Xtract One Releases Second Quarter Fiscal 2024 Results

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 bookings1 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 installation1 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