- exactEarth has entered into an agreement to be acquired by
- Consideration of
Q3 and Year-to-Date Fiscal 2021 Highlights:
- Revenue was
$6.0 million , up 26% compared to$4.8 million in Q3 2020; revenue Year-to-Date (“YTD”) was$17.3 million , up 30% compared to$13.3 million in the same period last year. - Subscription Services1 revenue was
$5.3 million , up 18% compared to$4.5 million in Q3 2020; Subscription Services revenue YTD was$15.3 million , up 26% compared to$12.2 million in the same period last year. - Adjusted EBITDA2 was a gain of
$661 thousand compared to a loss of($130) thousand in Q3 2020; Adjusted EBITDA YTD was a gain of$2.4 million compared to a loss of($429) thousand in the same period last year. - Cash generated from operations was
$395 thousand compared to$134 thousand in Q3 2020; Cash generated from operations YTD was$70 thousand compared to cash used in operations of($3.0) million in the same period last year. - Cash, cash equivalents and short-term investments were
$7.0 million at the end of Q3 2021 compared to$7.5 million at the end of Fiscal 2020.
“Q3 was another strong quarter and a continuation of the positive momentum we have generated since last year,” said
Proposed Acquisition by
On
The Transaction is subject to shareholder, applicable regulatory approvals and customary closing conditions. The Company’s Board of Directors unanimously approved the Transaction and will recommend that the shareholders of the Company accept this transaction. The directors, officers and certain shareholders of exactEarth, collectively holding approximately 60% of its outstanding common shares, have entered into voting support agreements under which they have agreed to support and vote in favor of the Transaction. The Transaction is expected to close in the fourth quarter of calendar 2021 or the first quarter of calendar 2022. Additional details on the transaction can be found in a joint press release issued earlier today by Spire and exactEarth.
Q3 and Year-to-Date Fiscal 2021 Financial Review
Total revenue in the three- and nine-month periods ended
Subscription Services revenue was
Data Products revenue and Other Products & Services revenue combined in Q3 2021 was
Revenue growth for Q3 2021 and for the YTD 2021 period was driven by customer growth in both the commercial and government market segments. Commercial market revenue was up 27% in Q3 2021 and 35% for the YTD 2021 period. Government market revenue was up 22% in Q3 2021 and up 9% for the YTD 2021 period. Reported revenue growth numbers would have been higher had it not been for the strengthening of the Canadian dollar, as the majority of the Company’s contracts are transacted in
Order Bookings backlog at
Gross margin for Q3 2021 and the YTD 2021 period was 52% and 51%, compared to 37% and 40% in the respective periods of the prior year. Gross margin improved year-over-year due primarily to revenue growth. Cost of revenue, excluding a favourable one-time
Selling, general and administrative (“SG&A”) expense for Q3 2021 and the YTD 2021 period was
Product development and research and development (“R&D”) expense for Q3 2021 and for the YTD 2021 period was
Adjusted EBITDA gains for Q3 2021 and the YTD 2021 period were
Adjusted EBITDA | Three months ended | Nine months ended | ||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
Net loss | $ | (249 | ) | $ | (941 | ) | $ | (1,483 | ) | $ | (4,432 | ) |
Interest income | (17 | ) | (13 | ) | (43 | ) | (67 | ) | ||||
Interest expense | 57 | 461 | 703 | 1,321 | ||||||||
Income tax expense | - | - | 109 | 119 | ||||||||
Depreciation and amortization | 170 | 178 | 525 | 669 | ||||||||
Unrealized foreign exchange (gain) loss | (224 | ) | (72 | ) | 596 | (440 | ) | |||||
Long-term incentive plan expense | 327 | 422 | 1,491 | 876 | ||||||||
Strategic initiative expenses | 530 | - | 530 | - | ||||||||
(Recovery) loss on disposal | - | (13 | ) | - | 825 | |||||||
Share of equity investment loss | - | 450 | - | 450 | ||||||||
COVID-19-related ECL | 67 | (602 | ) | (26 | ) | 250 | ||||||
Adjusted EBITDA | $ | 661 | $ | (130 | ) | $ | 2,402 | $ | (429 | ) |
Net loss for Q3 2021 was ($249) thousand, or (
Cash generated from operations in Q3 2021 and for the YTD 2021 period was
As of
1,2Non-IFRS Measures
We measure Adjusted EBITDA as earnings before interest expense, taxes, depreciation and amortization (“EBITDA”), unrealized foreign exchange losses, share based compensation costs, loss on disposal, strategic initiative expenses, share of equity investment loss, and COVID-19 related expected credit loss (“ECL”), less interest income, recovery on disposal and unrealized foreign exchange gains. We believe that Adjusted EBITDA provides useful supplemental information as it provides an indication of the income generated by our main business activities before taking into consideration how they are financed or taxed and exclude the impact of items that are considered by management to be outside of the Company's ongoing operating results. Adjusted EBITDA should not be construed as an alternative to net income (loss) determined in accordance with IFRS as an indicator of our performance or to cash flows from operating, investing and financing activities as a measure of liquidity and cash flows.
