Calgary, Alberta – May 3, 2022 – FLYHT Aerospace Solutions Ltd. (TSX-V: FLY) (OTCQX: FLYLF) (the “Company” or “FLYHT”) today reported financial results for the first quarter ended March 31, 2022 (“Q1 2022”). All figures are Canadian dollars unless otherwise stated.
|Three Months Ended|
|March 31, 2022|
|Gross Margin||54.7%||56.5%||-80 bps|
|Net Income (Loss)||(1,284,347)||(912,068)||-40%|
|EPS – Basic||(0.03)||(0.03)||(0.00)|
|EPS – Diluted||(0.03)||(0.03)||(0.00)|
“FLYHT is turning the page to the post-pandemic period, with financial results that are beginning to reflect the combined effect of the multi-year transformation of our company and more recently some normalization of commercial aviation activity,” said Bill Tempany, Interim CEO. “We delivered our highest revenue quarter in two years driven by all three of our largest businesses – SaaS, Hardware and Licensing. Our EBITDA was negative $938K but if you take out one-time expenses related to the CrossConsense acquisition, bad debt reserve which should not repeat with the recovery happening, the AFIRS™ Edge development, and exchange losses from a strengthening Canadian dollar, our EBITDA would be a negative $388K. While not ideal, we are working hard on making this turn around as our new products get released to the market.”
Added Tempany, “One major area that FLYHT is particularly well positioned to assist the aviation industry is climate, where we are focused on being the premier supplier of products and services to assist our customers in their efforts to meet or exceed net-zero targets. We are supporting customers in multiple ways, whether it be helping airlines reduce unnecessary fuel burn on the ground, or regulators and the planet as a whole better understand what is changing and where. The move to sustainable aviation fuel (“SAF”) will only further increase the importance of data and insights to on aircraft performance, and so we are very optimistic about how FLYHT can be part of an industry solution and how this growing area of global importance can be a megatrend driving continued performance of FLYHT’s business in the years ahead.”
Revenue increased by 87% to $5,030,657 compared to Q1 2021, driven by growth in all three of our largest businesses, and $186,360 of contribution from CrossConsense which was consolidated into the Company’s results beginning March 17, 2022. Excluding CrossConsense, revenue increased 80% compared to Q1 2021.
Licensing revenue increased by 523% to $1,134,706 due to a higher number of modems and associated license fees ordered for delivery in comparative periods. Hardware revenue increased by 154% to $2,109,598 due to the reopening of international travel, particularly seen in North America, resulting in customers moving forward with shipments of 34 contracted installation kits versus 17 in Q1 2021. SaaS revenue increased by 9% to $1,675,072 and due to a higher number of flights and flight hours. Technical Services revenue decreased by 2% to $111,281.
Gross margin was 55% of revenue compared to 57% in Q1 2021. The decrease in gross margin was due primarily to changes in the mix of revenue sources during the quarter.
Operating expenses increased by 43% from Q1 2021, with all categories contributing to the increase – Distribution expenses by 37%, Administration expenses by 71%, and Research and Development and certification engineering expenses by 27%. This increase contributed to an increase in bad debt reserve, labor and legal expenses related to the pursuit and acquisition of CrossConsense and the elimination of government grants in 2022.
EBITDA loss totaled $937,630 compared to EBITDA loss of $1,000,616 in Q1 2021.
Net loss was $1,284,347 compared to Net loss of $912,068 in Q1 2021.
Balance Sheet and Liquidity
Cash and short-term investments were $3,326,656 at March 31, 2022, compared to $4,520,591 at December 31, 2021.
Trade and other receivables increased to $3,700,553 compared to YE 2021, and Trade payables and accrued liabilities increased by 91% to $3,255,540 compared to YE 2021. The combination of the addition of CrossConsense working capital balances calculated as part of the acquisition purchase price allocation, in tandem with increased sales in Q1 and associated costs resulted in an increase in both the receivables and payables balances.
Conference Call Information
FLYHT will discuss its first quarter 2022 financial results at its Annual and Special Meeting to be held virtually via webinar at 2:00 pm MT (4:00 pm ET) on Wednesday, May 4, 2022. The webinar will include a brief presentation followed by a question-and-answer session. Questions can be emailed in advance to firstname.lastname@example.org.
The meeting and earnings discussion will be held online, accessible at: https://incommconferencing.zoom.us/webinar/register/WN_QgGqW1gDQSWc-XrxkBzzFw
The meeting will also be accessible by phone. The listen-only toll-free number is 1-800-319-4610 in Canada and the U.S. and 1-604-638-5340 outside of Canada and the U.S.
An archive of the conference call will be posted on the Investor Relations section of FLYHT’s website as soon as it is available from the webinar provider.
FLYHT’s Q1 2022 Report, which contains more detailed information including the CEO’s Letter to Shareholders, Management Discussion and Analysis and Financial Statements, can be accessed on the Company’s website. The MD&A and Financial Statements have also been filed with SEDAR and will be accessible at www.sedar.com.
About FLYHT Aerospace Solutions Ltd.
FLYHT provides airlines with Actionable Intelligence to transform operational insight into immediate, quantifiable action, and delivers industry leading solutions to improve aviation safety, efficiency, and profitability. This unique capability is driven by a suite of patented aircraft certified hardware products. These include AFIRS™, an aircraft satcom/interface device, which enables cockpit voice communications, real-time aircraft state analysis, and the transmission of aircraft data while inflight. The AFIRS Edge is a state-of-the-art 5G Wireless Quick Access Recorder (WQAR), Aircraft Interface Device (AID), and Aircraft Condition and Monitoring System (ACMS). The Edge can be interfaced with FLYHT’s TAMDAR probe or the FLYHT-WVSS-II relative humidity sensor to deliver airborne weather and humidity data in real-time.
CrossConsense, FLYHT’s wholly-owned subsidiary, offers highly skilled services to the commercial aviation industry and provides preventative maintenance solutions. These include Aircraft Fleet View, a native application that gives a real-time view of airline fleet status; AviationDW, a managed data warehouse for enhanced business intelligence; and ACSIS, a visualization and predictive maintenance alerting tool.
FLYHT is headquartered in Calgary, Canada, and is an AS9100 Quality registered company. CrossConsense, located in Frankfurt, Germany, is an ISO9001 certified operation. For more information, visit www.flyht.com.
Cautionary Note Regarding Forward-Looking Statements
Except for statements of historical fact, this news release contains certain “forward-looking information” within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. In particular, forward-looking information in this press release includes, but is not limited to, statements with respect to the anticipated/projected revenues and related matters. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
Forward-looking information is based on the opinions and estimates of management at the date the statements are made and are founded on the basis of expectations, assumptions and hypotheses made by the Company, including, but not limited to projected revenues. Such forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: general economic conditions in Canada, the United States and globally; industry conditions, and supply chain delays. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.
FLYHT Aerospace Solutions Ltd. FNK IR LLC
Alana Forbes Matt Chesler, CFA
Chief Financial Officer Investor Relations
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 EBITDA: defined as earnings before interest, income tax, depreciation and amortization (a non-GAAP financial measure). EBITDA is provided to aid in analysis and profitability comparisons among companies and industries, by segregating operating results from the effects of financing and capital expenditures.
2021 FLYHT Aerospace Solutions Ltd.