Flyht Aerospace Solution Ltd. (FLY.V) coverage was initiated back in February 2016. The company helps airlines improve safety and decrease operational costs through their innovative products. FLY.V streams data from an aircraft via satellite to the airlines' flight operations center.
Since our last update, the company has undergone a completed a number of milestone (not all included here) that are worth mentioning:
Mar. 1 - Signs new Chinese Airline for USD $1.68 Million Sales Contract as a result from a competitive bid they won.
Mar. 20 - Launches UpTime(TM) Cloud Software; all information about airplane is available using one portal.
Apr. 4 - Third Consecutive Profitable Quarter and First Profitable Year - Revenue of $4.1M, a 9.5% increase over Q4 2015.
Apr. 20 - Signs $1.9M contract with Chinese Airline for AFIRS hardware over a five year agreement.
May 10 - Q1 Revenue of $3.7M, a 43% increase over Q1 of 2016. Fourth Straight Profitable Quarter.
Jun. 5 - Management change CFO resigns.
Jun. 6 - Insider at $0.25 cents for 22,000
Jun. 19 - Receives U.S. Patent for FLYHTStream (emergency data streaming technology enabling plane location)
FLY.V already has the patent in China.
Jun. 26 - Q2 update. More than USD $3M in additional contracts and Purchase Orders to date, totaling nearly USD $5M. Total backlog of $25M.
Jul. 6 - Increase in Line of Credit to $1.5M from Export Development Canada. Proceeds towards trade receivables and inventory requirements.
Jul. 13 - 10 to 1 share consolidation effective on July 17, 2017. The rationale for the consolidation are driven by the recent financial performance.
Jul. 27 - Announce presenting at the China Aviation Tracking & Data Recovery Forum held in Beijing from Aug 24-25.
Topic: How to meet the ICAO GADSS requirements of the black box technology.
Aug. 10 - Announced supporting Boeing for tracking, locating and flight data recovery solutions testing, provide AFIRS and management platform (UpTimeTM Cloud) to Boeing part of their upcoming flight test program on a FedEx B777 aircraft. Project started on April 2017 and ends in 2018.
Fed Ex has a fleet of 660 aircraft and 190 (28%) are Boeing.
Aug. 17 - Q2 Earning Results: Revenue of $3.3M, which represents 4.2% YOY Q2 2016 but with a net loss of $742K (+12%) vs loss of $651,105 YOY. Recurring revenue (voice and data services) of $1.1M (+14.2%) vs. Q2 2016 and Parts revenue of $1.4M, an YOY increase of 30.8%. Revenue was recognized on 17 installation kits in Q2 2017 compared to 27 in the second quarter of 2016. Working capital at $3.9M at the end of June 2017.
Aug. 30 - Present at the 6th Annual Liolios Gateway Conference on September 6, 2017.
As depicted above, FLY.V's Q2 earning were not profitable. However, we believe that the issue is logistical in nature, related to timing and the different methods of revenue recognition. Revenue recognition with the company is challenging as it varies based on product and client and is sometimes based on shipment, and other times based on installs. Moreover, during the earnings call, FLY.V reported that 60% of Q2 revenue were recorded in June. Also the period of June-July 2017 amounted to a company record in revenue and a backlog of $25M is still present.
Other than the SatCom rule deadline in China (December 2017), we believe that the recent signing of Boeing with FedEx is a major achievement for the company. FLY.V was already active with Airbus and a formal deal with Boeing was elusive. Although, Boeing recently announced the formation of an Avionics group. we do not believe that the Boeing is as advanced as FLY.V in the vertical. We believe that the alliance with FLY.V by Boeing is strategic in nature. Remember, FLY.V has patents for AFIRS in US and China and it has already has a presence in China. In addition, Boeing has been wanting a footprint in China and earlier this year, it announced that it will start to build its first manufacturing facility in China. Hence, potential synergies.
Be as it may, with insiders having a weighted average at $2.60 cents, we believe that FLY.V continues to be a company to watch in the near future.
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