“While a relatively steady period of performance, the quarter ending
FINANCIAL HIGHLIGHTS
- Total Q3 FY23 revenue of
$8.7M was down 3% compared to Q3 FY22 revenue of$9.0M . Revenue for the nine months endedJune 30, 2023 (“9M FY23”) of$25.9M was also down approximately 8% compared to revenue of$28.1M for the nine months endedJune 30, 2022 (“9M FY22”). The drop in revenue was driven principally by fluctuations in court proceedings where active devices are assigned to customers inIllinois andCalifornia , partially offset by an increase in monitoring revenues for customers inIndiana andLouisiana .
- Gross profit of
$3.7M in Q3 FY23 was down approximately 8% compared to Q3 FY22 gross profit of$4.0M . Gross profit for the 9M FY23 was$11.6M compared to gross profit of$13.3M for 9M FY22, due to a decline in revenue of approximately$2.2M , partially offset by a decrease in communication services and monitoring center costs.
- An operating loss in Q3 FY23 of (
$0.3M ) improved nominally compared to an operating loss of ($0.5M ) in Q3 FY22. An operating loss for the 9M FY23 of ($1.3M ) compared to operating income of$0.1M in 9M FY22. The decline of approximately$1.3M in operating income for 9M FY23 is attributable to the decline in gross profit offset by a decrease of approximately 3% in operating expenses.
- Adjusted EBITDA for Q3 FY23 was
$1.1M , compared to$1.3M for Q3 FY22. Adjusted EBITDA for 9M FY23 was$2.8M compared to the Adjusted EBITDA for 9M FY22 of$5.3M , a decrease of$2.4M due to the drop in revenue, gross profit offset by a decrease in certain operating expenses. Adjusted EBITDA for 9M FY23 as a percentage of revenue declined to 10.9%, compared to 18.8% for 9M FY22 for the same reasons.
- Cash balance was
$3.8M onJune 30, 2023 , compared to$5.3M onSeptember 30, 2022 . The decrease in cash was due to an increase in net cash provided by operating activities of approximately$3M offset by purchases of monitoring equipment and the repayment of debts.
- Net loss attributable to common shareholders in Q3 FY23 was (
$0.7M ) compared to net loss attributable to shareholders of ($3.6M ) in Q3 FY22. Net loss attributable to common shareholders for the 9M FY23 was ($2.1M ), compared to net loss of ($3.5M ) for the 9M FY22. This decrease in net loss is primarily due to positive currency exchange rate movements and a litigation settlement of$1.6M recorded in the third quarter of 2022, partially offset by lower operating income and a vendor forgiving$0.6M of accrued expenses in 2022.
Business Outlook
Now that the 3G swap out in the
Actual | Revised Outlook | |||||||||||
FY 2021 | FY 2022 | FY 2023 | ||||||||||
Revenue: | $ | 39.7M | $ | 37.0M | $ | 34-36M | ||||||
Adjusted EBITDA Margin: | 25.9 | % | 18.0 | % | 12-14 | % | ||||||
About
The Company currently trades under the ticker symbol "TRCK" on the OTCQB exchange. For more information, visit www.trackgrp.com.
Chief Financial Officer
peter.poli@trackgrp.com
Forward-Looking Statements
Any statements contained in this document that are not historical facts are forward-looking statements as defined in the
Non-GAAP Financial Measures
This release includes financial measures defined as “non-GAAP financial measures” by the
Non-GAAP Adjusted EBITDA excludes items included but not limited to interest, taxes, depreciation, amortization, impairment charges, gains and losses, currency effects, one-time charges or benefits that are not indicative of operations, charges to consolidate, integrate or consider recently acquired businesses, costs of closing facilities, stock based or other non-cash compensation or other stated cash and non-cash charges (the “Adjustments”).
