TORONTO – April 27, 2021 – Dynamic Technologies Group Inc. (TSXV: DTG, OTC:ERILF) ( the “Company”) today reported its audited consolidated financial results for the year ended December 31, 2020. The consolidated financial statements and MD&A have been filed on SEDAR and can be viewed at sedar.com or at dynamictechgroup.com.
“We are continuing our drive towards a recurring revenue business model based on co-ventures,” said Guy Nelson, Executive Chairman and CEO. “The impact of the COVID-19 global pandemic on the theme park industry has brought into sharp focus the need to diversify our revenue streams. We expect that theme park capital expenditures will return to pre-pandemic levels in due course, at which time they will continue to be a revenue and earnings driver for us. However, we are determined to leverage our attractions IP to access the capital markets, thereby creating revenue streams that provide more predictable revenue and earnings independent of theme park ride sales.”
Summary of 2020 Consolidated Annual Results
- Revenues decreased to $69.8 million in 2020, down 37% from 2019.
- EBITDA improved by $8.5 million to a gain of $2.9 million from a loss of $5.6 million the prior year.
- Net loss in 2020 of $12.5 million versus a Net loss of $27.1 million in 2019.
- Cash used in operating activities improved significantly to only $2.3 million in 2020 versus $31.0 million in 2019.
- Cash on hand at December 31, 2020 was $5.5 million as compared to $12.8 million in 2019.
- Contract Backlog was $114 million at the end of 2020, down 47% from the end of 2019. 88% of the backlog rolling into 2021 is non-first generation contracts. Currently 70% of the backlog (7 contracts) are on hold because of client and/or pandemic caused delays.
For the year and Quarter Ended December 31, 2020
| ($ millions, except per-share amounts) | Fiscal 2020 | Fiscal 2019 | Q4 2020 | Q4 2019 |
|---|---|---|---|---|
| Revenue | 69.8 | 110.1 | 19.4 | 14.7 |
| EBITDA ($)1 | 2.9 | (5.6) | 1.5 | (11.6) |
| Net loss from continuing operations | (10.6) | (20.4) | (2.4) | (20.4) |
| Net loss | (12.5) | (27.1) | (3.0) | (25.3) |
| Per Share Information (Basic & Diluted) | ||||
| Loss per share – continuing operations | (0.06) | (0.20) | (0.01) | (0.20) |
| Loss per share – discontinued operations | (0.01) | (0.06) | 0.00 | (0.04) |
| Loss per share – all operations | (0.07) | (0.26) | (0.01) | (0.24) |
1 Earnings (loss) before interest, tax, depreciation and amortization (EBITDA) is not defined by IFRS. The definition of EBITDA does not take into account the Company’s share of profit of an associate investment, gains and losses on the disposal of assets, fair value changes in foreign currency forward contracts 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.
The 37% decline in 2020 revenue contributed to the $12.5 million Net loss and $18.8 million working capital deficit. There was $32.8 million of senior debt, classified as current which contributed to the working capital deficit. To deal with this the Company has been executing a three-pronged plan:
- Accelerate our development plans for the co-venture business (Dynamic Entertainment);
- Restructure and continue to reduce the ride manufacturing business (Dynamic Attractions) to withstand this industry slowdown; and
- Aggressively market Dynamic Structures’ innovative engineering capability to diversify the Company’s revenue sources beyond the attractions industry.
The Company is actively implementing a financing plan to support all three of these drivers. The first phase of the financing plan was to successfully restructure its US$32.7 million of long-term debt and successfully raise $5.0 million of equity to help fund the Company’s R&D subsidiary. This was completed successfully in October 2020. The second phase is well underway to source the investment necessary to fund the Company’s co-venture opportunities and correct the working capital deficiency arising from the Company’s financial leverage. The Company has engaged an investment banking firm to help raise the required investment.
Update on Co-ventures
The Company continues to be very bullish on its ability to penetrate the tourist location, entertainment market leveraging its world class attraction IP. It is the Company’s view that its co-venture strategy is well suited to capitalize on a post-pandemic world.
The Company holds an option to acquire a 50% share of the flying theatre attraction currently being built in The Island Theme Park in the Smoky Mountains of Tennessee. The Island is the sixth most popular theme park in the US according to TripAdvisor. The Company is well advanced in the creation of this exciting attraction in one of the most popular tourist destinations in America. The flying theater attraction is scheduled to open to the public just before the summer season gets underway.
The Company’s pipeline of co-venture prospects is geographically broad and advancing, in-spite of travel restrictions. The Company’s co-venture offices in Toronto and Orlando have been able to cover North America and Europe/UK effectively and its offices in Singapore and Shanghai have allowed it to continue to develop prospects in Asia and South Asia. The Company has three senior executives in Asia and this is helping to continue to advance prospects in this key market.
Conference Call Information
Dynamic’s management team will be holding an investor/analyst conference call to discuss the 2020 results and the outlook for the Company. The call-in details are as follows:
Time/Date: Friday, April 29, 2020 at 10:00AM Eastern Time
Dial-in Number: 1-800-319-4610 (Canada/USA toll-free)
1-416-915-3239 (Toronto)
Callers should dial in 5 – 10 minutes prior to the scheduled start time and ask to join the Dynamic Technologies Investor Conference Call.
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:
| 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 execute its co-venture plan, ride business restructuring, and R&D diversification plan, (ii) the Company’s ability to source the funding required to implement its co-venture plan and to 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.