VANCOUVER, British Columbia, March 04, 2019 (GLOBE NEWSWIRE) -- HIT Technologies Inc. (TSXV: HIT) ("HIT" or the “Company”), which designs, develops, manufactures and distributes the world's most advanced innovative protective products for iPhone, on Friday, March 1, 2019, reported financial and operating results for the three and six months ended December 31, 2018, prepared in accordance with International Financial Reporting Standards (IFRS). All results are reported in Canadian dollars unless otherwise stated.
Selected Quarter and Annual Information
| Q2- Fiscal 2019 | Q2-Fiscal 2018 | YTD Fiscal 2019 | YTD Fiscal 2018 | |
| Revenue | $989,052 | $164,985 | $1,289,663 | $395,192 |
| + % Increase over Prior Year | 499% | 226% | ||
| Gross Margin | $536,638 | $422 | $637,379 | $116,960 |
| Gross Margin % | 54% | 0% | 49% | 30% |
| Operating Expenses (excluding non-cash and cost of sales) | $477,927 | $314,896 | $932,774 | $570,424 |
| % change over Prior Year | 51% | 64% | ||
| Adjusted EBITDA (Loss) | $39,525 | ($264,475) | ($309,433) | ($403,463) |
| % change over Prior Year | 1162% | -23% | ||
| Net (Loss) | ||||
| Per share, Basic | 0.00 | -0.01 | -0.01 | -0.01 |
| December 31, 2018 | June 30, 2018 | |||
| Cash and Cash Equivalents | $277,725 | $286,106 | ||
| Inventory | $410,221 | $219,699 | ||
| Net Working Capital (Deficiency) | ($407,036) | ($474,405) | ||
| Total Assets | $1,322,978 | $1,036,610 | ||
| Accounts payable and accrued liabilities | $1,052,689 | $1,199,915 | ||
| Total liabilities | $2,556,360 | $1,985,555 |
“I am extremely proud of our Q2-F2019 quarter,” said Brooks Bergreen Founder and CEO. “We have been working hard to get the company turned around, and to create a category leading product mix for today’s iPhones, as well as expand our distribution relationships with large retailers such as Best Buy USA. This has enabled us to deliver a breakout quarter with revenues up 499%, gross margins up to 54%, and to produce our first Adjusted EBITDA positive quarter as a public company. We remain committed to growing our strong brand proposition and to expand into new product categories this year in our large and fast growing global market.”
Operational Summary for Q2 Fiscal 2018 include:
- Generated sales of $989,052 in Q2-F2019, compared to $164,985 in Q2 Fiscal 2018, and compared to $300,612 in Q1-2019, an increase of 499% and 229%, respectively. YTD 2019 sales are $1,289,663, compared to $395,192 YTD 2018. This is an increase of 226%. This is mainly due to the benefits of improved sales channels, such as Best Buy USA, and increases in direct sales from its new product-line. This quarter also benefited from the holiday season and seasonal sales promotions, such as Black Friday.
- Delivered a record level of Gross Margin at $536,638, or 54%, in Q2-F2019, compared to $422, or 0% in Q2 of last year, and $100,742, or 34% in Q1-F2019. YTD 2019 Gross Margin is $637,379 vs YTD 2018 of $116,959, an increase of 445%. The increased Gross Margin is due to a higher proportion of direct sales, which have a higher margin profile. It also benefited from the introduction of higher margin products (i.e. Splash had sales in Q2 of 11,761 units) and an increase in retail sales with Best Buy USA for the Splash product.
- Increased its operating expenditures (excluding non-cash items and cost of sales) to $477,927, a 51% increase from Q2-F2018 and relatively in-line with Q1-F2019. YTD 2019 operating expenses is $936,101, consistent with YTD 2018 of $923,376. This is mainly due to the increase in administrative and marketing expenses necessary to support and drive continued growth.
- Reported an Adjusted EBITDA of $39,525 for Q2-F2019, compared to an Adjusted EBITDA loss of ($264,475) in Q2-F2018 and of ($352,607) in Q1-F2019. YTD Adjusted EBITDA is ($309,433) vs an Adjusted EBITDA for YTD 2018 of ($403,463), and improvement of 23%. This is a result of the 499% sales growth in Q2, and the expanded gross margins from the improved product and channel sales mix.
- Closed Q2 with working capital deficiency of $407,036, including cash and cash equivalents of $277,725 and inventory of $410,221, at December 31, 2018.
Non-IFRS Measures
Adjusted EBITDA is a non-IFRS measure and management defines this metric as the loss and comprehensive loss under IFRS, adjusted by adding back interest, taxes, amortization, and other non-cash expenses. Please review the reconciliation of Adjusted EBITDA to net income (loss) in the Company’s MD&A for the corresponding period.
This press release should be read in conjunction with our unaudited interim Consolidated Financial Statements for the three months and year ended June 30, 2017 and the accompanying Management Discussion and Analysis, which can be found on SEDAR at www.sedar.com and on the Company’s website http://www.hitcase.com/invest.
About HIT Technologies Inc.
HIT Technologies, Inc. (TSX VENTURE: HIT), headquartered in Vancouver, British Columbia, Canada, under the brand HITCASE, makes the world's most innovative mobile accessories using patented technologies and quality materials. By designing industry leading device protection, the TrueLUX® lens system and versatile mounts, our products protect devices while turning them into a better camera. HITCASE is getting the world Ready for Adventure®, one HITCASE at a time. Find out more at hitcase.com and follow @hitcase.
Please review Forward-Looking Statements
Cautionary Statement
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy of this release.
For additional investor information, contact:
Brooks Bergreen, CEO HIT Technologies Inc.
invest@hitcase.com
www.hitcase.com/invest