very pleased to share with you our 2022 second quarter and six months financial results combined with some of the following recent achievements. 85% growth in the second quarter's revenue compared to Q2 of 2021. An 81% increase in the second quarter's gross profit with keeping the same 25% margin compared to the Q2 of 2021. Sequential revenue decrease of $2 million compared to strong Q1 of 2022, mainly due to the global supply chain shortages, which are getting better per our strong third quarter deliveries. A 54% growth in the six-month revenue marks another record of over $50 million in line with our annual run rate of $100 million revenue target. 104% growth in the six-month gross profit, up to over $12 million. Gross margin for the six-month up to 24%, compared to 18% in the same period of 2021, in line with our profitability increase target. Q2 marks another breakthrough, penetrating the retail and restaurant markets with the company's AI-integrated solutions. OmniQ's QShield AI-based law enforcement solution offered to municipalities is experiencing positive momentum as 12 cities in the U.S. have already contracted and more are in the pipeline. Revenue model is based on recurring revenue sharing. Here are some of the highlights of recent events. On April 19, 2022, we announced the receipt of a purchase order to deploy our AI machine vision system in South America. On June 8, 2022, we announced the receipt of $11 million order from the government of Israel for our supply chain IoT solution. On June 13, 2022, we announced the receipt of a $29 million order from our Fortune 100 customer for our supply chain IoT solution. On June 17, 2022, the company announced that it has been selected by the city of East Dublin to deploy its AI-based QShield vehicle recognition systems technology and its cloud-based citation management platform. On June 23, 2022, the company announced that its AI-based QShield system assisted law enforcement in Adrian, Georgia, to allocate and return home an elderly man suffering from cognitive, memory, impairment. Our municipality install base is constantly increasing hand-in-hand with a growing number of municipalities interested in deploying QShield in their cities to help keep their streets safe. Our momentum remains strong, achieving significant growth despite the macroeconomic conditions including the supply chain crisis that caused some limited delays in the second quarter's deliveries. We have a strong backlog of orders and are seeing strong deliveries in Q3. With our AI machine vision proprietary technology and innovative solutions, we're entering two mega markets, the retail and fast food restaurants markets. When we began this endeavor into the retail space, some saw fantasy, we saw vision. We knew our technology would add value to our customers by adding value to their consumers. To describe our QShield solution for retail and fast food restaurants in a nutshell, OmniQ automatically records and provides real-time and historical consumption information, which provides improved customer service and experience, resulting in revenue growth. Utilizing OmniQ's technology will provide tools to better understand consumers' consumption habits while improving each unique customer's interaction. OmniQ's solution will be part of the CRM, customer relationship management system, allowing for dynamic decisions based on each unique customer visit. And together with our OmniQ's security enforcement in each restaurant location, our total solution is unparalleled. Before I go further, let me now turn this over to Niamh to take a deeper look at our financial results. Niamh?

Yes, hello everybody. As Shai highlighted, we reported revenue of $24.2 million for the quarter ended June 30, 2022, which is an increase of 85% from $13.1 million in the second quarter of 2021. Revenue increase reflects a combined strength of our consolidation with Dangot, as well as continued traction in our market. total operating expenses for the second quarter were 8 million compared to 5 million in the second quarter of 2021. The increase reflect the consolidation of DANGOT as well as certain non-recurring expenses. That loss for the quarter was 3.1 million or a loss of 44 cents per share compared with the loss of 2.5 million dollars or loss of 53 cents per share for the second quarter of last year. Adjusted EBITDA, meaning adjusted earnings before interest taxes, depreciation, and amortization for the second quarter of 2022 amounted to a loss of $777,000 compared to an adjusted EBITDA loss of $437,000 in the three months that ended on June 30, 2021. Cash balance was $2.9 million at the period ended June 30, 2022, compared to $7.1 million in December 31, 2021. Turning to the six-month results, OmniQ reported record revenues of $50.5 million for the six months ended June 30, 2022, an increase of 54% from $32.9 million in the same period of 2021. Our gross profit grew to $12.1 million in the first six months of 2022 compared to $5.9 million in the same period in 2021. Total operating expenses for the six months that ended June 30, 2022 were $15.5 million compared with $10.6 million in the first half of 2021. Net loss for the six months ended June 30, 2022 was $5.7 million or a loss of compared with a loss of 5.8 million or a loss of $1.24 per basic share for the same period last year. Adjusted EBITDA for the six months that ended June 30, 2022 amounted to a loss of $964,000 compared with an adjusted EBITDA loss of 1.6 million in the six months that ended June 30, 2021. I do wish to point out that in April, we announced the acquisition of the last remaining shares of the Dango Computers Ltd. And as a result, we now own 100% of Dango. Let's now turn the call over back to Shai to talk more about operational achievements.