American Aires Announces Record Q4 and Annual 2023 Order Volume and Significant Q4 EBITDA Profitability
- None.
- None.
- Record quarterly order volume of
$3.7 million and gross margin of59% 1 - Record annual order volume of
$10.4 million (79% increase YoY) and gross margin of61% 1 - First significant adjusted quarterly EBITDA profitability1
Toronto, Ontario--(Newsfile Corp. - April 11, 2024) - American Aires Inc. (CSE: WIFI) (OTC Pink: AAIRF) ("Aires" or the "Company"), a pioneer in cutting-edge technology designed to protect against electromagnetic radiation and optimize human health, is pleased to announce the filing the Company's Financial Statements and Management's Discussion & Analysis (MD&A) for the year ended December 31, 2023 and disclose key performance metrics (non-IFRS and unaudited financial results). To keep financial results comparable on a YoY basis while making them consistent with ongoing and future reporting, all figures below combine the results of Aires and those achieved by HUCK Project LLC ("HUCK") pursuant to the Distributor-Royalty agreement initially announced on August 28, 2023 and which has been subsequently terminated by mutual agreement of the parties, as announced on February 16, 2024.
The Aires team is proud of its Q4 2023 performance, achieving record order volume of
The record level of quarterly order volume was achieved despite a temporary shortage of product that limited sales. The related supply chain constraint has now been resolved, and the Company has been fully stocked since that time thanks to the negotiation of new supply terms and increased working capital from our recently closed
The Company's most important quarterly achievement was reporting its first significant adjusted quarterly EBITDA profitability at
The Aires team is equally proud of its annual performance in 2023 on multiple fronts. The Company drove an impressive order volume increase of
American Aires CEO, Josh Bruni, commented: "This success builds on the hard work and sustainable growth we've demonstrated over the past 2 years. These financial results are just the latest proof that we have what it takes to reach and convert the massive and growing consumer market focused on wellbeing and EMF protection. Now it's time to focus on making 2024 our best year ever and continuing our trajectory of significant revenue growth. That means staying the course but with the welcomed advantage of working with a larger budget. That will involve ramping up our predictable growth engine to drive further revenue increases and deepening and widening our relationships with athletes, celebrities and performers to elevate Aires to the level of household brand."
Gross margin as a percentage in 2023 was mostly in line at
The financial results for 2023 demonstrate the effectiveness and ROI of the Company's revamped advertising and promotions approach, which includes expanded spending on social media platforms and further spending on developing affiliate relationships to promote Aires' products. During the year, advertising and promotion spend increased by only
Marketing expenses remained relatively stable with a modest
Overhead costs for the year remained flat at
American Aires Chief Financial Officer, Vitaliy Savitsky, commented: "American Aires is a young high-growth company, so a lot of my focus has been on disciplining growth, measuring effectiveness of ad spend, and reducing costs. That strategy paid off tremendously in 2023 with its difficult year in the capital markets. Instead of losing ground, we focused on hitting adjusted EBITDA profitability and on growing sustainably. I'm very excited about scaling up the business in existing markets and expanding internationally in 2024 and beyond with this disciplined approach. That's our strategy and vision for further strengthening our industry leader status and delivering more shareholder value."
