Genasys Inc. Q3 FY2021 Earnings Call

Good day, everyone, and welcome to the Genasys Inc. Fiscal Third Quarter 2021 Conference Call. At this time, I am pleased to introduce your host, Kim Rogers, from Investor Relations for Genasys. Kim, the floor is yours.

Thank you, Padma. Good afternoon, everyone, and welcome to the Genasys Inc. Fiscal Third Quarter 2021 Financial Results Conference Call. I'm Kim Rogers with Hayden IR, the Investor Relations firm for Genasys. With me on the call today are Richard Danforth, Chief Executive Officer; and Dennis Klahn, Chief Financial Officer of Genasys. Before we begin, I'd like to take this opportunity to remind you that during the course of this call, management will make forward-looking statements. Other than 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 health crises or outbreaks of diseases, such as epidemics or pandemics and how they may affect our supply chain 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 information and management's 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. Genasys disclaims any intent or obligation to update those forward-looking statements, except as otherwise specifically stated. We may also discuss the non-GAAP operational metrics of bookings and backlog, which we believe provide helpful information to investors with respect to evaluating the 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 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 4 hours through the Investor Relations page on our website. At this time, it's my pleasure to turn the call over to Genasys, Chief Executive Officer, Richard Danforth. Go ahead, Richard.

Thank you, Kim and welcome, everybody. I will open today's call with an update on the business. Following my opening remarks, Dennis will provide a recap of the fiscal third quarter and 9 months 2021 financial results. Following my closing remarks, we will open the call for questions. Robust revenues and bookings and the acquisition of fast-growing emergency management and public safety software provider, Zonehaven, highlighted a very strong fiscal third quarter. Fiscal third quarter bookings were a record $44.3 million, the largest fiscal quarter in the company's history. For the first 9 months of fiscal 2021, we have booked $59.8 million, exceeding any prior fiscal year total. Addressable 12-month backlog at June 30, 2021, was $37.7 million, a 43% increase over the same period last year. Total fiscal year backlog at June 30, 2021, was $49.7 million. The company continues to generate operating cash. Over our prior 2 fiscal years, we generated $18 million in positive operating cash. And in our third quarter, we added another $8 million to that. On calls earlier this year, I said we expected record fiscal 2021 bookings, backlog, and revenue. Through our third quarter, we have achieved record bookings and are in a strong position to achieve record fiscal year backlog and revenue and another year of record revenue in fiscal 2022. In our first quarter, we acquired Amika Mobile and in June, we completed the acquisition of Zonehaven. Both acquisitions are serving as a catalyst to produce significant GEM enterprise software and Integrated Mass Notification Systems hardware and software business opportunities. Zonehaven software-as-a-Service empowers public safety agencies with essential evacuation and repopulation management tools that help protect the people they serve. Zonehaven provides planning, training, drills, alerting, and a comprehensive Know Your Zone community outreach program to bridge the gap between first responders and the public. By continuing to offer Zonehaven software as is, and integrating it with the GEM enterprise software and as a layer in our Integrated Mass Notification System, Genasys will have 3 key competitive advantages for securing local, regional, and national emergency management and warning contracts. Our combined systems and solutions are expected to increase software sales, grow recurring revenues, and enhance profit margins. As discussed on our last call, European Union public warning system RFPs are increasing. Earlier this month, France selected a French company to implement its public warning system. The country of Estonia made an award. Although Genasys was rated number 1 technically, we were second at price and the award went to the lowest price bidder. The dynamics of each country's decision-making process are varied and complex. The timeline for contracts awards has taken longer than originally anticipated, mainly due to ongoing COVID-related issues in the EU. Our business development and engineering teams in Europe are participating in European Union government customers and 18 mobile network operators. Multichannel flexible and customizable Genasys NEWS features industry-leading location-based SMS and advanced cell-broadcast technology, all engineered, built, and supported by Genasys European-based team. With more than 180 million Genasys-powered mobile alerts sent and delivered to Australians endangered by disasters over the last 8 years, we are confident in competing for and winning EU and other countries public warning system awards. Last quarter, we completed and commissioned a citywide Genasys Integrated Mass Notification early warning system for Laguna Beach, California. Featuring solar power and satellite connectivity, our industry-leading voice acoustic arrays continue to operate when power and telecommunication infrastructure fails or is turned off by utilities, public safety power shutoffs, or PSPS events. GEM software enables multiple activation and warning options to deliver geo-specific emergency alerts and life-saving notifications via SMS, voice calls, emails, desktop alerts, social media, common alert protocol, and more. In addition to other large Integrated Mass Notification System projects expected to be finalized and announced this year, the combination of Zonehaven evacuation management software and Genasys Emergency Management software is rapidly filling up the business pipeline for integrated systems with opportunities from California and the Western United States. The ongoing regional drought, wind, hot weather, tinder-dry conditions, lightning strikes, and human carelessness have created a perfect storm for mega fires capable of creating their own weather. In these conditions, wildfires are capable of moving at 100 yards per second or more. Because of the increasing speed intensity of wildfires, local firefighters' roles are shifting towards better coordination with law enforcement on planning, training, and alerting to successfully manage evacuations and help protect and keep people safe. As the only provider of public safety warning systems that unifies sensor inputs, evacuation management, and multichannel alerting solutions, we anticipate substantial U.S. and international growth in our integrated mass notification systems and Zonehaven segments in fiscal 2022 and beyond. Our Genasys enterprise software business is gaining momentum throughout North America. We continue to enhance our software feature sets to meet customers' needs and continue to grow our internal software sales teams and add U.S. and international software resellers. The expansion of our software services contract with a global automaker to its facilities outside North America is close to being finalized. GEM enterprise software service contracts with other major corporations are also expected this fiscal and calendar year. U.S. and international government opportunities with cities, counties, and departments are part of a robust and growing GEM enterprise business pipeline. In addition to the large army program of record and mobile mass notification system orders received last quarter, we completed Phase 1 of the U.S. Navy SBIR research and development project announced last December. The project is focusing on developing next-generation technologies to make acoustic devices smaller, lighter, and louder. Our Phase 2 proposal has been submitted, and we anticipate an award decision this calendar year. New and follow-on U.S. and international defense business is expected this year and in fiscal 2022. With that, I'll turn the call over to Dennis.

