Highlights
• During this quarter the Company recorded three critical developments which will underpin its
profitable growth for the foreseeable future.
• The first was a capital raise of $8.7 million before issue costs
o $5.0 million from an institutional and sophisticated investor share placement
o $2.2 million through a Security Purchase Plan (SPP)
o $0.2 million director placement to Heinrich Loechteken
o $1.3 million share placement in early January to Drake Private Investments LLC
• As indicated in the investor presentation 80% of these funds are now available for new investment purposes
• Secondly, a substantial restructuring of operating costs within the business has released an annualised amount of over $2.5 million which is beginning to be realised in the current quarter (Q3)
• Thirdly a successful year-end sales campaign resulted in incremental Forest Radio sales of over $2 million
• The Company remains on track to achieve, at minimum, the lower bound of its revenue forecast for the current financial year and a positive free cash flow of more than $2 million for the full year
• In addition, good progress is being made on the major milestones for Q3 as outlined in the investor presentation
o In addition to the additional Forest Radio sales achieved in December, negotiations with CalFire for a significant order of 150 radios are well advanced
o CalFire’s prominent role in responding to the recent Los Angeles fires has highlighted the importance of our products and we are very proud of the fact that CalFire’s fleet is already a substantial customer for our loudspeaker systems (as we are of the many other Canadian contributions to the effort!)
o The certification process for ground-breaking CVM sensor solution for Aft Pressure Bulkhead inspections moved closer to conclusion with the finalisation of the FAA’s certification requirements.
Chairman and CEO Ross Love stated:
“The Q2 results reported here reflect the lower than forecast sales revenues in the first half, as well as additional restructuring costs we incurred in the quarter, before any of the cost savings began to be realised in January.
However, the significantly improved trajectory of our revenues, and the fact that those cost savings have now been realised, means that the full year results will recover to an even stronger free cash flow outcome than we had initially forecast.
And the second half run rate, which we are now experiencing, will be even stronger.
This gives us great confidence for the future, which will include new product investments and potentially
some new product acquisitions.
We look forward to sharing the evidence of this turn-around in our subsequent quarterly and end
of financial year reporting.”
(20min delay)