Detailed breakdown of preliminary, non-IFRS, unaudited figures
Due to the HUCK agreement being in effect since August 28, 2023 and for the entire Q4 2023, the Company realized the economic benefit from the sale of its products in the form of royalty and credit reimbursement rather than the typical formula of revenues less cost of goods sold ("COGS"), less advertising and promotion, less marketing and other expenses. As a result, accounting rules required revenues, COGS, advertising and promotion, marketing and certain other expenses to be allocated to HUCK during this period. The Company reported cash royalty income and credit reimbursement income for 2024 in the amounts of
HUCK-Aires Reconciliation Table
| 2023 | 2023 | 2023 | 2022 | |||||||||
| Revenue | Aires | HUCK | Combined | Comparison | | |||||||
| Sales | $ | 5,499,689 | $ | 4,912,433 | $ | 10,412,122 | $ | 5,822,140 | ||||
| Cost of sales | $ | (2,081,563 | ) | $ | (1,969,637 | ) | $ | (4,051,200 | ) | $ | (2,211,890 | ) |
| Gross margin | $ | 3,418,126 | $ | 2,942,796 | $ | 6,360,921 | $ | 3,610,250 | ||||
| Gross margin % | ||||||||||||
| Core expenses | ||||||||||||
| Advertising and promotion | $ | (2,210,866 | ) | $ | (1,571,541 | ) | $ | (3,782,406 | ) | $ | (2,443,604 | ) |
| Marketing | $ | (1,307,692 | ) | $ | (824,846 | ) | $ | (2,132,538 | ) | $ | (1,970,265 | ) |
| Core Net Income (Loss) | $ | (100,432 | ) | $ | 546,409 | $ | 445,977 | $ | (803,619 | ) | ||
| Overhead costs | ||||||||||||
| Office and general | $ | (293,557 | ) | $ | (53,867 | ) | $ | (347,424 | ) | $ | (363,818 | ) |
| Consulting and payroll | $ | (1,149,231 | ) | $ | (11,875 | ) | $ | (1,161,105 | ) | $ | (1,249,912 | ) |
| Legal and professional | $ | (392,190 | ) | $ | (58 | ) | $ | (392,248 | ) | $ | (283,864 | ) |
| Adjusted EBITDA | $ | (1,935,410 | ) | $ | 480,610 | $ | (1,454,800 | ) | $ | (2,701,213 | ) | |
| Other | ||||||||||||
| Cash royalty income/(expense) | $ | 283,427 | $ | (283,427 | ) | $ | - | $ | - | |||
| Credit reimbursement income/(expense) | $ | 197,183 | $ | (197,183 | ) | $ | - | $ | - | |||
| Stock-based compensation | $ | (554,744 | ) | $ | - | $ | (554,744 | ) | $ | (139,667 | ) | |
| Interest charges | $ | (616,809 | ) | $ | - | $ | (616,809 | ) | $ | (502,089 | ) | |
| Equity-based finance charge | $ | (953,444 | ) | $ | - | $ | (953,444 | ) | $ | (353,000 | ) | |
| Consulting fees settled in shares | $ | (782,057 | ) | $ | - | $ | (782,057 | ) | $ | - | ||
| Depreciation | $ | (137,958 | ) | $ | - | $ | (137,958 | ) | $ | (138,359 | ) | |
| Foreign exchange settlement | $ | (100,000 | ) | $ | - | $ | (100,000 | ) | $ | - | ||
| Sales tax provision | $ | (146,707 | ) | $ | - | $ | (146,707 | ) | $ | (74,520 | ) | |
| Net Income (Loss) | $ | (4,746,519 | ) | $ | - | $ | (4,746,519 | ) | $ | (3,908,848 | ) |
*Note: The "2023 HUCK" and "2023 Combined" columns contain non-IFRS, unaudited figures.