The Company believes the non-GAAP measures provide useful information to both management and investors when factoring in the Adjustments. Specific disclosure regarding the Company’s financial results, including management’s analysis of results from operations and financial condition, are contained in the Company’s annual report on Form 10-K for the fiscal year ended
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
2023 | 2022 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 3,814,518 | $ | 5,311,104 | ||||
Accounts receivable, net of allowance for doubtful accounts of | 4,343,221 | 6,236,555 | ||||||
Prepaid expense and deposits | 690,102 | 769,006 | ||||||
Inventory, net of reserves of | 1,276,388 | 1,053,245 | ||||||
Other current assets | - | 284,426 | ||||||
Total current assets | 10,124,229 | 13,654,336 | ||||||
Property and equipment, net of accumulated depreciation of | 130,141 | 170,329 | ||||||
Monitoring equipment, net of accumulated depreciation of | 5,473,207 | 3,624,101 | ||||||
Intangible assets, net of accumulated amortization of | 14,681,500 | 15,661,417 | ||||||
7,970,956 | 8,061,002 | |||||||
Other assets | 2,849,055 | 3,509,655 | ||||||
Total assets | $ | 41,229,088 | $ | 44,680,840 | ||||
Liabilities and Stockholders’ Equity (Deficit) | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,724,957 | $ | 2,858,915 | ||||
Accrued liabilities | 2,169,972 | 3,042,443 | ||||||
Current portion of long-term debt | 462,577 | 456,681 | ||||||
Total current liabilities | 5,357,506 | 6,358,039 | ||||||
Long-term debt, net of current portion | 42,798,575 | 42,979,243 | ||||||
Long-term liabilities | 291,477 | 398,285 | ||||||
Total liabilities | 48,447,558 | 49,735,567 | ||||||
Stockholders’ equity (deficit): | ||||||||
Common stock, | 1,186 | 1,186 | ||||||
Preferred stock, | - | - | ||||||
Series A Convertible Preferred stock, | - | - | ||||||
Paid in capital | 302,576,531 | 302,437,593 | ||||||
Accumulated deficit | (308,364,947 | ) | (306,218,889 | ) | ||||
Accumulated other comprehensive loss | (1,431,240 | ) | (1,274,617 | ) | ||||
Total equity (deficit) | (7,218,470 | ) | (5,054,727 | ) | ||||
Total liabilities and stockholders’ equity (deficit) | $ | 41,229,088 | $ | 44,680,840 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenue: | ||||||||||||||||
Monitoring and other related services | $ | 8,539,023 | $ | 8,836,622 | $ | 25,007,832 | $ | 27,148,837 | ||||||||
Product sales and other | 158,555 | 137,460 | 853,485 | 905,020 | ||||||||||||
Total revenue | 8,697,578 | 8,974,082 | 25,861,315 | 28,053,857 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Monitoring, products and other related services | 4,211,807 | 4,200,635 | 11,835,327 | 12,284,432 | ||||||||||||
Depreciation and amortization included in cost of revenue | 821,915 | 809,234 | 2,438,649 | 2,465,998 | ||||||||||||
Total cost of revenue | 5,033,722 | 5,009,869 | 14,273,976 | 14,750,430 | ||||||||||||
Gross profit | 3,663,856 | 3,964,213 | 11,587,339 | 13,303,427 | ||||||||||||
Operating expense: | ||||||||||||||||
General & administrative | 2,228,545 | 2,734,162 | 7,852,864 | 8,003,178 | ||||||||||||
Selling & marketing | 717,246 | 778,656 | 2,215,588 | 2,197,237 | ||||||||||||
Research & development | 750,124 | 583,492 | 2,046,701 | 1,799,821 | ||||||||||||
Depreciation & amortization | 247,083 | 400,062 | 742,366 | 1,231,634 | ||||||||||||
