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Track Group Reports Fiscal 2021 Financial Results

TRCK

NAPERVILLE, Ill., Dec. 16, 2021 /PRNewswire/ -- Track Group, Inc. (OTCQX: TRCK), a global leader in offender tracking and monitoring services, today announced financial results for its fiscal year ended September 30, 2021 ("FY21"). In FY21, the Company posted (i) record total revenue of $39.7M, an increase of approximately 17% over total revenue of $33.9M for the year ended September 30, 2020 ("FY20"); (ii) FY21 operating income of $4.7M, representing an increase of 70.8% compared to FY20 operating income of $2.8M; (iii) adjusted EBITDA of $10.3M in FY21, up approximately 26% compared to $8.2M for FY20; and (iv) net income attributable to common shareholders of $3.4M in FY21 compared to a net loss of $0.1M in FY20.

"Our employees worked closely with both our customers and service partners to meet increased demand during extremely difficult circumstances in FY21. Our ability to adapt resulted in record financial results including revenue, operating income and net income for common shareholders." said Derek Cassell, Track Group's CEO.

FINANCIAL HIGHLIGHTS

  • Total FY21 record revenue of $39.7M was up 17% compared to FY20 revenue of $33.9M.
  • Gross profit of $21.1M in FY21 was up over 13% compared to FY20 gross profit of $18.6M due to the growth in revenue offset primarily by the increase in amortization expense associated with implementation of the new software platform.
  • Operating income in FY21 of $4.7M compared to operating income of $2.8M for FY20, representing an improvement of over 70% despite the global pandemic.
  • Adjusted EBITDA for FY21 of $10.3M, up nearly 26%, compared to $8.2M for FY20. Adjusted EBITDA in FY21 as a percentage of revenue also increased to 25.9%, compared to 24.2% for FY20.
  • Cash balance of $8.4M for FY21, up nearly 25% compared to $6.8M for FY20.
  • Net income attributable to shareholders in FY21 was $3.4M compared to a net loss of $0.1M in FY20, a change principally attributable to the Company's strong operating performance.

Business Outlook

As of December 16, 2021, the Coronavirus pandemic has adversely impacted certain aspects of the Company's operations including delays within the supply chain. The extent to which the Coronavirus pandemic, tight labor market and global semiconductor shortage impact our operations and financial results from this point forward will depend on numerous evolving factors that we cannot accurately predict. Despite these challenges to technology companies worldwide, Track Group remains confident that our adjustments to this new normal have not only evidenced success in FY21 but will afford us the ability to remain agile in FY22.

About Track Group, Inc.

Track Group designs, manufactures, and markets location tracking devices; as well as develops and sells a variety of related software, services, and accessories, networking solutions, and monitoring applications. The Company's products and services are designed to empower professionals in security, law enforcement, corrections, and rehabilitation organizations worldwide with single-sourced offender management solutions that integrate reliable intervention technologies to support re-socialization and monitoring initiatives.

The Company currently trades under the ticker symbol "TRCK" on the OTCQX exchange. For more information, visit www.trackgrp.com.

Forward-Looking Statements

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "if", "should" and "will" and similar expressions as they relate to Track Group, Inc., and subsidiaries ("Track Group") are intended to identify such forward-looking statements. These statements are only predictions and reflect Track Group's current beliefs and expectations with respect to future events and are based on assumptions and subject to risks and uncertainties and subject to change at any time. Track Group may from time-to-time update these publicly announced projections, but it is not obligated to do so. Any projections of future results of operations should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. For a discussion of such risks and uncertainties, see "Risk Factors" in Track Group's annual report on Form 10-K, its quarterly report on Form 10-Q, and its other reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. New risks emerge from time to time. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

Non-GAAP Financial Measures

This release includes financial measures defined as "non-GAAP financial measures" by the Securities and Exchange Commission including non-GAAP EBITDA. These measures may be different from non- GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. Reconciliations of these non-GAAP financial measures are based on the financial figures for the respective period.

Non-GAAP Adjusted EBITDA excludes items included but not limited to interest, taxes, depreciation, amortization, impairment charges, gains and losses, currency effects, one-time charges or benefits that are not indicative of operations, charges to consolidate, integrate or consider recently acquired businesses, costs of closing facilities, stock based or other non-cash compensation or other stated cash and non-cash charges (the "Adjustments").

The Company believes the non-GAAP measures provide useful information to both management and investors when factoring in the Adjustments. Specific disclosure regarding the Company's financial results, including management's analysis of results from operations and financial condition, are contained in the Company's annual report on Form 10-K for the fiscal year ended September 30, 2021, and other reports filed with the Securities and Exchange Commission. Investors are encouraged to carefully read and consider such disclosure and analysis contained in the Company's Form 10-K and other reports, including the risk factors contained in such Form 10-K.


