CALGARY, AB, Nov. 27, 2020 /CNW/ - Nanalysis Scientific
Corp. ("the Company"), (TSXV: NSCI) (OTCQX: NSCIF) (FRA: 1N1)
released today its third quarter 2020 results and provided an
update on business operations.
|
Three months ended
September 30
|
Nine months ended
September 30
|
($000's)
|
2020
|
2019
|
($) Change
|
2020
|
2019
|
($) Change
|
|
|
|
|
|
|
|
Revenue
|
1,700
|
1,641
|
59
|
5,219
|
6,241
|
(1,022)
|
Cost of products
sold
|
644
|
385
|
259
|
1,855
|
1,897
|
(42)
|
Gross
profit
|
1,056
|
1,256
|
(200)
|
3,364
|
4,344
|
(980)
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
Sales and
marketing
|
822
|
409
|
413
|
2,200
|
1,588
|
612
|
General and
administration
|
668
|
782
|
(114)
|
2,187
|
1,929
|
258
|
Earnings (loss)
before other items
|
(434)
|
65
|
(499)
|
(1,023)
|
827
|
(1,850)
|
|
|
|
|
|
|
|
Other
Items(1)
|
749
|
363
|
386
|
1,706
|
2,542
|
(836)
|
Loss before
tax
|
(1,183)
|
(298)
|
(885)
|
(2,729)
|
(1,715)
|
(1,014)
|
Deferred tax
recovery
|
84
|
-
|
84
|
259
|
36
|
223
|
Net
loss
|
(1,099)
|
(298)
|
(801)
|
(2,470)
|
(1,679)
|
(791)
|
Other comprehensive
income
|
40
|
-
|
40
|
182
|
-
|
182
|
Total
comprehensive loss
|
(1,059)
|
(298)
|
(761)
|
(2,288)
|
(1,679)
|
(609)
|
(1) other items
includes acquisition transaction costs, RTO transaction
costs, depreciation and amortization expense, finance expense
(income) one time inventory adjustments, stock-based compensation
and foreign exchange (gain) loss
|
OVERALL PERFORMANCE
For the three months ended
September 30, 2020, the Company
reported consolidated revenue of $1,700K, an increase of $59K or 4% from the comparative period in 2019.
Unearned revenue was $2,800K as at
September 30, 2020, an increase of
$2,184K from $616K as at December 31,
2019. The Covid-19 pandemic impacted both Nanalysis and RS2D
in the quarter. Specifically, Nanalysis saw reduced sales as
customers were wary on capital spending during the uncertainty of
the pandemic, while RS2D employees were unable to complete certain
contracts due to COVID-19 travel restrictions. Despite these
challenges, the acquisition of RS2D earlier in 2020 and the
inclusion of its revenue in Q3 2020 (versus none in 2019)
enabled sales to show a 4% increase overall.
Gross profit for three months ended September 30, 2020, was $1,056K (a margin of 62%) compared to gross
profit of $1,256K (a margin of 77%)
for the third quarter of 2019. The three months ended September 2019 had a significant cost recovery
for inventory, resulting in increased margins for 2019.
The Company's comprehensive loss for the three months ended
September 30, 2020, was $1,059K as compared to comprehensive loss of
$298K for the comparable period of
2019. The increase in comprehensive loss for the three months ended
September 30, 2020, was due to
increased depreciation and amortization, increased stock-based
compensation expense, increased foreign exchange loss, increased
sales and marketing expenses partially offset by decreased general
and administration expense, decreased finance expense, a deferred
tax recovery, increased other comprehensive income and increased
revenue.
For the nine months ended September 30,
2020, the company reported consolidated revenue of
$5,219K, a decrease of 16% from the
$6,241K recognized from the
comparable period ended September 30,
2019. The Company's comprehensive loss for the nine months
ended September 30, 2020, was
$2,228K as compared to comprehensive
loss of $1,679K in the comparable
period of 2019. The decrease in revenue and the higher
comprehensive loss was primarily due to the aforementioned impact
of COVID-19, partially offset by the acquisition of RS2D.
FINANCIAL POSITION
At September 30, 2020, the Company
had $4,187K (December 31, 2019 - $8,534K) of working capital, including
$4,468K (December 31, 2019 - $6,619K) in cash. The Company has an undrawn line
of credit of $2,000K and $785K of available borrowing on the Western
Economic Diversification Canada interest free loan. Nanalysis's
business has been affected by COVID-19 and as such is eligible for
a subsidy of up to 75% of employees' eligible wages. During the
nine months ended September 30, 2020,
the Company claimed $1,213K and to
date has received $1,085K from the
Canadian emergency wage subsidy ("CEWS"). The Company will continue
to monitor revenues and seek government support for both Canadian
and French operations where assistance is offered.
