March 27, 2024

error page

Business is my step

Track Group Reports Fiscal 2020 Financial Results

6 min read

NAPERVILLE, Ill., Dec. 23, 2020 /PRNewswire/ — Track Group, Inc. (OTCQX: TRCK), a global leader in offender tracking and monitoring services, today announced financial results for its fiscal year ended September 30, 2020 (“FY20”). In FY20, the Company posted (i)  monitoring revenue of $33.2M, an increase of  approximately 3% over monitoring revenue of $32.1M for the year ended September 30, 2019 (“FY19”); (ii) FY20 operating income of $2.8M representing an increase of 137% compared to FY19 operating income of $1.2M; (iii) adjusted EBITDA of $8.2M in FY20, up 10% compared to $7.4M for FY19; and (iv) net loss attributable to common shareholders of $0.1M in FY20 compared to a net loss of $2.6M in FY19.

“Our employees, our customers, and our supply partners came together and worked extremely hard to drive the major financial metrics of our business to higher levels in the 2nd half of our fiscal year as compared to the 1st half (October – March period) despite challenges brought on by the Coronavirus,” said Derek Cassell, Track Group’s CEO.

FINANCIAL HIGHLIGHTS

  • Total FY20 revenue of $33.9M was down less than 0.5% compared to FY19 revenue of $34.0M as the increase in monitoring revenue of approximately 3% was offset by a decline in product sales.
  • Gross profit of $18.6M in FY20 was down 2% compared to FY19 gross profit of $19.0M principally due to the adverse impact of COVID-19 but up over 8% compared to FY18 gross profit of $17.2M.
  • Operating income in FY20 of $2.8M compared to operating income of $1.2M for FY19, representing an improvement of 137% despite the global pandemic.
  • Adjusted EBITDA for FY20 of $8.2M, up nearly 10%, compared to $7.4M for FY19. Adjusted EBITDA in FY20 as a percentage of revenue also increased to 24.2%, compared to 21.9% for FY19.
  • Cash balance of $6.8M for FY20, down 2% compared to $6.9M for FY19 and down 25% compared to the June 30, 2020 cash balance of $9.0M due to the repayment of $2.7 million to settle certain indebtedness at a discount on September 30, 2020.
  • Net loss attributable to shareholders in FY20 was $0.1M compared to a net loss of $2.6M in FY19, a change principally attributable to the Company’s strong operating performance and the increase in Other Income associated with the gain on settling the repayment of certain indebtedness at a discount.

Business Outlook
As of December 23, 2020, the coronavirus pandemic has adversely impacted both the Company’s revenue and costs by disrupting the operations in Chile, causing shortages within the supply chain and postponing sales opportunities as some government agencies have delayed new RFP (Request for Proposal) processes.  In addition, we continue to operate in a rapidly changing environment so the extent to which the coronavirus pandemic impacts our business, operations and financial results from this point forward will depend on numerous evolving factors that we cannot accurately predict. Given this uncertainty, the Company has elected not to provide specific guidance regarding fiscal 2021 results.  

About Track Group, Inc.
Track Group designs, manufactures, and markets location tracking devices; as well as develops and sells a variety of related software, services, and accessories, networking solutions, and monitoring applications. The Company’s products and services are designed to empower professionals in security, law enforcement, corrections, and rehabilitation organizations worldwide with single-sourced offender management solutions that integrate reliable intervention technologies to support re-socialization and monitoring initiatives.

The Company currently trades under the ticker symbol “TRCK” on the OTCQX exchange. For more information, visit www.trackgrp.com.

Forward-Looking Statements
Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “if”, “should” and “will” and similar expressions as they relate to Track Group, Inc., and subsidiaries (“Track Group”) are intended to identify such forward-looking statements. These statements are only predictions and reflect Track Group’s current beliefs and expectations with respect to future events and are based on assumptions and subject to risks and uncertainties and subject to change at any time. Track Group may from time to time update these publicly announced projections, but it is not obligated to do so. Any projections of future results of operations should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. For a discussion of such risks and uncertainties, see “Risk Factors” in Track Group’s annual report on Form 10-K, its quarterly report on Form 10-Q, and its other reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. New risks emerge from time to time. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

Non-GAAP Financial Measures
This release includes financial measures defined as “non-GAAP financial measures” by the Securities and Exchange Commission including non-GAAP EBITDA. These measures may be different from non- GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. Reconciliations of these non-GAAP financial measures are based on the financial figures for the respective period.

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 September 30, 2020, and other reports filed with the Securities and Exchange Commission. Investors are encouraged to carefully read and consider such disclosure and analysis contained in the Company’s Form 10-K and other reports, including the risk factors contained in such Form 10-K.