TRACK GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2021 AND 2020




September 30,



September 30,


Assets


2021



2020


Current assets:









Cash


$

8,421,162



$

6,762,099


Accounts receivable, net of allowance for doubtful accounts of $91,262 and $148,215, respectively



7,163,615




5,546,213


Prepaid expense and deposits



998,589




866,389


Inventory, net of reserves of $0 and $6,483, respectively



305,210




124,606


Total current assets



16,888,576




13,299,307


Property and equipment, net of accumulated depreciation of $2,615,967 and $2,531,631, respectively



202,226




378,764


Monitoring equipment, net of accumulated depreciation of $5,977,093 and $6,639,883, respectively



3,068,100




2,065,947


Intangible assets, net of accumulated amortization of $17,607,456 and $16,390,721, respectively



20,434,143




21,171,045


Goodwill



8,519,998




8,220,380


Deferred tax asset



101,159




432,721


Other assets



4,309,040




2,166,743


Total assets


$

53,523,242



$

47,734,907











Liabilities and Stockholders' Equity (Deficit)









Current liabilities:









Accounts payable


$

2,821,982



$

2,199,215


Accrued liabilities



4,350,030




14,958,628


Current portion of long-term debt



526,134




30,914,625


Total current liabilities



7,698,146




48,072,468


Long-term debt, net of current portion



43,452,216




418,575


Long-term liabilities



3,650




164,487


Total liabilities



51,154,012




48,655,530











Commitments and contingencies


















Stockholders' equity (deficit):









Common stock, $0.0001 par value: 30,000,000 shares authorized; 11,524,978 and 11,414,150 shares outstanding, respectively



1,152




1,141


Series A Convertible Preferred stock, $0.0001 par value: 1,200,000 shares authorized; 0 shares outstanding



-




-


Paid in capital



302,250,954




302,270,242


Accumulated deficit



(298,828,527)




(302,270,933)


Accumulated other comprehensive loss



(1,054,349)




(921,073)


Total equity (deficit)



2,369,230




(920,623)


Total liabilities and stockholders' equity (deficit)


$

53,523,242



$

47,734,907





TRACK GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)

FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2021 AND 2020




2021



2020


Revenue:









Monitoring and other related services


$

39,179,699



$

33,217,661


Product sales and other



481,626




657,506


Total revenue



39,661,325




33,875,167











Cost of revenue:









Monitoring, products and other related services



16,151,644




13,306,108


Depreciation and amortization



2,402,367




1,923,356


Total cost of revenue



18,554,011




15,229,464











Gross profit



21,107,314




18,645,703











Operating expense:









General & administrative



10,232,116




10,381,859


Selling & marketing



2,716,283




2,257,667


Research & development



1,548,527




1,182,542


Depreciation & amortization



1,896,481




2,064,097


Total operating expense



16,393,407




15,886,165











Operating income



4,713,907




2,759,538











Other income (expense):









Interest income



21,573




39,592


Interest expense



(2,192,108)




(2,503,542)


Currency exchange rate gain (loss)



615,361




(316,330)


Other income/expense, net



1,000,782




695,298


Total other income (expense)



(554,392)




(2,084,982)


Net income before income taxes



4,159,515




674,556


Income tax expense



717,109




793,197


Net income (loss) attributable to common stockholders



3,442,406




(118,641)


Foreign currency translation adjustments



(133,276)




80,529


Comprehensive income (loss)


$

3,309,130



$

(38,112)


Net income (loss) per share basic









Net income (loss) per common share


$

0.30



$

(0.01)


Weighted average common shares outstanding



11,450,269




11,413,535


Net income (loss) per common share


$

0.29



$

(0.01)


Weighted average common shares outstanding



12,036,577




11,413,535







Three Months Ended

September 30,



Twelve Months Ended

September 30,




2021



2020



2021



2020



















Non-GAAP Adjusted EBITDA

















Net income (loss) attributable to common shareholders


$

(1,264)



$

1,421



$

3,442



$

(119)


Interest expense, net



497




642




2,171




2,464


Depreciation and amortization



1,288




992




4,299




3,987


Income taxes (1)



581




181




717




793


Board compensation and stock-based compensation



75




75




300




320


Foreign exchange expense



519




(340)




(615)




316


Gain on settlement of note payable



-




(700)




(1,001)




(700)


Other charges, net (2)



263




246




972




1,122


Non GAAP Adjusted EBITDA


$

1,959



$

2,517



$

10,285



$

8,183


Non GAAP Adjusted EBITDA, percent of revenue



19.4

%



28.5

%



25.9

%



24.2

%


















Non-GAAP earnings per share - Basic

















Weighted average common shares outstanding



11,490,804




11,414,150




11,450,269




11,413,535


Non-GAAP earnings per share


$

0.17



$

0.22



$

0.90



$

0.72



















Non-GAAP earnings per share - Diluted

















Weighted average common shares outstanding



11,991,766




11,414,150




12,036,577




11,413,535


Non-GAAP earnings per share


$

0.16



$

0.22



$

0.85



$

0.72






(1)

Currently, the Company has significant U.S. tax loss carryforwards that may be used to offset future taxable income, subject to IRS limitations. However, the Company is still subject to certain state, commonwealth, and other foreign based taxes.





(2)

Other charges may include gains or losses and non-recurring accrual adjustments.

Cision View original content:https://www.prnewswire.com/news-releases/track-group-reports-fiscal-2021-financial-results-301446285.html

SOURCE Track Group, Inc.



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