Strategic Initiatives Lead To Significant
Improvement in Results Through First Half of Fiscal 2021
- Second quarter revenue of $5.9
million vs. $4.3 million, an
increase of 38% posted in fiscal 2020 as company continues to
benefit from rebound in sales
- Improved results continue to reflect success of company's
strategic and restructuring initiatives put in place in fiscal
2020
- Company delivered 178 security scanning system units to a wide
range of global clients across a diversified base of sectors
- Important inroads continue to be made within the sports and
entertainment as well as the state and local government
verticals
- Maintaining forecast of return to pre-pandemic annual sales
level and gross margins resulting in expected positive Adjusted
EBITDA for fiscal 2021 (barring any further unforeseen negative
impact from supply chain and logistics or escalation of
COVID-19)
MONTREAL, June 29, 2021 /CNW Telbec/ - VOTI Detection Inc.
("VOTI" or "the Company") (TSXV: VOTI), a leading-edge Canadian
technology company that develops latest-generation X-ray security
systems based on 3D Perspective™ technology, today announced record
results for its second quarter ended April
30, 2021.
"Our second quarter positions us to meet our targets for
the full fiscal year." commented Rory
Olson, President and CEO of VOTI Detection. "We are seeing
important positive indicators including a backlog for product,
service and extended warranties due to the reopening of the economy
and pent up demand for our X-Ray scanners. In addition, sales to
sporting arenas in North America
and to state and local governments in the US, two very important
verticals for us, have been very strong. In fact, in the second
quarter, we saw the widest distribution of transactions in the
history of our company. We see this as a positive indicator for
growth going forward. With our 3D Perspective technology, we
believe that we are offering the market the product that it is
looking for. On a cautionary note, we still believe that we will
have to navigate certain headwinds over the coming months related
to currency exchange rates and worldwide supply chain and logistics
challenges resulting from the reopening of the global economy. We
are following these factors closely and putting in place mitigation
strategies to ensure that we maintain our momentum."
For a discussion of risks related to the Covid-19 pandemic,
please see VOTI`s MD&A filed today under VOTI`s profile
at
www.sedar.com
Financial Highlights
(Unaudited, all amounts are in
Canadian dollars)
Period Ended April
30
|
Q2
2021
|
Q2
2020
|
Change
|
YTD
2021
|
YTD
2020
|
Change
|
Revenue
|
5,878,960
|
4,263,857
|
1,615,103
|
12,203,175
|
10,305,873
|
1,897,302
|
Gross
profit
|
1,830,289
|
1,366,259
|
464,030
|
4,195,125
|
3,271,458
|
923,667
|
Gross margin
%*
|
31%
|
32%
|
(1%)
|
34%
|
32%
|
2%
|
Net loss
|
(2,885,173)
|
(349,520)
|
(2,535,653)
|
(4,015,704)
|
(2,574,123)
|
(1,441,581)
|
Adjusted net income
(loss)*
|
(2,014,072)
|
(1,284,612)
|
(729,460)
|
(2,881,266)
|
(2,786,636)
|
(94,630)
|
Adjusted
EBITDA*
|
(711,752)
|
(941,413)
|
229,661
|
(208,377)
|
(2,020,566)
|
1,812,189
|
Cash (used in) from
operating activities
|
(728,021)
|
(372,351)
|
(355,670)
|
1,474,998
|
(3,586,005)
|
5,061,003
|
Revenue
Revenue for the three-month period ended April 30, 2021 totaled $5,878,960 compared to $4,263,857 for the same period in Fiscal 2020, an
increase of $1,615,103 or 38%. The
increase is primarily attributed to the greater number of units
sold, as well as the increase in the average selling price per
scanner resulting from the change in product mix sold, partially
offset by the decrease in the US dollar foreign exchange rate.
Revenue for the six-month period ended April 30, 2021 totaled $12,203,175 compared to $10,305,873 for the same period in Fiscal 2020,
an increase of $1,897,302 or 18%. The
increase is primarily attributed to the greater number of units
sold during the period, an increase in the average price per
scanner resulting from the change in product mix sold, the sale of
VotiINSIGHTS, and an increase in service, partially offset by the
decrease in the US dollar foreign exchange rate.
178 security scanning units were sold in the second quarter
compared to 147 units during the same period in Fiscal 2020
bringing the total number of units sold for the six month period to
345 compared to 295 during the same period in Fiscal 2020.
Gross Profit
Gross profit increased to $1,830,289 compared to $1,366,259 for the same period in Fiscal 2020.
