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Nanalysis announces Q4 and full year 2023 results

Nanalysis Scientific Corp.  announced fourth quarter and full year results for the period ending on December 31, 2023. Chief Executive Officer, Sean Krakiwsky and Chief Financial Officer, Randall McRae will host a conference call at 5 P.M. Eastern Time today to discuss the results. A second call will be held for European investors at 8:30am ET tomorrow, Tuesday, April 30th. All interested parties are invited to join these calls.

“As noted in our previous release dated February 6, 2024, we are very pleased with how our businesses ramped up in second half of 2023 and we closed out the year with good momentum which has carried into the current year,” said Sean Krakiwsky, Founder and CEO of Nanalysis. “Our benchtop sales have regained stride and the personnel changes that we made earlier in the year are producing good results that we expect to continue going forward. Our security services segment completed taking over all basic services on the Company’s Airport Security Project early in 2024, and this project will continue its expansion and roll-out, building towards full revenue run rate through the year. Additionally, in 2023 we had significant up-front training costs which contracted our margins. In 2024, we expect that to be significantly reduced and look for security services margins to improve throughout the year.”

Quarterly trend:

  • The Company has showed continuous growth in revenue, quarter over quarter, driven both by expansion of the Airport Security Project as the Company took over more airports from the incumbent service provider, as well as recovery of product sales revenue in the second half of the year.
  • Net loss improved from Q1 to Q2 as security services revenue expanded but reached a low in Q3 2023 as the Company recognized a non-cash $2.8 million loss related to the deconsolidation of Quad. In Q4, as product sales continued to recover and service revenue continued to grow, the Company continued to improve its net loss.

Recent strategic and operational highlights during and after the fourth quarter of 2023 include:

  • New quarterly revenue record: Q4 2023 revenue of $9.8 million was driven by continued expansion of security services related to the Company’s airport security maintenance project, as well as continued recovery in Benchtop NMR sales.
  • Completed phase-in of the company’s airport security maintenance project: On January 11, 2024, the Company completed the phase-in period related to its airport security maintenance project, resulting in the Company’s Security Services business now performing maintenance of passenger screening imaging and detection equipment across all of Canada and beginning a scale up phase to increase revenue to its expected run rate. The Company is confident that the highly capable team built during this project will provide significant growth opportunities for this business with new customers and partners.
  • 100 MHz Benchtop NMR product: In Q4, the Company sold and shipped 14 100MHz Benchtop NMR units, the highest number of shipments for 100 MHz units in a quarter since the Company cleared its backlog in 2022. This drove continued recovery in Benchtop NMR revenue.
  • Closed exempt offering and concurrent private placement: Gross proceeds of offering were $5 million.
  • Granted funding supporting AI software development for detection of Illicit substances: The Company is receiving advisory services and up to $1.45 million in non-repayable, non-dilutive funding from the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP), to develop Artificial Intelligence based software tools to detect illicit substances on top of the Company’s portable Nuclear Magnetic Resonance (NMR) spectrometers.

Outlook
“We are very encouraged by the continued sequential growth of our benchtop sales quarterly last year and we believe we can maintain strength in our product sales into 2024,” said Sean Krakiwsky, Founder and CEO of Nanalysis. “The operational changes and leadership changes that we put in place in both our sales organisation and Security Services are paying off and we believe we will continue to foster growth in the current year. We continue to demonstrate that we are a leader in Benchtop NMR and plan to retain that position through continued innovation and advancement of technologies used in our product line. Lastly, the changes implemented by right sizing our R&D and manufacturing capacity, particularly as it relates to Benchtop NMR, positions us to grow both our topline and margins in 2024, as we move towards profitability.
MB Bureau

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