The Company defines “Order Bookings” as the dollar sum of contracts for the supply of products and services to its customers. “Order Bookings backlog” is the dollar sum of revenue that is expected to be recognized derived from customer contracts. Order Bookings and Order Bookings backlog are indicative of firm future revenue streams; however, they do not provide a guarantee of future net income and provide no information about the timing of future revenue.
We define Subscription Revenue as the dollar sum of fully executed contracts for our products and/or services to our customers that are subscription-based, typically sold with a one-year period of service and recognized in our "Subscription Services" segmented revenue.
About exactEarth Ltd.
exactEarth is a leading provider of global maritime vessel data for ship tracking and maritime situational awareness solutions. Since its formation in 2009, exactEarth has pioneered a powerful new method of maritime surveillance called Satellite AIS and has delivered to its clients a view of maritime behaviours across all regions of the world's oceans unrestricted by terrestrial limitations. exactEarth’s second-generation constellation, exactView RT, securely relays satellite-detected AIS vessel signals from any location on the earth’s surface to the ground in seconds – thus enabling global real-time vessel tracking. This unique capability consists of 58 advanced satellite payloads designed and built by L3Harris Technologies, Inc. under agreement with exactEarth and that are hosted onboard the Iridium NEXT constellation of satellites. www.exactearth.com
Contact information
INVESTORS:
Investor Relations
Tel: +1 416-247-9652
investors@exactearth.com
Forward-Looking Statements
This news release contains statements that, to the extent they are not recitations of historical fact, may constitute "forward-looking statements" within the meaning of applicable Canadian securities laws. Forward-looking statements may include financial and other projections, as well as statements regarding exactEarth's future plans, objectives or economic performance, or the assumptions underlying any of the foregoing, including statements regarding, among other things, expectations of our exactView RT offering relative to competitors, expectations of the exactView RT capabilities driving growth, growth opportunities for the Company in the maritime information services market, expectations related to subscription revenue, the benefits expected from the Transaction, the requirement to obtain necessary regulatory and shareholder approvals in connection with the Transaction and the anticipated closing thereof. exactEarth uses words such as "may", "would", "could", "will", "likely", "expect", "anticipate", "believe", "intend", "plan", "forecast", "project", "estimate" and similar expressions to identify forward-looking statements. Any such forward-looking statements are based on assumptions and analyses made by exactEarth in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors exactEarth believes are appropriate under the relevant circumstances. However, whether actual results and developments will conform to exactEarth's expectations and predictions is subject to any number of risks, assumptions and uncertainties. Many factors could cause exactEarth's actual results, historical financial statements, or future events to differ materially from those expressed or implied by the forward-looking statements contained in this news release. These factors include, without limitation: uncertainty in the global economic environment; fluctuations in currency exchange rates; delays in the purchasing decisions of exactEarth's customers; the competition exactEarth faces in its industry and/or marketplace; the further delayed launch of satellites, the impact of the COVID-19 pandemic on customers and the market generally, the