OMNIQ Corp. (NASDAQ: OMQS) (“OMNIQ” or “the Company”), a
provider of Artificial Intelligence (AI) and IoT – based solutions
announces Q2 2023 revenue of $20.4M and increased AI based revenue
by 91%.
- Q2 2023
Revenue of $20.4 Million a 16% decrease vs Q2 2022 impacted by
temporary delay of several large orders
- 6 months
2023 Revenue of $48.26 Million a 4% decrease versus 6-month
2022
- AI
Machine Vision Revenue increased by 91% for Q2, driven by strong
customer demand across Homeland Security, Public Safety and
Automation of Parking.
- Company
continues the process of improving efficiencies initiated this
year, resulting in approximately $1.7M reduction in Sales and
G&A expenses maintaining its efforts to reach positive
EBITDA.
- Q Shield
AI based Machine Vision Safe City System added 2 new cities for a
total of 19 under contract. The company has navigated thru
regulatory requirements, is experiencing positive momentum, and
expects an acceleration in Q3.
- Q2
Adjusted EBITDA loss $1.5M versus Adjusted EBITDA loss of $777K
in Q2 2022
- Cash
June 30, 2023, of $1,998 Million vs. $1,311 Million on December
31st, 2022.
Additional Q2
2023 and
recent events:
- Three additional Airport ordered
OMNIQ’s AI based parking and security solution bringing the total
to 60 Airports in the US
- OMNIQ’s AI – Machine vision systems
to be deployed in South America in partnership with a
multibillion-dollar publicly traded high-tech defense and homeland
security company,
- AI based Border Safety System has
been enhanced with real-time anomaly detection. The technology
allows for identification of unusual acceleration of vehicle speeds
in high-risk areas, enabling authorities to respond immediately to
potential threats.
- OMNIQ partnered with EAGL
Technology, Inc to offer Shot Detection as an important add on to
its AI-Based solution with additional unique features like car’s
color, model and manufacturer, essential features for crime and
terron prevention.
- OMNIQ signed a definitive agreement
to acquire Tadiran Telecomm. The company is waiting for
governmental approvals before it can proceed with closing the
transaction.
Shai Lustgarten, CEO, commented “Our core legacy
business services the needs of many of the world’s largest
companies. While we remain confident in our continued success and
the opportunities ahead, these large companies were more cautious,
took more time to make decisions and pushed out orders as they were
faced with the challenges of an uncertain economy over the last
several months. This caused a temporary delay in receiving several
large orders resulting in a $4M decrease in Q2 revenue vs 2022.
Despite these challenges in the quarter, we continued to make
significant advancements which provide us the ability to reach our
yearly objectives and long-term growth plans.
Our dedicated team worked tirelessly throughout
the quarter to provide excellent customer service and actively
pursue numerous substantial new contracts. We are confident that
these efforts will yield positive results soon, more than
compensating for the $4 million decrease.
We continue to witness robust demand for our AI
systems in the United States, South America and the Middle East
which resulted in an overall AI revenue increase of 91%. Our
Q-Shield, Safe City system has exhibited impressive success,
fostering safer environments and generating increased revenues upon
deployment. Currently, we have 15 additional cities eagerly
anticipating the implementation of this system. As we ventured into
a new industry with groundbreaking technology, we encountered
several learning curves and navigated unexpected regulatory
demands. We are pleased to inform you that these challenges are
being successfully addressed. We anticipate a swifter pace of
deployments for the additional 16 cities and continued positive
pace of new contracts moving forward.
In our ongoing commitment to financial
responsibility, we have continued with significant cost-cutting
efforts in SG&A, resulting in a substantial reduction of
expenses by $1.7 million. This aligns with our ongoing efforts to
achieve positive EBITDA.
We are excited about our recent announcement
regarding the definitive agreement for Tadiran Telecomm, and we are
working on regulatory requirements to conclude the closing. Pending
approval, upon closure, this acquisition will significantly enhance
OMNIQ’s market positioning, adding robust technology to our product
portfolio."
Second Quarter 2023 Financial
Results
OMNIQ reported revenue of $20.4 million for the
quarter ended June 30, 2023, a decrease of 16% from $24.2 million
in the second quarter of 2022. Our Gross Margin in the 2nd quarter
was 19% compared to a Gross Margin of 25% in the same period in
2022. The decrease in Gross margin is due to the fix costs
accounted to the cost of goods sold combined with the decrease in
revenue. Margin on the variable cost (direct cost of material) is
higher by 2% from 31% in Q2 2022 to 33% in Q2 2023. Total operating
expenses for the quarter were $6.4 million, a decrease of 20% from
$8M in the second quarter of 2022.
