CALGARY,
AB, April 27, 2023 /CNW/ - Nanalysis
Scientific Corp. ("the Company", TSXV: NSCI, OTCQX: NSCIF,
FRA: 1N1), a leader in portable NMR machines and MRI technology for
industrial and research applications, releases its fourth quarter
and full year results ending December 31, 2022. Chief
Executive Officer, Sean Krakiwsky and Chief Financial
Officer, Randall McRae will host a conference call
at 5 P.M. Eastern Time today to discuss the results.
A second call will be held for European investors at 8:30am ET on Friday, April 28th. All interested
parties are invited to join these calls.
"This past year was pivotal for Nanalysis on our path to
becoming a fully vertically integrated scientific instrumentation
company," said Sean Krakiwsky, Founder and CEO of
Nanalysis. "Our core benchtop NMR business continues to grow
as we continue to improve and innovate our products. We have
added to our product offerings with High Field NMR in collaboration
with Quad Systems AG and with the acquisition of K'Prime
Technologies we added a sales and service organization that led us
to win the $160 million Canadian Air
Transportation Security Authority ("CATSA") project. The
CATSA project itself enables us to leapfrog ahead with a revenue
generating service organization as we roll into the five-year
contract and potentially longer. And finally, we continue to
see the MRI portion of our business progress with two million dollar plus wins in 2022."
Financial highlights for the twelve months ended December 31, 2022:
- The Company reported consolidated revenue of $24,821K, an increase of $8,778K or 55% from the comparative period in
2021. This includes $21,588K in
product sales and $3,233K of service
revenue related to our security services business.
- Gross profit margins on total sales was 45% for twelve months
ended December 31, 2022. This was the
result of increased training costs of personnel for the CATSA
airport security project, increased personnel and training in
Nanalysis' manufacturing group to increase manufacturing capacity,
and an increase in costs due to worldwide supply chain constraints
and inflation. Management expects gross profit margins to improve
as investments in manufacturing improvements continue, sales levels
increase, and the CATSA airport security project continues to
phase-in to full capacity. There was also a specific warranty
replacement issue that affected gross profits in the second half of
2022.
- (Loss) / Income before other items for the twelve months ended
December 31, 2022, was ($3,935K) versus $1,905K compared to the
same period last year.
- Net loss for the twelve months ended was $9,915K as
compared to the loss for December 31,
2021, of $1,772K.
- The Company had cash on hand of $3.5
million, an undrawn available credit facility of
$3.9 million, working capital of
$8.4 million and undrawn government
contribution funding of $3.5 million as of December
31, 2022.
Financial highlights for the three months ended December
31, 2022:
- For the three months ended December 31, 2022, the
Company reported consolidated revenue of $7,203K, an increase
of $2,126K or 42% from the comparative period in
2021. This includes $5,893K in
product sales and $1,310K of service
revenue related to security services.
- Gross profit margins on product sales were 36% for the three
months ended December 31, 2022.
This was the result of an increased manufacturing workforce whose
associated wages and training costs began impacting gross profits
in the second half of 2022. Current period gross profits were also
affected by K'Prime's product distribution business whereas in the
comparative period only Nanalysis manufactured equipment is in
product sales. As this workforce gains experience and sales
continues to grow, Management expects gross profit margins to
improve.
- Service gross profit margins in the quarter were (42%) as the
Company accelerated its training schedule for the CATSA project and
began expensing wages related to airports that were in
service. Wages related to airports not yet in service
continue to be deferred to prepaid expenses. Management
expects service gross profit margins to improve significantly as
the CATSA airport security project is phased-in to full
capacity.
- (Loss) / Income before other items for the three months
ended December 31, 2022, was ($2,532K) versus $413K compared to the
same period last year.
- Net loss for the three months ended was $3,292K as
compared to the three-month loss for December 31,
2021, of $658K.
Recent strategic and operational highlights during and after the
fourth quarter of 2022 include:
- Funding received from Prairies Economic Development
Canada: The Company received its first $1.5 million in funding from the Business
Scale-up Program. This program will provide Nanalysis up to
$5.0 million of funding in the form
of an unsecured interest free loan. The program is designed to help
fast growing tech firms scale-up and enter new markets. At
April 27, 2023, the Company has drawn
$2.8 million on this facility.
- Security Service: In November
2022, the Company began providing services under the CATSA
airport security contract and continues to execute its phase-in
plan for the entire project. During the first quarter the
Company has accelerated its phase in and now has a presence in 39
airports and is expanding.
- Manufacturing: Nanalysis has also invested in growing
out the manufacturing team allowing the Company to meet expected
growth in demand in 2023. Some of the additions included
Nanalysis investing in a state of the art five axis machining
center and wire electrical discharge machine. This has allowed the
Company to significantly reduce manufacturing time on certain
products.
