Improved Results & Significant
Strengthening of Leadership Team Highlight Quarter
- Third quarter revenue of $5.6
million vs. $3.9 million
posted in Fiscal 2020, an increase of 45%
- Gross margin of 38% as company continues to benefit from sales
of higher margin Matrix Series X-Ray scanners
- Positive Adjusted EBITDA achieved in the quarter
- Company delivered 170 security scanning systems to a wide range
of global clients across a diversified base of sectors versus 95
sold in Q3 of fiscal 2020, an increase of 79%
- Important inroads continue to be made within the sports and
entertainment as well as the state and local government
verticals
- New 3 year supply agreement signed with the United Nations High
Commissioner for Refugees
- Significant strengthening of executive team with key hires of
seasoned industry veterans
- Due to the slower than anticipated post COVID recovery and the
impact of the disruption in the global supply chain, now expecting
a 26% increase in year over year Fiscal 2021 revenues versus
original expectation of a 47% revenue increase
MONTREAL, Sept. 28, 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
results for its third quarter ended July 31,
2021.
"The unexpected intensity of the fourth wave of the COVID-19
pandemic has caused our recovery to be slower than initially
expected, but we are pleased with our performance year to date, and
with revenues increasing 45% and the achievement of positive
Adjusted EBITDA for the quarter. We continue and will continue, to
benefit from the significant efficiency initiatives that we
implemented in Fiscal 2020. However, as cautioned in our second
quarter release, in addition to the slower than anticipated
recovery, our company, like most other industries, has been
impacted by the COVID-led global supply chain disruptions. Massive
dislocations are evident within shipping routes and all other forms
of transportation and warehousing have been impacted. We have been
diligent in mitigating the risk of shortages of key manufacturing
components, order backlogs, delivery delays and the increase in
transportation costs. Given these extraordinary circumstances, we
will not be able to meet our initial expectations of reaching
pre-pandemic sales by this fiscal yearend which will also impact
our ability to achieve positive adjusted EBITDA and positive cash
flow from operations for the year. This does not take away from the
strength of our success in this current fiscal year given the
return to strong sales volumes of our X-ray scanners and the
benefits of our development activities. It's important to
note that this is not lost revenue, just delayed revenue. We are
looking at continued growth into Fiscal 2022 and are buoyed by the
strong demand that we are seeing for our scanners, software and
training modules. The strength of the company's margins resulting
from the introduction of new products, as well as the continuing
wide and growing distribution of transactions position VOTI for
solid sustained growth going forward" commented Rory Olson, President and CEO of VOTI
Detection.
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
Strengthening of Executive Team
As part of VOTI's strategic initiatives focused on operating
excellence and growth on a global scale, over the past two months
the company has significantly strengthened its executive leadership
team with the hires of the following individuals.
- Daniel Menard, COO. Daniel is a
seasoned senior executive with more than 35 years experience in
management. As COO, Daniel will have the primary responsibility of
leading day-to-day operations of the company.
- Bally Panesar, Vice President Product Management, New Product
Introduction & Interim Vice President Engineering. Bally brings
over 24 years of product development and engineering experience in
the X-ray industry, 17 years of which were with one of VOTI's major
competitors.
- Richard Coombs, Vice President,
Global Sales. Richard has 25 years of experience having held sales
leadership roles in the security industry and spent the past 5
years at one of VOTI's major competitors.
Commented Rory Olson, "The
addition of these three individuals is a gamechanger for our
company, significantly improving and bolstering our operating,
engineering and sales capability. All three of these seasoned
industry veterans saw the potential in VOTI's growth trajectory and
were anxious to be a part of our disruption of the X-ray scanning
industry. Daniel's extensive operating experience and overall
capability have already made a very significant impact on our day
to day operations. With 17 years of direct Engineering and Product
Management expertise, Bally's hiring is a considerable coup for
VOTI. His addition will immediately improve and enhance VOTI's
capability in these areas. Lastly, Richard's vast experience and
successes in building winning sales strategies for some major
competitors will immediately benefit our sales efforts on a global
basis."
New Agreement Signed With UNHCR
On September 23, 2021 VOTI
announced that it had signed a new three year agreement with the
office of the United Nations High Commissioner For Refugees
(UNHCR). VOTI signed the original agreement with UNHCR in
2016. Under the previous contract, VOTI delivered 32 scanning
systems over the course of a three year period. The new three year
contract contains an option to extend for an additional 2 years.
The estimated annual requirements under this agreement are for 15
X-ray scanning systems per year. The UNHCR has been in operation
for over 70 years and currently operates in over 132 countries. The
organization is charged with protecting and assisting refugees
around the world.
