TrackX Holdings Reports a 63% Year-over-Year Increase in Recurring Revenue for the Three Months Ended December 31, 2017

DENVER, March 01, 2018 (GLOBE NEWSWIRE) -- TrackX Holdings Inc. (TSX.V:TKX) (“TrackX” or the “Company”), an enterprise Industrial Internet of Things (IIoT) software platform provider, announces the financial and operational highlights from its first quarter of fiscal 2018 for the three months ended December 31, 2017. All results are reported in Canadian dollars unless otherwise specified. A complete set of the December 31, 2017 Consolidated Financial Statements and Management’s Discussion & Analysis has been filed on SEDAR (www.sedar.com).

Financial Highlights for the Quarter Ended December 31, 2017

• Q1/F18 recurring revenue was up 63% year-over-year to $0.43 million from $0.27 million in Q1/F17, reflecting the Company’s shift in focus from hardware to SaaS revenue;
• Gross margin increased to 42%, up from 27% in Q1/F17, as higher margin recurring SaaS revenue was a larger percentage of total revenue in Q1/F18;
• Q1/F18 total revenue of $1.0 million, a 37% decrease from $1.6 million in Q1/F17. In Q1/F17, the Company’s largest customer sourced hardware through TrackX for its phase one deployment, resulting in a significant, one-time, revenue provision for the Company;
• Q1/F18 services revenue was $0.52 million, a 16% increase over $0.45 million in Q1 2017;
• Adjusted EBITDA loss for the quarter was $0.58 million compared to a loss of $0.42 million during Q1/FY17, due to engineering expenses necessary to configure TrackX solutions for expansion opportunities and an increase in sales-related expenses resulting from increased sales activity and pipeline growth from which revenue has yet to be realized.
• Cash balance of $0.76 million, down from $1.35 million at December 31, 2017.

Quarterly Revenue Breakdown by Segment

Operational Highlights for the 3 Months Ended December 31, 2017

• Successful initial deployment of GAME (Global Asset Management for Enterprises) for Supply Chain Management (SCM) for a leading U.S. packaging provider and distributor;
• Commenced the implementation of GAME for SCM for a major U.S. appliance manufacturer at one of their large manufacturing and distribution facilities with 3 more locations identified for 2018 deployments;
• First production installation of GAME for EAM (Enterprise Asset Management) to track all IT assets for one of the largest insurance companies in the industry;
• Continued to drive operating efficiency and streamline the team to not only reduce costs but also increase our customer service capacity and facilitate the scale necessary to accommodate more simultaneous customer deployments;
• Combined the technology capabilities and engineering resources of TrackX and broTECH, resulting in the release of GAME for EAM, a major upgrade of the Company’s IIoT platform which is currently being implemented for multiple customers
• Released TrackX Mobile, an innovative mobile application for Android and IOS-based consumer devices, allowing customers to easily expand the TrackX solution platform to additional areas of the business without needing to purchase higher cost, ruggedized handheld readers or tablets. 

Highlights Subsequent to the First Quarter of F2018

• Continued execution of “Land and Expand” strategy:
  • A leading producer of chicken, beef, and pork products entered into an agreement to install its ninth yard location;
  • A large insurance company is currently installing the first seven of fourteen locations;
  • Carvana, among the largest online used car retailers, expanded its TrackX solution deployment for vehicle inventory and processing across a total of 42 locations, up from 22 locations in Q1/2017;
• Agreement with a US$5 billion annual revenue global powersports leader to deploy TrackX’s GAME platform for an initial yard management implementation;
• Sales team and process continues to generate momentum.

Management Commentary

“We are pleased with our Q1/F2018 financial and operations results,” said TrackX President and CEO Tim Harvie. “Although revenue was down year-over-year, last year’s first quarter benefited from a significant amount of hardware revenue from our largest customer. Backing out this hardware contribution in Q1 of fiscal 2017, year-over-year sales increased in the first quarter of fiscal 2018. We remain committed to our focus of growing our high-margin, recurring SaaS revenue, which was up 63% this quarter, leading to stronger gross margins. To accomplish this, we continue to execute our ‘land and expand’ strategy to increase our footprint across our customers’ operations after completing initial contracts. TrackX will also expand GAME with additional workflows and analytics in the areas of returnable asset tracking, high value asset tracking and supply chain management. An increased focus in both high value asset tracking and returnable asset tracking is expected to yield larger revenue opportunities with higher gross margins.”

Selected Financial Information

CONFERENCE CALL MARCH 1, 2018 AT 9:00AM EST

TrackX will host a conference call to provide a business update and discuss its fiscal Q1 2018 financial results today, March 1, 2018 at 9:00 am Eastern Standard Time. The call will be hosted by Tim Harvie, Chief Executive Officer and Chairman, and Gene McConnell, Chief Financial Officer. An investor presentation will be available before the call and can be accessed on the Company’s website at www.TrackX.com.

About TrackX

TrackX, based in Denver, Colorado, is an enterprise Industrial Internet of Things (IIoT) software platform provider leveraging multiple auto-ID technologies for the comprehensive 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, alerts and powerful analytics to deliver solutions across a growing number of industries. This platform creates unprecedented visibility and business intelligence of man-to-machine and machine-to-machine interaction. 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
GMcConnell@trackx.com
(303) 325-7300

Sean Peasgood, Sophic Capital
Sean@SophicCapital.com  
(416) 565-2805

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.