GTX Reports 2020 Financial Summary

Rhea-AI Summary

GTX Corp (OTC: GTXO) reported mixed financial results for 2020. While total revenue decreased by 29% year-over-year, product revenue surged by 109%, primarily due to the expansion into personal protective equipment (PPE). The company reported a dramatic 875% growth in online e-commerce sales and a 46% increase in B2B and government customers. General and administrative expenses dropped by 22%, and the company reduced its debt by 35%. Challenges included a significant decline in IP licensing revenue and lower-than-expected subscriptions due to COVID impacts.

Positive

• Product revenue increased by 109% year-over-year.
• E-commerce sales rose by 875%, with online customers up by 718%.
• B2B and government customer base grew by 46%.
• General and administrative expenses decreased by 22%.
• Loss from operations reduced by 435%.
• Debt decreased by approximately 35%.

Negative

• Total revenue decreased by 29% compared to 2019.
• IP licensing revenue significantly declined without major transactions.
• Lower subscription revenue due to COVID-19 and transition to 4G.

LOS ANGELES CALIFORNIA, April 05, 2021 (GLOBE NEWSWIRE) -- GTX Corp (OTC: GTXO) (“GTX” or the “Company”), a pioneer in the field of location based wearable GPS human and asset tracking systems and a supplier of Health and Safety personal protective medical equipment, today announced a summary for the year ended December 31, 2020.

2020 Financial Highlights:

• Product Revenue increased 109% over 2019 comparable period.
• Total Revenue decreased 29% over 2019 comparable period.
• Online ecommerce sales increased 875% over 2019 comparable period.
• Increased number of online customers by over 718% over 2019 comparable period.
• B2B and government customers increased by 46% over 2019 comparable period.
• G&A expenses decreased 22% over 2019 comparable period.
• Loss from Operations decreased 435% over 2019 comparable period.
• Other Income/(Expense) reduced 133% over 2019 comparable period.
• Reduced debt on balance sheet by approximately 35%

Management commentary: Patrick Bertagna, GTX Corp CEO.

In these unprecedented times we want to first and foremost extend our appreciation and gratitude to every GTX stake holder from our employees, vendors, customers, advisors, and shareholders that helped GTX navigate and expand throughout 2020.

YEAR IN REVIEW

2020 was probably our most transformative year since we launched our GPS SmartSoles. With the global economic slowdown and restrictive lockdowns enforced in California due to COVID, we did have a reduction in total revenues, however we increased product sales, increased our B2B, B2C and government customer base by double and triple digits, expanded our product lines to close to 100 products, maintained good profit margins, and reduced our general expenses. Except for a government backed 30-year, low interest loan, we did not take on any new debt and continued to retire our existing debt by $494K or 35% at the close of 2020. Because of our commitment to significantly reduce our debt and lower interest payments and derivative expenses, we had an increase of over $1,000,000 comparable to the 2019 period, in non-core below the line income.

Due to our pivot in early March 2020 to expand our Health and Safety product line into the Personal Protective Equipment (“PPE”) business, we saw a 109% increase in product revenues compared to 2019, added close to 2,500 new customers, elevated our product and brand awareness in the U.S. and showed a modest net profit for the first three quarters of 2020. The expansion into the PPE business enabled us to have additional cash flow for R&D and debt reduction, broaden our product offerings, start an advertising campaign, all of which we believe has expanded our visibility in the marketplace, as we are starting to see more cross selling across our product lines, an increase in total number of shareholders, and continue to see a noticeable increase in inquiries from our distributors for wearable tracking and monitoring solutions, which is the cornerstone of our business.

COVID did somewhat contribute to our reduction in total revenues but the big factor comparing 2019 to 2020 was directly related to IP licensing. In 2019, in addition to our normal IP licensing revenue, we had one large transaction for $650,000 that dramatically increased our licensing revenue for that year, however in 2020 we did not have one large transaction and only signed one agreement compared to fourteen in 2019. Subscriptions were also lower than expected due to COVID-19 and because many of the cellular providers worldwide transitioned to 4G and 5G shutting down 2G and 3G in many parts of the world. Even though we had been planning for the 2G and 3G sunset we had no way to plan for COVID at the same time, which effected our ability to quickly migrate customers over to 4G. Despite these temporary setbacks, we continue to see a steady flow of pre-orders for our 4G SmartSoles and as the global economy reopens, we expect to see continued demand for our 4G products and subscription reactivation.

At the onset of the second quarter of 2020, the Company was immersed in addressing the impact of COVID-19: from setting up work safety policies, social distancing guidelines, shelter in place lockdowns, evaluating our supply chain which at that time was completely disrupted and communicating with our customers and suppliers across the globe to address and ascertain their impact. At the same time, we had to quickly expand our infrastructure to support the rapid need and demand for protective medical equipment. We hired additional people and added new warehouse space, all while still managing to reduce total expenses throughout the year. As we faced many uncertainties, we filed for government assistance loan programs, which we received late in the second quarter. Even with all the uncertainty, chaos and panic that ensued in March, April and May we still managed to build out our PPE business, sold and donated hundreds of thousands of PPE items to a wide range of entities such as essential businesses, assisted living facilities, pharmacies, Fortune 1,000 companies, hospitals, police departments, nonprofits, and local, state, and federal government agencies, and consumers in every State across the U.S. We launched a dedicated website - www.gtxmask.com, which within weeks, saw over a 500% increase in website traffic, and 300% increase in consumer orders, with 40% repeat orders. As a result, GTX is now well positioned as a trusted health & safety supplier for providing a wide variety of high-quality products and reliable customer service, which is contributing to an increase in our brand awareness and product demand. Since we are now addressing a much larger potential audience, we started an advertising campaign, and based on the results so far, we expect to keep the campaign going into 2021.

Continuing throughout the year, our e commerce business saw a steady monthly increase and many of the new products we introduced were widely accepted and sales quickly ramped up throughout the year, seeing a significant increase in sales coming from Antibody and Antigen Rapid Test Kits beginning in the fourth quarter

FAQ

What were GTX Corp's financial highlights for 2020?

GTX Corp reported a 29% decrease in total revenue but a 109% increase in product revenue due to PPE sales.

How much did GTX Corp reduce its debt in 2020?

GTX Corp reduced its debt by approximately 35% in 2020.

What caused the decline in GTX Corp's total revenue?

The decline was primarily due to reduced IP licensing revenue and lower subscription numbers affected by COVID-19.

How did GTX Corp's e-commerce sales perform in 2020?

E-commerce sales increased by 875%, along with a 718% rise in the number of online customers.

What impact did COVID-19 have on GTX Corp in 2020?

COVID-19 contributed to decreased total revenues and impacted IP licensing, but also led to increased demand for PPE.