TrackX Reports Q4 and Fiscal 2018 Financial Results

DENVER, Jan. 28, 2019 (GLOBE NEWSWIRE) -- TrackX Holdings Inc. (TSX.V:TKX | 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 fourth quarter and fiscal year ended September 30, 2018. All results are reported in Canadian dollars unless otherwise specified. A complete set of the September 30, 2018 Consolidated Financial Statements and Management’s Discussion & Analysis has been filed on SEDAR (www.sedar.com).

Financial Highlights for the Year Ended September 30, 2018

• Revenue of $5.67 million versus $5.17 million in F17, a 10% increase year-over-year;
• Recurring & license revenue of $2.93 million, a 104% increase over $1.44 million in FY17;
• Gross margin of 44%, up from 27% in FY17;
• Adjusted EBITDA loss for the year decreased to $2.29 million compared to a $3.46 million loss during FY17;
• Net loss for F18 decreased to $3.45 million or ($0.04)/share from $3.97 million or ($0.07/share) in F17;
• Cash balance of $2.21 million, up from the $0.32 million reported exiting the June 30, 2018 quarter;
• Net working capital of $0.80 million;
• F18 cash used in operating activities was $1.39 million versus $3.14 million in F17;
• Secured up to C$5.2 million loan facilities and have $2.38 million balance outstanding long-term liability against them.

Annual Revenue Mix

Financial Highlights for the 3-Months Ended September 30, 2018

• Revenue of $0.67 million versus $1.33 million in the year-ago quarter. The annual decline was due to three accounts that delayed scheduled implementation. TrackX expects to complete these projects in the first two quarters of 2019;
• Recurring revenue increased 29% year-over-year to $0.51 million from $0.40 million;
• Gross margin of -54%, down from 15% from the fourth quarter of F17;
• Adjusted EBITDA loss $1.61 million compared to $1.08 million in the year-ago quarter;
• Net loss of $2.14 million ($0.03/share) versus $1.29 million ($0.02/share) in Q4/F17.
  

Fourth Quarter Revenue Mix

Management Commentary

“Fiscal 2018 was a year of significant change for TrackX,” said TrackX President and CEO Tim Harvie. “We secured financing, allowing us to support significant expansion within our existing customer base, consistent with our Land and Expand Strategy, and pursue large opportunities with multi-national enterprises across multiple industry horizontals. Although delays of some larger projects affected our fourth quarter revenues, we want to assure investors that these delays had nothing to do with our GAME platform, ability to deploy, or prior cash constraints (which we strengthened with up to $5.2 million in loan facilities). These delays originated with our clients and were largely due to conflicting projects and resource allocation. These  issues have since been resolved, and we are confident that investors will see results in the next two quarters as we implement solutions for these customers.  In the meantime, the investments we have made in our people, our partners, and our product continue to yield results both in terms of expanded revenue opportunities within our existing client base and as well as from new enterprise customers. We remind investors that historically all of our leads have been inbound, by word of mouth or from our website. We have invested heavily in sales and marketing personnel, and with that will come new targeted outbound marketing campaigns,  leveraging our success, collaborating more with our partners and driving an acceleration in revenue growth. “

Highlights Subsequent to the Fourth Quarter

• Contract to deploy keg tracking solution for Anheuser-Busch InBev;
• Completed phase 1 deployment for America’s second largest insurance company;
• Expansion deal with one of the world’s largest food companies;
• Major expansion with global household appliance manufacturer;
• Leadership veteran Rick Kasch joins TrackX’s Board of Directors;
• Strategic partnership and platform integration with Velociti.

Selected Financial Information

Business Outlook

In 2018, TrackX strengthened its core sales and customer delivery teams, enhanced its products, developed more partners, established strong business processes and secured up to $5.2 million in loan facilities to position the company well for growth in 2019.  These initiatives have allowed the Company to accelerate a highly scalable “Land and Expand” strategy, already resulting in commitments for 15 implementations targeted for completion in 2019.

Historically, TrackX’s sales have been largely the result of inbound leads generated via customer referral or from the website.  With the recent expansion in Sales and Marketing, the Company is undertaking outbound marketing campaigns, leveraging its customer success and value in Food Services, Beverage and Brewery, Automotive, and Insurance to drive additional revenue growth. The Company is also better equipped to leverage its partner network for both scale in solution delivery capacity as well as to identify new customer and industry opportunities.

TrackX’s solution platform, called GAME (Global Asset Management for Enterprises) has further extended its differentiation as a leading enterprise asset management platform. The recent implementation at a leading insurance company is already processing over 1.5 million transactions per day.  For another customer in the horticultural industry, TrackX is managing more than 800,000 returnable plant racks across an expansive network of nurseries and retailers. The core architecture will continue to evolve in 2019 with integration into additional IoT sensor and tag technologies.  Lower cost, more capable hardware and reduced implementation complexity provide TrackX access to a broader client base and provide current customers with lower cost as they look to expand their use of the TrackX solution to accommodate additional assets, locations and business processes.  The Company will offer add-on modules for integration into customers’ back end operating and ERP systems, such as SAP and BMC Helix, providing those systems with real time information and unlocking more value for the customer.  The ongoing development of workflow automation and analytics capabilities not only drive additional value and differentiation, but provides the configurability required to readily support opportunities that have emerged in other industries.

While the Company will continue to aggressively deploy Supply Chain Management solutions there will be a much larger emphasis in 2019 on tracking Returnable Transport Items (i.e. beer kegs, plastic pallets, horticultural racks, chemical containers, etc.) and Enterprise Assets (i.e IT assets, Calibration equipment, tools, etc.).  These solutions target a large number of assets, address very repeatable processes, can easily scale, provide a rapid ROI for our customers, and are easy for our partners to implement.  As a result, these solutions will represent larger revenue opportunities, with higher gross margin and a lower cost of implementation and support.    

TrackX Hosting Conference Call Tuesday Morning at 8:30am EST

Chairman and CEO Tim Harvie and CFO Gene McConnell will host a conference call to discuss the results at 8:30am EST on Tuesday, January 29, 2019.  All interested parties are invited to participate in this conference call and should dial the numbers below 10 minutes before the starting time.

About 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.
investor@trackx.com
303-325-7300

Sean Peasgood, Sophic Capital
Sean@SophicCapital.com 
647-361-8358

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.