Omniq Corp

Hello and welcome to the OmniQ Corporation's third quarter and 2022 earnings conference call. My name is Holly and I will be coordinating your call today. With us on the call are Mr. Shai Lustgarten, Chief Executive Officer, and Neve Nissinson, Chief Financial Officer. Today's call is being recorded and you should have access to the company's fourth quarter and year-end 2022 earnings press release issued after the market closed yesterday. This information is available on the Investor Relations section of OmniQ's website at www.omniq.com. During the course of this 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 risks and uncertainties that affect the company's business and performance and the 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. Following the prepared remarks, the company will be taking questions as time permits. Now I will turn the call over to Mr. Shai Losgarden, CEO. Mr. Losgarden, please go ahead.

Thank you, operator, and good morning, everybody. Thank you for joining us today to discuss our Q4 and year-end 2022 financial results. To start, I'd like to thank each one of our employees across the entire company for their continued hard work and dedication to our vision and strategic plan. During today's call, I'm pleased to share with you our financials as well as give you an update on our recent achievements and a clear understanding of our future focus and potential opportunities. I am proud to announce that we experienced record-breaking revenues of $102.5 million for 2022, growing from $78 million in 2021 and $55 million in 2020. In addition, we recognized a record gross profit of $22.1 million and an increase of $5 million or 33% over last year and 100% over 2020. Also, we recorded positive cash flow from operations, totaling $1.2 million, another strong milestone. This growth came from a diverse group of customers in a wide variety of sectors, including safe city, supply chain, hospitals, restaurants, and retail. This diversity proves once again that our platform-designed offering has demand and success from multiple large verticals who depend on our technology and services to improve their operations and increase safety. It is also important to note that our AI revenue increased over 100% from 2021 to 2022 as our higher margin products gained momentum. While we have incurred upfront expenses related to our AI product and sales our revenue share model will allow for higher margins going forward. As we look to 2023 and beyond, we see ongoing strength across verticals and are excited about both the progress and opportunities ahead. During the year, we made several significant announcements, including 14 contracted cities for QShield, our Safe City product, completed the closing of 100% of Dangot computers, formalize the banking relationship, increasing the strength of our balance sheet, name the total solution partner for one of the largest global leaders in enterprise asset intelligence for robotics, supply chain management, deploy our AI machine vision solution to our 50th airport, and many more achievements, which you can see from the numerous press releases throughout the year. As we look into 2023, we have three company initiatives as well as three areas of growth that we believe will drive our company to continue success. I will start with the company's initiatives. First, selling deeper and wider to our existing Fortune 100 and 500 customers in all three business lines. Second, increased focus on generating cash and profitability by further efficiencies in operations and continued focus on sales growth. And third, focusing on the momentum in our deployments of our AI products to existing and newly penetrated markets. Before I go further, let me turn the call over to Niamh Nissenson, our Chief Financial Officer, who will go over our financial results in more detail. Niamh.

Yes, thank you, Shai. Hello, everybody. In the year ended December 31st, 2022, OmniQ reported record revenue of $102 million, which is an increase of 31% from $78 million in the year ended December 31st, 2021. We also reported record gross profit of $22.1 million in 2022 compared to $16.7 million in 2021. Our gross margin for 2022 also slightly improved to 22%. total operating expenses for the year were 31.7 million compared with 27 million for last year for i mean the year before last 2021 net loss for 2022 was 13.6 million or a loss of 1.82 cents per share compared with the loss of 13.1 million or loss of 2.20 cents per share in 2021 this loss includes one-time expenses incurred from the implementation of our ERP system company-wide. Adjusted EBITDA, or Adjusted Earnings Before Interest Taxes, Depreciation, and Motivation in Nonrecurring Loss Events for the year end of 2022 amounted to an adjusted EBITDA loss of $2.9 million, compared with an adjusted EBITDA loss of $4.1 million in the year that ended December 31, 2021, an improvement of $1.2 million in our adjusted EBITDA profitability. Let me turn the call back to Shai to talk more about our operational achievements and focus goals. Shai?