Recurring Revenue Growth Anticipated in 2019
DENVER, CO — February 28, 2019— TrackX Holdings Inc. (TSX.V:TKX | OTC: TKXHF | FRANKFURT:3TH) (“TrackX” or the “Company), a Software-as-a-Service (SaaS)-based enterprise asset management solution provider, announces the financial and operational highlights from its first quarter of fiscal 2019 ended December 31, 2018. All results are reported in Canadian dollars unless otherwise specified. A complete set of the December 31, 2018 Consolidated Financial Statements and Management’s Discussion & Analysis has been filed on SEDAR (www.sedar.com).
Financial Highlights for the 3-Months Ended December 31, 2018
- Record revenue of $2.19 million versus $1.03 million in the year-ago quarter (113% increase);
- Recurring revenue of $0.57 million versus $0.43 million in Q1 FY18 (31% increase);
- Gross margin of 40% compared to 42% in the year-ago quarter;
- Adjusted EBITDA loss of $0.30 million compared to a $0.58 million loss in Q1FY18;
- Net loss of $0.82 million ($0.01/share) versus $0.94 million ($0.01/share) in Q1 FY18;
- Cash of $900,000 and $2.38 million of debt.
First Quarter Revenue Mix
|Revenue||Q1 FY19||Q1 FY18|
|Recurring and Software License||36%||42%|
|Setup, implementation, and other fees||37%||45%|
Operational Highlights for the 3-Months Ended December 31, 2018
- Announced plans for the deployment of GAME (Global Asset Management for Enterprises) for Anheuser-Busch InBev for keg tracking.TrackX will capture invaluable real-time data and business intelligence related to Anheuser-Busch’s keg fleet to drive efficiencies throughout the supply chain.
- Formalized strategic partnership with Velociti. Velociti and TrackX are jointly undertaking efforts to market and deploy TrackX’s GAME platform, hardware, and related services to a broad spectrum of industries including transportation and logistics, beverage and brewery, technology, insurance, and automotive.
- A Fortune 100 client announced a major expansion of the TrackX GAME platform to manage yard operations. The customer, which is the world’s second largest processor and marketer of chicken, beef, and pork, intends to expand TrackX’s solution from 8 currently installed locations to all 17 beef and pork locations in 2019.
- Announced another major expansion with one of the largest home appliance manufacturers in the United States. The customer will expand its current TrackX Yard Management solution to an additional 8 facility locations in the United States for a total of 11 facilities.
“In the first quarter of 2019, we realized strong revenue growth as we continued to implement solutions for previously announced customer engagements. Our strategic investments in sales, marketing and delivery services have generated incremental expansion in our sales pipeline, increased delivery capacity and greater traction with our expanded partner network”, said CEO Tim Harvie. “We will remain focused on driving increased recurring revenue, which was up 31% over the same period last year with significant growth anticipated throughout 2019. This revenue gain will be realized from both the onboarding of new customers and the expansion commitments we have as a result of the successful execution of our land and expand strategy.”
Highlights Subsequent to the First Quarter
- Completed phase 1 deployment for America’s second largest auto insurance company;
- Leadership veteranRick Kasch joins TrackX’s Board of Directors.The Company is granting Mr. Kasch 350,000 stock options with a strike price of C$0.355, which vest in equal tranches over a 3-year period;
- TrackX ranked #8 tech company on the TSX Venture 50
Selected Financial Information
|C$(000s) (except per share)||Three-month Period Ended December 31|
|Gross Margin %||40%||42%|
|Loss for the period||($816)||($936)|
|Loss per share||($0.01)||($0.01)|
|Adjusted EBITDA (Loss)*||($295)||($584)|
|* Adjusted EBITDA is a non-IFRS (international financial reporting standards) measure and excludes stock-based compensation|
TrackX will continue to focus and execute on its core strategies. The Company is realizing great success from its land and expand strategy within multiple industry horizontals (for example, yard management, high value asset tracking, returnable transport item management, and work in process tracking). TrackX has secured multi-site expansion opportunities with large multi-national organizations that are leaders in their industry verticals. At this juncture, these accounts alone are expected to result in more than 20 new implementations in Fiscal 2019.
TrackX will also continue its commitment to leverage its partner network. Not only do partners provide implementation resources to meet increased demand, they have access to a very large potential customer base. Through joint marketing activities and collaboration, this growing partner network is expected to drive new business and additional revenue for TrackX in 2019.
TrackX has also continued to build and strengthen its team to support growth. Additional resources in sales, marketing, delivery service and engineering will enable the Company to address the customer opportunities which it has visibility to in 2019. As the Company is able to convert these opportunities into customer contracts, it anticipates significant growth in higher margin recurring SaaS revenue throughout Fiscal 2019.
The Company has also continued to focus on the development of new innovations and features within its core IIoT platform, GAME. It has added support for additional IoT sensor technologies and has released updates to each of its core solution offerings. While Yard management opportunities will continue to generate incremental revenue, throughout 2019 the Company will focus more on high value asset tracking and returnable asset tracking related opportunities. Within enterprise accounts, opportunities in these areas typically address a large volume of assets, are easy for partners to implement, and represent larger recurring revenue opportunities with higher gross margins.
TrackX Hosting Conference Call Today at 5:00pm EST
Chairman and CEO Tim Harvie and CFO Gene McConnell will host a conference call to discuss the results at 5:00pm EST on Thursday, February 28, 2019. All interested parties are invited to participate in this conference call and should dial the numbers below 10 minutes before the starting time.
DATE: Thursday, February 28, 2019
TIME: 5:00pmEastern Standard Time
DIAL-IN NUMBER: (877) 830-2596, (785) 424-1744
CONFERENCE ID: TRACKX
TrackX, Inc. (TSX.V:TKX ), based in Denver, Colorado, is an enterprise asset management company deploying SaaS-based solutions leveraging multiple auto-ID and sensor technologies for the comprehensive tracking and management of physical assets. TrackX’s Global Asset Management for Enterprises (GAME) platform enables the IIoT by providing unique item level tracking, workflow processing, event management, alerting and powerful analytics to deliver solutions across a growing number of industries. TrackX delivers significant value to a growing list of Fortune 500 companies and for customers in industries such as transportation, beverage, brewery, healthcare, hi-tech, hospitality, mining, agriculture, horticulture, manufacturing and government.
For more information, please contact:
Gene McConnell, TrackX Holdings Inc.
Sean Peasgood, Sophic Capital
Neither TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. All statements that address future plans, activities, events or developments that the Company believes, expects or anticipates will or may occur including the Company’s anticipated pipeline and value of current and customer deployments and future opportunities are the managements best estimates and cannot be guaranteed or relied upon and is forward-looking information. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements in this news release, whether as a result of new information, future events or otherwise, except as required by law.