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Gatekeeper Systems Inc. (GSI.V) has filed its audited financial statements and management's discussion and analysis for the fiscal year ended Aug. 31, 2016, available for viewing on SEDAR.

Financial highlights

  • Revenues in fiscal 2016 increased 67 per cent to $9,899,875 from $5,943,773 in fiscal 2015.
  • Net income for the fiscal year-end 2016 was $695,566, compared with a loss of $920,796 during fiscal 2015.
  • Revenue during the three months ended Aug. 31, 2016, increased 67 per cent to $4,114,960, compared with $2,468,209 during the three months ended Aug. 31, 2015.
  • Gross profit during the three months ended Aug. 31, 2016, increased 86 per cent to $2,170,440 from $1,168,984 during the three months ended Aug. 31, 2015.
  • Gross margin as a percentage of revenue in fiscal 2016 improved to 51 per cent, compared with 45 per cent in fiscal 2015, representing a 13-per-cent increase.
  • As of Aug. 31, 2016, the company had cash and cash equivalents of $898,331 and working capital of $3,358,577.
  • EBITDA (earnings before interest, taxes, depreciation and amortization) for the three months ended Aug. 31, 2016, and fiscal year-end 2016 was $916,705 and $779,940, respectively.

During the fourth quarter, the following notable events occurred:

  • Secured $1.5-million (U.S.) non-dilutive credit facility;
  • Issued first citation under five-year revenue sharing contract with Jones County, Ga.;
  • Increased total number of cameras shipped by 65 per cent compared with the same period in 2015;
  • Increased total number of mobile digital recorders shipped by 41 per cent compared with the same period in 2015;
  • Stop-arm camera evaluation sites increased to 21, representing approximately 1,693 buses;
  • Continued product development activity, completing several new features in its base incident management software;
  • Finalized the design and commercialization plan for a multilane licence-plate-reading system for its stop-arm camera business;
  • Completed new features for the traffic infraction management system (TIMS) cloud software;
  • Launched stop-arm camera test programs in Washington and Illinois.

The company's base business continued to drive sales in the fourth fiscal quarter, reaching a record level of over $4.1-million. The sales increase is primarily due to an increase in camera sales and mobile digital recorders of 65 per cent and 41 per cent, respectively, compared with the same period in fiscal 2015. The company also increased the number of wireless systems shipped with its unique Autowake feature from 197 during fiscal 2015 to 445 during fiscal 2016, representing a 126-per-cent increase.

Stop-arm camera evaluation sites increased from 16 to 21 over the last quarter, involving 1,693 buses owned by various school districts. Gatekeeper is working with school districts, law enforcement and judicial systems to complete the evaluation phase on these sites and progress to commercial implementation, ideally in the form of revenue sharing arrangements.

The company executed on its first five-year revenue sharing contract in the stop-arm camera business with Jones County School District in Georgia. Equipment was installed April 16 and 17, 2016, with a press day on April 27, 2016. Pursuant to the contract, Gatekeeper will receive 50 per cent of the revenue from each citation issued, with 25 per cent shared with the school district and 25 per cent shared with Jones County. Stop-arm violation fines in Georgia are $300 (U.S.) for first-time offence, $750 (U.S.) for second-time offence and $1,000 (U.S.) for third-time offence.

The company issued its first citation prior to school ending for summer break and anticipates receiving proceeds from ticket citations during the current fiscal year. There are an estimated 13 to 15 million stop-arm violations in the United States with legislations now passed in 13 states that allow video enforcement technology to be used to issue citations.

Summary of financial results and information

                       CONSOLIDATED STATEMENT OF OPERATIONS                   
                          Year ended Aug. 31, 2016       Year ended Aug. 31, 2015
Revenue                               $  9,899,875                   $  5,943,773     
Cost of sales                            4,848,332                      3,250,899    
Gross profit                             5,051,543                      2,692,874      
Gross margin                                   51%                            45% 
Expenses                                 4,243,305                      3,740,182      
Operating income (loss)                    808,238                     (1,047,308)   
Net income (loss) for the year             695,566                       (920,796)   
Earnings (loss) per share                                         
Basic                                         0.01                          (0.02)   
Diluted                                       0.01                          (0.02)  

Financial reports

Full details of the financial reports and operating results for the fiscal year 2016 are described in the company's consolidated financial statements with accompanying notes and related management's discussion and analysis. These documents and additional information on Gatekeeper are available on SEDAR.