Thank you, Richard. Revenues for the fiscal 2021 third quarter were $12.6 million, up 6% from the prior year quarter. As compared to the same prior year period, LRAD revenue was $11.4 million, up 9%. Software revenue was $752,000, up 102%, and IMNS revenue was $455,000, down 60%. The increase in software revenue was primarily from professional services on new software contracts and the sale of the software license. Gross profit margin was 53% this quarter compared with 54.1% in the third quarter of fiscal 2020. Gross profit as a percentage of revenue was lower in the fiscal 2021 third quarter due to a 61% increase in engineering personnel, primarily software related. Higher software expenses were due to the recent additions of Amika Mobile to our Canadian subsidiary, Genasys Communication Canada; and Zonehaven and additional employees and resources for the Australia, EU, and GEM enterprise software initiatives to support future revenue growth. Operating expenses were $6.2 million, up from $4.5 million in the same period a year ago, largely due to a 76% increase in sales and marketing personnel to support future revenue growth opportunities, including opening sales offices in Singapore, the United Arab Emirates, and Puerto Rico. Net income for the quarter was $0.3 million or $0.01 per share, a decrease from $1.5 million in the fiscal 2020 third quarter. The decrease was largely due to the increased selling, general, and administrative expenses, offsetting the higher revenue and gross profit in the third quarter of fiscal year 2021. For the first 9 months of fiscal 2021, revenues were $32 million, up 10% from $29 million in the same period last year. Gross profit margin was 49.2% compared with 52% in the first 9 months of fiscal 2020. Gross profit as a percentage of revenue was lower compared to the prior year period, primarily due to a 64% increase in engineering personnel over last year to support the Australia, EU, and enterprise software initiatives. Operating expenses for the year-to-date were $15.3 million, up from $12.1 million in the same period last year, largely due to a 60% increase in sales and marketing personnel over the prior year to support future business and revenue growth opportunities. Net loss for the first 9 months was $0.1 million or breakeven per diluted share compared with net income of $2.4 million or $0.07 per diluted share in the 9 months of fiscal 2020. This decrease was primarily due to the higher operating expenses, partially offset by the higher gross profit in the current year period. Our balance sheet remains strong. Cash, cash equivalents, and marketable securities totaled $22.8 million on June 30, 2021, compared to $31.4 million on September 30, 2020. Working capital totaled $17.8 million on June 30 compared with $29.8 million on September 30, 2020. The decrease in working capital was primarily due to the use of cash to complete the Amika Mobile asset purchase and Zonehaven acquisition in the first and third quarters of fiscal year 2021, respectively, offset by a larger amount of customer deposits.