Net loss for the quarter was $3.9 million, or a
loss of $.49 per basic share, compared with a loss of $3.2 million,
or a loss of $.44 per basic share, for the second quarter of last
year.
Adjusted EBITDA (adjusted Earnings Before
Interest, Taxes, Depreciation and Amortization) for the second
quarter of 2023 amounted to a loss of $1.5 million compared with an
adjusted EBITDA loss of $777 thousand in the second quarter of
2022.
Cash balance at June 30, 2022 was $2 million
compared with $1.3 million at December 31, 2022.
Six Months ending June 30, 2023 Financial
Results
OMNIQ reported revenue of $48 million for the
six months ended June 30, 2023, a decrease of 4% from $50 million
in the first six months of 2022. Our Gross Margin for the first
half of 2023 was 20%, compared to a Gross Margin of 24% for the
same period in 2022. Total operating expenses for the six months
ended June 30, 2023 were $14.1 million, compared with $15.5 million
in the same period of 2022 a decrease of 9%.
Net loss for the six months ended June 30, 2023
was $7.4 million, or a loss of $0.95 per basic share, compared with
a loss of $5.8 million, or a loss of $0.79 per basic share, for the
first six months of last year.
Adjusted EBITDA (adjusted Earnings Before
Interest, Taxes, Depreciation and Amortization) for the six months
ended June 30, 2023 amounted to a loss of $2.4 million compared
with an adjusted EBITDA loss of $1 million in the same period of
2022.
Earnings Call Details
To participate in this event, dial approximately 5 to 10 minutes
before the beginning of the call.
Event Date: August
15th -
8:00 AM Eastern Time
Toll Free: 888-506-0062
International: 973-528-0011
Participant Access Code: 261124
Event Link: Webcast URL:
https://www.webcaster4.com/Webcast/Page/2310/48934
Replay Number:
Toll Free: 877-481-4010
International: 919-882-2331
Replay Passcode: 48934
Replay will be available on the company website at www.omniq.com
under the investor tab.
About omniQ Corp.
omniQ Corp. (Nasdaq: OMQS) provides computerized
and machine vision image processing solutions that use patented and
proprietary AI technology to deliver data collection, real-time
surveillance and monitoring for supply chain management, homeland
security, public safety, traffic & parking management, and
access control applications. The technology and services provided
by the Company help clients move people, assets, and data safely
and securely through airports, warehouses, schools, national
borders, and many other applications and environments.
omniQ's customers include government agencies
and leading Fortune 500 companies from several sectors, including
manufacturing, retail, distribution, food and beverage,
transportation and logistics, healthcare, and oil, gas, and
chemicals. Since 2014, annual revenues have grown to more than $50
million from clients in the USA and abroad.
The Company currently addresses several
billion-dollar markets, including the Global Safe City market,
forecast to grow to $67.1 billion by 2028, and the Ticketless Safe
Parking market, forecast to grow to $33.5 billion by 2023 and the
fast casual restaurant sector expected to reach $209 billion by
2027.
For more information,
visit www.omniq.com.
Information about Forward-Looking
Statements
“Safe Harbor” Statement under the Private
Securities Litigation Reform Act of 1995. Statements in this press
release relating to plans, strategies, economic performance and
trends, projections of results of specific activities or
investments, and other statements that are not descriptions of
historical facts may be forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934.
This release contains “forward-looking
statements” that include information relating to future events and
future financial and operating performance. The words “anticipate”,
“may,” “would,” “will,” “expect,” “estimate,” “can,” “believe,”
“potential” and similar expressions and variations thereof are
intended to identify forward-looking statements. Forward-looking
statements should not be read as a guarantee of future performance
or results, and will not necessarily be accurate indications of the
times at, or by, which that performance or those results will be
achieved. Forward-looking statements are based on information
available at the time they are made and/or management’s good faith
belief as of that time with respect to future events, and are
subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in
or suggested by the forward-looking statements. Important factors
that could cause these differences include, but are not limited to:
fluctuations in demand for the Company’s products particularly
during the current health crisis , the introduction of new
products, the Company’s ability to maintain customer and strategic
business relationships, the impact of competitive products and
pricing, growth in targeted markets, the adequacy of the Company’s
liquidity and financial strength to support its growth, the
Company’s ability to manage credit and debt structures from
vendors, debt holders and secured lenders, the Company’s ability to
successfully integrate its acquisitions, and other information that
may be detailed from time-to-time in omniQ Corp.’s filings
with the United States Securities and Exchange Commission. Examples
of such forward looking statements in this release include, among
others, statements regarding revenue growth, driving sales,
operational and financial initiatives, cost reduction and
profitability, and simplification of operations. For a more
detailed description of the risk factors and uncertainties
affecting omniQ Corp., please refer to the Company’s recent
Securities and Exchange Commission filings, which are available at
https://www.sec.gov. omniQ Corp. undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, unless
otherwise required by law.
