Gatekeeper Reports $4.3M Revenue and $0.6M Net Income in Record-Breaking Third Quarter

INVESTORS NEWS

FOR IMMEDIATE RELEASE

Gatekeeper Reports $4.3M Revenue and $0.6M Net Income in Record-Breaking Third Quarter

Abbotsford, BC – July 23, 2019 – Gatekeeper Systems Inc. (‘Gatekeeper’ or the ‘Company’) (TSX-V: GSI) (OTC: GKPRF) (FSE: 1GK), a leading provider of video surveillance systems developed to protect people while in transit, today reported its financial results for the three and nine months ended May 31, 2019.

Financial Highlights for Third Quarter

  • Revenue for the three months ended May 31, 2019 was $4,308,506, the highest quarterly revenue in the Company’s history and an increase of 70% when compared to $2,527,308 in the same period in the previous year;
  • Revenue for the nine-month period ended May 31, 2019 was $8,846,803, the highest nine-month period revenue in the Company’s history and an increase of 70% when compared to $5,194,527 in the same period in the previous year;
  • Gross profit during the three and nine-month period ended May 31, 2019 was $1,973,883 and $4,027,298 respectively, which compares to $1,360,930 and $2,767,242 respectively in the prior year comparable periods and represents the highest nine-month period gross profit in the Company’s history;
  • Net income for the three-month period ended May 31, 2019 was $616,572 or $0.01 per share, the highest third-quarter net income in the Company’s history which compares to a net loss of $126,209 or $0.00 per share for the same period in the previous year;
  • As at May 31, 2019 the Company had working capital of $5,740,807, no long-term debt, and approximately 87.6 million common shares outstanding.

Management Commentary

Doug Dyment, President and CEO commented, “Our fiscal third quarter marks the third consecutive quarter of record-breaking revenues, and a return to profitability. We developed a strategy in 2018 to expand into the US transit market, and over the past year we invested in operations to support this strategy. Although we recorded net losses over the past year to make these investments, today’s record-breaking quarterly results validate the meaningfulness of this strategic plan, which positions us exceptionally well for continued growth. Our employees are clearly motivated to deliver excellence to our valued customers, and we continue to strengthen our customer relationships – especially with our cornerstone customer in our transit business. We are also receiving increasing interest from the school bus market, as customers seek safety solutions for school children, and governments embrace the use of video evidence.”

U.S. Transit Initiative

In April 2018, the Company executed a strategic plan to focus on the U.S. transit industry as a key growth initiative by establishing Gatekeeper Systems USA Inc. (“Gatekeeper USA”) and purchasing assets of an existing mobile video surveillance service provider to the transit industry. This strategic initiative enabled a business relationship with the Southeastern Pennsylvania Transportation Authority (“SEPTA”) which is the sixth largest public transportation system in the U.S., has an average weekday ridership of approximately 1.1 million, and is actively using video evidence as protection against fraudulent claims, with an installed base of more than 27,000 video cameras on vehicles and in stations.

The Company has already been chosen for several new contracts which include video solutions for SEPTA transit buses being manufactured by New Flyer of America Inc. (TSX: NFI), video system solutions for SEPTA trains, as well as ongoing video servicing solutions.

School Bus Vision Technology

During the quarter ended May 31, 2019, the Company continued sales and deliveries of its recently-launched SP25 School Bus Vision systems, which have 10-megapixel dual-camera systems for multi-lane viewing license plate capture capability, a high-speed license plate tag reader, and cellular network compatibility ready for remote, and auto downloading of stop-arm violations.

The Company has received increasing interest from school districts regarding the use of video evidence to help protect school children, following the increase in tragic deaths of several students who have been struck within the past year by vehicles illegally passing school buses in various states. The National Association of State Directors of Pupil Transportation Services estimates that there are more than 15 million school bus stop-arm violations per year in the United States alone. The Company is actively marketing its new SP25 product line and is supportive of the social movements and legislation changes that increase awareness and address the safety concerns for school children.

Financial Summary 

         
  For the three months ended For the nine months ended
  May 31,

2019

May 31,

2018

May 31,

2019

May 31,

2018

     
Revenue $     4,308,506 $     2,527,308 $       8,846,803 $     5,194,527
Cost of Sales 2,334,623 1,166,378 4,819,505 2,427,285
Gross Profit 1,973,883 1,360,930 4,027,298 2,767,242
Gross Margin 46% 54% 46% 53%
 
Expenses 1,424,785 1,519,016 4,654,795 3,844,983
 
Operating Income (Loss) 549,098 (158,086) (627,497) (1,077,741)
 
Net Income (Loss) for the period $      616,572 $      (126,209) $       (526,332) $      (966,048)
Earning (Loss) per share –
Basic $              0.01 $            (0.00) $             (0.00) $            (0.01)
Diluted $              0.01 $            (0.01) $             (0.00) $            (0.01)
 
 
  May 31,

2019

August 31,

2018

 
Total Assets $      7,840,198 $      7,894,272
 
Total Liabilities 1,271,061           873,817
 
Total Shareholders’ Equity $      6,569,137 $        7,020,455

 

Full details of the financial reports and operating results for the three and nine months ended May 31, 2019 are described in the Company’s condensed interim consolidated financial statements with accompanying notes and related Management’s Discussion and Analysis, available on SEDAR at www.sedar.com.

About Gatekeeper Systems Inc.

Gatekeeper provides wireless high-resolution video security and safety solutions for in-transit applications, including school buses, municipal transit, first response, and the military. The Company offers wireless live-streaming video surveillance, video analytics, driver monitoring, and incident management solutions to help protect school children, public transit users, and employees on the move. The Company has unique photo enforcement and auto-ticketing solutions to deter stop-arm violations and protect school children. Gatekeeper has installed over 100,000 video devices for more than 3,500 customers throughout North America. www.gatekeeper-systems.com

Contact Information:

Douglas Dyment

President & CEO

ddyment@gatekeeper-systems.com

(604) 864-6187

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