— Cash Balance Steady with Last Year Due to Disciplined Cost Control —
— SaaS Revenue Represented 57% of Total, Driving 57% Gross Margins —
— Preparing for “Go Live” with First Actionable Intelligence Launch Partner —
Calgary, Alberta – May 5, 2021 – FLYHT Aerospace Solutions Ltd. (TSX-V: FLY) (OTCQX: FLYLF) (the “Company” or “FLYHT”) today reported financial results for the first quarter ended March 31, 2021.
“The first quarter results reflect what we expect to be the worst of the pandemic’s impact on travel and our business,” said Bill Tempany, Interim CEO. “We are already observing many of our customers actively readying their operations for the expected return of passengers to the skies. FLYHT will be there to support their recovery with existing and new solutions, executing on our exciting strategic initiatives. We expect to show significantly improved financial performance over the coming quarters as vaccinations unleash pent-up demand for travel, and as airlines recover their ability to deliver services to their customers. The impact of trained pilots, suitable aircraft configurations and government regulations all will continue to be factors.
Tempany continued, “As has been the case in prior quarters, we saw mixed performance across geographies, customer categories and service lines. This is likely to continue even in recovery and reflects the strategic diversification of our global business and uneven pace of the recovery. Strength in cargo and specialty carriers, which collectively represent approximately 19% of our business, was more than offset by a lack of international and business travel which remain restricted due to closed borders and continued social distancing. Despite this, we shipped 17 AFIRS hardware kits in the first quarter which was up from only 3 in Q1 2020; licensing improved sequentially from the prior two quarters; and even with these headwinds, we held the line on cash compared to last year.”
“There is a lot of excitement in the halls at FLYHT. We are launching new products and services within our Actionable Intelligence suite and the AFIRS family of products which cover a wide spectrum of aircraft, communication methods, and geographies. As we announced on May 4 we have also recently signed on a new customer, Waltzing Matilda.”
Concluded Tempany, “We are well-positioned, given our cash reserves and current recovery trends, to see a significant improvement in our operating results as we move through 2021 and 2022 as the vaccination rollout continues and pandemic related travel restrictions dissipate.”
First Quarter 2021 Financial Overview
Total revenue decreased by 49% to $2,691,275 compared to the first quarter of 2020. This decline was attributable to decreases in SaaS and Licensing revenue partially offset by increases in Hardware and Technical Services revenue. SaaS revenue decreased by 44% from a record high in Q1 2020 to $1,539,825 and Licensing revenue decreased by 92% from Q1 2020 to $182,181. Hardware revenue increased 265% from Q1 2020 to $831,704 and Technical Services revenue increased by 111% from Q1 2020 to $137,565.
Gross margin was 57% of revenue compared to 75% in the first quarter of 2020. The decrease in gross margin was due primarily to changes in the mix of revenue sources during the quarter, as Q1 2021 revenue included a larger contribution from Hardware, which has the lowest gross margin among revenue sources, compared to Q1 2020.
Operating expenses decreased by 49% from the first quarter of 2020, with all categories contributing to the decrease. Distribution expenses by 52%, Administration expenses by 30%, and Research and Development and certification engineering expenses by 1%. This decrease reflects the Company’s cost containment efforts.
Negative EBITDA totaled $1,000,616 in the quarter compared to positive EBITDA of $729,438 in the first quarter of 2020.
Net Loss was $912,068, compared to a net profit of $686,022 in Q1 2020.
Balance Sheet and Liquidity
FLYHT’s balance sheet ended the quarter with cash and short-term investments balances of $3,871,741, a decrease from 2020’s ending balance of $5,127,963, and comparable to Q2 2020’s ending cash balance of $3,702,824.
Trade and other receivables increased by 14% from 2020 year-end, and customer deposits increased by 75% since December 31, 2020.