Xtract One Releases Second Quarter Fiscal 2024 Results

Xtract One Releases Second Quarter Fiscal 2024 Results

GlobeNewswire

Published

Strong Year-over-Year Growth; Company on Track for Record Performance

TORONTO, March 07, 2024 (GLOBE NEWSWIRE) -- Xtract One Technologies Inc. (TSX: XTRA) (OTCQX: XTRAF) (FRA: 0PL) (“Xtract One” or the “Company”), a leading technology-driven threat detection and security solution that prioritizes the patron access experience by leveraging AI, today announced fiscal second quarter results for the three and six month periods ended January 31, 2024. All information is in Canadian dollars unless otherwise indicated.*Second Quarter Financial Highlights*

· Revenue of $2.9 million for the three months ended January 31, 2024 versus $0.8 million in the same period in the prior year.· Gross margin of 61.1% for the second quarter as compared to 47.1% for the same period last year.· Announced several new customer wins across multiple market segments during the quarter, including with the Baird Center, Wisconsin’s largest convention center, CPKC Stadium, the first stadium purpose-built for a professional women’s soccer team, H-E-B Centre at Cedar Park home of the Texas Stars, and the Community Health Network.· Total contract value of new bookings^1 was $5.1 million for the three months ending January 31, 2024 as compared to $1.1 million for the same period last year.· Platform contractual backlog of $12.2 million as of January 31, 2024 as compared to $3.4 million as of January 31, 2023; excludes an additional $10.0 million of agreements pending installation^1 versus approximately $3.0 million of agreements pending installation last year.“I’m pleased to announce another solid quarter for Xtract One, with strong margins and top line growth setting the stage for our best year ever,” stated Peter Evans, Chief Executive Officer of Xtract One. “Quarterly revenue rose to nearly $3 million – more than triple that of fiscal 2023 – and we continued to build our backlog of sales commitments, now over $22 million versus approximately $7 million last year. While the fiscal second quarter is typically impacted by seasonal factors, we remain on track for record-setting performance, with strong results anticipated in the second half of the fiscal year. We are committed to meeting the increasing demand of our expanding customer base and look forward to growth acceleration this year and beyond.”

*Financial Results for the three month period ended January 31, 2024*

Consolidated revenue was $2.9 million for the three months ended January 31, 2024 as compared to $0.8 million for the same period in fiscal 2023. Revenue from the Platform operating segment was $2.8 million for the three month period ended January 31, 2024 as compared to $0.7 million for the same period in fiscal 2023, reflecting new business contract wins and overall increasing demand. Revenue for the Xtract operating segment was $0.2 million for the three months ended January 31, 2024 as compared to $0.1 million for the same period in fiscal 2023.

Loss and comprehensive loss was $3.3 million for the three month period ended January 31, 2024 as compared to $4.3 million for the same period in fiscal 2023. The decrease was primarily attributable to the increase in Platform revenue and corresponding higher gross profit, while total operating expenses remained relatively flat year-over-year.

This press release should be read in conjunction with the Company’s Unaudited Condensed Consolidated Interim Financial Statements, prepared in accordance with International Financial Reporting Standards (“IFRS”) and the Company’s Management’s Discussion and Analysis for the periods ended January 31, 2024 and 2023, which can be found under the Company’s profile on SEDAR+ at www.sedarplus.ca.

*Conference Call Details*

Xtract One will host a conference call to discuss its results on Friday, March 8, 2024, at 10:00 am EST. Peter Evans, Xtract One CEO and Director, and Karen Hersh, CFO and Corporate Secretary, will provide an overview of the interim financial results along with management’s outlook for the business, followed by a question-and-answer period.

The webcast and presentation will be accessible on the company’s website. The webcast can be accessed here and the telephone number for the conference call is 877-317-6789 (412-317-6789 for international callers).