reduced scope of significant existing contracts; the possibility of technical, logistical or planning issues in connection with the deployment of exactEarth's products or services; the ability to obtain necessary regulatory and shareholder approvals in connection with the Transaction; and the ability to close the Transaction. The forward-looking statements contained in this communication are also subject to other risks and uncertainties, including those more fully described under the caption “Risk Factors” in exactEarth’s filings on SEDAR, including its Annual Information Form for the year ended
exactEarth™ Ltd. | |||||||
Interim Condensed Consolidated Statements of Financial Position | |||||||
(in thousands of Canadian dollars) | |||||||
(unaudited) | |||||||
As at | As at | ||||||
2021 | 2020 | ||||||
$ | $ | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | 7,041 | 7,423 | |||||
Short-term investments | - | 29 | |||||
Accounts receivable | 3,153 | 3,215 | |||||
Unbilled revenue | 1,547 | 1,698 | |||||
Prepaid expenses | 605 | 392 | |||||
Other current assets | 329 | 359 | |||||
Total current assets | 12,675 | 13,116 | |||||
Property, plant and equipment | 5,037 | 5,272 | |||||
Intangible assets | 1,155 | 1,286 | |||||
Other long-term assets | 412 | 566 | |||||
Total assets | 19,279 | 20,240 | |||||
LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIENCY) | |||||||
Current liabilities | |||||||
Accounts payable and accrued liabilities | 5,315 | 6,402 | |||||
Deferred revenue | 2,685 | 2,548 | |||||
Total current liabilities | 8,000 | 8,950 | |||||
Loans payable | 1,748 | 11,131 | |||||
Long-term incentive plan liability | 2,202 | 1,124 | |||||
Other long-term liabilities | 51 | 1,660 | |||||
Total liabilities | 12,001 | 22,865 | |||||
Shareholders' equity (deficiency) | |||||||
Share capital | 138,936 | 123,923 | |||||
Contributed surplus | 1,332 | 4,956 | |||||
Accumulated other comprehensive loss | (158 | ) | (155 | ) | |||
Deficit | (132,832 | ) | (131,349 | ) | |||
Total shareholders' equity (deficiency) | 7,278 | (2,625 | ) | ||||
Total liabilities and shareholders' equity (deficiency) | 19,279 | 20,240 | |||||
exactEarth™ Ltd. | ||||||||||||||
Interim Condensed Consolidated Statements of Changes in Shareholders' Equity (Deficiency) | ||||||||||||||
(in thousands of Canadian dollars) | ||||||||||||||
(unaudited) | ||||||||||||||
For the nine months ended | Total | Deficit | Accumulated Other Comprehensive Loss | Share Capital | Contributed Surplus | |||||||||
$ | $ | $ | $ | $ | ||||||||||
Balance at | (2,625 | ) | (131,349 | ) | (155 | ) | 123,923 | 4,956 | ||||||
Stock-based compensation | 143 | - | - | 13 | 130 | |||||||||
Stock options exercised | 2 | - | - | 2 | - | |||||||||
Restricted share units | (3,243 | ) | - | - | 511 | (3,754 | ) | |||||||
Debenture conversion | 14,487 | - | - | 14,487 | - | |||||||||
Comprehensive loss | (1,486 | ) | (1,483 | ) | (3 | ) | - | - | ||||||
Balance at | 7,278 | (132,832 | ) | (158 | ) | 138,936 | 1,332 | |||||||
For the nine months ended | ||||||||||||||
$ | $ | $ | $ | $ | ||||||||||
Balance at | 2,119 | (126,238 | ) | (113 | ) | 123,823 | 4,647 | |||||||
Stock-based compensation | 128 | - | - | 11 | 117 | |||||||||
Restricted share units | 140 | - | - | 89 | 51 | |||||||||
Comprehensive loss | (4,549 | ) | (4,432 | ) | (117 | ) | - | - | ||||||
Balance at | (2,162 | ) | (130,670 | ) | (230 | ) | 123,923 | 4,815 | ||||||
exactEarth™ Ltd. | |||||||||||||
Interim Condensed Consolidated Statements of Loss and Comprehensive Loss | |||||||||||||
(in thousands of Canadian dollars except for per share figures) | |||||||||||||
(unaudited) | |||||||||||||
Three months ended | Nine months ended | ||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||
$ | $ | $ | $ | ||||||||||
Revenue | 6,022 | 4,789 | 17,262 | 13,329 | |||||||||
