Tickers: PINX:GKPRF, XTSE:GSI
Tags: Technology
Abbotsford, BC / TheNewswire / August 1, 2017 - Gatekeeper Systems Inc. ('Gatekeeper' or the 'Company') ((TSX.V: GSI, OTC:GKPRF, FSE: 1GK)) announces that the Company has filed its financial statements and Management's Discussion and Analysis for the three and nine months ended May 31, 2017, available for viewing on www.sedar.com. All figures are expressed in Canadian dollars unless otherwise stated.
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-Revenue during the three months ended May 31, 2017 decreased 27% to $2,274,528 compared to $3,103,333 during the three months ended May 31, 2016;
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-Revenue during the nine months ended May 31, 2017 decreased by 14% to $4,953,564 compared to $5,784,915 during the nine months ended May 31, 2016;
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-Gross profit during the three months ended May 31, 2017 decreased 23% to $1,183,068 from $1,541,440 during the three months ended May 31, 2016;
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-Gross margin as a percentage of revenue during the nine months ended May 31, 2017 decreased to 49%, compared to 50% during the nine months ended May 31, 2016, representing a 1% decrease;
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-Net income for the three months ended May 31, 2017 was $139,508 compared to a net income of $322,078 during the three months ended May 31, 2016;
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-As of May 31, 2017, the Company had cash and cash equivalents of $6,049,705 and working capital of $7,698,374; and
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-EBITDA for the three months ended May 31, 2017 was $161,951 and for the nine months ended May 31, 2017 was ($383,372).
BUSINESS UPDATE
During the third quarter, the following notable events occurred:
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-Closed the non-brokered private placement as announced on April 3rd, 6th, and 10th, through the issuance of 21,280,000 units for gross proceeds of $4.256 million increasing working capital to over $7 million;
-Decreased total number of cameras shipped by 4% compared to same period 2016, and a 8% decrease year to date in 2017 compared to 2016;
-An equivalent total number of DVR's shipped compared to the same period in 2016, and a 5% decrease year to date in 2017 compared to 2016; and
-The number of stop-arm camera evaluation sites remains at twenty-four, involving 1,862 buses owned by various school districts.
The Company's base business continued to support sales in the third fiscal quarter reaching over $2.27 million for the quarter. The sales decrease was primarily due to the timing of certain sales contracts expected to land in the third quarter, but that have been delayed for various reasons.
The current number of stop-arm camera evaluation sites remains at twenty-four, involving 1,862 buses owned by various school districts. Gatekeeper is working with school districts, law enforcement, and judicial systems to complete the evaluation phase on these sites and progress to commercial implementation, ideally in the form of revenue-sharing arrangements.
The Company expects to secure purchase orders for up to three more revenue sharing contracts in the stop-arm camera business prior to the end of the 2017 fiscal year.
Sales and business development activity for the third quarter was robust resulting in the sales funnel tripling at May 31, 2017 compared to May 31, 2016.
During the third quarter, the Company accomplished the following:
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-Completed development of an additional two new digital video recorders ("DVRs") with the latest analog high definition ("AHD") standard. The new AHD standard allows customers to upgrade their existing analog camera and DVRs using the existing analog wiring infrastructure. The two new DVRs are expected to ship in the fourth quarter of fiscal 2017.
-Added capability to its Traffic Infraction Management System ("TIMS(TM)") to support additional stop-arm camera projects expected to land by the end of fiscal 2017.
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-Finalized development of high definition video for multi-lane license plate reading technology for its stop-arm camera systems. Shipment of this new camera is expected in the first quarter of fiscal 2018.
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-Initiated development of a unique cloud based software application that automates certain communication protocols of its recording devices.
The Company's increased working capital of over $7 million will be used to fund operations in its base business, including the transit market, and accelerate the stop-arm camera business.
The company is in the process of increasing its staff by up to 30% in the areas of senior management, sales, engineering and administration. The timing of some new hires will be directly related to the Company's revenue and profitability performance. A specific focus will be to add sales people in geographic regions where brand saturation is required.
