VOTI DETECTION REPORTS 25% REVENUE GROWTH IN FISCAL 2021

February 28, 2022

F2022 Revenue Guidance Is For Between $26 Million And $28 Million Fiscal 2021 revenue increased 25% to $23.7 million; Delivered 685 security scanning systems up from 526 sold in fiscal 2020; Gross...

F2022 Revenue Guidance Is For Between $26 Million And $28 Million

  • Fiscal 2021 revenue increased 25% to $23.7 million;
  • Delivered 685 security scanning systems up from 526 sold in fiscal 2020;
  • Gross margin improved to 34% from 30% as Company continues to benefit from cost reduction initiatives and product mix;
  • Industry leading features and technology are leading to a growing pipeline in new verticals such as the U.S. Federal Government and the global air cargo market;
  • Significant strengthening of executive team with key hires of seasoned industry veterans;
  • Company provides guidance for F2022 of revenue of between $26 million to $28 million representing growth of 10%-18%, despite a weaker than anticipated Q1/F22 due to the impact of Omicron.

MONTREAL, Feb. 28, 2022 /CNW Telbec/ - VOTI Detection Inc. ("VOTI" or "the Company") (TSXV: VOTI), a leading-edge Canadian technology company that develops the latest-generation X-ray security systems based on 3D Perspective™ technology, announces results for its fiscal year ended October 31, 2021, and guidance for F2022.  Unless otherwise noted, all dollar amounts are Canadian dollars. Please refer to the audited condensed Consolidated Financial Statements and Management's Discussion and Analysis (" MD&A ") for the twelve months ended October 31, 2021 filed on SEDAR at www.sedar.com for more information.

"Although our 25% year-over-year revenue increase was tempered by the slower than expected recovery from the pandemic's fourth wave, our sales pipeline returned to pre-pandemic levels as we exited the first quarter of fiscal 2022," said Rory Olson, President and CEO of VOTI Detection. "While some customers have pushed orders to future quarters due to the emergence of the Omicron variant, we are already seeing a rebound in orders and anticipate continued, strong growth in Fiscal 2022. New and recurring orders are set to ship in the second quarter of Fiscal 2022 and accelerate into the third and fourth quarters."

For a discussion of risks related to the Covid-19 pandemic, please see VOTI`s MD&A filed today under VOTI`s profile at www.sedar.com     

VOTI's Matrix Scanning Systems Receive Approval from Major U.S. federal Agency
On February 14, 2022, VOTI announced that a large U.S. federal agency with global facilities had approved the Company's XR3D-60s and XR3D-60 MATRIX Small Package X-Ray scanning systems for purchase.  VOTI's systems now qualify as an alternative solution to the current small package X-ray scanners currently in use by the agency's network. The U.S. federal agency's approval follows VOTI's recent deal with Global Affairs Canada validating the evolution of VOTI's leading technology MATRIX systems and cementing the Company's position as a key supplier of security equipment to top tier government agencies. The Company confirmed that it had already received the first landmark order, and additionally, as a result of the purchase approval, there is the potential for significant additional revenues to be generated in 2022 and beyond.

Financial Highlights
(Unaudited, all amounts are in Canadian dollars)

Period Ended October 31

Q4 2021

Q4 2020

 Change

FY 2021

FY 2020

Change

Revenue

5,889,970

4,852,379

1,037,591

23,695,236

19,013,905

4,681,331

Gross profit

1,671,746

1,197,758

473,988

8,017,980

5,696,891

2,321,089

Gross margin %*

28%

25%

3%

34%

30%

4%

Net loss

(1,040,755)

(2,216,449)

1,175,694

(6,064,758)

(6,735,410)

670,652

Adjusted net income (loss)*

(1,991,892)

(1,412,863)

(579,029)

(5,715,584)

(6,070,956)

355,372

Adjusted EBITDA*

(1,005,182)

(511,848)

(493,334)

(1,101,024)

(2,942,275)

1,841,251

Cash (used in) from




(171,347)

(1,515,004)

1,343,657

operating activities

Revenue
Revenue for the three-month period ended October 31, 2021, totaled $5.9 million compared to $4.9 million for the same period in Fiscal 2020, an increase of $1.0 million or 21%. The Company sold 170 security scanning systems compared to 136 during the same period in Fiscal 2020.  The increase is primarily attributed to the greater number of systems sold, partially offset by a decrease in the average selling price per scanner resulting from the change in the US dollar foreign exchange rate.

Revenue for the fiscal year ended October 31, 2021 totaled $23.7 million compared to $19.0 million in Fiscal 2020, an increase of $4.7 million or 25%.  The Company sold 685 security scanning systems compared to 526 in Fiscal 2020.  The increase in revenue is primarily attributed to the greater number of systems sold during the period, the Company's first-time sales of its VotiINSIGHTS fleet management and analytics dashboard, an increase in the average price per scanner resulting from the change in product mix sold, and an increase in after-sale services and extended warranties, partially offset by the decrease in the US dollar foreign exchange rate.

