Track Group Reports 2nd Quarter Fiscal 2020 Financial Results

NAPERVILLE, ILLINOIS, May 7, 2020 – Track Group, Inc. (OTCQX: TRCK), a global leader in offender tracking and monitoring services, today announced financial results for its second quarter ended March 31, 2020 (the “Q2 FY20”). In Q2 FY20, the Company posted (i) revenue of $8.1 million (“M”), an increase of approximately 1% over the same period last year, (ii) operating income of $0.2M representing an increase of 186% compared to an operating loss of $0.3M for the quarter ended March 31, 2019 (“Q2 FY19”), which also led to a cash balance of $7.7M, up 36% compared to $5.7M for the same period one year ago, (iii) adjusted EBITDA of $1.6M, flat to Q2 FY19, and (iv) a net loss attributable to common shareholders of $1.7M compared to a net loss of $0.3M for the same period last year, largely due to non-cash foreign exchange fluctuations.

“Our Company, our customers, our supply partners and our employees have all performed extremely well despite facing unprecedented challenges over the past 2 1⁄2 months brought on by the Coronavirus,” said Derek Cassell, Track Group’s CEO. “I am proud to work with all of these people and remain confident that together, if we continue to work hard and communicate effectively, we have the opportunity to record even stronger results in the second half of our fiscal year.”

Financial Highlights

  • Quarterly revenue of $8.13M in Q2 FY20, up 1% over Q2 FY19 revenue of $8.09M. Revenue for the 6 months ended March 31, 2020 (“6M FY20”) of $16.6M was up approximately 2% compared to revenue of $16.3M for the 6 months ended March 31, 2019 (“6M FY19”). Revenue in Q2 FY20 and 6M FY20 was $0.4M and $0.6M lower than the same periods in FY19 due to the strengthening of the U.S. dollar against the Chilean peso.
  • Quarterly gross profit of $4.4M in Q2 FY20, down 1% over Q2 FY19 gross profit of $4.5M. Gross Profit for 6M FY20 was $9.1million, or flat compared to gross profit of $9.1 million for 6M FY19.
  • Total operating expense for Q2 FY20 of $4.2M is down 12% versus Q2 FY19’s $4.8M of operating expense. The reduction in quarterly operating expense when combined with Q2 FY20 gross profit of $4.4M led to a quarterly operating income of $237K, which is an improvement of 186% compared to the $276K operating loss for Q2 FY19. For 6M FY20, operating income was $38K compared to the operating loss for 6M FY19 of $333K, representing an improvement of approximately 261%.
  • Adjusted EBITDA for the Q2 FY20 finished at $1.6M, flat compared to $1.6M for Q2 FY19. Adjusted EBITDA for 6M FY20 of $3.4M, up approximately 2% vs $3.3M for 6M FY19.
  • Cash balance of $7.7M for Q2 FY20, up 36% compared to $5.7M for Q2 FY19 and down 10% over the December 31, 2019 cash balance of $8.5M.
  • Net loss attributable to shareholders in the Q2 FY20 was $1.7M compared to a net loss of $0.3M in Q2 FY19, a change principally attributable to the non-cash impact of the volatility of the US dollar as compared to the Chilean peso. The net loss attributable to shareholders for the 6M FY20 was $2.0 million compared to a net loss of $2.0 million in 6M FY19.



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