- Quad Systems: The Company recently launched the
full 400MHz full high-field NMR product in collaboration with Quad
Systems, of which the company owns 43%. Sales have continued to
increase, and the Company expects Quad's sales to gain momentum in
the second half of 2023.
- Announced $3.5 Million Private
Placement: The Company announced April
21, 2023, the intention to close a $3.5 million private placement in order to
bolster the Company's balance as it enters the final stages of the
CATSA project roll out.
Outlook
"Since we went public in June of 2019, we have executed on the
plan that we communicated to investors. This plan has entailed new
products, four acquisitions, and a growing direct sales
organization, as well as a burgeoning service business. While the
road has not been easy, we believe we have created tremendous
intrinsic value. We are very optimistic about the next five years
of our business, and are committed to staying the course and
overcoming any adversity we face. We continue to focus on improving
our tactical execution, especially with regards to our sales
organization, and we are prepared for any potential headwinds if
recessionary fears in our industry manifest themselves. In 2023 we
are committed to continuing to strengthen our direct sales pipeline
for our products, as well as establishing some vertical market
partnerships. We are laser focused on completing the roll out
of the CATSA airport service contract to full run rate at all 81
Airports. With the launch of the full systems at ENC in
Monterrey California last week, we look forward to and will
continue to work towards the initial sales of the full multi-module
high-field NMR product via Quad Systems," said Sean Krakiwsky.
"The value that has been created by our recent acquisitions and
resulting business from those, like the CATSA project, have
positioned us well for growth and well on the path to becoming the
full service global scientific instrumentation company of our
vision, as high field NMR, MRI, and benchtop NMR all require global
service support" concluded Mr. Krakiwsky.
Conference Call
Investors interested in participating in the live full year call
can dial 1-888-664-6392 or 416-764-8659 from abroad. Investors can
also access the call online through a listen-only webcast
here: https://app.webinar.net/6QdyAgwARmo or on the
investor relations section of the Company's website HERE.
The webcast will be archived on the Company's investor relations
webpage for at least 90 days and a telephonic playback will be
available for seven days after the conference call by calling
1-888-390-0541 or 416-764-8677, conference ID #931980.
Additionally, the Company will be hosting a Q&A session for
its European investors at 8:30am ET on
Friday, April 28th which can be accessed by the following
link: Click here to join the meeting or call in (audio only)
+1 437-703-4522, Phone Conference ID: 372 224 118#.
About Nanalysis Scientific Corp. (TSXV: NSCI, OTCQX: NSCIF,
FRA: 1N1)
Nanalysis' business is what we term "MRI and NMR for industry".
The Company develops and manufactures portable Nuclear Magnetic
Resonance (NMR) spectrometers or analyzers for laboratory and
industrial markets. The NMReady-60™ was the first full-feature
portable NMR spectrometer in a single compact enclosure requiring
no liquid helium or any other cryogens. The company has followed-up
that initial offering with new products and continues to have a
strong innovation pipeline. In 2020 Nanalysis announced the launch
of its100MHz device, the most powerful and most advanced compact
NMR device ever brought to market.
Nanalysis' devices are used in many industries (oil and gas,
chemical, mining, pharma, biotech, flavor and fragrances,
agrochemicals, law enforcement, and more) as well as numerous
government and university research labs around the world. The
Company continues to exploit new global market opportunities
independently and with partners.
In 2022 the Company acquired K'(Prime) Technologies Inc.
(K'Prime), a North American sales and service company which
provides sales services for scientific instrumentation for pharma,
food, chemical and oil & gas customers, as well as imaging
systems for security applications. K'Prime's service
organization provides airport and commercial security installation
and maintenance solutions across North
America.
Additionally in 2022, the Company acquired a 43% ownership in
Quad Systems AG ("Quad Systems"), a Zurich-based Nuclear
Magnetic Resonance (NMR) company focused on high-field NMR for
pharmaceutical and other vertical markets.
Notice regarding Forward Looking Statements and Legal
Disclaimer
This news release contains certain "forward-looking statements"
within the meaning of such statements under applicable securities
law. Forward-looking statements are frequently characterized by
words such as "anticipates", "plan", "continue", "expect",
"project", "intend", "believe", "anticipate", "estimate", "may",
"will", "potential", "proposed", "positioned" and other similar
words, or statements that certain events or conditions "may" or
"will" occur. These statements are only predictions. Various
assumptions were used in drawing the conclusions or making the
projections contained in the forward-looking statements throughout
this news release. Forward-looking statements are based on the
opinions and estimates of management at the date the statements are
made and are subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those projected in the forward-looking statements.
The Company is under no obligation, and expressly disclaims any
intention or obligation, to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as expressly required by applicable law.
Neither TSX Venture Exchange nor its Regulation Services
Provider accepts responsibility for the adequacy or accuracy of
this release.
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SOURCE Nanalysis Scientific Corp.