Gross Profit
Gross profit for the three-month period ended October 31, 2021 increased to $1.7 million or 28% of revenue, compared to $1.2 million or 25% of revenue, for the same period in Fiscal 2020, an increase of $0.5 million or 3% of revenue, representing a 41% improvement year over year. The 300bp increase in gross margin is primarily due to a decrease in the average component cost per scanner resulting from the cost reduction initiatives that were executed by the Company and an increase in after sales services profitability and increase in extended warranty as a percentage of overall revenue, which carry higher margins, and partially offset by an increase in freight costs allocated to inventory being sold.

Gross profit for the year increased to $8.0 million or 34% of revenue, compared to $5.7 million or 30% in Fiscal 2020. The 4% increase in gross margin compared to Fiscal 2020 is primarily due to a decrease in the average component cost per scanner resulting from the cost reduction initiatives that were executed by the Company, and the Company's first time sales of its VotiINSIGHTS fleet management and analytics dashboard, partially offset by an increase in freight costs allocated to inventory being sold and certain scanner sales with low margins.

Net Loss
Net loss for the three-month period decreased to $1.0 million compared to $2.2 million net loss for the same period in Fiscal 2020. The decrease in net loss of $1.2 million is primarily related to the increase in gross profit, a decrease in net financial expenses, general and administrative expenses, research and development expenses, increase in non-cash gain from changes in fair value of embedded derivative, and the increase in the non-cash gain from change in fair value of warrants, partially offset by an increase in selling and distribution expenses, and decrease in gain from non-cash share-based payments.

Net loss decreased to $6.1 million compared to $6.7 million net loss in Fiscal 2020. The decrease of $0.6 million is primarily related to the increase in gross profit, decrease in general and administrative expenses, a decrease in non-cash share-based payments expenses, and an increased gain in the change in fair value of warrants, partially offset by increased loss in change in fair value of embedded derivatives and increased net financial, research and development and selling and distribution expenses.

Adjusted EBITDA* 
Adjusted EBITDA for the three-month period ended October 31, 2021 decreased to  ($1.0 million) compared to a negative $0.5 million for the same period of Fiscal 2020. The decrease is primarily related to the increase in net operating expenses, partially offset by an increase in gross profit.

Adjusted EBITDA for the twelve-month period ended October 31, 2021 increased to ($1.1 million) compared to ($2.9 million) for the same period of Fiscal 2020. The increase of $1.8 million is primarily related to the increase in gross profit and a decrease in net operating expenses.

Cash Flows
Net cash used in operating activities during the fiscal year ended October 31, 2021, decreased by $1.3 million when compared to Fiscal 2020 year end.. The decrease in net cash used in operations is primarily due to the improvement of the Company's cash-based operating results in Fiscal 2021, partially offset by the impact from the change in the Company's non-cash working capital.

Outlook for F2022
The Company is providing guidance for revenue of $26 million to $28 million, up 14% y/y at the midpoint.  While Q1 has been negatively impacted by the Omicron variant with expected revenues of $4 million, visibility has been improving and Q2 should see strong sequential growth and the second half of the year should see strong year-over-year growth.  Management anticipates gross margin to be in the range of 36%-38% and anticipates to exit F2022 in a positive EBITDA position. 

Fiscal 2021 Yearend Results Conference Call:

When: March 1st, 2022 at 9:00 a.m. ET.
Dial in number: (+1) 888 390 0546, (+1) 416 764 8688 or (+1) 514 225 6995

Conference call replay available until Tuesday, March 8th, 2021. 
Recording Playback Number: (+1) 888 390 0541
Playback passcode: 334414#

To access the webcast, click on this link:

https://produceredition.webcasts.com/starthere.jsp?ei=1531842&tp_key=095474aec9

The conference ID is 79334414.

A full version of VOTI Detection Inc.'s Fiscal 2021 Yearend Management's Discussion and Analysis (MD&A) and consolidated financial statements for the year ended October 31, 2021 are available on www.sedar.com.

*Non-IFRS Financial Measures
Certain financial and non-financial measures included in this news release, including Adjusted EBITDA, Gross margin percent and Adjusted net loss, do not have a standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. The Company includes these measures because it believes they provide to certain investors a meaningful way of assessing financial performance. For a more complete description of these measures and a reconciliation of VOTI's non-IFRS financial measures to financial results, please see VOTI's Management Discussion and Analysis for the third quarter ended July 31, 2021.

