RE:Blowout Quarter and Just Getting started !This is a very good business, in a great niche and growing very rapidly.
Q3 financials speak for themselves.....absolutely superb.
Gross margins are very fat at 50 % and the contracts keep pouring in.
The Company's base business continued to drive sales in the third fiscal quarter with a record sales climbing to over $3.1 million CDN.
Sales increase was primarily due to an increase in camera sales and mobile digital recorders of 51% and 36%, respectively, as compared to the same period in fiscal 2015.
Stop-arm camera evaluation sites increased from sixteen to twenty over the last quarter, representing 1,543 buses owned by various school districts.
Gatekeeper is in the process of working with school districts, law enforcement, and judicial systems in an effort to close evaluation sites, moving to shared revenue contracts.
The Company executed on its first five-year revenue sharing contract (the " Contract ") in the stop-arm camera business with Jones County School District in Georgia.
Equipment was installed April 16 th and 17 th , 2016 with a Press Day on April 27 th , 2016. Pursuant to the Contract, Gatekeeper will receive 50% of the revenue from each citation issued with 25% shared with the school district and 25% shared with Jones County.
Stop-arm violation fines in Georgia are $300 USD for first time offence, $750 USD for second time offence and $1,000 USD for each subsequent offence.
The Company anticipates receiving proceeds from ticket citations prior to the end of the current fiscal year.
There is an estimated 13 to 15 million stop-arm violations in the United States with legislations now passed in thirteen States that allow video enforcement technology to be used to issue citations.
As is obvious, GSI's base business is just in the early stages of its nascency.
It offers multiples in business sales with strong GMs and superb recurring revenues in which gross margins will be even fatter.
I peg sales at $20 to $ 25 million over the next 4 quarters, with net earnings in the 7 to 10 cents range.
Considering its explosive growth, I see GSI above $0.75 by exit 2016.
Solid balance sheet and very good management.
What else can you ask for..