Total operating expense | 3,942,998 | 4,496,372 | 12,857,519 | 13,231,870 | ||||||||||||
Operating income (loss) | (279,142 | ) | (532,159 | ) | (1,270,180 | ) | 71,557 | |||||||||
Other income (expense): | ||||||||||||||||
Interest expense, net | (430,824 | ) | (450,582 | ) | (1,251,349 | ) | (1,390,318 | ) | ||||||||
Currency exchange rate gain | 418,011 | (750,124 | ) | 972,953 | (460,033 | ) | ||||||||||
Other income, net | - | (1,593,099 | ) | - | (959,628 | ) | ||||||||||
Total other income (expense) | (12,813 | ) | (2,793,805 | ) | (278,396 | ) | (2,809,979 | ) | ||||||||
Income (loss) before income tax | (291,955 | ) | (3,325,964 | ) | (1,548,576 | ) | (2,738,422 | ) | ||||||||
Income tax expense | 405,229 | 279,095 | 597,482 | 719,718 | ||||||||||||
Net income (loss) attributable to common shareholders | (697,184 | ) | (3,605,059 | ) | (2,146,058 | ) | (3,458,140 | ) | ||||||||
Foreign currency translation adjustments | (402,454 | ) | (527,431 | ) | (156,622 | ) | (530,204 | ) | ||||||||
Comprehensive income (loss) | $ | (1,099,638 | ) | $ | (4,132,490 | ) | $ | (2,302,680 | ) | $ | (3,988,344 | ) | ||||
Net income (loss) per share – basic: | ||||||||||||||||
Net income (loss) per share | $ | (0.06 | ) | $ | (0.31 | ) | $ | (0.18 | ) | $ | (0.30 | ) | ||||
Weighted average shares outstanding | 11,863,758 | 11,566,869 | 11,863,758 | 11,546,673 | ||||||||||||
Net income (loss) per share – diluted: | ||||||||||||||||
Net income (loss) per share | $ | (0.06 | ) | $ | (0.31 | ) | $ | (0.18 | ) | $ | (0.30 | ) | ||||
Weighted average shares outstanding | 11,863,758 | 11,566,869 | 11,863,758 | 11,546,673 | ||||||||||||
NON-GAAP ADJUSTED EBITDA | ||||||||||||||||
(amounts in thousands, except share and per share data) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Non-GAAP Adjusted EBITDA | ||||||||||||||||
Net income (loss) attributable to common shareholders | $ | (697 | ) | $ | (3,605 | ) | $ | (2,146 | ) | $ | (3,458 | ) | ||||
Interest expense, net | 431 | 450 | 1,251 | 1,390 | ||||||||||||
Depreciation and amortization | 1,069 | 1,210 | 3,181 | 3,698 | ||||||||||||
Income tax expense (1) | 405 | 279 | 598 | 720 | ||||||||||||
Board compensation and stock-based compensation | 76 | 169 | 314 | 319 | ||||||||||||
Currency exchange rate gain | (418 | ) | 750 | (973 | ) | 460 | ||||||||||
Settlement of litigation | - | 1,600 | - | 1,600 | ||||||||||||
Gain on forgiveness of accrued vendor expense | - | - | - | (633 | ) | |||||||||||
Other charges, net (2) | 229 | 478 | 598 | 1,170 | ||||||||||||
Non-GAAP Adjusted EBITDA | $ | 1,095 | $ | 1,331 | $ | 2,823 | $ | 5,266 | ||||||||
Non-GAAP Adjusted EBITDA, percent of revenue | 12.6 | % | 14.8 | % | 10.9 | % | 18.8 | % | ||||||||
Non-GAAP earnings per share - Basic | ||||||||||||||||
Weighted average common shares outstanding | 11,863,758 | 11,566,869 | 11,863,758 | 11,546,673 | ||||||||||||
Non-GAAP earnings per share | $ | 0.09 | $ | 0.12 | $ | 0.24 | $ | 0.46 | ||||||||
Non-GAAP earnings per share - Diluted | ||||||||||||||||
Weighted average common shares outstanding | 11,863,758 | 11,566,869 | 11,863,758 | 11,546,673 | ||||||||||||
Non-GAAP earnings per share | $ | 0.09 | $ | 0.12 | $ | 0.24 | $ | 0.46 |
(1 | ) | Currently, the Company has significant | |
(2 | ) | Other charges may include gains or losses and non-recurring accrual adjustments. |
Source:
2023 GlobeNewswire, Inc., source