Volatus Releases Q1 2024 Financial Results and Provides General Corporate Update
Volatus Aerospace Corp. (OTCQB: VLTTF) announced its Q1 2024 financial results, reporting a revenue of $6.62M, a 34% gross margin, and a 22% improvement in adjusted EBITDA. Service revenue surged by 39% to $3.9M, driven by increased aerial intelligence activities. However, equipment revenue declined by 40% due to working capital. The comprehensive loss was $2.99M, slightly better than the $3M loss in Q1 2023, attributed to higher depreciation and interest charges. Operational highlights include expansions in the UK and US, notably in the oil and gas sector, and new contracts in the utility and building inspections sectors. The company also raised $950,000 in May 2024 and completed a non-brokered private placement of debentures for $585,060.
Overall, the company demonstrated growth in service revenue and gross margin, but faced challenges with equipment revenue and overall losses.
- Service revenue increased by 39% to $3.9M.
- Gross margin improved to 34%, up from 32%.
- Adjusted EBITDA improved by 22%, reducing the loss to $1.38M.
- Expansion in the UK with the acquisition of UAV Hub and Drone Mentor.
- Expansion in the US oil and gas sector with advanced technological applications.
- Secured inspection contracts for 11,000 structures in the US utility sector.
- Raised $950,000 in May 2024 for additional operational capital.
- Completed non-brokered private placement of debentures for $585,060.
- Comprehensive loss of $2.99M, only slightly improved from $3M in Q1 2023.
- Equipment revenue declined by 40% due to working capital.
- Higher depreciation and interest charges contributed to the overall loss.
- Revenue decreased to $6.62M from $7.41M in Q1 2023.
- Significant operating expenses totaling $4.82M, impacting profitability.
Services Revenue increases by
TORONTO, ON / ACCESSWIRE / May 28, 2024 / Volatus Aerospace Corp. (TSXV:VOL)(OTCQB:VLTTF) ("Volatus" or "the Company"), a leader in the aerial intelligence industry, is pleased to announce its financial results for the three months ended March 31, 2024.
The Company generated revenues of
Q1 2024 Performance Highlights:
- Service Revenue increased by
39% from$2.78M in Q1 2023 to$3.9M . - Gross profit was
$2,225,757. In Q1 2024, the Company successfully increased its gross margin percentage from32% in Q1 2023 to34% . This growth in the gross margin is a direct result of our strategic shift towards higher efficiency operations and an optimized product mix. Notably, the significant increase in our aerial intelligence service activities has been a key driver of this improvement. - Available cash on hand on December 31, 2023, was
$1,040,925 , and as part of a subsequent event, the Company raised additional$950,000 on May 21, 2024. The temporary limitation in growth working capital led to a decline in equipment revenue by40% in the current quarter. - The Comprehensive loss of (
$2,991,319) in Q1 2024 compared to ($3,003,365) Q1 2023. The increase in loss is due to higher depreciation expenses and interest charges. - Adjusted EBITDA improved by
22% to ($1,380,119) from ($1,785,335) in Q1 2023. Efficiency measures implemented in late Q3 2023 will continue to be realised over the next few quarters. Management feels that adjusted EBITDA is an efficient measure of the performance of the Company.
Notable Operational Accomplishments During the Quarter:
- Continued expansion in the UK with the strategic acquisition of UAV Hub and Drone Mentor.
- Continued expansion in oil and gas sector in the U.S. by leveraging advanced technological applications such as optical gas inspections and magnetometry
- Secured work for the inspection of 11,000 structures in the US utility sector.
- Expanded LiDAR services in Eastern Canada and secured work in the growing façade and building envelope inspections sector in the U.S.
Webinar
In conjunction with this release, Volatus investor relations will host a webinar on Thursday, May 30 th at 8:30 AM EST at which time Glen Lynch, Chief Executive Officer, and Abhinav Singhvi, Chief Financial Officer, will review financial results and major milestones with Danielle Gagne, Head of Corporate Communications as moderator. Investors are invited to register for the webinar here .
https://us06web.zoom.us/webinar/register/WN_toHGFuw3S7etj0PEFajy9Q
Audio Replay Options
An audio replay of the event will be archived on the Investor Relations page of the company's website here .
