Mr. Bill Tempany reports
FLYHT REPORTS FOURTH QUARTER AND FULL YEAR 2020 RESULTS, PROVIDES CORPORATE UPDATE
Flyht Aerospace Solutions Ltd. has released financial results for the fourth quarter and full year ended Dec. 31, 2020.
"We are encouraged by recent trends for short-haul travel and cargo activity in the current environment, and are relieved to have 2020 behind us," said Bill Tempany, chief executive officer. "While it was a challenging year for Flyht and the commercial aviation industry, we feel that we have weathered the storm relatively well. Given that we serve a client base that has seen a 40-per-cent to 75-per-cent reduction in revenue, unprecedented financial losses and staff reductions, the revenue slip experienced by Flyht is better than the industry as a whole and testament to the critical value that our solutions bring to airline operations."
Mr. Tempany continued: "During the fourth quarter, we started to see signs of recovery across our business. We have seen clients that had experienced financial distress early in the pandemic return to the skies equipped with Flyht solutions. Additionally, we shipped 24 AFIRS hardware kits in the fourth quarter, which was up from only one in the third quarter, and have a solid pipeline of additional units committed for deliveries in 2021. While still down on a year-over-year basis, overall revenue increased 76 per cent sequentially from the third quarter of 2020.
"We enter 2021 with an expanded suite of solutions that leverage Flyht's historical core strength in real-time aircraft data with additional insights and actions from our Actionable Intelligence suite of [software-as-a-service] applications. We expect to have at least three clients using the AI software suite in the second quarter of 2021 and to start generating incremental revenue from these services beginning in the third quarter."
Concluded Mr. Tempany, "We are well positioned, given our cash reserves and current recovery trends, to see a significant improvement in our operating results in 2021 and 2022 as the vaccination rollout continues and pandemic-related travel restrictions dissipate."
Fourth quarter 2020 results:
Revenue decreased 21 per cent to $3,379,186 compared with the fourth quarter of 2019. This included:
SaaS revenue of $1,627,421, a decrease of 40 per cent from Q4 2019;
Hardware revenue of $1,490,709, an increase of 127 per cent from Q4 2019;
Licensing revenue of $48,068, down 94 per cent from Q4 2019;
Technical services of $212,988, an increase of 52 per cent from Q4 2019.
Gross margin was 56 per cent of revenue compared with 63.0 per cent in the fourth quarter of 2019.
Operating expenses decreased 12 per cent from the fourth quarter of 2019. Distribution expenses decreased by 23 per cent, administration expenses increased by 11 per cent, and research and development and certification engineering expenses decreased by 13 per cent.
Negative EBITDA (earnings before interest, taxes, depreciation and amortization) was $1,657,110 in the quarter compared with negative EBITDA of $711,486 in the fourth quarter of 2019.
Net loss was $1,999,715, compared with a net loss of $1,212,971 in Q4 2019.
Full-year 2020 results:
Revenue for the full year was $13,652,985, representing a decrease of 36 per cent compared with full-year 2019 revenue of $21,171,159. This included:
SaaS revenue of $7,323,125, a 29-per-cent decrease year over year;
Hardware revenue of $2,306,371, a 65-per-cent decrease year over year;
Licensing revenue of $3,630,874, an increase of 12 per cent year over year;
Technical services of $392,615, a 62-per-cent decrease compared with 2019.
Gross margin of $9,257,099 was a 25-per-cent decrease from $12,326,802 in 2019.
Operating expenses decreased 21 per cent year over year to $12,786,742. This included decreases in all expense categories: 35 per cent in distribution, 4 per cent in administration, and 11 per cent in research and development.
The full-year EBITDA loss was $1,854,413 in 2020, which compares with an EBITDA gain of $1,015,591 for the full year of 2019.
Net loss for the year increased to $3,237,457 from a 2019 net loss of $746,635.
Flyht's balance sheet ended the year with:
Cash and short-term investment balances of $5,127,963, an increase from 2019's ending balance of $4,127,648;
Trade and other receivables decreased 68 per cent year over year, in part due to reserves for bad debts;
Increases in both property and equipment and non-current lease liabilities, reflecting the addition of a new leased office space for the company's headquarters in Calgary;
Movement of the debenture due in July, 2021, to current from non-current loans and borrowings.
Flyht will host a live conference call to discuss its fourth quarter and full-year 2020 financial results on April 8, 2021, at 7 a.m. MT (9 a.m. ET or 6 a.m. PT). The conference call will include a brief presentation about Flyht's fourth quarter and full-year financial results followed by a question-and-answer period with Mr. Tempany, and Alana Forbes, chief financial officer.
To access the conference call by phone within Canada and the United States, dial 1-800-319-4610 (toll-free). Outside Canada and the U.S., dial 1-604-638-5340. (Callers should dial in five to 10 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 star one. Questions can be e-mailed in advance or during the conference call to firstname.lastname@example.org.
An archive of the conference call will be posted on the investor communications section of Flyht's website as soon as it is available from the conference call provider.
Flyht's 2020 annual report, which contains more detailed information including the CEO's letter to shareholders, management's 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 SEDAR.
Barry Eccleston, executive chairman of Flyht, has decided to not run for re-election at the annual general meeting.
Mr. Eccleston said: "It has been a pleasure working with the board and staff at Flyht, and I feel confident that the recent changes in management have the company on a strong course to thrive as the airline business recovers from the pandemic. I have always believed in the Flyht technology and the need the industry has for it, and the current direction with Actionable Intelligence, using JetBridge technology, will serve the company's customers and prospects well to emerge healthier and more agile than prepandemic. It has been a pleasure to serve the shareholders of Flyht, and I wish the company, its staff, customers and shareholders every success in the coming years."
Mr. Tempany stated: "It has been a pleasure to work with and get to know Barry over the last seven years. For him to be able to carve out the time and energy to give a small company like ours the insights he has of the industry, business and trends has been an immeasurable help to me and to the staff, and has given us a foundation to build on. We will all miss having Barry's insights, humour and guidance but also understand that after five-plus decades of hard work, retirement is supposed to mean taking time for your own passions and family. We wish Barry many days of clear skies while he perfects his flying techniques, zero IROP issues while he and Valerie enjoy their many planned activities once the COVID beast is defeated, and many years to take advantage of the time well earned while helping aviation in general become a safe, clean, great industry."
The board will leave the vacancy unfilled, and a chairman will be elected from among the elected directors after Flyht's AGM in May.
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, Colo., and is an AS9100 quality registered company.
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