"FLYHT is at an exciting and critical juncture," said Mary McMillan, Interim CEO and Executive Chair of the Board at FLYHT. "With the development of the AFIRS EdgeTM+ functionally complete, we are now focused on sales of the Edge to new and existing customers and on achieving positive EBITDA on a sustainable basis."
Continued McMillan, "As announced in the quarter, FLYHT received a Supplemental Type Certificate ("STC") from Transport Canada for the flange version of the 5G AFIRS Edge on Boeing 737 aircraft. We now have two STC's in Canada and have a clear path to obtaining additional aircraft certifications for both the Airbus A320 and Boeing 737 aircraft. These two aircraft types are the most popular aircraft in key global markets creating a huge pipeline of commercial opportunities for our product. Our weather solutions continue to expand with the receipt of an additional purchase order from the U.S. National Oceanic and Atmospheric Administration (NOAA) for the FLYHT-WVSS-II humidity sensors. Our European division, CrossConsense continues to perform well and recently secured two new contracts, demonstrating the growing demand for its Maintenance Repair Organization (MRO) offering."
Added Alana Forbes, CFO, "In recent months we have taken decisive action to strengthen our financial position and reduce costs. This includes a $5 million unsecured debenture arrangement in June that raised significant capital to support our growth plans, and a strategic restructuring in August that will deliver $1.75 million in annual cost savings. As a result of these and other actions, we are now on an accelerated path to profitability and believe that we have the capital on our books today to get us there."
Concluded McMillan, "Looking to the second half of the year, we are laser-focused on the conversion of our sizeable pipeline to sales. With a strengthened balance sheet, a world class product that we believe will rapidly penetrate the market, and a lower fixed cost base, we enter the next chapter squarely set on driving revenue growth and realizing positive EBITDA."
Operating Results
Revenue decreased by 29% to $4,311,999 in Q2 2024 compared to Q2 2023, mainly driven by declines in Licensing and Hardware. SaaS revenue increased by 1% to $2,707,667, driven by an increase in customers' pricing structure. Hardware revenue decreased 46% to $627,756 with a total of 6 installations kits shipped in Q2 2024 compared to 15 kits shipped in Q2 2023, mainly due to installation schedules for our contracted AFIRS 228 product and per kit pricing variances. Licensing revenue decreased by 100% to $931 due to differences in orders from our long-term OEM customer. Technical Services revenue increased by 31% to $975,645 due to an increased amount of AMOS data migration work completed and an increase in certification services provided.
Gross margin was 61.9% of revenue in Q2 2024 compared to 59.6% in Q2 2023. The increase in gross margin was due primarily to changes in the mix of revenue sources during the quarter.
Operating expenses increased by 17% from Q2 2023, driven by a 66% increase in Research, Development and Certification Engineering expenses, mainly driven by contract labour reflecting the final push required to complete the AFIRS Edge+ development work, moving that product into its new phase of commercialization, including required certifications. An increase of 5% in Distribution expenses was offset by an 8% decrease in Administration expenses.
Negative EBITDA1 totaled $1,380,917 in Q2 2024 compared to positive EBITDA of $168,045 in Q2 2023.
Net loss was $1,796,131 in Q2 2024 compared to a net loss of $168,807 in Q2 2023.
Balance Sheet and Liquidity
Cash and short-term investments totaled $2,518,339 at June 30, 2024, compared to $1,542,203 at December 31, 2023. The quarter end cash balance reflects additional capital from the $5,000,000 unsecured debenture arrangement completed in June (click here for press release).
Trade and other receivables increased by 6% to $3,075,105 compared to YE 2023, and Trade payables and accrued liabilities increased by 11% to $3,436,504 compared to YE 2023.
Conference Call Information
FLYHT will host a conference call to discuss its financial results for Q2 2024 on Thursday, August 29, 2024, at 7:30 a.m. MT (9:30 a.m. ET). The conference call will include a brief presentation followed by a question-and-answer session. To access the conference call by phone within Canada and the U.S., the toll-free number is 1-844-763-8274. Outside Canada and the U.S., dial 1-647-484-8814.
Management will accept questions by telephone and e-mail. Individuals wishing to ask a question during the call can do so by pressing *1. Questions can be emailed in advance or during the conference call to [email protected]. An archive of the conference call will be posted on the Investor Communications section of FLYHT's website following the meeting.
Additional Information
FLYHT's Q2 2024 Report, which contains more detailed information including the CEO's Letter to Shareholders, Management Discussion and Analysis and Financial Statements, can be accessed on the Company's website. The MD&A and Financial Statements have also been filed with SEDAR and will be accessible at www.sedar.com.
About FLYHT Aerospace Solutions Ltd.
FLYHT provides airlines with Actionable Intelligence to transform operational insight into immediate, quantifiable action, and delivers industry leading solutions to improve aviation safety, efficiency, and profitability. This unique capability is driven by a suite of patented aircraft certified hardware products, AFIRS?. Solutions include an aircraft satcom/interface device that enables cockpit voice communications, transmission of aircraft data both while inflight via satellite and post-flight via 5G, real-time aircraft state and fleet status analysis, and preventative maintenance solutions. FLYHT's hardware products can also be interfaced with FLYHT's proprietary relative humidity sensors to deliver airborne weather and humidity data in real-time.
FLYHT is headquartered in Calgary, Canada, and is an AS9100 Quality registered company. For more information, visit www.flyht.com.
Contact Information:
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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1EBITDA: defined as earnings before interest, income tax, depreciation and amortization (a non-GAAP financial measure). EBITDA is provided to aid in analysis and profitability comparisons among companies and industries, by segregating operating results from the effects of financing and capital expenditures.
SOURCE: FLYHT Aerospace Solutions Ltd.
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