VANCOUVER, British Columbia, May 30, 2019 (GLOBE NEWSWIRE) -- HIT Technologies Inc. (TSXV: HIT) ("HIT" or the “Company”), which designs, develops, manufactures and distributes the world's most advanced adventure products for iPhone, today reported its third quarter (Q1-F2019) financial and operating results for the quarter ended March 31, 2019 prepared in accordance with International Financial Reporting Standards (IFRS). All results are reported in Canadian dollars unless otherwise stated.
Selected Quarter and Annual Information
| Q3-Fiscal 2019 | Q3-Fiscal 2018 | YTD-Fiscal 2019 | YTD-Fiscal 2019 | |||||||||
| Revenue | $597,165 | $89,500 | $1,886,828 | $484,693 | ||||||||
| + % Increase over Prior Year | 567% | 289% | ||||||||||
| Gross Margin | $339,731 | ($15,108) | $983,289 | $101,852 | ||||||||
| Gross Margin % | 57% | -17% | 48% | 21% | ||||||||
| Operating Expenses (excluding non-cash and cost of sales) | $378,746 | $304,980 | $1,396,740 | $1,023,969 | ||||||||
| % change over Prior Year | 24% | 36% | ||||||||||
| Adjusted EBITDA (Loss) | ($40,312) | ($274,143) | ($332,740) | ($680,079) | ||||||||
| % change over Prior Year | -85% | -51% | ||||||||||
| Net (Loss) | ||||||||||||
| Per share, Basic | $0.00 | $0.00 | ($0.01) | ($0.01) | ||||||||
| March 31, 2019 | June 30, 2018 | |||||||||||
| Cash and Cash Equivalents | $50,172 | $286,106 | ||||||||||
| Inventory | $384,219 | $219,699 | ||||||||||
| Net Working Capital (Deficiency) | ($953,042) | ($474,404) | ||||||||||
| Total Assets | $933,904 | $1,036,610 | ||||||||||
| Accounts payable and accrued liabilities | $624,156 | $1,199,915 | ||||||||||
| Total liabilities | $2,247,096 | $1,985,555 | ||||||||||
“We are very proud to announce our strongest Q3 in company history with 567% revenue growth YoY. We continue to execute against our turnaround plan and direct to consumer sales stayed strong despite typically slower seasonal effects. Our continued focus on our DTC channel (Direct to Consumer) reflects consumer demand for our product lineup and execution of our marketing plan. Higher margins reflect a greater portion of sales mix coming from our DTC channel and less seasonal discounting. We will look to continue to grow this channel in the quarters to come,” says Brooks Bergreen, CEO HIT Technologies Inc.
Operational Summary for Q3 Fiscal 2019 include:
- Generated sales of $597,165 in Q3-F2019, compared to $89,500 in Q3 Fiscal 2018, an increase of 567%, and compared to $989,052 in Q2-F2019, a decrease of 40%. YTD 2019 sales are $1,886,828, compared to $484,693 YTD 2018. This is an increase of 289%. 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.
- Gross Margin was recorded at $339,731, or 57%, in Q3-F2019, compared to ($15,108), or (17%) in Q3 of last year, and $536,638, or 54% in Q2-F2019. YTD 2019 Gross Margin is $983,289 vs YTD 2018 of $101,852, an increase of 865%. The increase of the Gross Margin %, year over year, 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.
- Increased its operating expenditures (excluding non-cash items and cost of sales) to $378,746, a 24% increase from Q2-F2018 and a decrease of 21% Q2-F2019. YTD 2019 operating expenses is $1,396,740, an increase from YTD 2018 of $1,023,969. This is mainly due to the increase in administrative and marketing variable expenses necessary to support and drive continued growth.
- Reported an Adjusted EBITDA of ($40,312) for Q3-F2019, compared to an Adjusted EBITDA of ($274,143) in Q3-F2018 and of $55,425 in Q2-F2019. YTD Adjusted EBITDA is ($332,740) vs an Adjusted EBITDA for YTD 2018 of ($680,079), and improvement of 51%. Q3 closed with a working capital deficiency of $953,042 including cash and cash equivalents of $50,172 and inventory of $384,219, at March 31, 2019.
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 interim unaudited Consolidated Financial Statements for the quarter ended March 31, 2019 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. (TSXV: HIT) develops and markets a portfolio of products that transform Apple iPhones into high-performing, weather- and shock-resistant smartphone accessories. Both its, flagship product, HITCASE PRO and its new Shield LINK and CRIO products, allows users to easily capture photo and video content hands-free, using a variety of HIT Technologies’ patented Railslide® and LINK mounts that attach to virtually any surface. Swappable lenses and accessories provide a variety of perspectives, otherwise unattainable while participating in adventure sports. HIT Technologies is headquartered in Vancouver, British Columbia, Canada and trades on the TSX Venture Exchange. For more information about HITCASE, visit www.HITCASE.com. Search #hitcase on Instagram to see some of the amazing images created by HITCASE customers.
Forward-Looking Statements
This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities laws that are based on expectations, estimates and projections as at the date of this news release. The information in this release about the Company's anticipated use of available funds, and the future plans and objectives of the Company are forward-looking information.
Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information and are intended to identify forward-looking information.
This forward-looking information is based on reasonable assumptions and estimates of management of the Company at the time it was made, and involves known and unknown risks, uncertainties and other factors which 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 such forward-looking information. Such factors include, among others, global economic climate; dilution; the Company's limited operating history; future capital needs and uncertainty of additional financing; the competitive nature of the industry; currency exchange risks; the need for the Company to manage its planned growth and expansion; the effects of product development and need for continued technology change; protection of proprietary rights; the effect of government regulation and compliance on the Company and the industry; network security risks; the ability of the Company to maintain properly working systems; theft and risk of physical harm to personnel; reliance on key personnel; global economic and financial market deterioration impeding access to capital or increasing the cost of capital; and volatile securities markets impacting security pricing unrelated to operating performance. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements 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. The Company undertakes no obligation to revise or update any forward-looking information other than as required by law.
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
+1 416 815 0700
www.hitcase.com/invest