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Company Achieved 50% YoY Revenue Growth & Positive EBITDA CALGARY, AB , Nov. 21, 2024 /PRNewswire/ - 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 announces third quarter results for the period ending on September 30, 2024 , achieving 50% year-over-year revenue growth to $10.
6 million in Q3. 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 Eastern Time tomorrow, November 22 nd . All interested parties are invited to join these calls.
All dollar figures in this press release are in thousands of Canadian dollars, except per share amounts or unless otherwise stated. "We continue to see strength in both of our core business segments, product sales and security services," said Sean Krakiwsky, Founder and CEO of Nanalysis. "We had a solid Q3, as demonstrated by our year over year revenue growth.
Within Benchtop NMR we experienced our typical seasonal slowdown in the third quarter. This was partially offset, however, by a large medical imaging sale in the quarter. Our focus on efficiencies in both our manufacturing processes and service delivery is resulting in gross margin improvements and positive EBITDA.
" Financial highlights for the three months ended September 30, 2024: For the three months ended September 30, 2024, the Company reported consolidated revenue of $10,570, an increase of $3,534 or 50% from the comparative period in 2023. Gross margin percentage on product sales was 52% versus 41% for the three months ended September 30, 2024. Improvement in gross margin percentage for Benchtop NMR is materializing, as average selling prices have improved and manufacturing cost reductions started in 2023 and continued in 2024 are taking effect.
Security service gross margin percentage in the quarter was 15% versus (3)% in prior year comparative period as the Company completed the full transition of 100% of airports serviced to its control from the incumbent provider in the first quarter of 2024 and expects to increase revenue and drive efficiency within this business through 2024. Adjusted EBITDA for the three months ended September 30, 2024, was $264K versus an Adjusted EBITDA (loss) of ( $1,354K ) in the same period last year. This improvement was driven primarily by full transition of airports to the Company's control resulting in increased security services revenue, the effect of cost reduction initiatives, and slightly improved product sales over the prior year.
This was offset partially by a slight decrease in third-party equipment sales. Net loss for the three months ended was $1,644K as compared to the three-month loss for September 30, 2023, of $6,287K. The difference between Adjusted EBITDA and Net loss includes a number of non-cash charges such as depreciation and amortization.
Included in Net loss for the three months ended September 30, 2023 , the Company recognized a one-time charge of $2.8 million related to the deconsolidation of its Quad subsidiary. Quarterly Trend: The Company has demonstrated continuous margin expansion in Security service revenue quarter over quarter, driven by the expansion of the Company's airport security maintenance business as the Company took over more airports from the incumbent service provider, ultimately taking over all airports in Q1 2024.
The Company reported positive Adjusted EBITDA in the third quarter of 2024 despite the seasonality effects of the slower summer months. The Company expects this to continue as it works to grow both product sales and security service revenue, while closely managing costs. Net loss was $1,644 in Q3 2024.
Net losses are decreasing as the Company has successfully grown revenue and implements cost reduction initiatives. Recent strategic and operational highlights during and after the third quarter of 2024 include: Margin Expansion in both business segments: The Company was able to reap the benefits of cost cutting and drive efficiencies to grow gross margins to 52%, up 11% year over year in product sales and 15%, up 18% year over year in security services from (3%) in the prior year. Consistent Revenue in Airport Security Maintenance Business: The mix between scheduled maintenance, unscheduled maintenance and project work will shift quarterly but should provide a consistent balance of billing.
The Company is focused on improving its efficiency and planning related to service delivery in order to increase margins through 2024 and into 2025. Medical Imaging : The Company completed another large medical imaging hardware sale in the quarter contributing to strong product sales in a traditionally slower quarter. Outlook "As we enter the fourth quarter, we have continued strong sales and the hard work we have done to expand our margins is materializing," said Sean Krakiwsky, Founder and CEO of Nanalysis.
"Growth initiatives within the Scientific Equipment segment include the development and future launch of new products, developing new software applications, and seeking vertical market partnerships. Our market opportunity is expanding as more industries conclude that NMR, combined with the small size and portability of our products, is an excellent solution for their analysis needs. As we evolve, it is likely that we will reduce effort selling other companies' products, and increasingly focus on sales of our own proprietary products and services.
"Within the Security Services segment, we are pursuing several new customer opportunities to leverage our existing capabilities. "Overall, we continue to grow our sales and are laser focused on operational improvements to reach our ultimate goal of profitability. These trends will continue through the rest of the year and into 2025.
We have a positive outlook, are executing well, and expect a strong fourth quarter to close out the year." Conference Call: Investors interested in participating in the live full year call can dial 1-800-510-2154 or 437-900-0527-1350 from abroad. Investors can also access the call online through a listen-only webcast here: https://app.
webinar.net/qArLoq1oXkG 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 1-888-660-6345 or 289-819-1450, conference ID # 14204.
Additionally, the Company will be hosting a Q&A session for its European investors at 8:30am ET tomorrow, Friday , November 22nd, which can be accessed by the following link: Join the meeting now Non-IFRS and Supplementary Financial Measures The Company prepares and reports its consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, as adopted by the Canadian Accounting Standards Board (" IFRS "). However, this press release may make reference to certain non-IFRS measures including key performance indicators used by management. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies.
Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. The Company uses Flow-through parts revenue, Security service revenue, and Adjusted Earnings Before Interest, Tax, Depreciation and Amortization ("Adjusted EBITDA") as non-IFRS measures, which may be calculated differently by other companies.
These non-IFRS measure are used to provide investors with a supplemental measure of the Company's operating performance and liquidity and thus highlight trends in the Company's business that may not otherwise be apparent when relying solely on IFRS measures. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of companies in similar industries. Supplementary Financial Measures The Company may also use supplementary financial measures which are intended to be disclosed on a periodic basis to depict the historical or expected future financial performance, cash position, or cash flow of the Company, are not a non-IFRS measure, and are not presented in the financial statements.
The measures as discussed in this press release include: Gross margin percentage, which is defined as either (Product sales less Cost of product sold) divided by Product sales or (Security services revenue less Security services costs) divided by Security services revenue About Nanalysis Scientific Corp. (TSXV: NSCI, OTCQX: NSCIF , FRA:1N1) Nanalysis Scientific Corp. in operates two primary business segments: Scientific Equipment and Security Services.
Within its Scientific Equipment business is what the Company terms "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-60TM 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, the Company announced the launch of its 100MHz device, the most powerful and most advanced commercial compact NMR device ever brought to market. The Company's 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 is working to expand into new global market opportunities independently and with partners. With its partners, the Company provides scientific equipment sales and maintenance services globally. In 2022 the Company was awarded a five-year, $160 million contract to provide maintenance services for passenger screening equipment in Canadian airports.
This has resulted in expansion of the Company's Security Services business. The Company is providing airport security equipment maintenance services in each province and territory of Canada. In addition, the Company provides commercial security equipment installation and maintenance services to a variety of customers in North America.
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. SOURCE Nanalysis Scientific Corp..