SUMMARY OF RESULTS
| Three months ended March 31 | ||||||||
| 2024 | 2023 | |||||||
Revenue | $ | 6,623,741 | $ | 7,412,480 | ||||
Direct costs | $ | 4,397,985 | 5,045,802 | |||||
Gross Profit | 2,225,757 | 2,366,678 | ||||||
OPERATING EXPENSES | ||||||||
Advertising & marketing | $ | 293,339 | 406,118 | |||||
IT & tech | $ | 256,802 | 185,095 | |||||
Personnel | $ | 2,196,722 | 2,156,297 | |||||
R&D | $ | 11,840 | 100,420 | |||||
Office cost | $ | 583,199 | 892,539 | |||||
Travel | $ | 57,621 | 94,285 | |||||
External partner cost | $ | 200,072 | 274,013 | |||||
Depreciation and amortization | $ | 1,098,088 | 745,136 | |||||
Share based Payments | $ | 126,822 | 176,401 | |||||
| 4,824,504 | 5,030,304 | |||||||
(Loss) from Operations | (2,598,748 | ) | (2,663,626 | ) | ||||
OTHER ITEMS - INCOME/(EXPENSE) | ||||||||
Finance cost | $ | (379,106 | ) | (312,982 | ) | |||
Other income (expense) | $ | (10,168 | ) | (1,558 | ) | |||
Gain (Loss) on disposal of property and equipment | $ | (7,184 | ) | (10,511 | ) | |||
Foreign exchange translation | $ | 3,887 | (14,688 | ) | ||||
Net Loss | $ | (2,991,319 | ) | $ | (3,003,365 | ) | ||
Total comprehensive Income (loss) for the period attributable to: | ||||||||
Owners of Volatus Aerospace Corp. | (2,915,143 | ) | (2,611,890 | ) | ||||
Non-controlling interest | (76,176 | ) | (391,475 | ) | ||||
| (2,991,319 | ) | (3,003,365 | ) | |||||
SUMMARY OF QUARTERLY RESULTS
| Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | |||||||||||||||||||||||||
Revenue | 6,623,741 | 10,500,995 | 8,274,349 | 8,684,991 | 7,412,480 | 7,213,129 | 11,120,589 | 6,629,593 | ||||||||||||||||||||||||
Direct Cost | 4,397,985 | 7,700,881 | 5,265,775 | 5,724,516 | 5,045,802 | 5,190,979 | 7791145 | 4728672.918 | ||||||||||||||||||||||||
Gross Profit | 2,225,757 | 2,800,114 | 3,008,574 | 2,960,475 | 2,366,678 | 2,022,150 | 3,329,444 | 1,900,920 | ||||||||||||||||||||||||
| 33.60 | % | 26.67 | % | 36.36 | % | 34.09 | % | 31.93 | % | 28.03 | % | 29.94 | % | 28.67 | % | |||||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||||||||||||||
Advertising & marketing | 293,339 | 278,781 | 541,635 | 629,686 | 406,118 | 575,539 | 599,285 | 591,365 | ||||||||||||||||||||||||
IT & tech | 256,802 | 28,439 | 243,602 | 211,960 | 185,095 | 164,260 | 140,392 | 110,775 | ||||||||||||||||||||||||
Personnel | 2,196,722 | 1,312,983 | 1,727,086 | 1,788,347 | 2,156,297 | 1,552,913 | 1,393,606 | 1,565,456 | ||||||||||||||||||||||||
R&D | 11,840 | 771,861 | 104,832 | 364,263 | 100,420 | 541,023 | - | - | ||||||||||||||||||||||||
Office cost | 583,199 | 605,396 | 722,276 | 610,650 | 892,539 | 490,740 | 378,474 | 416,589 | ||||||||||||||||||||||||
Travel | 57,621 | 126,710 | 90,804 | 167,364 | 94,285 | 144,372 | 140,622 | 54,456 | ||||||||||||||||||||||||
External partner cost | 200,072 | 436,686 | 243,443 | 326,979 | 274,013 | 602,171 | 403,238 | 168,371 | ||||||||||||||||||||||||
Depreciation | 1,098,088 | 1,647,364 | 843,744 | 797,487 | 745,136 | 604,849 | 270,081 | 300,511 | ||||||||||||||||||||||||