The Company continues to explore and add new partners by way of business development and sales arrangements, third party software integrations, and new product technology partners to drive more revenue. The company is also looking at strategic acquisitions to increase revenue and expand distribution to existing and new markets. In addition, the Company is exploring expansion of its operations to the United States.
Doug Dyment, President and CEO of Gatekeeper commented, "I am happy that the third quarter was profitable and operating expenses were in line with expectations. The revenues were lower than expected due to the timing of certain projects landing. The Company's revenue continues to be lumpy quarter to quarter given that we are still in a development mode. What is encouraging is that the sales funnel has increased over last year given our limit sales resources. The closing of the $4.256 million financing provides the necessary working capital for the Company moving forward. This new working capital allows us to expand our sales force while ensuring that the Company's cash position remains healthy until the revenue from that new sales force is realized. In order to ensure our plan is executed, the Company is actively looking to add key senior management positions and appoint strategic board members. "
Summary of Financial Results and Information
|
Three months ended |
Nine months ended |
|||
|
May 31, 2017 |
May 31, 2016 |
May 31, 2017 |
May 31, 2016 |
|
|
$ 2,274,528 |
$ 3,103,333 |
$ 4,953,564 |
$ 5,784,915 |
|
|
Cost of Sales |
$ 1,091,460 |
$ 1,561,893 |
$ 2,522,804 |
$ 2,903,812 |
|
Gross Profit |
$ 1,183,068 |
$ 1,541,440 |
$ 2,430,760 |
$ 2,881,103 |
|
Gross Margin |
52% |
50% |
49% |
50% |
|
Expenses |
$ 1,050,846 |
$ 1,035,642 |
$ 2,865,036 |
$ 2,951,357 |
|
Operating Income (Loss) |
$ 132,222 |
$ 505,798 |
$ (434,276) |
$ (70,254) |
|
Net Income (Loss) for the period |
$ 139,508 |
$ 322,078 |
$ (445,835) |
$ (189,145) |
|
Earnings (Loss) per share - |
||||
|
Basic |
$ 0.00 |
$ 0.01 |
$ (0.01) |
$ 0.00 |
|
Diluted |
$ 0.00 |
$ 0.01 |
$ (0.01) |
$ 0.00 |
|
May 31, |
May 31, |
May 31, |
May 31, |
|
|
2017 |
2016 |
2017 |
2016 |
|
|
Total Assets |
$ 8,655,985 |
$ 3,362,720 |
$ 8,655,985 |
$ 3,362,720 |
|
Total Liabilities |
$ 735,150 |
$ 922,218 |
$ 735,150 |
$ 922,218 |
|
Total Shareholders' Equity |
$ 7,920,835 |
$ 2,440,502 |
$ 7,920,835 |
$ 2,440,502 |
Full details of the financial reports and operating results for the three and nine months ended May 31, 2017 are described in the Company's condensed interim consolidated financial statements with accompanying notes and related Management's Discussion and Analysis. These documents and additional information on Gatekeeper is available on SEDAR at www.sedar.com.
A TSX-V Company since 2013, Gatekeeper Systems Inc. has provided total mobile video security solutions to over 3,500 customers and has installations in every state and province in North America. Customers include school districts, public transit, law enforcement and military.
For more information visit: www.gatekeeper-systems.com.
On behalf of the Board,
Neither the TSX Venture Exchange nor its Regulation 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 Note Regarding Forward-Looking Statements: Certain statements made in this press release that are not historical facts are forward-looking statements and are subject to important risks, uncertainties and assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements. As a result, we cannot guarantee that any forward-looking statement will materialize and readers are cautioned not to place undue reliance on these forward-looking statements. For more exhaustive information on these risks and uncertainties, the reader should refer to the risk factors described in the management's discussion and analysis for the period ended May 31, 2017. The forward-looking statements contained in this press release represent our expectations as of the date hereof. We disclaim any intention and assume no obligation to update or revise any forward-looking statements. Forward-looking statements are presented for the purpose of providing information about management's current expectations and plans and allowing investors and others to obtain a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. The Company undertakes no obligations to update or revise such statements to reflect new circumstances or unanticipated events as they occur, unless required by applicable law.
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