WRAP TECHNOLOGIES, INC. Q2 FY2023 earnings call

• Acquisition of Intrensic, LLC, a leading player in cloud-based evidence management and body worn camera technology, involving an investment of $500,000 in cash and 1.25 million shares of Wrap common stock, to fortify and diversify public safety solutions.
• Wrap Reality platform achieved record sales in the first six months of 2023, with anticipated growth in unique scenarios to enhance officer decision-making.
• BolaWrap continues to resonate with law enforcement agencies worldwide, with robust sales growth and advanced talks for large international orders.
• Expanded sales team to cater to increasing demand in domestic and international markets.
• Started to reap rewards of long-term investments in marketing, training, and R&D, establishing a robust brand and forging relationships with law enforcement agencies globally.
• Implemented a multifaceted approach to enhance collaboration between sales teams, optimize sales territories, and streamline operating model for efficiency and scalability.

In the second quarter of 2023, Wrap Technologies reported revenues of $1.2 million, consistent with the prior year. Americas revenues saw a 7% increase from the prior year period, rising to $1.2 million from $1.1 million, while international revenues held steady year-on-year. Gross profit for the quarter increased by 46% from the prior year, going from $457,000 to $667,000, with a healthy gross margin of 56%. The product segments include BolaWrap, which continues to gain global traction; Wrap Reality, a virtual reality training platform with record sales in the first six months of 2023; and the recently acquired Intrensic, which brings cloud-based evidence management and body worn camera technology to enhance the solutions portfolio.

• Outlook for the second half of 2023 is promising with a robust pipeline, including advanced talks for international orders and a clearer regulatory landscape in some regions.
• Anticipates higher margins in the second half due to a more favorable product mix and strategic initiatives.
• Historically, certain markets served see a seasonal uptick in demand in the latter part of the year, expected to hold true in 2023.
• Integration of Intrensic is expected to add significant contribution to accretive earnings and open new revenue streams.

Q: How does the second half of 2023 look compared to the first half of 2023?

A: The outlook for the second half is promising with a robust pipeline, advanced discussions with international clients, clearer regulatory landscapes in some regions, efficiencies from continuous improvement initiatives leading to lower operational costs and faster delivery, and anticipation of higher margins due to product mix and strategic initiatives. Also, historical seasonal demand uptick in the latter part of the year is expected.

Q: Why Intrensic and why now?

A: The acquisition of Intrensic is strategic as it aligns core competencies, brings advanced digital evidence management solutions, expands the customer base, deepens relationships with existing clients by offering enhanced bundled solutions, positions for new revenue streams, and sets the stage for remaining an industry leader in a digital world.

Q: How does Intrensic help 2023?

A: Integration of Intrensic immediately enhances the value proposition, allows tapping into additional revenue streams, adds to accretive earnings, opens multiple expansion opportunities with established relationships and market presence, complements product portfolio for bundled and integrated solutions, creates upsell and cross-sell opportunities, and drives operational efficiencies and caters to sophisticated customer needs, amplifying Wrap Technologies' portfolio and positioning for growth in 2023 and beyond.