Genasys Inc. Provides Update on Puerto Rico Dam EWS Project

Implementation Phase Has Begun

SAN DIEGO--(BUSINESS WIRE)--Genasys Inc. (NASDAQ: GNSS), the global leader in Protective Communications, today provided updated information related to the previously announced $75 million contract to provide Puerto Rico Electric Power Authority (PREPA) with an Emergency Warning System (EWS) to protect residents and visitors downstream of the island’s 37 dams.

Since signing the definitive agreement in August 2024, PREPA and Genasys have been actively working to complete the implementation. The overall project has been broken down into 7 groups of dams, that will each have an Emergency Operating Center (EOC) established. The agreement stipulates that after each group’s design is approved, a deposit of 60% of the group’s value will be paid to Genasys, in order to facilitate procurement, manufacturing, and delivery of all hardware and instrumentation. The first three of seven groups have been designed and approved to proceed. The total value of these first three groups is over $36 million. In the fiscal first quarter earnings release on February 11^th, Genasys reported that it had received two of the deposits and that a third deposit was expected soon. On the company’s May 13^th second quarter earnings call, management reported that the third deposit had not yet been received but was expected shortly. Last Friday, May 16^th, Genasys received a partial deposit for the third group of dams. The remainder of the third deposit is expected to be received within the next few weeks.

Detailed plans and permits have been approved on a number of the sites. Initial construction on the island of Puerto Rico began in early April. Instrumentation and material is being aggregated and assembled in Genasys’ San Diego facility with shipments for the first three groups now expected to begin this month. Current shipping schedules call for all of the material required to complete the first three groups of dams be delivered to Puerto Rico in the Company’s fiscal fourth quarter.

As discussed during the second quarter earnings call, cash receipts will precede revenue and profit recognition. Initial ‘percent of complete’ revenues will be recognized on a cost basis for the delivery of hardware and instrumentation to Puerto Rico. Then, as installation and implementation of the equipment is completed, additional revenues will be accrued on an hourly basis. The resulting impact of this treatment is that the vast majority of revenues associated with the first three groups is expected to be recognized in the September quarter. Initial revenue recognition on the delivery of instrumentation will be on a cost, or zero margin basis, with subsequent revenues reflecting the profits on both the equipment and the implementation.

This update has been provided with the intent of informing investors of the progress of this significant contract, though no obligation or commitment to further update progress exists.

About Genasys Inc.

Genasys Inc. (NASDAQ: GNSS) is the global leader in Protective Communications. Incorporating the most comprehensive portfolio of preparedness, response, and analytics software and systems, as well as the Company’s Long Range Acoustic Devices® (LRAD®) the Genasys Protect platform is designed around one premise: ensuring organizations and public safety agencies are “Ready when it matters™.” Protecting people and saving lives for over 40 years, Genasys covers more than 155 million people in all 50 states and in over 100 countries worldwide. . For more information, visit genasys.com.

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