Gatekeeper 2016 Revenue up 67%; Net Income up $1.6 Million to $695 Thousand

INVESTORS NEWS

FOR IMMEDIATE RELEASE

 Gatekeeper 2016 Revenue up 67%; Net Income up $1.6 Million to $695 Thousand 

Abbotsford, BCDecember 29, 2016 – Gatekeeper Systems Inc. (‘Gatekeeper’ or the ‘Company’) (TSX.V: GSI; OTC: GKPRF; FSE: 1GK) announces that it has filed its audited financial statements and management’s discussion and analysis for the fiscal year ended August 31, 2016, available for viewing on www.sedar.com.  All figures are expressed in Canadian dollars unless otherwise stated.

Financial Highlights

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

BUSINESS UPDATE

During the fourth quarter, the following notable events occurred:

• • • • Secured $1.5 million USD 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% compared to same period 2015; 
      • Increased total number of mobile digital recorders shipped by 41% compared to same period 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 license-plate-reading system for its stop-arm camera business;
      • Completed new features for Traffic Infraction Management System cloud software (“TIMS^TM”); and
      • 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% and 41%, respectively, compared to 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% increase.

Stop-arm camera evaluation sites increased from sixteen to twenty-one 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 (the “Contract”) in the stop-arm camera business with Jones County School District in Georgia. Equipment was installed April 16^th and 17^th, 2016 with a Press Day on April 27^th, 2016. Pursuant to the Contract, Gatekeeper will receive 50% of the revenue from each citation issued with 25% shared with the school district and 25% shared with Jones County.  Stop-arm violation fines in Georgia are $300 USD for first time offence, $750 USD for second time offence and $1,000 USD 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 thirteen States that allow video enforcement technology to be used to issue citations.     

PRODUCT NEWS

During the year ended August 31, 2016 the engineering team completed the following:

• • • • Blur Tracking – The Company launched an industry first by adding Blur Tracking in Gatekeeper’s G4 Viewer Plus video viewing application.  This feature allows users to dynamically move blur areas in video to protect the privacy of bystanders who are not involved but still captured in the video.
      • Integration with Routing and Scheduling – The Company produced software that allowed the integration of real-time location and sensor data to 3rd party Routing and Scheduling software.  This allow customers to realize additional value from the MDVR system as they can now compare actual routes to planned routes and increase the efficiency of their fleets.
      • Body cameras – Completed the integration of DOC-N-GO to 3rd party back-end video storage system.
      • G4 Connect – Released Android application (available on the Google Play Store) that allows customers to plug portable USB WiFi dongles into a DVR and then modify a DVR’s configuration, view previously recorded video and download target video.
      • TIMS™ – In support of the Stop Arm business, TIMS™ (Traffic Infraction Management System) functionality continued to grow including the ability to add customers in new jurisdictions. 
      • SP 422 Stop Arm Camera – A new Stop Arm Camera Pod, SP 422 was released to market.  This camera pod captures the license plates of vehicles passing a school bus in multiple lanes.  Video motion detection was added to the DVR to reduce the number of stop arm events that an analyst needed to review.
      • In-house Hosting Infrastructure for TIMS™ Cloud Based Incident Processing was expanded to facilitate the support of multiple customers and TIMS™ was moved behind a 3rd party content delivery network to provide intrusion prevention and mitigate potential DDOS attacks.

MOVING AHEAD

The Company continues to plan for expanding sales in multiple markets including the stop-arm camera and law enforcement markets, as well as the transition of analog cameras to high-definition.

To date, Gatekeeper has been working on the following initiatives:

• • • • Working with strategic software and alliance partners to build Gatekeeper brands in its base business as well as other mobile markets;
      • Executing on revenue sharing programs with Gatekeeper’s stop-arm cameras and Traffic Infraction Management software TIMS™;
      • Transitioning stop-arm camera evaluation projects to revenue sharing contracts; and
      • Expanding distribution of Gatekeeper’s high-definition products in the Company’s base business.

Doug Dyment, President and CEO commented, “We are extremely pleased with the financial results in 2016 as Gatekeeper gains momentum in our base business while strategically increasing sales in new mobile video markets.  Our plan is to continue to drive profitability in our base business while increasing top line growth as well as transitioning a portion of the business to recurring revenue.  During the fourth quarter, we realized a record sales level of over $4 million which I directly attribute to the efforts of all Gatekeeper employees who have showed a strong commitment to the Company for many years. On behalf of management and our shareholders, I thank them for their efforts and look forward to growing the Company together.”

Summary of Financial Results and Information

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 at www.sedar.com.

About Gatekeeper Systems Inc.

A TSX-V Company since 2013, Gatekeeper Systems Inc. has provided total mobile video security solutions to over 3,500 customers and has installations in every state and province in North America. Customers include school districts, public transit, law enforcement and military.  

For more information visit: www.gatekeeper-systems.com.

On behalf of the Board,

 

“Douglas Dyment”

President & CEO

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.

Cautionary Note Regarding Forward-Looking Statements: Certain statements made in this press release that are not historical facts are forward-looking statements and are subject to important risks, uncertainties and assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements. As a result, we cannot guarantee that any forward-looking statement will materialize and readers are cautioned not to place undue reliance on these forward-looking statements. For more exhaustive information on these risks and uncertainties, the reader should refer to the risk factors described in the management’s discussion and analysis for the year ended August 31, 2016. The forward-looking statements contained in this press release represent our expectations as of the date hereof. We disclaim any intention and assume no obligation to update or revise any forward-looking statements. Forward-looking statements are presented for the purpose of providing information about management’s current expectations and plans and allowing investors and others to obtain a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. The Company undertakes no obligations to update or revise such statements to reflect new circumstances or unanticipated events as they occur, unless required by applicable law.

2016-12-29 -NR – Gatekeeper 2016 Revenue up 67%; Net Income up $1.6 Million to $695 Thousand.pdf