*About Xtract One Technologies*

Xtract One Technologies is a leading technology-driven threat detection and security solution leveraging AI to provide seamless and secure patron access control experiences. The Company makes unobtrusive threat detection systems that enable venue building operators to prioritize and deliver improved patron experiences while providing unprecedented safety. Xtract One’s innovative AI-powered Gateway product enables companies to covertly screen for weapons at points of entry without disrupting the flow of traffic. Its AI-based Xtract One Vision allows venue and building operators to identify weapons and other threats inside and outside of facilities, and Xtract One View provides valuable intelligence for optimizing operations. For more information, visit www.xtractone.com or connect on Facebook, Twitter, and LinkedIn. 

*For further information, please contact:*
*Xtract One Inquiries: *info@xtractone.com, http://www.xtractone.com*    *
*Media Contact: *Kristen Aikey, JMG Public Relations, 212-206-1645, kristen@jmgpr.com
*Investor Relations: *Chris Witty, Darrow Associates, 646-438-9385, cwitty@darrowir.com

^*1 **Supplementary Financial Measures:*

The Company utilizes specific supplementary financial measures in this earnings release to allow for a better evaluation of the operating performance of the Company’s business and facilitates meaningful comparison of results in the current period with those in prior periods and future periods. Supplementary financial measures do not have any standardized meaning prescribed under IFRS and therefore may not be comparable to measures presented by other companies. Supplementary financial measures presented in this earnings release include ‘Agreements pending installation’ and ‘Total contract value of new bookings’. Agreements pending installation reflects total value of signed contracts awarded to the Company that has not been installed at the customer site. ‘Total contract value of new bookings’ is comprised of all new contracts signed and awarded to the Company, regardless of the performance obligations outstanding as at the end of the reporting period. Total contract value is the aggregate value of sales commitments from customers as at the end of the reporting period without consideration of the Company’s completion of the associated performance obligations outlined in each contract.

*CAUTIONARY DISCLAIMER STATEMENT*:

This news release contains forward-looking statements within the meaning of applicable securities laws that are not historical facts. Forward-looking statements are often identified by terms such as “will”, “may”, “should”, “anticipates”, “expects”, “believes”, and similar expressions or the negative of these words or other comparable terminology. All statements other than statements of historical fact, included in this release are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company’s expectations include but are not limited to the risks detailed from time to time in the continuous disclosure filings made by the Company with securities regulations. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and the Company will update or revise publicly any of the included forward-looking statements only as expressly required by applicable law.

No securities exchange or commission has reviewed or accepts responsibility for the adequacy or accuracy of this release.

*Unaudited Interim Statements of Loss and Comprehensive Loss for the Three and Six Month Periods Ended January 31, 2024, and 2023 *

The following table is extracted from the Company’s unaudited condensed consolidated interim financial statements and presented in Canadian dollars to demonstrate the Statements of Loss and Comprehensive loss for the three and six month periods ended January 31, 2024, and 2023:
    Three months ended January 31,   Six months ended January 31,         2024       2023       2024       2023                        
*Revenue*                  Platform revenue   $ 2,750,418     $ 721,334     $ 5,746,624     $ 1,147,872    Xtract revenue     169,640       93,590       289,787       313,858    
*Total revenue*   $ 2,920,058     $ 814,924     $ 6,036,411     $ 1,461,730                        
*Cost of revenue*                  Platform cost of revenue   $ 1,081,337     $ 385,866     $ 2,059,899     $ 579,050    Xtract cost of revenue     55,049       53,711       108,429       168,202    
*Total cost of revenue*   $ 1,136,386     $ 439,577     $ 2,168,328     $ 747,252                        
*Gross profit*   $ 1,783,672     $ 375,347     $ 3,868,083     $ 714,478                        
*Operating expenses*                  Selling and marketing   $ 1,299,727     $ 961,095     $ 2,807,384     $ 2,451,454    General and administration     1,693,019       1,810,887       3,340,835       3,388,105    Research and development     2,058,606       1,696,094       3,784,797       3,831,869    Loss on inventory write-down     107,013       314,103       107,013       314,103    Loss on retirement of assets     -       81,274       -       81,274    
*Total operating expenses*   $ 5,158,365     $ 4,863,453     $ 10,040,029     $ 10,066,805                        
*Loss from operations*     (3,374,693 )     (4,488,106 )     (6,171,946 )     (9,352,327 )                      
*Other income*                  Unrealized gain on investments     -       182,292       -       116,667    Interest and other income     56,543       34,444       152,583       46,106                        
*Loss and comprehensive loss for the period*     $ (3,318,150 )   $ (4,271,370 )   $ (6,019,363 )   $ (9,189,554 )                      
*Weighted average number of shares*     198,495,594       163,181,255       198,463,158       163,180,233                        
*Basic and diluted loss per share *   $ (0.02 )   $ (0.03 )   $ (0.03 )   $ (0.06 )                      

