Abbotsford, British Columbia--(Newsfile Corp. - January 22, 2020) - Gatekeeper Systems Inc. (TSXV: GSI) (OTC Pink: GKPRF) (FSE: 1GK) ('Gatekeeper' or the 'Company') a leading provider of video surveillance systems developed to protect people while in transit, reports its financial results for the three months ended November 30, 2019.
First Quarter Highlights
Revenue for the first quarter ended November 30, 2019 ("Q1 2019") was $ 3,356,397, the highest first quarter revenue in the Company's history and an increase of 82% when compared to $1,839,478 for the first quarter ended November 30, 2018 ("Q1 2018");
Gross profit for Q1 2019 was $1,468,012, the highest first quarter gross profit in the Company's history and an increase of 61% when compared to $911,286 for Q1 2018;
Net loss and comprehensive loss for Q1 2019 was $332, which compares to Net Loss and comprehensive loss of $687,379 for Q1 2018, representing an increase in profitability of 100%;
As at November 30, 2019 the Company had working capital of $6,218,444, and approximately 87.9 million shares outstanding;
The Company announced two significant contracts: a digital video recorder contract for $6.3 million with delivery scheduled to begin spring 2020, and an annually recurring service contract for $2.36 million per year for up to five years commencing November 2019.
Management Commentary
Doug Dyment, President and CEO, commented, "2020 is already shaping up to be another pivotal year of growth for Gatekeeper and we are extremely happy with these record-breaking first quarter results. The Company performed well in all strategic initiatives during the quarter. We also announced the largest contracts in the Company's history which total over $18 Million CDN. These two contracts not only represent significant growth for us in 2020 but also represent recurring revenue for up to five years from one of the largest transit agencies in North America. It is very exciting for Gatekeeper to experience this growth and our employees are motivated to develop and launch new solutions for our customers across our various markets."
Transit Initiative
In April 2018, the Company executed a strategic plan to focus on the U.S. transit industry as a key growth initiative by establishing Gatekeeper Systems USA Inc. ("Gatekeeper USA") and purchasing assets of an existing mobile video surveillance service provider to the transit industry. This strategic initiative enabled a business relationship with the Southeastern Pennsylvania Transportation Authority ("SEPTA"), which is the sixth largest public transportation system in the U.S., has an average weekday ridership of approximately 1.1 million, and is actively using vehicle video surveillance to evaluate and defend claims, monitor system safety and security, and protect against fraud. SEPTA has an installed base of more than 27,000 video cameras on vehicles and in stations.
On October 9, 2019 the Company announced that Gatekeeper USA had been contracted by SEPTA to supply and install digital video recorders on SEPTA vehicles and trains in a contract valued at approximately $6.3 million. The Company expects to begin delivery and installation of equipment for this contract beginning in the third fiscal quarter of 2020 with projected completion on or before fiscal year end August 31, 2020.
On October 17, 2019 the Company announced that Gatekeeper USA had been contracted by SEPTA to provide annually recurring vehicle video system maintenance services for SEPTA's approximately 3,000 vehicles. This annually recurring contract is valued at approximately $2.36 million per year. SEPTA has approved an initial three-year service term beginning in November 2019 for approximately $7.1 million, plus two one-year extension options, for a total potential contract value of up to $11.8 million over five years.
The Company is also actively pursuing initiatives with other transit authorities in North America.
Student Safety Initiative
During the first quarter the Company continued sales and deliveries of its recently-launched SP25 School Bus Vision systems, which have 10-megapixel dual-camera systems for multi-lane viewing license plate capture capability, a high-speed license plate tag reader, and cellular network compatibility ready for remote, and auto downloading of stop-arm violations.
Gatekeeper has received increasing interest from school districts regarding the use of video evidence to help protect school children, following the increase in tragic deaths of several school children who have been struck within the past year by vehicles illegally passing school buses in various states. The National Association of State Directors of Pupil Transportation Services estimates that there are more than 15 million school bus stop-arm violations per year in the United States alone. The Company is actively marketing its new SP25 product line and is supportive of the social movements and legislation changes that increase awareness and address the safety concerns for school children.
Financial Summary
| For the three months ended | ||||||
| November 30, 2019 | November 30, 2018 | |||||
| Revenue | $ | 3,356,397 | $ | 1,839,478 | ||
| Cost of Sales | 1,888,385 | 928,192 | ||||
| Gross Profit | 1,468,012 | 911,286 | ||||
| Gross Margin Percentage | 44% | 50% | ||||
| Expenses | 1,497,217 | 1,664,260 | ||||
| Operating Loss | (29,205 | ) | (752,974 | ) | ||
| Net Loss | $ | (15,747 | ) | $ | (687,379 | ) |
| Total Comprehensive loss | $ | (332 | ) | $ | (687,379 | ) |
| Earnings (Loss) per share - | ||||||
| Basic and Diluted | $ | (0.00 | ) | $ | (0.01 | ) |
| November 30, 2019 | August 31, 2019 | |||||
| Total Assets | $ | 8,917,960 | $ | 9,249,093 | ||
| Total Liabilities | 1,955,590 | 2,331,195 | ||||
| Total Shareholders' Equity | $ | 6,962,370 | $ | 6,917,898 |
Full details of the financial reports and operating results for the first quarter ended November 30, 2019 are described in the Company's condensed interim consolidated financial statements with accompanying notes and related Management's Discussion and Analysis, available on SEDAR at www.sedar.com.
The Board of Directors of the Company have approved the issuance of an aggregate of 878,000 common shares of the Company (the "Bonus Shares") at a deemed price of $0.135 per Bonus Share to Douglas Dyment, the Company's President, Chief Executive Officer and a director of the Company, to recognize his significant contributions to the Company.
The Board of Directors of the Company has exercised its discretion to award the Bonus Shares in lieu of a cash bonus payment. Mr. Dyment disclosed his interest in the issuance of the Bonus Shares and abstained from consideration or approval of matters relating to the issuance of the Bonus Shares. The Bonus Shares will be subject to a four month hold period pursuant to applicable securities laws and the policies of the TSX Venture Exchange.
About Gatekeeper Systems Inc.
Gatekeeper provides wireless high-resolution video security and safety solutions for in-transit applications, including school buses, municipal transit, first response, and the military. The Company offers wireless live-streaming video surveillance, video analytics, driver monitoring, and incident management solutions to help protect school children, public transit users, and employees on the move. The Company has unique photo enforcement and auto-ticketing solutions to deter stop-arm violations and protect school children. Gatekeeper has installed over 100,000 video devices for more than 3,500 customers throughout North America and provides annually recurring vehicle video system solutions for Southeastern Pennsylvania Transit Authority. www.gatekeeper-systems.com
Contact Information:
Douglas Dyment
President & CEO
ddyment@gatekeeper-systems.com
(604) 864-6187
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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 quarter ended November 30, 2019. 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.
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.
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