Thank you, Dennis. With 2 synergistic software acquisitions, opening and staffing sales offices in the Asia Pacific and Middle East and augmenting our global software sales and engineering teams, fiscal 2021 continues to be a transformative year for the company and adding important elements to accelerate business and revenue growth and maximize shareholder value. Increasing emergency warning, enterprise, and public safety needs are driving demand for our full suite of hardware systems and software solutions. Genasys's unified multichannel platform is uniquely positioned to capitalize on rapid growth in the critical communications and mass notification markets. Based on our record fiscal year bookings and robust backlog and business pipeline, Genasys is strongly positioned to achieve record fiscal year backlog and revenue and another year of record revenue in fiscal 2022. I'll now turn it back to the operator for Q&A.

Our first question comes from Mike Latimore with Capital Market.

This is Anchal Sahu on for Mike. Could you just give me an update on the sales or the pipeline out of Singapore and UAE offices. More government or enterprises focused business and those regions?

Well, the APAC region still is largely impacted by COVID-related shutdowns across most of the countries in the APAC region. With that said, there's significant system opportunities in multiple countries that we are pursuing that include both integrated systems and software-only solutions. In the Middle East office, UAE, similarly, it's not a shutdown. That part of the world is not shut down as much as the APAC region is. But we have opportunities that we're pursuing across most Middle Eastern countries. We have new opportunities in Africa, and we're pursuing the Eastern European countries out of that office as well. The specific numbers by office or region, I don't have in front of me, but we can provide those at a later date.

Okay. And how much was software of total booking in the quarter?

I don't have the bookings. I mean the revenue was $752,000. Year-to-date software revenue is about $2.1 million, which is more than we've had in any total year in the last 3 years.

Right. You don't provide specific guidance, but could you clarify if Q2 revenue is expected to be higher than Q3 revenue?

Could you repeat the question?

Yes. Like as you don't give the specific guidance, should Q4 revenue be higher than Q3 revenue?

What I've said is that our fiscal 2021 revenue will be yet another record year. So last year, we did $43 million in total year revenue. We're at $32 million in revenue through Q3. So just to match last year's total, we would have to do $11 million. And as I said, we will do more than that, notwithstanding supply chain and other related issues, but we still expect to do record revenues in Q4, record total year revenues with the addition of Q4.

Our next question comes from Martin Yang with Oppenheimer.

My first question is about your near-term outlook for the share of software revenues. When do you expect it to reach 10% of the total?

For software? Is that the question?

Yes. For software.

My expectation was certainly we'll be exceeding 10% next year.

Got it. And a follow-up to that is, as you expand the sales force and operating structure to support your organization, is achieving breakeven for software part of the midterm or near-term priorities?

As the software business expands, it will reach a point where it covers its own costs. Beyond that, it will provide a significant gross margin for the company. We are still in the early stages, but I expect that next year we will transition to a very favorable position for the company.

Got it. And last question from me. Can you maybe provide us with more context on when and what kind of revenue level would you be able to operate the software business profitably?

I don't think we've provided that information publicly.

We've not.

Our next question comes from Ed Woo with Ascendiant Capital.

Congratulations on the quarter. In terms of the supply chain and any chip issue shortages or transportation issue shortages, have that impacted your business at all, any delays?

We've experienced some delays and had to redesign products to use available commodities in the supply chain. However, we have met all of our revenue forecasts, including our internal projections made over a year ago. We anticipate that Q4 will align with our planned expectations. The engineering and operations teams have effectively collaborated to address the supply chain challenges, primarily through necessary redesigns.

Great. So it sounds like it hasn't really impacted you that much, if you guys were able to still meet your targets?

We have. Underneath the covers, though, Ed, there's a lot of people working to make sure it doesn't impact us. And they've been successful. And I fully expect that they'll continue to be very successful.

Great. And then my last question is on the EU. You mentioned France and Estonia. Do you still feel as confident as you do now with the opportunities there than you did prior to, I guess, these 2 countries announcing their contracts?

