CALGARY, AB / ACCESSWIRE / November 9, 2023 / FLYHT Aerospace Solutions Ltd. (TSXV:FLY)(OTCQX:FLYLF) (the "Company" or "FLYHT") today reported financial results for the third quarter ended September 30, 2023 ("Q3 2023"). All figures are Canadian dollars unless otherwise stated.
Financial Summary
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||
| 2023 | 2022 | Inc./ Dec. | 2023 | 2022 | Inc./ Dec. | |||||||||||||||||||
Revenue |
5,099,019 | 6,725,373 | -24.2 | % | 15,899,792 | 16,637,402 | -4.4 | % | ||||||||||||||||
SaaS |
2,787,664 | 2,073,284 | 34.5 | % | 7,891,437 | 5,904,268 | 33.7 | % | ||||||||||||||||
Hardware |
1,001,817 | 480,064 | 108.7 | % | 3,945,523 | 3,502,345 | 12.6 | % | ||||||||||||||||
Licensing |
494,573 | 3,536,153 | -86.0 | % | 1,936,574 | 6,070,761 | -68.1 | % | ||||||||||||||||
Technical Services |
814,965 | 635,872 | 28.2 | % | 2,126,258 | 1,160,028 | 83.3 | % | ||||||||||||||||
Gross Margin |
58.7 | % | 72.4 | % | -1370 | bps | 58.6 | % | 62.2 | % | -360 | bps | ||||||||||||
EBITDA |
(430,865 | ) | 924,680 | NM | (1,606,734 | ) | (912,562 | ) | NM | |||||||||||||||
Net Income (Loss) |
(728,655 | ) | 703,765 | NM | (2,554,576 | ) | (1,715,554 | ) | NM | |||||||||||||||
EPS - Basic & Diluted |
(0.02 | ) | 0.02 | (0.04 | ) | (0.07 | ) | (0.05 | ) | (0.02 | ) | |||||||||||||
Management Commentary
"FLYHT delivered solid results in Q3 2023, as demonstrated by our double-digit growth in SaaS and Technical Services and triple-digit growth in Hardware," said Kent Jacobs, President and Interim CEO of FLYHT. "The reported licensing revenue decline is due to last year's large OEM order not being repeated. These results affirm that our solutions are in demand as the aviation industry recognizes the need for improved efficiency, profitability and a more sustainable environment."
Continued Jacobs, "We continue to make significant progress on our two main strategic growth initiatives, the AFIRS EdgeTM and weather. As announced in the quarter, we have signed up airline partners to help launch the AFIRS Edge on both the Boeing 737 and A320 aircraft types, and just last week completed the installation and engineering tests on the A320. We are now working through certification testing before we submit our final package to Transport Canada as we seek the Supplemental Type Certificate ("STC"). In our weather business, during the quarter we signed agreements with the world's two largest meteorological agencies, the UK Met Office and NOAA, to collaborate and improve weather forecasting, which leverages the FLYHT-WVSS-II water vapor sensor system in conjunction with the AFIRS Edge."
"At the same time, we are realizing the contributions of our MRO systems business CrossConsense, which landed a significant data management migration for a large flag carrier in Europe. This is the largest win for CrossConsense since we acquired the business last year."
Concluded Jacobs, "The entire FLYHT organization is laser focused on delivering on the AFIRS Edge and Weather opportunities ahead of what we expect to be an exciting 2024. We are making great progress and will continue to source opportunities for growth to further scale the business."
Operating Results
Revenue decreased by 24% to $5,099,019 in Q3 2023 compared to Q3 2022. Excluding licensing, revenue would have increased 44% year-over-year driven by growth in SaaS, Hardware and Technical Services.
SaaS revenue increased by 34% to $2,787,664, driven by an increase in customers' flights and flight hours, as well as growth in weather-related software services. Licensing revenue decreased by 86% to $494,573 due to a large order from a long-term OEM customer that was not replicated in Q3 2023.Hardware revenue increased by 109% to $1,001,817, with a total of 18 installation kits shipped in Q3 2023. Technical Services revenue increased by 28% to $814,965 as a result of data migration work delivered and an increase in customer requests for certification services.
Gross margin was 59% of revenue in Q3 2023 compared to 72% in Q3 2022. The decrease in gross margin was due primarily to changes in the mix of revenue sources during the quarter.
Operating expenses decreased by 11% from Q3 2022, driven by a 25% decrease in Administration expenses, a 14% decrease in Research and Development and certification engineering expenses and a 1% increase in Distribution expenses.
EBITDA1 loss totaled $430,865 in Q3 2023 compared to positive EBITDA of $924,680 in Q3 2022.
Net loss was $728,655 in Q3 2023 compared to a Net Income of $703,765 in Q3 2022.
Balance Sheet and Liquidity
Cash and short-term investments totalled $1,939,959 at September 30, 2023, compared to $2,647,650 at December 31, 2022. When compared to Q2 2023, cash and short-term investments of $1,719,904, our cash position increased by $220,055 quarter-over-quarter.
Trade and other receivables decreased by 26% to $3,751,129 compared to YE 2022, and Trade payables and accrued liabilities increased by 0.9% to $2,759,864 compared to YE 2022.
Conference Call Information
FLYHT will host a conference call to discuss its financial results for Q3 2023 on Friday, November 10, 2023, at 7:30 a.m. MT (9:30 a.m. ET). The conference call will include prepared remarks followed by a question-and-answer session with FLYHT's President & Interim CEO Kent Jacobs and CFO Alana Forbes. 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.
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 2023 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, and delivers industry leading solutions to improve aviation safety, efficiency, and profitability. This unique capability is driven by a suite of patented aircraft certified hardware products. These include AFIRS™, an aircraft satcom/interface device, which enables cockpit voice communications, real-time aircraft state analysis, and the transmission of aircraft data while inflight. The AFIRS Edge is a state-of-the-art 5G Wireless Quick Access Recorder (WQAR), Aircraft Interface Device (AID), and Aircraft Condition and Monitoring System (ACMS). The Edge can be interfaced with FLYHT's TAMDAR probe or the FLYHT-WVSS-II relative humidity sensor to deliver airborne weather and humidity data in real-time.
CrossConsense, FLYHT's wholly-owned subsidiary, offers highly skilled services to the commercial aviation industry and provides preventative maintenance solutions. These include Aircraft Fleet View, a native application that gives a real-time view of airline fleet status; AviationDW, a managed data warehouse for enhanced business intelligence; and ACSIS, a visualization and predictive maintenance alerting tool.
FLYHT is headquartered in Calgary, Canada, and is an AS9100 Quality registered company. CrossConsense, located in Frankfurt, Germany, is an ISO9001 certified operation. For more information, 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 |
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1 EBITDA: defined as earnings before interest, income tax, depreciation and amortization (a non-GAAP financial measure). EBITDA is provided to aid in analysis and profitability comparisons among companies and industries, by segregating operating results from the effects of financing and capital expenditures.
SOURCE: FLYHT Aerospace Solutions Ltd.
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