Gatekeeper Reports Q2 Revenue of $3.6M in 8th Consecutive Quarter of Year-over-Year Revenue Growth
Abbotsford, BC – April 22, 2020 – Gatekeeper Systems Inc. (‘Gatekeeper’ or the ‘Company’) (TSX-V: GSI) (OTC: GKPRF) (FSE: 1GK) a leading provider of intelligent video solutions for public transport and smart cities, reports its financial results for the three and six months ended February 29, 2020.
Second Quarter Highlights
- Revenue for the three and six months ended February 29, 2020 was the highest in the Company’s history at $3,574,643 and $6,931,041 respectively which compares to $2,698,819 and $ 4,538,297 for the same prior year comparable periods, representing an increase of 32% and 53% respectively;
- Gross profit for the three months and six months ended February 29, 2020 was the highest in the Company’s history at $1,614,468 and $3,082,481 respectively which compares to $1,142,129 and $2,053,415 for the same prior year comparable periods, representing an increase in gross margin of 41% and 50%, respectively;
- Net income for the three and six months ended February 29, 2020 was the highest in the Company’s history at $90,551 and $90,219 respectively which compares to net loss of $455,525 and $1,142,904 for the same prior year comparable periods, representing an increase in profitability of 120% and 108%, respectively;
- As at February 29, 2020 the Company had working capital of $6,346,481, and approximately 88 million shares outstanding;
- Introduced Platform-as-a-Service for Smart City Initiatives and Video Analytics solutions.
Doug Dyment, President and CEO commented, “The second fiscal quarter of 2020 marks our 8th consecutive quarter of year-over-year revenue growth. We are also very happy to report a profitable quarter during what is typically our slowest six-month period. On average over the past five years, this first half period represented just 33% of our full fiscal year revenues. We are now rapidly advancing our new AI-based solutions for Smart Cities which we believe will be a significant contributor to our continued growth.”
Gatekeeper, through its subsidiary Gatekeeper Systems USA Inc., has been deemed essential business in Philadelphia and surrounding counties. The Company’s business relating to the Southeast Pennsylvania Transportation Authority (SEPTA) continues normal operations. SEPTA is the Company’s largest customer and represented approximately 30% of the Company’s revenues during its 2019 fiscal year.
The Company has reported no material change in its contract with SEPTA to provide annually recurring services valued at approximately $2.36 million per year, or its contract to supply and install digital video recorders on SEPTA vehicles and trains valued at approximately $6.3 million, which is expected to be billed during the second half of the Company’s fiscal year ending August 31, 2020.
Platform-as-a-Service Business Model
Gatekeeper introduced its Platform-as-a-Service (“PaaS”) business model, designed to enable intelligent transportation systems for Smart City initiatives, which the Company believes is important to its growth strategy. A Smart City is an urban area that uses different types of electronic Internet of Things sensors to collect data and then use insights gained from that data to manage assets, resources and services efficiently.
Gatekeeper’s PaaS platform is centered around the intelligent video devices that the Company is actively installing for transit authorities on multiple transportation modes. The devices are GPS equipped and interface with vehicle signals such as door open/close. The devices are wirelessly connected, which enables future software downloads and most importantly, allows public transit assets to be interconnected into the ecosystem of a Smart City.
The Company is evaluating solutions that interface with its PaaS platform, including new innovations that may be desired by transit authorities and Smart Cities during and following the Covid-19 pandemic.
Artificial Intelligence and Video Analytics
The Company’s Artificial Intelligence (AI) solutions support reliable video evidence collection and are an important component within vehicle video safety and security. Vehicle video solutions operate as mobile data collection systems where video data is analyzed and available to be transmitted in real-time. AI has the potential to transition conventional mobile video systems to intelligent machine vision solutions that automatically make decisions without human interaction. Examples of video AI algorithms include driver performance monitoring, abnormal passenger behavior, passenger tracking and counting and illegal passing of buses while passengers are loading and unloading.
During the quarter the Company announced new video analytics system installations and is actively pursuing AI and video analytics solutions as part of its Smart City solution offerings.
The Company’s subsidiary, Gatekeeper Systems USA, provides service to the transit industry and has a business relationship with SEPTA, the sixth largest public transportation system in the United States. SEPTA is actively using vehicle video surveillance to evaluate and defend claims, monitor system safety and security, and protect against fraud. SEPTA has an installed base of more than 27,000 video cameras on vehicles and in stations.
Gatekeeper USA has been contracted by SEPTA to supply and install digital video recorders on SEPTA vehicles and trains in a contract valued at approximately $6.3 million. This contract is expected to be billed during the second half of the Company’s fiscal year which ends August 31, 2020.
Gatekeeper USA has been contracted by SEPTA to provide annually recurring vehicle video system maintenance services for SEPTA’s approximately 3,000 vehicles. This annually recurring contract is valued at approximately $2.36 million per year. SEPTA has approved an initial three-year service term beginning in November 2019 for approximately $7.1 million, plus two one-year extension options, for a total potential contract value of up to $11.8 million over five years.
The Company has also initiated sales activities with other transit authorities in North America.
School Bus Solutions
During the quarter the Company continued sales and deliveries of its school bus solutions which include:
G4 video analytics software – offers advanced video analytics and video clipping, which allows security officers to react faster to complaints and share information efficiently, thereby ensuring a more comfortable environment for children riding on school buses. Gatekeeper’s video analytics platform integrates zoom-enabled high-definition cameras, advanced video compression algorithms, digital video recorders, and video management software to monitor audio, video, time, date and GPS location. This enables quick and easy assembly of the necessary video evidence needed to deal with school bus problems such as bullying, grazing, vaping, or verbal abuse.
Stop Arm Camera – Infraction camera specifically designed to record and target vehicles that illegally pass a school bus when the stop arm is deployed. The Company’s new SP-25 high-speed Stop Arm Camera can capture license plate information day or night, up to 4 lanes from a school bus. Gatekeeper’s video analytics and proprietary software automates the ticketing process of school bus stop-arm infractions.
360 Camera solution – is a quad-camera system which provides the driver with 360 real-time imaging that is automatically activated at pre-programmed bus speeds. The 360 imaging system is elegantly displayed within the vehicle’s specialized rear-view mirror system, allowing drivers to monitor schoolchildren all around the bus.
Full details of the financial reports and operating results for the second quarter ended February 29, 2020 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 is a leading provider of intelligent video solutions designed to provide a safer transportation environment for children, passengers, and public safety personnel on multiple transportation modes. The Company uses AI, video analytics and mobile data collectors to inter-connect public transit assets as part of intelligent transportation systems for Smart City initiatives. The Company’s Platform-as-a-Service (PaaS) business model is designed to connect moving vehicles in the era of Internet of Things (IOT). www.gatekeeper-systems.com
President & CEO
Cautionary Note Regarding Forward-Looking Statements: Certain statements made in this press release that are not historical facts are forward-looking statements and are subject to important risks, uncertainties and assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements. As a result, we cannot guarantee that any forward-looking statement will materialize, and readers are cautioned not to place undue reliance on these forward-looking statements. For more exhaustive information on these risks and uncertainties, the reader should refer to the risk factors described in the management’s discussion and analysis for the quarter ended February 29, 2020. The forward-looking statements contained in this press release represent our expectations as of the date hereof. We disclaim any intention and assume no obligation to update or revise any forward-looking statements. Forward-looking statements are presented for the purpose of providing information about management’s current expectations and plans and allowing investors and others to obtain a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. The Company undertakes no obligations to update or revise such statements to reflect new circumstances or unanticipated events as they occur, unless required by applicable law.
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