I do. In fact, I'd state that I feel more confident. I have mentioned for more than a year that there will be cases where there will be a home field advantage. And I think that's what we experienced in France. Estonia is a very small country with not that many people, about 1 million or so people that live there, is disappointing to lose but coming in number one technically against people that have been in the business for a very long time was reassuring and a validation of our strategy. On a simple low price wins, we're probably not going to win that. And somebody else will. But not all countries are going to put award criteria based on price, not based simply on price. There are several, as I mentioned in my remarks. There's 11 government RFPs out now. There's 18 mobile network operator RFPs out now. There are large countries and small countries in that mix. And I believe when we speak next quarter, that number will be larger. I expect additional award announcements in our fiscal Q4 and then again in our fiscal Q1 and beyond.

Our next question comes from Richard Neaton with Rivershore Investments.

My question concerns the Zonehaven acquisition in your thinking of the ROI involved given the price paid for the company in terms of stock and cash. You mentioned that this isn't primarily a financial-based acquisition. How are you thinking in terms of return on investment and over what period of time what percentage of return, given the number of new shares you issued in the short term dilution to your preexisting shareholders?

I have a few points to make. First, Zonehaven is a start-up that has been in operation for two years. Therefore, using a revenue or earnings multiple doesn't really apply here. Looking ahead over the next 12 months for fiscal 2022, I anticipate our multiple will be in the 4 range. I expect significant growth from Zonehaven, and their pipeline looks strong, and we're starting to see results.

And was that expectation that multiple the primary determinant of arriving at an acquisition price?

It was certainly a factor in our decision. However, the key was the people involved. It was the customer base; as part of our due diligence, we engaged with the users of the software product. These users are extremely passionate and serve as the best sales force for this product line. For example, during the current fire season in Northern California, about 16 of the incidents are utilizing Zonehaven software, which is a significant increase from just a few instances a year ago. I believe this growth will continue to be explosive. If we had waited another year for Zonehaven's revenue, we would have been paying a higher multiple than what we anticipate for the next 12 months.

What opportunities do you see Zonehaven presenting for your software business in Europe, Australia, APAC, and other parts of the U.S.?

There are several answers to that question. As I mentioned earlier, Zonehaven will continue to be sold as is. Additionally, a version of Zonehaven integrated with the GEM enterprise software will be offered as part of the integrated system platform that Genasys provides. So far, Zonehaven has primarily been focused on Northern California, but we have plans to expand internationally, with Australia being a significant opportunity. The Genasys software already has access to the location of all phones, so integrating the evacuation software from Zonehaven is a logical step. We see opportunities in the United States, Asia, the APAC region, and the Middle East. Our sales and marketing efforts aim to grow both Zonehaven and GEM, including hardware and software. I believe this year has been transformative for us, and we expect to see the benefits in our fiscal 2022.

Our next question comes from Myles Wittenstein with UBS.

I have a couple of questions. First, regarding the Great Britain contracts that were awarded to a competitor, did you actively compete in that market? If so, why do you think they chose the other option? Secondly, you mentioned that we came in second in price. Is there enough value added in our pricing to justify our position compared to what Estonia ultimately purchased? Lastly, where are we with stock buybacks?

We have an active program, but we're not utilizing it. The U.K. requirement for mass notification has been in place for nearly a decade, and they are not part of the EU, so my earlier comments were not applicable to them. Due to the pandemic, there was a pressing need for a system, and they procured a cell broadcast system for 4G and 5G from a supplier that has been active in that market since 2010, which did not include us. Regarding your second question about Estonia and pricing, each country has varying evaluation criteria, some straightforward and others quite complex. For Estonia, price was weighted at 85% while technical considerations were only 15%. That creates a significant imbalance; if it were a 50-50 split, I would agree with your perspective, but at 85-15, it's nearly impossible to achieve.

Our next question comes from Michael Morelli.

I’m a long-time stockholder. In fact, I think I've been following the company for 20 years. I'm now 86 years old, and I'm getting to the point where the old saying from Keynes comes in, 'in the long run, we're all dead.' And I'm saying that because in the last several quarters, you've been saying, yes, we're investing in this and that and everything else for future growth, future growth. And my question is, at what point do you stop spending all this money and start turning it into profits?

Well, first, we've been profitable for the past 3 years. We've generated $24 million, $25 million in operating cash. I've stated that even despite the significant investment that we planned for in our fiscal 2021 that we would also be profitable and cash flow positive, despite the investments. Those investments are at least in part responsible for a $60 million booking through 9 months. Our prior full year booking record was $46.5 million, I think. We're substantially higher than that, and we have a full quarter to go. So we will enter our fiscal 2022, excuse me, Michael, with a backlog that will support, again, another record year of revenue for our fiscal 2022. So our top line from revenue has been growing at just under a 30% CAGR for the last 4 years. And we've delivered operating income, net income, and lots of cash while investing around the world and in engineering and marketing. That's the company.