BUSINESS UPDATE
The Company continues to address challenges due to
COVID-19 by adapting numerous work policies which have allowed
it to operate with minimal disruptions to development and
manufacturing. Travel restrictions and border closures have
impacted the timeline and completion of significant contracts,
specifically at its RS2D subsidiary. However, through the
utilization of government COVID-19 relief programs, the Company
remains in a strong financial position.
"Eight months of the pandemic has created numerous business
challenges that we continue to push through," said Sean Krakiwsky, CEO, Nanalysis Scientific Corp.
"Despite the impact of the pandemic, we remain confident in our
business, with a significant number of contracts in our pipeline,
backlog of customer sales orders, strong working capital balance,
untouched debt facilities, and continued government grant
applications, we are optimistic about the future."
The following objectives remain important for the Company in Q4
2020 and Q1 2021:
- New product: The Company expects to begin shipping its new 100
MHz benchtop NMR instrument, for which it has over $3 million in purchase orders and larger sales
funnel reflecting strong market demand. The Company is striving to
fulfill the sales backlog and will press release when the first 100
MHz product is shipped to a customer. We are pleased to convey that
we have satisfied the regulatory safety requirements to ship our
100 MHz product commercially.
- Strategic contracts with partners that can fuel growth in the
short, medium, and long terms.
- Evolving our scalable magnetic resonance technology platform,
with a particular emphasis on leveraging commonalities between
Nuclear Magnetic Resonance (NMR) spectroscopy and NMR imaging (aka
MRI) to maximize performance for current and future customers, as
well as enabling future products.
- Government grants and COVID relief funds to ensure continued
innovation during these challenging times.
- Momentum in RS2D-related revenue growth, manifesting the value
of the acquisition.
The pandemic has slowed the progress of strategic partnerships
with companies such as Bosch and Sartec, both previously disclosed,
but these relationships remain strong. The pandemic has also
impacted the Company's ability to deliver on customer solutions in
Europe as well negatively affected
the Company's ability to commence shipping of its new 100 MHz
product.
About Nanalysis Scientific Corp. (TSXV: NSCI, OTCQX:
NSCIF, FRA: 1N1)
The Company trades on the TSX Venture Exchange (TSXV) in
Canada with ticker symbol 'NSCI'
and over the counter in the United
States under the ticker symbol 'NSCIF'.
Nanalysis business is what we term "MRI for industry": It
develops and manufactures portable Nuclear Magnetic Resonance (NMR)
spectrometers or analyzers for laboratory and industrial markets.
The NMReady60™ was the first fully featured portable NMR
spectrometer in a single compact enclosure requiring no liquid
helium or any other cryogens, and the Company continues to develop
new products and has a strong innovation pipeline. Nanalysis began
taking orders for the 100MHz device in early 2020. The Company's
new device will be the most powerful non-cryogen, permanent magnet
compact NMR device ever brought to market. Nanalysis devices are
used by chemical professionals in many industries (oil and gas,
chemical, mining, pharma, biotech, flavor and fragrances,
agrochemicals, and more) as well as numerous government and
university research labs around the world. The Company continues to
exploit new global market opportunities both independently and with
partners.
In March 2020, the Company
acquired all outstanding shares of RS2D, a complementary technology
company based in Strasbourg France
that specializes in the development of cutting-edge MR
electronics. Based on a single electronic board, RS2D has
developed MR product lines in high-field ("HF") NMR and magnetic
resonance imaging ("MRI") that can further advance Nanalysis'
existing product line, while the new products to round out the
Company's magnetic resonance technology portfolio.
Notice regarding Forward Looking Statements and Legal
Disclaimer
This news release contains certain "forward-looking statements"
within the meaning of such statements under applicable securities
law. Forward-looking statements are frequently characterized by
words such as "anticipates", "plan", "continue", "expect",
"project", "intend", "believe", "anticipate", "estimate", "may",
"will", "potential", "proposed", "positioned" and other similar
words, or statements that certain events or conditions "may" or
"will" occur. These statements are only predictions. Various
assumptions were used in drawing the conclusions or making the
projections contained in the forward-looking statements throughout
this news release. Forward-looking statements are based on the
opinions and estimates of management at the date the statements are
made and are subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those projected in the forward-looking statements.
The Company is under no obligation, and expressly disclaims any
intention or obligation, to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as expressly required by applicable law.
Neither TSX Venture Exchange nor its Regulation Services
Provider accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Nanalysis Scientific Corp.