Adjusted EBITDA Reconciliation Table for Q4/2023
| Q4 | Q4 | Q4 2023 | | ||||||
| Revenue | Aires | HUCK | Combined | | |||||
| Sales | $ | - | $ | 3,746,442 | $ | 3,746,442 | |||
| Cost of sales | $ | - | $ | (1,546,300 | ) | $ | (1,546,300 | ) | |
| Gross margin | $ | - | $ | 2,200,142 | $ | 2,200,142 | |||
| Gross margin % | N/A | ||||||||
| Core expenses | |||||||||
| Advertising and promotion | $ | - | $ | (1,144,965 | ) | $ | (1,144,965 | ) | |
| Marketing | $ | - | $ | (624,499 | ) | $ | (624,499 | ) | |
| Core Net Income (Loss) | $ | - | $ | 430,678 | $ | 430,678 | |||
| Overhead costs | |||||||||
| Office and general | $ | (43,133 | ) | $ | (40,580 | ) | $ | (83,713 | ) |
| Consulting and payroll | $ | (159,542 | ) | $ | (8,679 | ) | $ | (168,221 | ) |
| Legal and professional | $ | (100,937 | ) | $ | (58 | ) | $ | (100,995 | ) |
| Adjusted EBITDA | $ | (303,612 | ) | $ | 381,362 | $ | 77,750 | ||
| Other | |||||||||
| Cash royalty income/(expense) | $ | 168,392 | $ | (168,392 | ) | $ | - | ||
| Stock-based compensation | $ | (554,744 | ) | $ | - | $ | (554,744 | ) | |
| Interest charges | $ | (27,843 | ) | $ | - | $ | (27,843 | ) | |
| Equity-based finance charge | $ | - | $ | - | $ | - | |||
| Consulting fees settled in shares | $ | (782,057 | ) | $ | - | $ | (782,057 | ) | |
| Depreciation | $ | (34,489 | ) | $ | - | $ | (34,489 | ) | |
| Foreign exchange settlement | $ | (100,000 | ) | $ | - | $ | (100,000 | ) | |
| Legal costs - restructuring | $ | (20,000 | ) | $ | - | $ | (20,000 | ) | |
| Sales tax provision | $ | (146,707 | ) | $ | - | $ | (146,707 | ) | |
| Net Income (Loss) | $ | (1,801,061 | ) | $ | 212,970 | $ | (1,588,091 | ) |
*Note: The "Q4 HUCK" and "Q4 Combined" columns contain non-IFRS, unaudited figures.
In addition, the Company has also extended its engagement of Clarkham Capital Ltd. ("Clarkham") (phone: +44-20-3883-9398; address: Flat 285 - 61 Praed Street, London, W2 1NS, United Kingdom) to provide investor relations and consulting services with a focus on the German stock market and the German-speaking investor community. The services will include the preparation of articles and coverages on several financial platforms and newsletters. The services will also include the translation and distribution of news releases in Germany. The services commenced on April 11, 2024 and will end on May 11, 2024. The Company will pay Clarkham EUR€150,000 for its services. The Company will not issue any securities to Clarkham in consideration of the services. The Company and Clarkham deal at arm's length and do not have any prior relationship.
About American Aires Inc.
American Aires Inc. is a Canadian-based nanotechnology company committed to enhancing well-being and environmental safety through science-led innovation, education, and advocacy. The company has developed a proprietary silicon-based resonator that protect against the harmful effects of electromagnetic radiation (EMR). Aires' Lifetune products target EMR emitted by consumer electronic devices such as cellphones, computers, baby monitors, and Wi-Fi, including the more powerful and rapidly expanding high-speed 5G networks. Aires is listed on the CSE under the ticker 'WIFI' and on the OTC Pink under the symbol 'AAIRF'. Learn more at www.investors.airestech.com.
On behalf of the board of directors
Company Contact:
Josh Bruni, CEO
Website: www.investors.airestech.com
Email: wifi@airestech.com
Telephone: (415) 707-0102
The financial results of HUCK included in this news release are unaudited and actual results may vary materially from the estimated results included in this press release. The Company undertakes no obligation to update or supplement the information with respect to HUCK's financial results provided in this press release. The HUCK financial information included in this press release reflects the Company's current estimates based on information available as of the date of this press release and has been prepared by management of the Company. This preliminary financial information should not be viewed as a substitute for full financial statements prepared in accordance with International Financial Reporting Standards and is not necessarily indicative of the results to be achieved for any future periods.
This news release refers to certain financial performance measures that are not defined by and do not have a standardized meaning under International Financial Reporting Standards including "Adjusted EBITDA" (termed "Non-IFRS measures"). Non-IFRS measures are used by management to assess the financial and operational performance of the Company. The Company believes that these Non-IFRS measures, in addition to conventional measures prepared in accordance with International Financial Reporting Standards, enable investors to evaluate the Company's operating results, underlying performance and prospects in a simil
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