I appreciate all that. I know all that. And of course, I've been sticking with you for such a long time. However, I'm still looking for the reported net operating profits are still miniscule, even compared to the price. And I guess, maybe I should reform the question to say when are we going to see earnings, which are the only reason why the stockholders buy stocks because their earnings are going to go up.

Our next question comes from Lloyd Corton with Unique Investments.

I have a few questions. Well, in the RFPs for Europe, will Zonehaven be incorporated into those?

Not initially. There isn’t a requirement for that at this time, Lloyd, but it’s clearly an opportunity for upselling, especially in countries where we have implemented the SMS system, like Australia, where the location of all the phones is known. Integrating the Zonehaven software into that platform makes sense since we already have the location data for all the phones.

It wouldn't be advantageous as an upsell that we have this, which nobody else has?

It will certainly be part of our proposals, but it won't be going into the pricing.

Okay. In the rest of Europe, there are multiple carriers in each country, is that correct?

Yes.

And are we negotiating with individual carriers or with the government or what?

It depends. It depends on the structure of the RFP. In some cases, like the country of Estonia, the government ran the whole thing. As I recall, there were 3 individual carriers in Estonia and then the front end for the government. So there were 1 RFP to cover 4 activities. In other countries, that would be 4 RFPs.

You feel it's more advantageous for us to have separate RFPs there in each country?

I do. It gives you a better opportunity to win. You may have a better relationship with one of the network carriers. And another you may have a better partner and a country.

Don't we have a strong position in Spain?

Sure. We certainly do.

Do you feel like there's a good possibility we'll get something out of that country seeing that we're there already and another capacity, if you now have remembered.

I think it's going to be a fair and open RFP process.

Also, in the last call, you were going to release an SEC something on the cost of an acquisition. I never saw that come through.

There was an 8-K that was filed that disclosed, I believe. I'm pretty sure that it disclosed the purchase price. In addition, it's a good-sized footnote in the 10-Q that will be filed today or first thing in the morning.

What was that purchase price?

It was $24.2 million.

I'm sorry. Say it again.

$24.2 million.

That was for which acquisition?

For Zonehaven.

$24 million in cash, stock, or what?

Yes, both. Cash and stock.

50-50.

Okay. In our RFPs, as you stated, we're the only ones that have the physical speaker system in addition to the software. How important do you think that's going to be or how much interest are these countries showing because we have that and our competitor doesn't, I believe.

You're correct. I would say, in the North America enterprise market, it is a significant difference that automobile manufacturers that we mentioned in the last quarter, we expect to be awarded contracts to put acoustic devices, both inside their factories and outside their factories here shortly. And there's more that to come from the enterprise side for sure. In the national emergency warning systems, again, it's in our proposals. It's not part of the requirement, but it's an upsell opportunity. And in counties and cities like Laguna Beach, we're the only ones that do that. So Laguna Beach has acoustic devices, has software. We announced the Riverside County all software win. We expect additional opportunities in Riverside and lots of other counties here in California and beyond. And it's the whole package, Lloyd. It's the hardware, it's the software, it's the sensors. It's the command and control software.

It just seems that it's a selling opportunity. In an emergency, not everybody has their cell phone on them, their batteries die, they don't have reception. And I would think that the speaker system would be critical for a lot of people out there.

Your assessment is correct.

Also, there was an announcement of a college that redid their contract with you guys. Cambridge or something, what was that college?

Lambton College in Canada.

Are we working with other colleges? Are we getting anywhere with other colleges in this country or any country?

Sure. We're in several colleges in Canada and in the United States we're in several colleges along the East Coast.

Oh, I didn't know if they had been announced or just been...

They're announced when we're allowed to announce them. Frequently, we're prohibited from doing that.

Our next question comes from Stephen Wagner with Integrity Wealth.

And welcome aboard, Kim. The bookings are impressive. I was expecting a much larger actual revenue recognition for the quarter. That's just my personal view. Were there any challenges that impacted this? Did any delays, like COVID shutdowns, play a role in that?

No. As I mentioned, our revenue in Q3 was exactly where we anticipated it to be.

