FLYHT Aerospace Solutions Ltd. (TSX-V: FLY)
(OTCQX: FLYLF) (the “Company” or “FLYHT”) today reported financial
results for the second quarter and six months ended June 30, 2021.
“While the COVID pandemic remains an issue around the globe and
has continued to skew FLYHT’s financial performance, we are
beginning to see signs of recovery in customer confidence and the
aviation industry in general which we expect will lead to
improvement in our results in the quarters ahead,” said Bill
Tempany, Interim CEO. “The decline in revenue in the quarter, which
significantly moderated from prior periods, was mostly attributable
to the timing difference in license sales as some OEM deliveries
have been delayed. Encouragingly, although not reflected in the
second quarter numbers, we are seeing licensing revenue start to
return. Our customers are certainly not back to any semblance of
their 2019 levels, but the increase in SaaS revenue this quarter
driven by more customer flights and flight hours over Q2 2020 is a
positive sign of recovery.”
Continued Tempany, “Throughout the pandemic we have taken many
steps to improve our business which we believe will lead to growth
and higher returns to our shareholders as our company and industry
emerge from the pandemic. We are strategically shifting from being
a Satcom provider to becoming more of a SaaS provider, leveraging
our roots in data and significant installed customer base of over
80 airlines around the globe. We have increased our investment in
research and development, developing solutions such as AFIRS Edge,
our low cost - high value data feed device, which is on track for
delivery this year, with launch customers being identified for
early 2022 installations. We hired industry veteran Willie Cecil to
drive product direction and enhance our sales and marketing
efforts. Furthermore, our successful private placement and debt
retirement in July strengthen our balance sheet, and provide us
with the capital to carry out our growth
initiatives.”
Concluded Tempany, “Although new virus variants could always
pose a challenge for the aviation industry, we are cautiously
optimistic that the worst of the pandemic is behind us. As the
commercial aviation industry begins its inevitable recovery, the
need for airlines to reduce avoidable operating expenses and to
minimize the impact on the environment of their operations is
becoming a higher strategic imperative for them, and I am confident
that FLYHT is positioned as a critical partner. We will remain
focused on developing cutting edge solutions for our customers to
help them rebuild their businesses as they emerge from the
pandemic. We are excited about the year ahead for FLYHT.”
Second Quarter 2021 Financial Overview
Total revenue decreased by 4% to $2,926,122 compared to the
second quarter of 2020, although the decline in revenue moderated
from Q1 2021. SaaS revenue increased by 11% from Q2 2020 to
$1,446,221 and Hardware revenue increased by 212% from Q2 2020 to
$1,404,193. Increases in SaaS and Hardware were more than offset by
declines in Licensing and Technical Services. Licensing revenue
decreased 99% from Q2 2020 to $7,924 and Technical Services revenue
decreased by 5% from Q2 2020 to $67,784.
Gross margin was 52% of revenue compared to 68% in the second
quarter of 2020. The decrease in gross margin was due primarily to
changes in the mix of revenue sources during the quarter, as Q2
2021 revenue included a larger contribution from Hardware compared
to Q2 2020, which has the lowest gross margin among revenue
sources, and limited revenue from Licensing, which carries the
highest gross margin among revenue sources.
Operating expenses increased by 17% compared to the second
quarter of 2020, largely attributable to the Company’s sharpened
focus on its growth and product development efforts. A 23% decrease
in Distribution expenses was offset by an increase in
Administration expenses of 8% and an increase in Research and
Development and certification engineering expenses of 138%.
Negative EBITDA1 was $980,611 compared to positive EBITDA of
$153,132 in the second quarter of 2020.
Net Loss was $1,395,889 compared to a net loss of $276,515 in
the second quarter of 2020.
Balance Sheet and Liquidity
FLYHT ended the quarter with cash and short-term investments of
$3,079,255, a decrease from 2020’s year-end balance of $5,127,963,
and slightly lower than Q1 2021’s ending cash balance of
$3,871,741.
Trade and other receivables increased by 4% to $1,647,436
compared to year-end 2020, and Trade payables and accrued
liabilities decreased by 10% to $1,918,856 compared to year-end
2020.
Subsequent Events
On July 21, 2021, the Company closed a non-brokered private
placement, issuing 8,828,818 common shares at an issue price of
$0.75 per share, resulting in proceeds to the Company of
CAD$6,621,615. Directors, officers and senior employees contributed
10% of the offering total. The Company used a portion of the
proceeds from the offering to repay its outstanding secured
convertible debentures, including any accrued and unpaid interest,
in the amount of CAD$1,806,425.