TRACK GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2020 AND 2019




September 30,



September 30,


Assets


2020



2019


Current assets:







Cash


$

6,762,099



$

6,896,711


Accounts receivable, net of allowance for doubtful accounts of $2,654,173 and $2,454,281, respectively



5,546,213




6,763,236


Prepaid expense and deposits



866,389




1,339,465


Inventory, net of reserves of $6,483 and $26,934, respectively



124,606




274,501


Total current assets



13,299,307




15,273,913


Property and equipment, net of accumulated depreciation of $2,531,631 and $2,248,913, respectively



378,764




675,037


Monitoring equipment, net of accumulated depreciation of $6,639,883 and $6,322,768, respectively



2,065,947




2,624,900


Intangible assets, net of accumulated amortization of $16,390,721 and $14,157,090, respectively



21,171,045




21,955,679


Goodwill



8,220,380




8,187,911


Deferred tax asset



432,721




540,563


Other assets



2,166,743




124,187


Total assets


$

47,734,907



$

49,382,190











Liabilities and Stockholders’ Deficit









Current liabilities:









Accounts payable


$

2,199,215



$

2,628,003


Accrued liabilities



14,958,628




13,828,696


Current portion of long-term debt



30,914,625




33,827,689


Total current liabilities



48,072,468




50,284,388


Long-term debt, net of current portion



418,575





Long-term liabilities



164,487





Total liabilities



48,655,530




50,284,388











  Commitments and contingencies (Note 12)


















Stockholders’ deficit:









Common stock, $0.0001 par value: 30,000,000 shares authorized; 11,414,150 and 11,401,650 shares outstanding, respectively



1,141




1,140


Series A Convertible Preferred stock, $0.0001 par value: 1,200,000 shares authorized; 0 shares outstanding







Paid in capital



302,270,242




302,250,556


Accumulated deficit



(302,270,933)




(302,152,292)


Accumulated other comprehensive loss



(921,073)




(1,001,602)


Total deficit



(920,623)




(902,198)


Total liabilities and stockholders’ deficit


$

47,734,907



$

49,382,190


 

TRACK GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2020 AND 2019




2020



2019


Revenue:







Monitoring and other related services


$

33,217,661



$

32,100,370


Product sales and other



657,506




1,918,782


Total revenue



33,875,167




34,019,152











Cost of revenue:









Monitoring, products and other related services



13,306,108




12,989,186


Depreciation and amortization



1,923,356




2,012,975


Total cost of revenue



15,229,464




15,002,161











Gross profit



18,645,703




19,016,991











Operating expense: 









General & administrative



10,381,859




12,243,459


Gain on sale of asset






(10,563)


Selling & marketing



2,257,667




2,257,101


Research & development



1,182,542




1,313,499


Depreciation & amortization



2,064,097




2,047,980


Total operating expense



15,886,165




17,851,476











Operating income



2,759,538




1,165,515











Other income (expense):









Interest income



39,592




23,929


Interest expense



(2,503,542)




(2,403,047)


Currency exchange rate loss



(316,330)




(466,140)


Other income/expense, net



695,298




143


Total other income (expense)



(2,084,982)




(2,845,115)


Net income (loss) before income taxes



674,556




(1,679,600)


Income tax expense



793,197




884,353


Net loss attributable to common stockholders



(118,641)




(2,563,953)


Foreign currency translation adjustments



80,529




(31,332)


Comprehensive loss


$

(38,112)



$

(2,595,285)


Net loss per common share, basic and diluted


$

(0.01)



$

(0.23)


Weighted average common shares outstanding, basic and diluted



11,413,535




11,213,431


 


Three Months Ended

September 30,


Twelve Months Ended

September 30,


2020

2019


2020

2019







Non-GAAP Adjusted EBITDA






Net income (loss) attributable to common shareholders

$1,421

$(495)


$(119)

$(2,564)

Interest expense, net

642

596


2,464

2,379

Depreciation and amortization

992

992


3,987

4,061

Income taxes (1)

181

427


793

884

Board compensation and stock-based compensation

75

(32)


320

321

Foreign exchange expense

(340)

331


316

466

Gain on settlement of note payable

(700)


(700)

Other charges, net (2)

246

353


1,122

1,902

Non-GAAP Adjusted EBITDA

$2,517

$2,172


$8,183

$7,449

Non-GAAP Adjusted EBITDA, percent of revenue

28.5%

24.8%


24.2%

21.9%







Weighted average common shares outstanding

11,414,150

11,251,650


11,413,535

11,213,431

Non-GAAP earnings per share

$0.22

$0.19


$0.72

$0.66








(1) Currently, the Company has significant U.S. tax loss carryforwards that may be used to offset future taxable income, subject to IRS limitations. However, the Company is still subject to certain state, commonwealth, and other foreign based taxes.


(2) Other charges may include gains or losses and non-recurring accrual adjustments.

 

View original content:http://www.prnewswire.com/news-releases/track-group-reports-fiscal-2020-financial-results-301197888.html

SOURCE Track Group, Inc.

error-page.com © All rights reserved. | Newsphere by AF themes.