*Unaudited Interim Statements of Financial Position as at January 31, 2024 and July 31, 2023*

The following table is extracted from the Company’s unaudited condensed consolidated interim financial statements and presented in Canadian dollars to demonstrate the Company’s financial position as at the periods ended January 31, 2024, and July 31, 2023:
    January 31, 2024   July 31, 2023
*Assets*        
Current assets         Cash and cash equivalents   $ 4,192,460     $ 8,327,449   Receivables     2,151,527       847,429   Prepaid expenses and deposits     626,186       1,026,668   Current portion of deferred cost of revenue     308,474       -   Inventory     1,767,167       1,602,971                   9,045,814       11,804,517            
Property and equipment     2,319,476       2,063,817  
Intangible assets     4,440,750       4,843,700  
Non-current portion of deferred cost of revenue     479,926       -  
Right of use assets     212,119       286,796            
*Total assets*   $ 16,498,085     $ 18,998,830            
*Liabilities*        
Current liabilities         Accounts payable and accrued liabilities   $ 2,423,277     $ 2,519,350   Deferred revenue     4,558,185       1,379,741   Current portion of lease liability     199,652       232,483                   7,181,114       4,131,574            
Non-current portion of lease liability     63,420       124,358                 $ 7,244,534     $ 4,255,932            
*Shareholders' equity*         Share capital   $ 135,954,748     $ 135,823,337   Contributed surplus     14,818,864       14,420,259   Accumulated deficit     (141,520,061 )     (135,500,698 )               $ 9,253,551     $ 14,742,898            
*Total liabilities and shareholders' equity*   $ 16,498,085     $ 18,998,830            

*Unaudited Interim Statements of Cash Flows for the Six Month Periods Ended January 31, 2024 and 2023*

The following table is extracted from the Company’s unaudited condensed consolidated interim financial statements and presented in Canadian dollars to demonstrate the Company’s cash flows for the six month periods ended January 31, 2024, and 2023:
      Six months ended January 31,           2024       2023    
*Cash flow used in operating activities *           Loss and comprehensive loss for the period   $ (6,019,363 )   $ (9,189,554 )   Adjustment for:             Share-based compensation     445,167       529,942       Depreciation     608,308       414,539       Amortization     402,950       402,950       Finance cost     12,212       24,413       Loss on inventory     107,013       314,103       Loss on retirement of assets     -       81,274       Other income     -       (20,000 )     Unrealized gain on investments     -       (116,667 )                         (4,443,713 )     (7,559,000 )   Changes in non-cash working capital             Receivables     (1,304,098 )     1,250,527       Prepaid expenses and deposits     400,482       140,322       Inventory     (1,838,646 )     (818,202 )     Deferred cost of revenue     74,264       -       Accounts payable and accrued liabilities     (96,073 )     1,697,862       Deferred revenue     3,178,444       205,832                   Cash used in operating activities     (4,029,340 )     (5,082,659 )                
*Cash flow used in investing activities*           Purchase of property and equipment     -       (32,539 )                 Cash used in investing activities     -       (32,539 )                
*Cash flow from financing activities*           Proceeds on issue of share capital     84,849       950     Lease payments     (190,498 )     (186,384 )                 Cash used in financing activities     (105,649 )     (185,434 )                
Net decrease in cash for the period   $ (4,134,989 )   $ (5,300,632 )                
*Cash beginning of the period*     8,327,449       6,277,321                  
*Cash end of the period*   $ 4,192,460     $ 976,689                  

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