Calgary, Alberta – August 16, 2023 – FLYHT Aerospace Solutions Ltd. (TSX-V: FLY) (OTCQX: FLYLF) (the “Company” or “FLYHT”) today reported financial results for the second quarter ended June 30, 2023 (“Q2 2023”). All figures are Canadian dollars unless otherwise stated.
Financial Summary
| Three Months Ended June 30 | Six Months Ended June 30 | ||||||
| 2023 | 2022 | Inc./ Dec. | 2023 | 2022 | Inc./ Dec. | ||
| Revenue | $6,043,543 | $4,881,372 | 24% | $10,800,773 | $9,912,029 | 9% | |
| SaaS | 2,690,573 | 2,155,912 | 25% | 5,103,773 | 3,830,984 | 33% | |
| Hardware | 1,172,261 | 912,682 | 28% | 2,943,706 | 3,022,280 | -3% | |
| Licensing | 1,433,264 | 1,399,903 | 2% | 1,442,001 | 2,534,609 | -43% | |
| Technical Services | 747,445 | 412,875 | 81% | 1,311,293 | 524,156 | 150% | |
| Gross Margin | 59.6% | 55.8% | 380bps | 58.6% | 55.2% | 340bps | |
| EBITDA | 168,045 | (905,780) | NM | (1,175,869) | (1,843,412) | NM | |
| Net Income (Loss) | (168,807) | (1,141,140) | NM | (1,825,921) | (2,425,487) | NM | |
| EPS – Basic & Diluted | (0.01) | (0.03) | 0.02 | (0.05) | (0.07) | 0.02 | |
Management Commentary
“FLYHT delivered strong results in Q2 2023,” said Kent Jacobs, President and Interim CEO of FLYHT. “Revenue increased 24% year-over-year, with growth in all four categories – SaaS, Hardware, Licensing and Technical Services. Our gross margins expanded by 380 basis points to 59.6% and we generated positive EBITDA of $168,045.”
Continued Jacobs, “FLYHT is benefitting from solid global demand for passenger travel and air cargo activity and is also executing well against our strategic growth initiatives. There is a long runway of growth for existing solutions such as AFIRS 228 with customers continuing to renew for multi-year commitments, and for which we received an additional sizeable order from our long-term OEM partner. This quarter we reached a major milestone – over 5 million flight hours with our AFIRS hardware onboard our customers’ aircraft. It’s a simple measure of the longevity of our solutions amassed from over 20 years of experience supporting the global aviation industry.”
Concluded Jacobs, “Looking to the second half of the year, we are on the cusp of delivering on two of our most promising incremental growth initiatives – the AFIRS EdgeTM and weather. We have received the first order to install the AFIRS Edge on a Boeing 737 Max aircraft and are working diligently to receive a Supplemental Type Certificate (“STC”). Meanwhile, our conversations with the UK Met Office continue to advance in a positive direction, as we leverage our WVSS-II water vapor sensor system in conjunction with the AFIRS Edge to address critical environmental imperatives for both the aviation industry and broader weather community. We are continuing to look for ways to further scale the business to accelerate these significant and exciting opportunities.”
Operating Results
Revenue increased by 24% to $6,043,543 in Q2 2023 compared to Q2 2022, driven by growth in all four revenue categories: SaaS, Hardware, Licensing and Technical Services.
SaaS revenue increased by 25% to $2,690,573, driven by an increase in customers’ flights and flight hours, as well as growth in weather-related software services. Licensing revenue increased by 2% to $1,433,264 due to increases in the number of modems and associated license fees generated from our long-term OEM customer. Hardware revenue increased by 28% to $1,172,261, although a total of 15 installation kits were shipped in Q2 2023, matching the15 shipped in Q2 2022. Technical Services revenue increased by 81% to $747,445.
Gross margin was 59.6% of revenue in Q2 2023 compared to 55.8% in Q2 2022. The increase in gross margin was due primarily to changes in the mix of revenue sources during the quarter.
Operating expenses decreased by 4% from Q2 2022, driven by a 22% decrease in Administration expenses and a 9% decrease in Research and Development and certification engineering expenses, partially offset by a 19% increase in Distribution expenses.
Positive EBITDA[1] totaled $168,045 in Q2 2023 compared to an EBITDA loss of $905,780 in Q2 2022.
Net loss was $168,807 in Q2 2023 compared to a Net loss of $1,141,140 in Q2 2022.
Balance Sheet and Liquidity
Cash and short-term investments totalled $1,719,904 at June 30, 2023, compared to $2,647,650 at December 31, 2022.
Trade and other receivables decreased by 17% to $4,231,078 compared to YE 2022, and Trade payables and accrued liabilities increased by 2% to $2,778,884 compared to YE 2022.
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. These include AFIRS™, an aircraft satcom/interface device, which enables cockpit voice communications, real-time aircraft state analysis, and the transmission of aircraft data while inflight. The AFIRS Edge is a state-of-the-art 5G Wireless Quick Access Recorder (WQAR), Aircraft Interface Device (AID), and Aircraft Condition and Monitoring System (ACMS). The Edge can be interfaced with FLYHT’s TAMDAR probe or the FLYHT-WVSS-II relative humidity sensor to deliver airborne weather and humidity data in real-time.
CrossConsense, FLYHT’s wholly-owned subsidiary, offers highly skilled services to the commercial aviation industry and provides preventative maintenance solutions. These include Aircraft Fleet View, a native application that gives a real-time view of airline fleet status; AviationDW, a managed data warehouse for enhanced business intelligence; and ACSIS, a visualization and predictive maintenance alerting tool.
FLYHT is headquartered in Calgary, Canada, and is an AS9100 Quality registered company. CrossConsense, located in Frankfurt, Germany, is an ISO9001 certified operation. For more information, visit www.flyht.com.