Financial Highlights
(Unaudited, all amounts are in
Canadian dollars)
Period Ended April
30
|
Q3
2021
|
Q3
2020
|
Change
|
YTD
2021
|
YTD
2020
|
Change
|
Revenue
|
5,602,091
|
3,855,653
|
1,746,438
|
17,805,266
|
14,161,526
|
3,643,740
|
Gross
profit
|
2,151,109
|
1,227,675
|
923,434
|
6,346,234
|
4,499,133
|
1,847,101
|
Gross margin
%*
|
38%
|
32%
|
6%
|
36%
|
32%
|
4%
|
Net loss
|
(1,008,299)
|
(1,944,838)
|
936,539
|
(5,024,003)
|
(4,518,961)
|
(505,042)
|
Adjusted net income
(loss)*
|
(842,426)
|
(1,871,457)
|
1,029,031
|
(3,723,692)
|
(4,658,093)
|
934,401
|
Adjusted
EBITDA*
|
112,535
|
(409,861)
|
522,396
|
(95,842)
|
(2,430,427)
|
2,334,585
|
Cash (used in) from
operating activities
|
(1,481,760)
|
705,563
|
(2,187,323)
|
(6,762)
|
(2,880,442)
|
2,873,680
|
Revenue
Revenue for the three-month period ended July 31, 2021 totaled $5,602,091 compared to $3,855,653 for the same period in Fiscal 2020, an
increase of $1,746,438 or 45%. The
Company sold 170 security scanning systems compared to 95 during
the same period in Fiscal 2020. The increase is primarily
attributed to the greater number of systems sold, partially offset
by a decrease in the average selling price per scanner resulting
from the change in product mix sold and the decrease in the US
dollar foreign exchange rate.
Revenue for the nine-month period ended July 31, 2021 totaled $17,805,266 compared to $14,161,526 for the same period in Fiscal 2020,
an increase of $3,643,740 or
26%. The Company sold 515 security scanning systems compared
to 390 during the same period in Fiscal 2020. The increase is
primarily attributed to the greater number of systems sold during
the period, the Company's first time sales of its VotiINSIGHTS
fleet management and analytics dashboard, an increase in the
average price per scanner resulting from the change in product mix
sold, and an increase in after-sale services and extended
warranties, partially offset by the decrease in the US dollar
foreign exchange rate.
Gross Profit
Gross profit for the three-month period ended July 31, 2021 increased to $2,151,109 or 38% of revenue, compared to
$1,227,675 or 32% of revenue, for the
same period in Fiscal 2020, an increase of $923,434 or 6% of revenue. The increase in gross
margin of 6% is primarily due to a decrease in the average
component cost per scanner resulting from the cost reduction
initiatives that were executed by the Company, partially offset by
a decrease in revenue from after sales services and extended
warranty as a percentage of overall revenue, which carry higher
margins, and an increase in freight costs allocated to inventory
being sold.
Gross profit for the nine-month period ended July 31, 2021 increased to $6,346,234 or 36% of revenue, compared to
$4,499,133 or 32% for the same period
in Fiscal 2020. The 4% increase in gross margin compared to the
same period in Fiscal 2020 is primarily due to a decrease in the
average component cost per scanner resulting from the cost
reduction initiatives that were executed by the Company, the
Company's first time sales of its VotiINSIGHTS fleet management and
analytics dashboard, and the increase in after sale services and
revenue from extended warranty, partially offset by an increase in
freight costs allocated to inventory being sold and certain scanner
sales with low margins.
Net Loss
Net loss for the three-month period ended July 31, 2021 decreased to $1,008,299 compared to $1,944,838 for the same period in Fiscal 2020.
The decrease in net loss of $936,539
is primarily related to the increase in gross profit, a decrease in
net financial expenses, general and administrative expenses,
non-cash share-based payments expense, and the increase in the
non-cash gain from change in fair value of warrants, partially
offset by an increase in research and development and selling and
distribution expenses, and the decrease in non-cash gain from
changes in fair value of embedded derivatives.
Net loss for the nine-month period ended July 31, 2021 increased to $5,024,003 compared to $4,518,961 for the same period in Fiscal 2020.
The increase of $505,042 is primarily
related to an increase in loss in change in fair value of embedded
derivatives and warrants, and an increase in net financial expenses
and research and development expenses, partially offset by an
increase in gross profit, a decrease in non-cash share-based
payments expenses and the decrease in general and administrative
expenses and selling and distribution expenses.
Adjusted EBITDA*
Adjusted EBITDA for the three-month period ended July 31, 2021 increased to a positive
$112,535 compared to a negative
($409,861) for the same period of
Fiscal 2020. The increase of $522,396
is primarily related to the increase in gross profit, partially
offset by an increase in net operating expenses.
Adjusted EBITDA for the nine-month period ended July 31, 2021 increased to ($95,842) compared to ($2,430,427) for the same period of Fiscal 2020.
The increase of $2,334,585 is
primarily related to the increase in gross profit and a decrease in
net operating expenses.
Cash Flows
Net cash from operating activities during the nine-month period
ended July 31, 2021 increased by
$2,873,680 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 nine-month period ended July 31,
2021, and the positive impact from the change in the
Company's non-cash working capital.
Fiscal 2021 Third Quarter Results Conference Call:
When: September 29th,
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, October 6th,
2021.
Recording Playback Number: (+1) 888 390 0541
Playback passcode: 243704#
To access the webcast, click on this link:
https://produceredition.webcasts.com/starthere.jsp?ei=1498507&tp_key=53b857789a
The conference ID is 48243704.
A full version of VOTI Detection Inc.'s Fiscal 2021 Third
Quarter Management's Discussion and Analysis (MD&A) and Interim
condensed consolidated financial statements for the quarter-ended
July 31, 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 third quarter ended July 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.