VOTI's definition of the non-IFRS terms are as follows:
Gross margin percent is defined as Gross profit divided by Revenue.

Adjusted EBITDA is defined as net income or loss before net finance expenses, depreciation and amortization expense and income tax expense, share-based compensation expenses and items that Management believes do not necessarily arise as part of the Company's normal day-to-day operations and could distort the analysis of trends in business performance.

Adjusted net loss is defined as net loss adjusted for share-based compensation and items Management believes do not necessarily arise as part of the Company's normal day-to-day operations and could distort the analysis of trends in business performance.

About VOTI Detection
VOTI Detection, headquartered in Montreal, Quebec, and listed on the TSX Venture Exchange, is a leading-edge Canadian technology company that develops latest-generation X-ray security systems based on 3D Perspective™ technology. VOTI's technology produces remarkably sharp and more revealing X-ray images that are competitively superior while delivering enhanced threat detection capabilities and an improved user experience. Since its inception, VOTI has installed scanners in more than 50 countries and has consulted heavily with government agencies and security specialists worldwide to develop feature-rich and easy-to-use scanners that meet the sophisticated needs of modern security screening operations.  www.votidetection.com

Notice regarding forward-looking statements:

This release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") which the meaning of applicable securities laws. Forward-looking statements may relate to VOTI's financial outlook and anticipated events or results and may include information regarding VOTI's financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, taxes, plans and objectives. Particularly, information regarding VOTI's expectations of future results, performance, achievements, prospects or opportunities or the markets in which it operates and the impact thereon of the ongoing COVID-19 pandemic declared by the World Health Organization on March 11, 2020 ("COVID-19"), as well as statements relating to expectations regarding industry trends, growth rates, expectations regarding revenue and the revenue generation potential, business plans and strategies, VOTI's competitive position in its industry, VOTI's expectations relating to its rollout of its next generation MATRIX Series line of X-Ray scanners and the results associated therewith and its projections and forecasts relating to its expectations that it will return to or exceed pre-pandemic sales and gross margins constitute forward-looking statements.

In some cases, when used in this release, the words ''may'', ''would'', ''could'', ''will'', ''intend'', ''plan'', ''anticipate'', "does not anticipate", ''believe'', ''seek'', ''propose'', ''estimate'', ''project'', ''expect", "does not expect", "forecasts", "projection", "prospects", "outlook", "targets", or similar expressions, variations of such terms or the negative of such terms are intended to identify forward- looking statements.  Such forward-looking statements reflect VOTI's then current views with respect to future events based on certain material facts, assumptions, opinions and estimates in light of management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors VOTI currently believes are appropriate and reasonable in the circumstances and as of the date such forward-looking statements are made. Despite a careful process to prepare and review the forward-looking statements, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. The forward- looking statements are based on certain key expectations and assumptions made by VOTI, including expectations and assumptions concerning availability of capital resources and ability to finance, business performance, market conditions, and customer demand. Although VOTI believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements since no assurance can be given that they will prove to be correct.

Forward-looking statements are necessarily based on a number of opinions, estimates and assumptions that VOTI considered appropriate and reasonable as of the date such statements are made, are subject to certain known and unknown risks and uncertainties that may cause the actual results or events to differ materially from anticipated in such forward-looking statements, including without limitation risks regarding the threat detection technology industry, failure to obtain regulatory approvals, or changes in regulatory environment,  economic factors, management's ability to manage and to operate the business of VOTI, the equity markets generally and risks associated with growth and competition, in addition to other risks identified in VOTI's most recently filed management's discussion and analysis and in other publicly filed documents under VOTI's profile at www.sedar.com as well as other unknown risks.

Many factors could cause VOTI's actual results, performance or achievements to vary from those described in this release, including without limitation those listed above, as well as the assumptions upon which they are based proving incorrect. These factors should not be construed as exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this MD&A as intended, planned, anticipated, believed, sought, proposed, estimated or expected, and such forward-looking statements should not be unduly relied upon. VOTI does not intend, and does not assume any obligation, to update these forward-looking statements except as required by law. The forward-looking statements contained in this release are expressly qualified by these cautionary statements. Forward-looking statements contained in this release about prospective results of operations, financial position or cash flows are based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available. Readers are cautioned that outlook information contained in this release should not be used for the purposes other than for which it is disclosed herein or therein, as the case may be. In addition, the current situation and future developments with respect to COVID-19 could cause certain of the assumptions and information set forth herein or the fact that on which such assumptions are based to differ materially from previous expectations including in respect of demand for VOTI's products, supply chain and availability of materials, mobility and shipping of materials and or products, access to debt and equity capital and other factors.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE VOTI Detection Inc.

For more information:  Daniel Menard, Chief Operating Officer, (514) 782-1566, IR@votidetection.com

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