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Reduced Debt by $8 million in Q3 2021 and $15 million year to date.
TORONTO, Nov. 29, 2021 (GLOBE NEWSWIRE) -- Dynamic Technologies Group Inc. (TSXV: DTG, OTC:ERILF) ( the “Company”) today reported its unaudited consolidated financial results for the third quarter ended September 30, 2021. The consolidated financial statements and MD&A have been filed on SEDAR and can be viewed at sedar.com or at dynamictechgroup.com.
“The third quarter was better than plan and within our banking covenants, with our debt being reduced by $15 million year to date. SkyFly-Soar America opened on July 9th and its revenue and profitability is also ahead of plan, placing the Company’s option to purchase 50% well into the money. SkyFly has also provided a significant boost to our re-financing efforts because it has clearly demonstrated how much value can be created by leveraging our considerable IP of developing and partnering in the ownership of world class attractions,” said Guy Nelson, Executive Chairman and Chief Executive Officer. “The pivot in our strategy and the successful refinancing of our Company targeted for early 2022 is designed to result in a more resilient, agile and much more valuable company, with an increased focus on recurring profit from co-ventures and a much-improved profit outlook on a much lower level of sales.”
Summary of third quarter consolidated results
Cash generated from operating activities was $9.2 million in the third quarter of 2021 and $12.5 million year to date 2021, which allowed the company to reduce its debt by $8 million in the third quarter and $15.0 million year to date.
Revenues were $9.3 million in the third quarter of 2021, a decrease of $7.3 million from the third quarter 2020.
Adjusted EBITDA was a loss of $0.8 million in the third quarter, a decrease of $1.2 million from the third quarter 2020.
Overhead costs decreased $5.3 million, predominantly in the ride division, in the nine months of 2021 as compared to the same period in 2020, getting them in line with where the company wants them to stabilize at in the post pandemic world of new ride sales.
Net loss from continuing operations was $3.4 million in third quarter 2021 compared to a $2.7 million loss in the third quarter 2020.
Cash on hand at September 30, 2021 was $2.6 million as compared to $2.4 million as of December 31, 2020.
Contract Backlog was $93.4 million as of September 30, 2021 with 70% of the backlog (4 contracts) on hold because of client and/or pandemic caused delays.
For the 3- and 9-month periods ended September 30, 2021
($ millions, except per-share amounts)
Adjusted EBITDA ($)1
Income (loss) from continuing operations before tax
Net Income (loss)
Per Share Information (Basic & Diluted)
Loss per share – continuing operations
Loss per share – all operations
1 Adjusted Earnings (loss) before interest, tax, depreciation and amortization (Adjusted EBITDA) is not defined by IFRS. The definition of Adjusted EBITDA does not consider the Company’s share of profit of an associate investments, gains and losses on the disposal of assets, non-controlling interest share of net income (loss) and non-cash components of stock-based compensation. While not IFRS measures, Adjusted EBITDA is used by management, creditors, analysts, investors and other financial stakeholders to assess the Company’s performance and management from a financial and operational perspective.
The Company was very active in the third quarter executing its four-pronged operational plan to accommodate the reduced backlog from its ride division and the lower level of production anticipated from its pivot towards developing more of its own co-ventures and less ride sales for third parties:
accelerate its development plans for the co-venture business (Dynamic Entertainment);
continue to aggressively market its parts and service division to its customers as they started the process of reactivating their theme and amusement parks (Dynamic Attractions);
aggressively market our innovative and very talented engineering capability to diversify the Company’s revenue sources beyond the attractions industry (Dynamic Structures); and
restructure and continue to reduce the cost structure of the ride manufacturing business (Dynamic Attractions) to adequately address the ride industry capital expenditure slowdown.
The Company has continued to reduce in its cost structure significantly in 2021, reflecting the reduced backlog and the lower level of sales that are expected because of the almost two years of ride capital expenditure planning time that was lost because of the pandemic. In the first nine months of 2021, the Company’s indirect production cost overhead decreased $2.6 million and its SG&A overhead decreased $2.7 million when compared to the same period of 2020 after adjusting for the government wage subsidies recorded in both periods.
Cash generated in the first nine months of 2021 from operating activities was $12.5 million. This was a big improvement from the $2.1 million of cash used in continuing operations in the first nine months of 2020. The increased liquidation of working capital allowed the company to reduce its current debt by $15 million year to date 2021.
The Company is working aggressively to strengthen its balance sheet by working with its investment bank to actively implement a financing plan to improve our working capital, reduce our current debt and fund several specific co-ventures the company is developing. The Company expects to succeed with this effort early in 2022.
Update on Co-ventures
The Company continues to be bullish on its ability to penetrate the tourist location, entertainment market by leveraging its world class attraction IP. It is the Company’s view that its co-venture strategy is well suited to capitalize on the entertainment opportunities in a post-pandemic world as pent-up demand and increased customer savings seek out memorable guest experiences. Replicating SkyFly’s success is the plan.
The Company’s pipeline of co-venture prospects is geographically broad and progressing, in spite of travel restrictions. Our co-venture offices in Toronto and Orlando have been able to cover North America, the UK and Australia effectively and our offices in Singapore and Shanghai have allowed us to continue to develop our prospects in Asia. We have three senior executives in Asia, and this is helping to continue to advance our prospects in this key market. The robustness of our co-venture outlook is what is driving interest in the Company’s financing initiative.
About Dynamic Technologies Group Inc.
Dynamic is a world leader in the design engineering, production, and commissioning of iconic, media-based attractions and ride systems for the global theme park industry and entertainment destinations. It also applies these same engineering integration and problem solving skills for special projects in diversified industries such as alternative energy and large optical telescopes and enclosures. Dynamic also has commenced an initiative to leverage its world class flying theater products and attraction development capability on a co-venture ownership basis. It was selected as a 2020 TSX Venture 50 company. The 2020 TSX Venture 50 is a ranking of top performers on the TSX Venture Exchange over the past year. The ranking is comprised of 10 companies from each of 5 industry sectors, with Dynamic being selected in the Diversified Industry category. Selection was based on three equally weighted criteria; share price, trading and market capitalization. Dynamic’s common shares are listed on the TSX Venture Exchange under the symbol DTG.
For more information about the Company, visit www.dynamictechgroup.com or contact:
Executive Chair & CEO
Vice President – Corporate Affairs and Administration
Phone: (416) 366-7977
Phone: (204) 589-9301
This news release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Dynamic’s business and affairs. In certain cases, forward-looking statements can be identified by the use of words such as ‘‘plans’’, ‘‘expects’’ or ‘‘does not expect’’, ‘‘budget’’, “booked”, ‘‘scheduled’’, “positions”, ‘‘estimates’’, “forecasts’’, ‘‘intends’’, ‘‘anticipates’’, “believes” or variations of such words and phrases or state that certain actions, events or results ‘‘may’’, “may be”, ‘‘could’’, “should”, ‘‘would’’, ‘‘might’’ or ‘‘will’’, ‘‘occur’’ or ‘‘be achieved’’. Such statements include statements with respect to (i) the Company’s ability to execute its co-venture plan, ride business restructuring, and R&D diversification plan, (ii) the Company’s ability to source the funding required to exercise its option to acquire 50% of the SkyFly attraction, implement its co-venture plan and correct its working capital deficiency. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although Dynamic believes these statements to be reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. Actual results could differ materially from those anticipated in these forward-looking statements as a result of prevailing economic conditions, and other factors, many of which are beyond the control of the Company. The forward-looking statements contained in this news release represent Dynamic’s expectations as of the date hereof, and are subject to change after such date. The Company 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 may be required by applicable securities regulations. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.