Notwithstanding, the gross margin decreased to 31% compared to 32%
for the same period in Fiscal 2020. The 1% decrease in gross margin
is primarily the result of the change in product mix sold,
partially offset by the benefits of cost reduction initiatives.
Gross profit increased to $4,195,125 or 34% of revenue, compared to
$3,271,458 or 32% for the same period
in Fiscal 2020. The 2% increase in gross margin compared to the
same period in Fiscal 2020 is primarily the result of the Company's
first time sales of its VotiINSIGHTS fleet management and analytics
dashboard, the benefits of cost reduction initiatives, and the
increase in after sale services and revenue from extended warranty,
partially offset by certain scanner sales with low margins.
Net Loss
Net loss in the second quarter increased to $2,885,173 compared to $349,520 for the same period of Fiscal 2020. The
increase in net loss of $2,535,653 is
primarily related to the increase in the non-cash change in fair
value of warrants and embedded derivatives expenses, share-based
payments expenses, accretion expense, foreign exchange loss, and
net operating costs, partially offset by the increase in gross
profit.
Net loss for the six months increased to $4,015,704 compared to $2,574,123 for the same period of Fiscal 2020.
The increase in net loss of $1,441,581 is primarily related to the increase
in financial expenses and change in fair value of warrants and
embedded derivatives expenses, partially offset by the increase in
revenue and gross profit, funding received from the CEWS stimulus
program, and the decrease in operating expenses.
Adjusted EBITDA*
Adjusted EBITDA for the second quarter was ($711,752) compared to ($941,413) for the same period of Fiscal 2020.
The improvement of $229,661 is
primarily related to the increase in gross profit, partially offset
by an increase in net operating expenses.
Adjusted EBITDA for the six months was ($208,377) compared to ($2,020,566) for the same period of Fiscal 2020.
The improvement of $1,812,189 is
primarily related to the increase in gross profit and funding
received from the CEWS stimulus program, and a decrease in
operating expenses.
Cash Flows
Net cash from operating activities during the six-month period
ended April 30, 2021 increased by
$5,061,003 when compared to Fiscal
2020. The increase in net cash from operations is primarily due to
the improvement of the Company's cash-based operating results for
the six-month period ended April 30,
2021, and the positive impact from the change in the
Company's non-cash working capital.
Fiscal 2021 Second Quarter Results Conference Call:
When: June 30th, 2021
at 9:00 a.m. ET.
Dial in number: (+1) 888 390 0546, (+1) 416 764 8688 or (+1) 514
225 6995
Conference call replay available until Wednesday, July 7th, 2021.
Recording Playback Number: (+1) 888 390 0541
Playback passcode: 145474#
To access the webcast, click on this link:
https://produceredition.webcasts.com/starthere.jsp?ei=1476409&tp_key=ea63628424
The conference ID is 6614547.
A full version of VOTI Detection Inc.'s Fiscal 2021 Second
Quarter Management's Discussion and Analysis (MD&A) and Interim
condensed consolidated financial statements for the quarter-ended
April 30, 2021 are available on
www.sedar.com.
*Non-IFRS Financial Measures
Certain financial and
non-financial measures included in this news release, including
Adjusted EBITDA, Gross margin percent and Adjusted net loss, do not
have a standardized meaning under IFRS and therefore may not be
comparable to similar measures presented by other companies. The
Company includes these measures because it believes they provide to
certain investors a meaningful way of assessing financial
performance. For a more complete description of these measures and
a reconciliation of VOTI's non-IFRS financial measures to financial
results, please see VOTI's Management Discussion and Analysis for
the first quarter ended January 31,
2021.
VOTI's definition of the non-IFRS terms are as
follows:
Gross margin percent is defined as Gross profit divided by
Revenue.
Adjusted EBITDA is defined as net income or loss before net
finance expenses, depreciation and amortization expense and income
tax expense, share-based compensation expenses and items that
Management believes do not necessarily arise as part of the
Company's normal day-to-day operations and could distort the
analysis of trends in business performance.
Adjusted net loss is defined as net loss adjusted for
share-based compensation and items Management believes do not
necessarily arise as part of the Company's normal day-to-day
operations and could distort the analysis of trends in business
performance.
About VOTI Detection
VOTI Detection, headquartered in
Montreal, Quebec, and listed on
the TSX Venture Exchange, is a leading-edge Canadian technology
company that develops latest-generation X-ray security systems
based on 3D Perspective™ technology. VOTI's technology produces
remarkably sharp and more revealing X-ray images that are
competitively superior while delivering enhanced threat detection
capabilities and an improved user experience. Since its inception,
VOTI has installed scanners in more than 50 countries and has
consulted heavily with government agencies and security specialists
worldwide to develop feature-rich and easy-to-use scanners that
meet the sophisticated needs of modern security screening
operations. www.votidetection.com
Notice regarding forward-looking statements:
This release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
statements") which the meaning of applicable securities laws.
