Company Exploring Strategic Alternatives
MONTREAL, May 24, 2022 /CNW Telbec/ – VOTI Detection Inc. (“VOTI” or the Company”) (TSXV: VOTI), a leading-edge Canadian technology company that develops the latest-generation X-ray security systems based on 3D Perspective™ technology, is providing a market update ahead of its second quarter earnings report set for release on May 31, 2022. This update is necessitated by the fact that the softness experienced in the first quarter of fiscal 2022, primarily related to the impact of the Omicron variant and the resulting slower than expected recovery from the pandemic, has extended into the second quarter. The timing of a return to more normal markets remains uncertain at this time. As a result, second quarter revenues are expected to fall below the expected $6 million level to a range of between $4.575 million and $4.7 million. At the same time, the company has experienced an erosion in its gross margins, with gross margins in the second quarter expected to range between 25.5% and 27%. The current softness in the market coupled with a significant increase in supply and shipping costs has resulted in continued uncertainty extending industry wide. Given the current environment, the company is removing its previously released guidance for the 2022 fiscal year, including guidance pertaining to annual revenue, gross margin and its expectation that it will exit fiscal 2022 EBITDA positive.
The weakness in the Company’s performance year to date has had a negative impact on its cash position. Whether the Company can generate sufficient operating cash flows to pay for its expenditures and settle its obligations as they fall due is uncertain. The Company’s ability to continue as a going concern is dependent on its ability to manage costs, raise additional equity on reasonable terms and benefit from an improving market. The existence of these conditions indicates that there are material uncertainties which may cast significant doubt on the Company’s ability to continue as a going concern.
The Company is reviewing its available alternatives and will provide an update upon the release of its quarterly results on May 31, 2022. There can be no guarantee as to the results of this endeavour.
About VOTI Detection
VOTI Detection, headquartered in Montreal, Quebec, and listed on the TSX Venture Exchange, is a leading-edge Canadian technology company that develops latest-generation X-ray security systems based on 3D Perspective™ technology. VOTI’s technology produces remarkably sharp and more revealing X-ray images that are competitively superior while delivering enhanced threat detection capabilities and an improved user experience. Since its inception, VOTI has installed scanners in more than 50 countries and has consulted heavily with government agencies and security specialists worldwide to develop feature-rich and easy-to-use scanners that meet the sophisticated needs of modern security screening operations. www.votidetection.com
Notice regarding forward-looking statements:
This release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) which the meaning of applicable securities laws. Forward-looking statements may relate to VOTI’s financial outlook and anticipated events or results and may include information regarding VOTI’s financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, taxes, plans and objectives. Particularly, information regarding VOTI’s expectations of future results, performance, achievements, prospects or opportunities or the markets in which it operates and the impact thereon of the ongoing COVID-19 pandemic declared by the World Health Organization on March 11, 2020 (“COVID-19”), as well as statements relating to expectations regarding industry trends, growth rates, expectations regarding revenue and the revenue generation potential, business plans and strategies, including the results of its review of strategic alternatives, VOTI’s ability to continue to operate as a going concern, VOTI’s competitive position in its industry, VOTI’s expectations relating to its rollout of its next generation MATRIX Series line of X-Ray scanners and the results associated therewith and its projections and forecasts relating to its expectations that it will return to or exceed pre-pandemic sales and gross margins constitute forward-looking statements.
In some cases, when used in this release, the words ”may”, ”would”, ”could”, ”will”, ”intend”, ”plan”, ”anticipate”, “does not anticipate”, ”believe”, ”seek”, ”propose”, ”estimate”, ”project”, ”expect”, “does not expect”, “forecasts”, “projection”, “prospects”, “outlook”, “targets”, or similar expressions, variations of such terms or the negative of such terms are intended to identify forward- looking statements. Such forward-looking statements reflect VOTI’s then current views with respect to future events based on certain material facts, assumptions, opinions and estimates in light of management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors VOTI currently believes are appropriate and reasonable in the circumstances and as of the date such forward-looking statements are made. Despite a careful process to prepare and review the forward-looking statements, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. The forward- looking statements are based on certain key expectations and assumptions made by VOTI, including expectations and assumptions concerning availability of capital resources and ability to finance, business performance, market conditions, and customer demand. Although VOTI believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements since no assurance can be given that they will prove to be correct.
Forward-looking statements are necessarily based on a number of opinions, estimates and assumptions that VOTI considered appropriate and reasonable as of the date such statements are made, are subject to certain known and unknown risks and uncertainties that may cause the actual results or events to differ materially from anticipated in such forward-looking statements, including without limitation, risks regarding the threat detection technology industry, failure to obtain regulatory approvals, or changes in regulatory environment, economic factors, management’s ability to manage and to operate the business of VOTI, the equity markets generally and risks associated with growth and competition, in addition to other risks identified in VOTI’s most recently filed management’s discussion and analysis and in other publicly filed documents under VOTI’s profile at www.sedar.com as well as other unknown risks.
Many factors could cause VOTI’s actual results, performance or achievements to vary from those described in this release, including without limitation those listed above, as well as the assumptions upon which they are based proving incorrect. These factors should not be construed as exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described as intended, planned, anticipated, believed, sought, proposed, estimated or expected, and such forward-looking statements should not be unduly relied upon. VOTI does not intend, and does not assume any obligation, to update these forward-looking statements except as required by law. The forward-looking statements contained in this release are expressly qualified by these cautionary statements. Forward-looking statements contained in this release about prospective results of operations, financial position or cash flows are based on assumptions about future events, including economic conditions and proposed courses of action, based on management’s assessment of the relevant information currently available. Readers are cautioned that outlook information contained in this release should not be used for the purposes other than for which it is disclosed herein or therein, as the case may be. In addition, the current situation and future developments with respect to COVID-19 could cause certain of the assumptions and information set forth herein or the fact that on which such assumptions are based to differ materially from previous expectations including in respect of demand for VOTI’s products, supply chain and availability of materials, mobility and shipping of materials and or products, access to debt and equity capital and other factors.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE VOTI Detection Inc.
For further information: Daniel Menard, Chief Operating Officer, (514) 782-1566, [email protected]