TrackX Holdings Inc. (TSX.V:TKX | FRANKFURT:3TH) (“TrackX” or the
“Company), a Software-as-a-Service (SaaS)-based enterprise asset
management solution provider, announces the financial and
operational highlights from its fourth quarter and fiscal year
ended September 30, 2020. All results are reported in Canadian
dollars unless otherwise specified. A complete set of the September
30, 2020 Consolidated Financial Statements and Management’s
Discussion & Analysis has been filed on SEDAR (www.sedar.com).
“Fiscal 2020 represented a challenging year for
many companies,” said President and CEO, Tim Harvie. “Disruptions
across many industries due to COVID-19 resulted in contract delays
and an inability to travel to customer sites to complete
implementations. While we expect to see progress on these
implementations in 2021, the delays did have a negative impact on
our revenue in Fiscal 2020. The sale of the yard management
business to FourKites and transition of related customer accounts
also represented a decline in recurring revenue, offset by a
significant increase in services revenue and a strong partnership
that we anticipate will generate additional opportunity for TrackX
over subsequent quarters. The transition away from yard management
represents a strategic decision for the Company, enabling it to
focus on leveraging its experience and enterprise platform to
deliver more repeatable, higher margin, IoT-enabled supply chain
tracing, tracking, execution and sustainability solutions to help
customers achieve increased visibility, transparency, efficiency,
responsiveness and proof of environmental, social and governance
(ESG) claims. With this being a core strategy for TrackX moving
forward, The Company recently announced a strategic partnership
with Topl, a blockchain-based social impact technology company. The
joint solution, TrackX Verify, will provide customers and consumers
with IoT event-driven tracing, tracking, verifiable proof of origin
and sustainability as well as Corporate Social Responsibility (CSR)
claims. Unlike other supply chain optimization platforms, the
TrackX and Topl platform will be one of the very few to reliably
collect, track, report, and verify supply chain events in a single
end-to-end solution.”
Financial Highlights for the Year Ended
September 30, 2020
- Net income was to $0.385 million or
$0.01/share compared to a net loss of $3.92 million or
($0.05/share) for the year ended September 30, 2019
(“FY19”);
- FY20 gross margin of 56%, as
compared to 43% in FY19;
- Recurring revenue of $2.059
million, a 24% decrease over $2.711 million for the FY19, largely
due to the sale of the yard management business to FourKites and
decline in business from a large automotive customer moving its
requirements in-house.
- Adjusted EBITDA loss for the year
decreased to $0.33 million compared to a $1.88 million loss for the
FY19;
Annual Revenue Mix
Revenue |
FY20 |
FY19 |
Recurring and Software License |
52 |
% |
43 |
% |
Hardware |
7 |
% |
17 |
% |
Setup, implementation, and other fees |
41 |
% |
40 |
% |
TOTAL |
100 |
% |
100 |
% |
Financial Highlights for the 3-Months
Ended September 30, 2020
- Revenue of $0.82 million versus
$1.05 million in the fourth quarter of FY19 (“Q4
19”).
- Gross margin of 68%, up from 55%
from for Q4 19;
- Adjusted EBITDA of ($0.06) million
compared to $0.49 million in Q4 19;
- Net loss of $0.51 million
($0.01/share) versus $0.51 million ($0.01/share) in Q4 19.
Fourth Quarter Revenue Mix
Revenue |
FY20 |
FY19 |
Recurring and Software License |
18 |
% |
67 |
% |
Hardware |
10 |
% |
(3 |
)% |
Setup, implementation, and other fees |
73 |
% |
36 |
% |
TOTAL |
100 |
% |
100 |
% |
Highlights Subsequent to the Fourth
Quarter
- America’s second largest insurance
company is expanding their GAME implementation to include third
party hardware manufacturers in order to drive additional supply
chain visibility to hardware shipments from the vendor to the
customer’s facilities;
- Formalized a partnership with TOPL,
a blockchain-based social impact technology company, to provide a
joint solution that allows users to visualize their supply chain
data, monitor suppliers, and easily report the progress of
environmental, social, and governance (ESG) initiatives to all
stakeholders; and
- Solution expansion with a global
powersports leader where GAME will be further leveraged for vehicle
management across a multitude of recognizable brands.