Understood. Okay. And if...

Now remember, Steve, we came into this fiscal year with $16.6 million in backlog. And we have converted that backlog plus another $18 million of book and bill. And we still have the fourth quarter ahead of us.

Understood. It should be a great year ahead. This connects to my next question. Previously, you mentioned in our last call and in another discussion that your goal is to achieve $100 million in revenue within the next 3 to 5 years, with an even split between software and hardware. If we look at the trailing 12 months, the revenue is $45 million, which translates to a compound annual growth rate of nearly 30% over 3 years and 18% over 5 years. Personally, I believe these figures could be communicated more effectively. I urge analysts on the call to consider this. While they have heard your projections, some estimates remain in the single digits. This is just a comment, so no need for a response. However, I'd like to follow up with a quick question. That projection was made before the Zonehaven acquisition. Now that we have made that acquisition, you have confidently suggested that we can expect significant revenue growth from it. I completely agree with this sentiment as the time for this product has arrived. What would you say about the $100 million revenue target? Should we expect it to be achieved in closer to 3 years, or could it happen sooner? What are your thoughts?

As you pointed out, Steve, I've said before multiple times that the company would be $100 million in 3 to 5 years. The Zonehaven acquisition will get us there closer to 3 than 5. So I think...

So here we are, we got the company...

FY 2022 is a big deal. Yes.

Yes. So if we got a company growing at 30% CAGR, that's remarkable. And I would just wonder when that news is going to get out there in terms of growth potential. And that will alone get us on significant radars and create what has been a lackluster institutional interest in our company over the last couple of years. I mean, our institutional ownership has declined in the last 2 years. I'm not an institution. We more than doubled our shares to over 4 million. And yet I've noticed and seen these other folks that have been in the story for so many years just lose interest. They're still good shareholders and they're loyal shareholders, and we're appreciative of it. But Kim, you've got an opportunity here, a massive opportunity here with a wonderful growth story. I just hope that we can get in front of more of these kinds of funds, micro cap, very small cap that are able to buy now and they don't need to wait for, well, we need to see more software revenue or we need to see more this or that because I think we're there from that standpoint. The other question that I have is regarding Europe, and I appreciate your comments earlier, and I know that you alluded to some delays. One of the things that you mentioned in the last call was that there would be more than 1 expectation of an award to Genasys in the second quarter. Now obviously, we wouldn't expect it to be announced in the second quarter, but sometime in the following quarter. Where are we there? Are you still confident with regard to that? Has that been accomplished? Are you able to comment at all on that?

Only the 2 that have been announced, Steve, France and Estonia.

Okay. Fair enough. But you're still...

My remarks highlighted our strong confidence in our position in the EU.

Understood, as you should be. I mean, again, it's a fantastic opportunity and product that we have to offer. Again, as you said, if the waiting in Estonia would have been different in terms of importance, we clearly would have won that. But they are who they are and they have their own parameters, and that's just the way it goes. Moving on to another question that I have, obviously, 2 gigantic wins for us in the face of competition versus our larger competitor, in fact, in seating our largest competitor in BMW, North America. I know that you had anticipated or were preparing other proposals for them in other locations throughout the world. Can you give us an update on that?

Sure. I mentioned that in my remarks. We expect a contract for a Latin American country. We also anticipate a third contract from another Latin American country. Additionally, we are working on a contract in a European country for the same company.

Fair enough. Fair enough. And on Zonehaven and by the way, I completely love that acquisition and completely agree that now is the time to do it. Waiting a year would have made it a lot more expensive, maybe even prohibited. So congratulations on that. I think that's a fantastic investment in our future and one that's going to pay significant dividends. And again, maybe this is just an editorial thing to think about. But I think it would be very helpful if you guys were able to somehow find your way to give us guidance on what you think that is going to do from a projected dollar amount. I appreciate the comments regarding explosive growth, but none of us out here really knows what that means. And I think it would help, if we did now a little bit more detail on that. That's just a comment. I appreciate your hard work, and we look forward to a fantastic rest of the year in fiscal 2022.

It looks like that was our final question.

Thank you. We regularly discuss our business at investor events during the year. You're invited to join us for these events. Thank you for participating in today's call. We look forward to speaking with you again later this year, when we report fiscal year 2021 results.

Thank you. This concludes today's conference call. We thank you for your participation. You may disconnect your lines at this time, and have a great day.