Cost of revenue | 2,917 | 3,005 | 8,439 | 8,048 | |||||||||
Gross profit | 3,105 | 1,784 | 8,823 | 5,281 | |||||||||
Selling, general and administrative | 3,014 | 1,617 | 7,688 | 5,957 | |||||||||
Product development and research and development | 258 | 116 | 781 | 628 | |||||||||
Depreciation and amortization | 170 | 178 | 525 | 669 | |||||||||
(Recovery) loss on disposal | - | (13 | ) | - | 825 | ||||||||
Loss from operations | (337 | ) | (114 | ) | (171 | ) | (2,798 | ) | |||||
Other expenses | |||||||||||||
Other expense | 9 | - | 36 | - | |||||||||
Foreign exchange (gain) loss | (137 | ) | (71 | ) | 507 | (189 | ) | ||||||
Share of equity investment loss | - | 450 | - | 450 | |||||||||
Interest income | (17 | ) | (13 | ) | (43 | ) | (67 | ) | |||||
Interest expense | 57 | 461 | 703 | 1,321 | |||||||||
Total other expenses | (88 | ) | 827 | 1,203 | 1,515 | ||||||||
Income tax expense | - | - | 109 | 119 | |||||||||
Net loss | (249 | ) | (941 | ) | (1,483 | ) | (4,432 | ) | |||||
Other comprehensive loss | |||||||||||||
Item that may be subsequently reclassified to net loss: | |||||||||||||
Foreign currency translation, net of income tax expense of nil | (50 | ) | (53 | ) | (3 | ) | (117 | ) | |||||
Total other comprehensive loss | (50 | ) | (53 | ) | (3 | ) | (117 | ) | |||||
Comprehensive loss | (299 | ) | (994 | ) | (1,486 | ) | (4,549 | ) | |||||
Loss per share | |||||||||||||
Basic and diluted loss per share | (0.00 | ) | (0.04 | ) | (0.03 | ) | (0.20 | ) | |||||
exactEarth™ Ltd. | |||||||||||||
Interim Condensed Consolidated Statements of Cash Flows | |||||||||||||
(in thousands of Canadian dollars) | |||||||||||||
(unaudited) | |||||||||||||
Three months ended | Nine months ended | ||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||
$ | $ | $ | $ | ||||||||||
Operating activities | |||||||||||||
Net loss | (249 | ) | (941 | ) | (1,483 | ) | (4,432 | ) | |||||
Add (deduct) items not involving cash | |||||||||||||
Non-cash interest | 43 | 151 | 358 | 400 | |||||||||
Depreciation and amortization | 170 | 178 | 525 | 669 | |||||||||
(Recovery) loss on disposal | - | (13 | ) | - | 825 | ||||||||
Share of equity investment loss | - | 450 | - | 450 | |||||||||
Operating grant recognized on SIF loan | (96 | ) | (237 | ) | (252 | ) | (598 | ) | |||||
Long-term incentive plan expense | 327 | 373 | 1,491 | 759 | |||||||||
Stock-based compensation | - | 49 | - | 117 | |||||||||
Net change in non-cash balances | 215 | 124 | (554 | ) | (1,207 | ) | |||||||
Other operating cash flows | |||||||||||||
Settlement of restricted share units | (15 | ) | - | (15 | ) | - | |||||||
Cash flows from (used in) operating activities | 395 | 134 | 70 | (3,017 | ) | ||||||||
Investing activities | |||||||||||||
Acquisition of property, plant and equipment | (19 | ) | (213 | ) | (686 | ) | (1,786 | ) | |||||
Reimbursement of acquisition costs of property, plant and equipment | - | - | - | 331 | |||||||||
Net change in non-cash working capital related to investing activities | - | (450 | ) | - | (450 | ) | |||||||
Cash flows used in investing activities | (19 | ) | (663 | ) | (686 | ) | (1,905 | ) | |||||
Financing activities | |||||||||||||
Government loan repayment | - | - | - | (205 | ) | ||||||||
Government loan advance | - | 439 | 688 | 1,647 | |||||||||
Payment of principal portion of lease obligations | (39 | ) | (37 | ) | (115 | ) | (110 | ) | |||||
Debenture transaction costs | - | - | (91 | ) | - | ||||||||
Cash flows (used in) from financing activities | (39 | ) | 402 | 482 | 1,332 | ||||||||
Effect of exchange rate changes on cash | 12 | 32 | (248 | ) | 143 | ||||||||
Net increase (decrease) in cash | 349 | (95 | ) | (382 | ) | (3,447 | ) | ||||||
Cash, beginning of the period | 6,692 | 6,836 | 7,423 | 10,188 | |||||||||
Cash, end of the period | 7,041 | 6,741 | 7,041 | 6,741 | |||||||||
Source: exactEarth Ltd
2021 GlobeNewswire, Inc., source