Return to Revenue Growth in the Quarter at +65% Year
Strategic Acquisition Bolsters Competitive Position and Creates Cross-Selling Opportunity
Private Placement and Debt Repayment Enhance Financial Position
CALGARY, AB / ACCESSWIRE / November 4, 2021 / FLYHT Aerospace Solutions Ltd. (TSXV:FLY)(OTCQX:FLYLF) (the "Company" or "FLYHT") today reported financial results for the third quarter and nine months ended September 30, 2021.
"Our third quarter financial performance is beginning to reflect the significant efforts we have made to reinvent the business," said Bill Tempany, Interim CEO. "We delivered 65% revenue growth, the first quarterly growth since 2019, narrowed our net losses despite a decline in government grant support, and strengthened our balance sheet with an over subscribed private placement and the retirement of our convertible debentures. We also purchased complementary weather sensor technology which is further increasing the value of our offering to airlines."
Continued Mr. Tempany, "The significant increase in FLYHT's licensing revenues this quarter as well as recent new sales contracts and purchase orders from new and existing customers are positive signs both for FLYHT and the global airline industry. It is clear there is pent up demand for travel, especially domestic travel, and the financial performance of the aviation industry as a whole is expected to improve in 2022 compared to 2021."
Concluded Mr. Tempany, "FLYHT is well-positioned to emerge from the pandemic as the global aviation leader in Actionable Intelligence. With a sharpened focus on software solutions, leading technology, loyal customers who value the service, a strong leadership team and salesforce, and the financial strength to execute a targeted M&A strategy to scale the offering, we are highly confident that we will be able to leverage our installed customer base of over 80 global airlines to generate profitable growth for the company and value creation for our stakeholders."
Third Quarter 2021 Financial Overview
Total revenue increased by 65% to $3,173,331 compared to Q3 2020. Growth was driven by Licensing, which generated over $1 million of revenue in Q3 2020 versus minimal a year ago. Additionally, Hardware revenue increased by 314% to $567,356. Technical Services revenue increased by 117% to $93,911. SaaS revenue declined 9% year-over-year to $1,507,366 and increased 4% compared to Q2 2021.
Gross margin increased slightly to 68.2% of revenue compared to 69.2% in Q3 2020. The decrease in gross margin was due primarily to changes in the mix of revenue sources during the quarter, as Q3 2021 revenue included a larger contribution from Licensing compared to Q3 2020, which carries the highest gross margin among revenue sources.
Operating expenses increased by 16% compared to Q3 2020, largely due to a reduction in government grants which are applied as an offset to reported expenses. A 22% decrease in Administration expenses was offset by an increase in Distribution expenses of 70% and an increase in Research and Development and certification engineering expenses of 25%.
EBITDA1 loss narrowed to $811,966 compared to an EBITDA loss of $1,079,873 in Q3 2020.
Net loss narrowed to $1,107,195 compared to a net loss of $1,647,249 in Q3 2020.
Balance Sheet and Liquidity
FLYHT ended the quarter with cash and short-term investments of $5,355,302, an increase from $5,127,963 at YE 2020 and $3,079,255 at June 30, 2021.
Trade and other receivables increased by 25% to $1,978,189 compared to YE 2020, and Trade payables and accrued liabilities decreased by 20% to $1,717,060 compared to YE 2020.
Third Quarter Achievements
During the quarter, the Company acquired the Water Vapor Sensing System ("WVSS-II") product line from SpectraSensors Inc ("SpectraSensors") to enhance its weather business. The WVSS-II is a sensor installed on aircraft and provides water vapour measurements in near real-time throughout an aircraft's flight. These observations directly benefit weather forecasting and improve weather support to aviation. The acquisition includes manufacturing assets, inventory, aviation-specific intellectual property, and a license to SpectraSensors' Tunable Diode Laser Absorption Spectroscopy ("TDLAS") technology for use in the weather and aviation markets. The WVSS-II product line was purchased by FLYHT from SpectraSensors for $500,000 USD.
Also during the quarter, 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$1.8 million.
Conference Call Information
FLYHT will host a conference call to discuss its third quarter 2021 financial results on November 5, 2021 at 7:30 am MT (9:30 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., the toll-free number is 1-800-319-4610. Outside Canada and the U.S., 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 Q3 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.
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.
Alana Forbes
Chief Financial Officer
403.291.7437
aforbes@flyht.com
investors@flyht.com
FNK IR LLC
Matt Chesler, CFA
Investor Relations
646.809.2183
flyht@fnkir.com
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1 EBITDA: defined as earnings before interest, income tax, depreciation and amortization (a non-GAAP financial measure).
SOURCE: FLYHT Aerospace Solutions Ltd.
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