Share based Payments | 126,822 | 173,671 | 195,372 | 178,361 | 176,401 | 340,761 | 330,918 | 290,103 | ||||||||||||||||||||||||
| 4,824,504 | 5,381,891 | 4,712,793 | 5,075,097 | 5,030,304 | 5,016,628 | 3,656,616 | 3,497,626 | |||||||||||||||||||||||||
(Loss) from Operations | 2,598,748 | (2,581,777 | ) | (1,704,219 | ) | (2,114,622 | ) | (2,663,626 | ) | (2,994,477 | ) | (327,172 | ) | (1,596,707 | ) | |||||||||||||||||
OTHER ITEMS - INCOME/(EXPENSE) | - | |||||||||||||||||||||||||||||||
Finance cost | 379,106 | (667,949 | ) | (425,671 | ) | (368,635 | ) | (312,982 | ) | (249,798 | ) | (121,672 | ) | (81,239 | ) | |||||||||||||||||
Bargain Purchase Gain | 221,808 | 2,112,197 | - | - | ||||||||||||||||||||||||||||
Changes in Fair Value of Contingent Consideration | 386,731 | (33,846 | ) | - | - | |||||||||||||||||||||||||||
Other income (expense) | (10,168 | ) | 14,955 | (39,229 | ) | 41,237 | (1,558 | ) | 192,498 | 79,640 | 31,576 | |||||||||||||||||||||
Gain (Loss) on disposal of equipment | (7,184 | ) | (125,476 | ) | 228,769 | (0 | ) | (10,511 | ) | 414 | 10,566 | (1,011 | ) | |||||||||||||||||||
Foreign exchange translation | 3,887 | (24,156 | ) | 19,946 | (16,191 | ) | (14,688 | ) | (195,277 | ) | 6,430 | 20,484 | ||||||||||||||||||||
Net loss and comprehensive loss before tax | (2,991,319 | ) | (2,775,864 | ) | (1,920,403 | ) | (2,458,211 | ) | (3,003,365 | ) | (1,168,290 | ) | (352,208 | ) | (1,626,897 | ) | ||||||||||||||||
Deferred Tax Income/ (Expense) | 464,216 | (71,311 | ) | |||||||||||||||||||||||||||||
Net Loss and comprehensive loss after tax | (2,991,319 | ) | (2,311,647 | ) | (1,920,403 | ) | (2,458,211 | ) | (3,003,365 | ) | (1,239,601 | ) | (352,208 | ) | (1,626,897 | ) | ||||||||||||||||
Loss per share | ||||||||||||||||||||||||||||||||
Basic and Diluted | (0.02 | ) | (0.02 | ) | (0.02 | ) | (0.03 | ) | (0.02 | ) | (0.01 | ) | (0.01 | ) | (0.02 | ) |
RECONCILIATION OF ADJUSTED EBIDTA TO NET LOSS
| Three months ended Mar 31, | ||||||||
| 2024 | 2023 | |||||||
Adjusted EBITDA (loss) | (1,380,119 | ) | (1,758,335 | ) | ||||
Interest | 379,106 | 312,982 | ||||||
Depreciation | 1,098,088 | 745,136 | ||||||
Share-based Payments | 126,822 | 176,401 | ||||||
Loss from Sale of Drones | 7,184 | 10,511 | ||||||
Net Loss | (2,991,319 | ) | (3,003,365 | ) | ||||
Other Corporate Update:
Further to the Company's press release dated May 21, 2024, we are pleased to announce completion of first tranche of previously announced non-brokered private placement of up to 1,000,
The Debentures shall have a maturity date of 12 months from the date of issuance and will bear an initial interest rate of
In connection with the Offering, the Company paid eligible Finders a cash commission equal to
This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the " U.S. Securities Act ") or any applicable state securities laws, and may not be offered or sold to, or for the account or benefit of, persons in the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. "United States" and "U.S. persons" shall have the meanings assigned to them in Regulation S under the U.S. Securities Act.