Forward-looking statements may relate to VOTI's financial outlook
and anticipated events or results and may include information
regarding VOTI's financial position, business strategy, growth
strategies, addressable markets, budgets, operations, financial
results, taxes, plans and objectives. Particularly, information
regarding VOTI's expectations of future results, performance,
achievements, prospects or opportunities or the markets in which it
operates and the impact thereon of the ongoing COVID-19 pandemic
declared by the World Health Organization on March 11, 2020 ("COVID-19"), as well as
statements relating to expectations regarding industry trends,
growth rates, expectations regarding revenue and the revenue
generation potential, business plans and strategies, VOTI's
competitive position in its industry, VOTI's expectations relating
to its rollout of its next generation MATRIX Series line of
X-Ray scanners and the results associated therewith
and its projections and forecasts relating to its expectations that
it will return to or exceed pre-pandemic sales and gross margins
constitute forward-looking statements.
In some cases, when used in this release, the words ''may'',
''would'', ''could'', ''will'', ''intend'', ''plan'',
''anticipate'', "does not anticipate", ''believe'', ''seek'',
''propose'', ''estimate'', ''project'', ''expect", "does not
expect", "forecasts", "projection", "prospects", "outlook",
"targets", or similar expressions, variations of such terms or the
negative of such terms are intended to identify forward- looking
statements. Such forward-looking statements reflect VOTI's
then current views with respect to future events based on certain
material facts, assumptions, opinions and estimates in light of
management's experience and perception of historical trends,
current conditions and expected future developments, as well as
other factors VOTI currently believes are appropriate and
reasonable in the circumstances and as of the date such
forward-looking statements are made. Despite a careful process to
prepare and review the forward-looking statements, there can be no
assurance that the underlying opinions, estimates and assumptions
will prove to be correct. The forward- looking statements are based
on certain key expectations and assumptions made by VOTI, including
expectations and assumptions concerning availability of capital
resources and ability to finance, business performance, market
conditions, and customer demand. Although VOTI believes that the
expectations and assumptions on which such forward-looking
statements are based are reasonable, undue reliance should not be
placed on the forward-looking statements since no assurance can be
given that they will prove to be correct.
Forward-looking statements are necessarily based on a number
of opinions, estimates and assumptions that VOTI considered
appropriate and reasonable as of the date such statements are made,
are subject to certain known and unknown risks and uncertainties
that may cause the actual results or events to differ materially
from anticipated in such forward-looking statements, including
without limitation risks regarding the threat detection technology
industry, failure to obtain regulatory approvals, or changes in
regulatory environment, economic factors, management's
ability to manage and to operate the business of VOTI, the equity
markets generally and risks associated with growth and competition,
in addition to other risks identified in VOTI's most recently filed
management's discussion and analysis and in other publicly filed
documents under VOTI's profile at www.sedar.com as well as other
unknown risks.
Many factors could cause VOTI's actual results, performance
or achievements to vary from those described in this release,
including without limitation those listed above, as well as the
assumptions upon which they are based proving incorrect. These
factors should not be construed as exhaustive. Should one or more
of these risks or uncertainties materialize, or should assumptions
underlying forward-looking statements prove incorrect, actual
results may vary materially from those described in this MD&A
as intended, planned, anticipated, believed, sought, proposed,
estimated or expected, and such forward-looking statements should
not be unduly relied upon. VOTI does not intend, and does not
assume any obligation, to update these forward-looking statements
except as required by law. The forward-looking statements contained
in this release are expressly qualified by these cautionary
statements. Forward-looking statements contained in this release
about prospective results of operations, financial position or cash
flows are based on assumptions about future events, including
economic conditions and proposed courses of action, based on
management's assessment of the relevant information currently
available. Readers are cautioned that outlook information contained
in this release should not be used for the purposes other than for
which it is disclosed herein or therein, as the case may be. In
addition, the current situation and future developments with
respect to COVID-19 could cause certain of the assumptions and
information set forth herein or the fact that on which such
assumptions are based to differ materially from previous
expectations including in respect of demand for VOTI's products,
supply chain and availability of materials, mobility and shipping
of materials and or products, access to debt and equity capital and
other factors.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE VOTI Detection Inc.