Selected Financial
Information
C$(000s) (except per share) |
Twelve-month PeriodEnded September
30 |
Three-month PeriodEnded September 30 |
|
2020 |
2019 |
2020 |
2019 |
Revenue |
$3,955 |
$6,288 |
$818 |
$1,053 |
Gross Margin % |
56% |
43% |
68% |
55% |
Income (loss) for the period |
$0.385 |
($3,919) |
($506) |
($512) |
Loss per share |
($0.01) |
($0.05) |
($0.01) |
($0.01) |
Adjusted EBITDA (Loss)* |
($0.328) |
($1,881) |
($0.064) |
$0.489 |
* Adjusted EBITDA is a non-IFRS (international financial reporting
standards) measure and excludes stock-based compensation |
Business Outlook
In 2020, the Company made a strategic decision
to exit its yard management business and completed the sale of that
business to FourKites, the Chicago-based creator of the predictive
supply chain visibility category. The completion of this
transaction enables TrackX to focus on the delivery of high margin,
repeatable and more easily deployable solutions leveraging its
long-term experience in supply chain and IoT. In the wake of
COVID-19, we anticipate an increased demand for supply chain
visibility and efficiency as enterprises strive to ensure that they
are able to protect their value chains and deliver quality goods
and services to their customers. With a proven, enterprise
scalable, IoT-agnostic, blockchain-enabled supply chain platform,
TrackX expects to see a further increase in pipeline activity and
expects to see opportunities close more quickly throughout
2021.
To increase delivery capacity and more
effectively respond to industry opportunities, TrackX will continue
to develop its partner network. New partners, like FourKites, will
continue to be added to the TrackX ecosystem, and additional joint
sales and marketing collaboration with partners is expected to fuel
additional growth in pipeline activity, and growth in high margin
recurring SaaS revenue.
In 2021, the Company intends to make additional
investments in marketing, website content and social media in order
to improve its messaging to the market. New outbound target
marketing campaigns and an aggressive prospecting program are
expected to generate an increase in pipeline opportunities and
revenue growth.
Subsequent to Q4, 2020, TrackX announced a
partnership with Topl, a blockchain-based social impact technology
company. An integrated solution will combine Topl’s purpose-built
blockchain technology with TrackX’s core GAME asset management and
supply chain capabilities. The joint solution allows users to
visualize their supply chain data, monitor suppliers, and easily
report the progress of environmental, social, and governance (ESG)
initiatives to all stakeholders.
About TrackX
TrackX Holdings, Inc., is a Denver-based supply
chain solutions company leveraging multiple auto-ID and sensor
technologies and an event driven software platform to provide
transparency and velocity to the world most complex supply chains.
TrackX’s Global Asset Management for Enterprises (GAME) platform
enables the Industrial Internet of Things (IIoT) by providing
unique item level tracking, workflow processing, event management,
alerting and powerful analytics to deliver solutions across a
growing number of industries. TrackX delivers significant value to
companies in industries such as transportation, beverage, brewery,
hi-tech, hospitality, automotive, agriculture, horticulture,
manufacturing, and government.
www.trackx.com
For more information, please contact:
Gene McConnell, TrackX Holdings
Inc.investor@trackx.com303-325-7300
Neither TSX Venture Exchange nor its Regulations
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION: This news release includes certain “forward-looking
statements” under applicable Canadian securities legislation.
Forward looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable, are
subject to known and unknown risks, uncertainties, and other
factors which may cause the actual results and future events to
differ materially from those expressed or implied by such
forward-looking statements. All statements that address future
plans, activities, events or developments that the Company
believes, expects or anticipates will or may occur including the
Company’s anticipated pipeline and value of current and customer
deployments and future opportunities are the managements best
estimates and cannot be guaranteed or relied upon and is
forward-looking information. There can be no assurance that such
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking statements. The Company disclaims any intention or
obligation to update or revise any forward-looking statements in
this news release, whether as a result of new information, future
events or otherwise, except as required by law.
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