The Company continues to execute its four-pronged plan: advance co-ventures to create recurring revenue, expand our parts and service business, scale the ride business to reflect demand, and focus our technology development on product innovation and revenue diversification.
TORONTO, Nov. 29, 2022 (GLOBE NEWSWIRE) -- Dynamic Technologies Group Inc. (TSXV: DTG, OTC:ERILF) ( the "Company" and "our") today reported its unaudited consolidated financial results for the quarter ended September 30, 2022. The consolidated financial statements and MD&A have been filed on SEDAR and can be viewed at www.sedar.com or at www.dynamictechgroup.com.
"Refinancing our senior debt on August 5, 2022 was a critical step in our planned pivot to the design, build, own and operate business model for putting our world class attractions in tourist based locations," said Guy Nelson, Dynamic's Executive Chairman and Chief Executive Officer. "We now have a new senior lender who is also a strategic equity owner and is committed to supporting this transition. Our overall financing plan continues to advance and we expect to close the next step in the financing plan by year-end. During the transition, diversifying revenue sources and reducing operating costs are the near-term tactical focus of the company, as is closing the next step of our financing plan."
Summary of third quarter consolidated results
- Revenues decreased to $6.4 million in Q3 2022, down 33% from $9.6 million in Q3 2021.
- EBITDA loss of $3.1 million in Q3 2022 compared to an EBITDA loss of $0.8 million in Q3 2021. The change was driven largely by reduced revenues.
- Net loss in Q3 2022 reduced to $1.2 million versus a Net loss of $3.5 million in Q3 2021.
- Cash generated from operating activities was $0.4 million in Q3 2022 compared to $9.2 million in Q3 2021.
- Cash on hand at September 30, 2022 was $2.4 million as compared to $1.3 million at December 31, 2021.
- Contract Backlog was $102.0 million as of September 30, 2022, up slightly from June 30, 2022. Currently 68% of the backlog (3 contracts) are on hold because of client and/or pandemic caused delays.
| For the 3 and 9 month periods ended September 30, 2022 | ||||||||||||
| ($ millions, except per-share amounts) | Q3 2022 | Q3 2021 | YTD 2022 | YTD 2021 | ||||||||
| Revenue | 6.4 | 9.6 | 20.0 | 28.5 | ||||||||
| EBITDA ($)* | (3.1 | ) | (0.8 | ) | (6.1 | ) | (2.6 | ) | ||||
| Loss from continuing operations | (1.2 | ) | (3.4 | ) | (9.3 | ) | (11.4 | ) | ||||
| Comprehensive loss | (2.2 | ) | (3.8 | ) | (10.5 | ) | (12.6 | ) | ||||
Per Share Information (Basic & Diluted) | ||||||||||||
| Loss per share - continuing operations | (0.01 | ) | (0.02 | ) | (0.06 | ) | (0.07 | ) | ||||
| Loss per share - all operations | (0.01 | ) | (0.02 | ) | (0.06 | ) | (0.07 | ) | ||||
1 Earnings (loss) before interest, tax, depreciation and amortization (EBITDA) is not defined by IFRS. The definition of EBITDA does not take into account gains and losses on the disposal of assets, non-controlling interest share of net income (loss), derecognition of financial liabilities and non-cash components of stock-based compensation. While not IFRS measures, 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. Readers are cautioned that EBITDA should not be considered to be more meaningful than loss before tax determined in accordance with IFRS.
The Company continues to execute its four-pronged operational plan:
- continue to advance the Company's 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);
- continue to market our innovative and very talented engineering capability to diversify the Company's revenue sources beyond the attractions industry and to continue to use its engineer's knowhow to develop new media-based attraction ride systems for the meta-verse and large theme parks and miniaturize its product line for the smaller parks and tourist locations (Dynamic Structures).
- Continue the restructuring of the Ride Division (Dynamic Attractions) until we have ensured our manufacturing costs for our innovative product line is globally competitive.
Update on Financing
During the quarter, the Company completed an important step in its financing plan by successfully closing on a USD $16.0 million senior debt financing with Promising Expert Limited ("PEL"), a strategic investor from Hong Kong. The Company drew USD $11.3 million at closing and has subsequently drawn the remainder of the facility.
The goals of our overall financing plan have not changed, which are to improve our working capital in the ride manufacturing division and provide equity and project debt for our co-venture division. The company has made good progress on its overall financing plan. We have identified a strategic investor whose interest is being driven by the company's proprietary IP, ownership of 50% of SkyFly: Soar America, our pipeline of co-venture prospects, technical and creative knowhow, proven reputation of creating and delivering innovative, iconic ride systems and the company's substantial tax losses to shelter future profits. We expect to close the next step of our financing plan successfully by year end.
Update on Co-ventures
The Company's first co-venture, Sky Fly™ - Soar America, is now in its second year of operations and continues to enjoy very good reviews and excellent attendance at the gateway to the Smoky Mountains, one of the most popular tourist destinations in America. The attraction itself was awarded the Best New Attraction for 2021 by USA Today's Readers' Choice Awards. Replicating SkyFly's success is the plan for Dynamic Entertainment, our co-venture business unit. The Company's pipeline of co-venture prospects are geographically broad and are progressing. Our co-venture offices in Toronto and Orlando have been able to cover North America, UK, and Australia effectively and our office in Shanghai has allowed us to continue to develop our prospects in Asia, in spite of the challenging zero-Covid policy there.
Update on Ride Business
We continue to focus on growing our Ride division's parts and service group and it continues to get stronger and contribute more to the Company's bottom line. The Company has continued to focus on reducing and aligning our cost structure in our ride division with the delayed projects in our contract backlog and the slower approach to awarding new ride contracts. The Company has continued to reduce its cost structure significantly throughout 2021 and 2022 in response to the reduced backlog and the lower level of sales that are expected because of the almost two years of theme park ride capital expenditure planning time that was lost because of the pandemic.
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. 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:
| Guy Nelson | Allan Francis |
| Executive Chair & CEO | Vice President - Corporate Affairs and Administration |
| Phone: (416) 366-7977 | Phone: (204) 589-9301 |
| Email: gnelson@dynamictechgroup.com | Email: afrancis@dynamictechgroup.com |
Reader Advisory
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 successfully close the next step of its financing plan by year-end. (ii) the Company's ability to execute its co-venture plan, expansion of its parts and service business, ride business restructuring, and R&D diversification plan, (iii) the new senior lender's continuing commitment to support the transition to a build, own, and operate business model, (iv) the Company's ability to source and close the funding required to refinance its senior debt, implement its co-venture plan, correct its working capital deficiency, and reduce its current debt; (v) the expectation that the financing initiative will reduce the Company's overall interest expense and change the Company's working capital from negative to positive in 2022; (vi) the Company's ability to scale back up once ride procurement market demand improves; (vii) the expectation that ride procurement market demand will improve in 2023 and beyond; (viii) the Company's view that its co-venture strategy is well suited to capitalize on a post-pandemic world; (ix) the Company's plan to replicate the success with its investment in Sky Fly™ - Soar America; and (x) the lower level of sales that are expected because of the almost two years of theme park ride capital expenditure planning time that was lost because of the pandemic. 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. The forward-looking statements in this news release assume, inter alia, that the conditions for completion of the funding required to implement its co-venture plan and to correct its working capital deficiency, including regulatory approval will be met. 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.