About Volatus Aerospace:
Volatus Aerospace Corp. is a leading international provider of aerial intelligence solutions, using drones and commercial aircraft. Volatus serves civil, public safety, and defense markets with imaging and inspection, security and surveillance, equipment sales and support, training, as well as R&D, design, and manufacturing. We are focused on introducing green and innovative drone solutions to supplement and replace traditional aircraft and helicopters for long-linear inspections such as pipeline, energy, rail, and cargo services. Volatus is committed to carbon neutrality; the fostering of a safe, equitable and inclusive workplace; and responsible governance.
Note Regarding Non-GAAP Measures
In this press release we describe certain income and expense items that are unusual or non-recurring. There are terms not defined by International Financial Reporting Standards (IFRS). Our usage of these terms may vary from the usage adopted by other companies. Specifically, gross profit, gross margin, and Adjusted EBITDA are undefined terms by IFRS that may be referenced herein. We provide this detail so that readers have a better understanding of the significant events and transactions that have had an impact on our results.
Throughout this release, reference is made to "gross profit," "gross margin," and "Adjusted EBITDA" which are non-IFRS measures. Management believes that gross profit, defined as revenue less operating expenses, is a useful supplemental measure of operations. Gross profit helps provide an understanding on the level of costs needed to create revenue. Gross margin illustrates the gross profit as a percentage of revenue. Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"). The Company defines Adjusted EBITDA as IFRS comprehensive loss excluding interest expense, depreciation and amortization expense, share-based payments, income tax expense, integration and due diligence costs, one time profit or loss (non-recurring), and impairment of goodwill, property, plant, and equipment and right-of-use assets (ROU). The Company believes that Adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives. Readers are cautioned that these non-IFRS measures may not be comparable to similar measures used by other companies. Readers are also cautioned not to view these non-IFRS financial measures as an alternative to financial measures calculated in accordance with International Financial Reporting Standards ("IFRS"). Adjusted EBITDA does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers and should not be construed as alternatives to comprehensive loss or income determined in accordance with IFRS. For more information with respect to financial measures which have not been defined by GAAP, including reconciliations to the closest comparable GAAP measure, see the "Non-GAAP Measures and Additional GAAP Measures" section of the Company's most recent MD&A which is available on SEDAR.
Forward-Looking Statement
This news release contains statements that constitute "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs, and current expectations of the Company with respect to future business activities and operating performance. Often, but not always, forward-looking information and forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results "may", "could", "would", "might" or "will" (or other variations of the foregoing) be taken, occur, be achieved, or come to pass. Forward-looking information includes information regarding: (i) the business plans and expectations of the Company; and (ii) expectations for other economic, business, and/or competitive factors. Forward-looking information is based on currently available competitive, financial, and economic data and operating plans, strategies, or beliefs as of the date of this news release, but involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors may be based on information currently available to the Company, including information obtained from third-party industry analysts and other third-party sources, and are based on management's current expectations or beliefs. Any and all forward-looking information contained in this news release is expressly qualified by this cautionary statement. Investors are cautioned that forward-looking information is not based on historical facts but instead reflects expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Forward-looking information and forward-looking statements reflect the Company's current beliefs and is based on information currently available to it and on assumptions it believes to be not unreasonable in light of all of the circumstances. In some instances, material factors or assumptions are discussed in this news release in connection with statements containing forward-looking information. Such material factors and assumptions include, but are not limited to: the commercialization of drone flights beyond visual line of sight and potential benefits to the Company; and meeting the continued listing requirements of the TSXV. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. The forward-looking information contained herein is made as of the date of this news release and, other than as required by law, the Company disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.
TSXV: VOL
OTCQB: VLTTF
CONTACT DETAILS
Abhinav Singhvi
Chief Financial officer
+1 833-865-2887
abhinav.singhvi@volatusaerospace.com
COMPANY WEBSITE
https://volatusaerospace.com
SOURCE: Volatus Aerospace Corp.
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