Contact:
ir@omniq.com
OMNIQ CORP.CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands) |
|
As of |
|
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
|
|
(UNAUDITED) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,998 |
|
|
$ |
1,311 |
|
Accounts receivable, net |
|
|
18,283 |
|
|
|
23,893 |
|
Inventory |
|
|
6,685 |
|
|
|
8,726 |
|
Prepaid expenses |
|
|
1,261 |
|
|
|
1,268 |
|
Other current assets |
|
|
371 |
|
|
|
473 |
|
Total current assets |
|
|
28,598 |
|
|
|
35,671 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net of accumulated depreciation of $1,069
and $1,030 respectively |
|
|
1,373 |
|
|
|
1,086 |
|
Goodwill |
|
|
16,432 |
|
|
|
16,542 |
|
Trade name, net of accumulated amortization of $4,669 and $4,458,
respectively |
|
|
1,522 |
|
|
|
1,826 |
|
Customer relationships, net of accumulated amortization of $11,241
and $10,762, respectively |
|
|
4,261 |
|
|
|
4,967 |
|
Other intangibles, net of accumulated amortization of $1,569 and
$1,541, respectively |
|
|
577 |
|
|
|
675 |
|
Right of use lease asset |
|
|
1,800 |
|
|
|
2,300 |
|
Other assets |
|
|
1,202 |
|
|
|
1,744 |
|
Total Assets |
|
$ |
55,765 |
|
|
$ |
64,811 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
52,859 |
|
|
$ |
54,736 |
|
Line of credit |
|
|
2,990 |
|
|
|
1,971 |
|
Accrued payroll and sales tax |
|
|
1,699 |
|
|
|
2,633 |
|
Notes payable, related parties – current portion |
|
|
97 |
|
|
|
293 |
|
Notes payable – current portion |
|
|
8,941 |
|
|
|
11,572 |
|
Lease liability – current portion |
|
|
829 |
|
|
|
942 |
|
Other current liabilities |
|
|
1,431 |
|
|
|
1,394 |
|
Total current liabilities |
|
|
68,846 |
|
|
|
73,541 |
|
|
|
|
|
|
|
|
|
|
Long term
liabilities |
|
|
|
|
|
|
|
|
Accrued interest and accrued liabilities, related party |
|
|
73 |
|
|
|
72 |
|
Notes payable, less current portion |
|
|
1,570 |
|
|
|
55 |
|
Lease liability |
|
|
1,010 |
|
|
|
1,404 |
|
Other long term liabilities |
|
|
178 |
|
|
|
265 |
|
Total
liabilities |
|
|
71,677 |
|
|
|
75,337 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ deficit |
|
|
|
|
|
|
|
|
Series A Preferred stock; $0.001 par value; 2,000,000 shares
designated, 0 shares issued and outstanding |
|
|
- |
|
|
|
- |
|
Series B Preferred stock; $0.001 par value; 1 share designated, 0
shares issued and outstanding |
|
|
- |
|
|
|
- |
|
Series C Preferred stock; $0.001 par value; 3,000,000 shares
designated, 502,000 and 544,500 shares issued and outstanding,
respectively |
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
Common stock; $0.001 par value; 15,000,000 shares authorized;
7,890,198 and 7,714,780 shares issued and outstanding,
respectively. |
|
|
8 |
|
|
|
8 |
|
Additional paid-in capital |
|
|
75,000 |
|
|
|
73,714 |
|
Accumulated deficit |
|
|
(91,849 |
) |
|
|
(84,460 |
) |
Cumulative Translation Adjustment |
|
|
928 |
|
|
|
211 |
|
Total OmniQ stockholders’ deficit |
|
|
(15,912 |
) |
|
|
(10,526 |
) |
|
|
|
|
|
|
|
|
|
Total liabilities and deficit |
|
$ |
55,765 |
|
|
$ |
64,811 |
|
OMNIQ CORP.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS(UNAUDITED)
|
|
For the three months |
|
|
For the Six months |
|
|
|
ending June 30, |
|
|
ended June 30, |
|
(In thousands, except share
and per share data) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues |
|
$ |
20,446 |
|
|
$ |
24,209 |
|
|
$ |
48,268 |
|
|
$ |
50,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
16,560 |
|
|
|
18,222 |
|
|
|
38,659 |
|
|
|
38,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
