NAPERVILLE, ILLINOIS – Track Group, Inc. (OTCQB: TRCK), a global leader in offender tracking and monitoring services, today announced financial results for its fiscal year ended September 30, 2023 (“FY23”). In FY23, the Company posted (i) total revenue of $34.5 Million (“M”), a decrease of approximately 6.7% over total revenue of $37.0M for the year ended September 30, 2022 (“FY22”); (ii) FY23 operating loss of ($1.5M) compared to FY22 operating loss of ($2.1M); and (iii) net loss attributable to common shareholders of ($3.4M) in FY23 compared to net loss attributable to common shareholders of ($7.4M) in FY22. “Notwithstanding the challenges in the fiscal year ended September 30, 2023, the Company’s recently awarded contracts, growth with existing customers, and our pipeline for new business are more robust than at any other time in my tenure as CEO since January 1, 2018. Due to a rising trend in bail reform, our new statewide pretrial contract is showing growth, as are some of the other ten (10) new contracts won in FY23. Our expertise supervising high-risk populations uniquely positions us to address bipartisan concerns across the U.S., where bail reform initiatives are taking shape. As these contracts are fully implemented in the next fiscal year, we reiterate that the Company anticipates growth in revenue and operating income,” said Derek Cassell, Track Group’s CEO.
Financial Highlights
- Total FY23 revenue of $34.5M was down approximately 6.7% compared to FY22 revenue of $37.0M. The drop in revenue was caused by less activity at customers in the U.S. and Canada offset by increases in revenue for our customer in Chile.
- Gross profit of $15.3M in FY23 was down approximately 12% compared to FY22 gross profit of $17.4M due to a decrease in revenue, higher device repair costs and nominally higher depreciation and amortization costs offset by lower monitoring center costs, lower communication costs, lower commission costs and lower product sales costs.
- Operating loss in FY23 of ($1.5M) improved compared to the operating loss of ($2.1M) in FY22. The improvement in net loss in FY23 is primarily due to the impairment charge of $1.7M associated with the discontinuance of two product lines in FY22 and the decrease in depreciation and amortization that resulted from the impairment.
- Adjusted EBITDA for FY23 of $3.8M, compared to $6.6M for FY22 due to the drop in revenue, gross profit and the increase in certain operating expenses. Adjusted EBITDA in FY23 as a percentage of revenue declined to 11.1%, compared to 18.0% for FY22 for the same reasons.
- Cash balance of $4.1M for FY23, compared to $5.3M for FY22. The change in cash position was principally due to the reinvestment in monitoring technology, offset by a decrease in net operating assets, mainly accounts receivable and prepaid expenses, deposits and other assets.
- Net loss attributable to shareholders in FY23 was ($3.4M) compared to net loss of ($7.4M) in FY22, a change principally attributable to the changes in the Company’s operating performance.