Conference Call Information
FLYHT will host a conference call to discuss its second quarter
2021 financial results on August 5, 2021 at 9:00 am MT (11:00 am
ET). The conference call will include a brief presentation from
FLYHT’s Interim CEO Bill Tempany and CFO Alana Forbes followed by a
question and answer session. To access the conference call by phone
within Canada and the U.S.A., the toll-free number is
1-800-319-4610. Outside Canada and the U.S.A., dial
1-604-638-5340. Callers should dial in five to ten minutes
prior to the scheduled start time.
Management will accept questions by telephone and e-mail.
Individuals wishing to ask a question during the call can do so by
pressing *1. Questions can be emailed in advance or during the
conference call to investors@flyht.com. An archive of the
conference call will be posted on the Investor Communications
section of FLYHT’s website following the meeting.
Additional Information
FLYHT’s Q2 2021 Report, which contains more detailed information
including the CEO’s Letter to Shareholders, Management Discussion
and Analysis and Financial Statements, can be accessed on the
Company’s website. The MD&A and Financial Statements have also
been filed with SEDAR and will be accessible
at www.sedar.com.
Options Granted
FLYHT has granted incentive stock options for an aggregate
43,760 common shares, subject to regulatory approval, to new
employees and a director under the stock option plan approved at
the Annual and Special Meeting held on May 6, 2021.
The stock options are exercisable at a price of $0.93 per share.
The options will vest 1/3 on each of August 4, 2022, 2023 and 2024
and will expire on August 4, 2025. A maximum of 10% of the issued
and outstanding shares are reserved under the Company’s stock
option plan. The options, and any common shares issued upon
exercise of the stock options, are subject to a four-month resale
restriction.
About FLYHT Aerospace Solutions
Ltd.
FLYHT provides airlines with Actionable
Intelligence to transform operational insight into immediate,
quantifiable action, delivering industry leading solutions to
improve aviation safety, efficiency and profitability. This unique
capability is driven by FLYHT’s patented aircraft certified
hardware products including AFIRS™, a satcom aircraft interface
device which enables real-time streaming of flight information,
cockpit voice and black box data streaming and TAMDAR™, which
aggregates and streams airborne weather data in real-time. FLYHT is
headquartered in Calgary, Canada with an office in Littleton,
Colorado, and is an AS9100 Quality registered company. For more
information, view our latest presentation here, or
visit www.flyht.com
Cautionary Note Regarding
Forward-Looking Statements
Except for statements of historical fact, this
news release contains certain "forward-looking information" within
the meaning of applicable securities law. Forward-looking
information is frequently characterized by words such as "plan",
"expect", "project", "intend", "believe", "anticipate", "estimate"
and other similar words, or statements that certain events or
conditions "may" or "will" occur. In particular, forward-looking
information in this press release includes, but is not limited to,
statements with respect to the anticipated/projected revenues and
related matters. Although we believe that the expectations
reflected in the forward-looking information are reasonable, there
can be no assurance that such expectations will prove to be
correct. We cannot guarantee future results, performance or
achievements. Consequently, there is no representation that the
actual results achieved will be the same, in whole or in part, as
those set out in the forward-looking information.
Forward-looking information is based on the
opinions and estimates of management at the date the statements are
made and are founded on the basis of expectations, assumptions and
hypotheses made by the Company, including, but not limited to
projected revenues. Such forward-looking information is subject to
a variety of risks and uncertainties and other factors that could
cause actual events or results to differ materially from those
anticipated in the forward-looking information. Some of the risks
and other factors that could cause the results to differ materially
from those expressed in the forward-looking information include,
but are not limited to: general economic conditions in Canada, the
United States and globally; industry conditions, and supply chain
delays. Readers are cautioned that this list of risk factors should
not be construed as exhaustive.
The forward-looking information contained in
this news release is expressly qualified by this cautionary
statement. We undertake no duty to update any of the
forward-looking information to conform such information to actual
results or to changes in our expectations except as otherwise
required by applicable securities legislation. Readers are
cautioned not to place undue reliance on forward-looking
information.
Contact Information: |
|
|
FLYHT Aerospace Solutions Ltd. |
FNK IR LLC |
Alana Forbes |
Matt Chesler, CFA |
Chief Financial Officer |
Investor Relations |
403.291.7437 |
646.809.2183 |
aforbes@flyht.com |
flyht@fnkir.com |
investors@flyht.com |
|
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the adequacy or accuracy of this release.
1 EBITDA: defined as earnings before interest, income tax,
depreciation and amortization (a non-GAAP financial measure).
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