3,886 |
|
|
|
5,987 |
|
|
|
9,609 |
|
|
|
12,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research & Development |
|
|
559 |
|
|
|
468 |
|
|
|
982 |
|
|
|
990 |
|
Selling, general and administrative |
|
|
5,315 |
|
|
|
7,072 |
|
|
|
12,082 |
|
|
|
13,547 |
|
Depreciation |
|
|
96 |
|
|
|
58 |
|
|
|
204 |
|
|
|
151 |
|
Amortization |
|
|
422 |
|
|
|
406 |
|
|
|
858 |
|
|
|
851 |
|
Total operating expenses |
|
|
6,392 |
|
|
|
8,004 |
|
|
|
14,126 |
|
|
|
15,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(2,506 |
) |
|
|
(2,017 |
) |
|
|
(4,517 |
) |
|
|
(3,425 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(740 |
) |
|
|
(878 |
) |
|
|
(1,678 |
) |
|
|
(1,689 |
) |
Other (expenses) income |
|
|
(721 |
) |
|
|
(389 |
) |
|
|
(1,472 |
) |
|
|
(653 |
) |
Total other expenses |
|
|
(1,461 |
) |
|
|
(1,267 |
) |
|
|
(3,150 |
) |
|
|
(2,342 |
) |
Net Loss Before Income
Taxes |
|
|
(3,967 |
) |
|
|
(3,284 |
) |
|
|
(7,667 |
) |
|
|
(5,767 |
) |
Provision for Income
Taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
|
101 |
|
|
|
98 |
|
|
|
294 |
|
|
|
14 |
|
Total Provision for Income
Taxes |
|
|
101 |
|
|
|
98 |
|
|
|
294 |
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(3,866 |
) |
|
$ |
(3,186 |
) |
|
$ |
(7,373 |
) |
|
$ |
(5,753 |
) |
Net income attributable to
noncontrolling interest |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
67 |
|
Net Loss attributable to OmniQ
Corp |
|
$ |
(3,866 |
) |
|
$ |
(3,186 |
) |
|
$ |
(7,373 |
) |
|
$ |
(5,820 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(3,866 |
) |
|
$ |
(3,186 |
) |
|
$ |
(7,373 |
) |
|
$ |
(5,753 |
) |
Foreign currency translation
adjustment |
|
|
260 |
|
|
|
241 |
|
|
|
717 |
|
|
|
77 |
|
Comprehensive loss |
|
$ |
(3,606 |
) |
|
$ |
(2,945 |
) |
|
$ |
(6,656 |
) |
|
$ |
(5,676 |
) |
Reconciliation of net loss to
net loss attributable to common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(3,866 |
) |
|
$ |
(3,186 |
) |
|
$ |
(7,373 |
) |
|
$ |
(5,753 |
) |
Less: Dividends attributable
to non-common stockholders’ of OmniQ Corp |
|
|
(8 |
) |
|
|
(141 |
) |
|
|
(16 |
) |
|
|
(189 |
) |
Net income attributable to
noncontrolling interest |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
67 |
|
Net loss attributable to
common stockholders’ of OmniQ Corp |
|
$ |
(3,874 |
) |
|
$ |
(3,327 |
) |
|
$ |
(7,389 |
) |
|
$ |
(6,009 |
) |
Net (loss) per share - basic
attributable to common stockerholders’ of OmniQ Corp |
|
$ |
(0.49 |
) |
|
$ |
(0.44 |
) |
|
$ |
(0.95 |
) |
|
$ |
(0.79 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding - basic |
|
|
7,887,283 |
|
|
|
7,579,795 |
|
|
|
7,777,665 |
|
|
|
7,545,190 |
|
|
Six Months ended |
|
(In thousands) |
June 30, |
|
Adjusted EBITDA Calculation |
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
Net loss |
|
(7,373 |
) |
|
|
|
(5,754 |
) |
|
Depreciation &
amortization |
|
1,062 |
|
|
|
|
1,002 |
|
|
Interest expense |
|
1,678 |
|
|
|
|
1,689 |
|
|
Income taxes |
|
(294 |
) |
|
|
|
14 |
|
|
Stock compensation |
|
1,032 |
|
|
|
|
1,203 |
|
|
Nonrecurring loss events |
|
1,507 |
|
|
|
|
882 |
|
|
Adjusted EBITDA |
|
(2,388 |
) |
|
|
|
(964 |
) |
|
|
|
|
|
|
|
|
|
Total revenues, net |
|
48,268 |
|
|
|
|
50,531 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA as a % of
total revenues, net |
|
(5 |
%) |
|
|
|
(2 |
%) |
|
OMNIQ (NASDAQ:OMQS)
Historical Stock Chart
From Jun 2024 to Jul 2024
OMNIQ (NASDAQ:OMQS)
Historical Stock Chart
From Jul 2023 to Jul 2024