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GuestLogix Inc., the leading provider of on-board retail solutions to the airline industry, announces its financial and operational results for the first quarter ended February 28, 2009. All results are reported in Canadian dollars.
Q1 fiscal 2009 financial highlights
– Increased revenue 185% to $4.0 million, up from $1.4 million in Q1 fiscal 2008
– Grew monthly revenue run rate to $1.5 million in February 2009, up from $1.2 million in November 2008 and $0.6 million in February 2008
– Achieved $0.8 million in EBITDA, up from $0.09 million in Q1 fiscal 2008
– Cash and cash equivalents including restricted cash of $4.3 million as at February 28, 2009, compared to $5.5 million as at November 30, 2008
“Through continued success on the deployment front, we built strong momentum in Q1, delivering nearly 50% of total fiscal 2008 revenue in the first three months of fiscal 2009,” said Tom Douramakos, President and CEO, GuestLogix. “As a result, we generated positive EBITDA, which we believe is sustainable on a go-forward basis, and have established a clear path toward profitability. Based on our progress in the quarter, we are on track to achieve sustainable profitability in the second half of fiscal 2009 and a $2.0 million monthly revenue run rate by fiscal year end.”
Mr. Douramakos continued: “Driven by new customer wins in the quarter, we have added 121 million passenger trips under agreement since the end of fiscal 2008, and we entered Q2 with a deployment pipeline of 368 million passenger trips. In addition, we continue to expand our on-board merchandising program. We recently signed two more partnership agreements, further supporting our efforts to leverage our footprint and increase revenue per passenger trip over the long-term.”
GuestLogix’ growth strategy has two main pillars: 1) Grow passenger trip footprint, and 2) Leverage footprint to increase revenue per passenger trip. “Over the long-term, our vision is to transition GuestLogix from an on-board retailing technology provider to the enabler of a large scale on-board marketplace,” Mr. Douramakos added.
As a result of the rapid adoption of its Mobile Virtual Store technology, GuestLogix has established a dominant market position in North America and is expanding its market share in Europe. The Company is on track to achieve its goal of one billion passenger trips under agreement in fiscal 2009.
Having a sizable share of the total global airline market already under agreement, GuestLogix is now increasingly focused on expanding its reach into the rail industry. This is demonstrated by the Company’s deployment of its technology platform on-board its first North American rail customer in Q1 fiscal 2009.
With many on-board merchandising partnership agreements in place, GuestLogix has built a foundation for an on-board retailing program that can enable the Company to effectively leverage its customer footprint to grow the number and value of transactions processed via its technology platform. By offering its customers a suite of products and services that can be sold on-board exclusively via its technology, GuestLogix is positioned to grow its revenue per passenger trip with minimal capital investment and short deployment timelines.
Through the launch of more extensive on-board merchandising programs, airlines have the opportunity to further grow their profitable ancillary revenue streams, while GuestLogix can continue to strengthen its top-line via revenue sharing agreements with its various on-board merchandising partners. GuestLogix estimates that each $1.00 increase in average on-board purchases per passenger trip would potentially represent more than $16.0 million in additional annual revenue for the Company, based on its current number of passenger trips under agreement.
Third-party research into the buying habits of travelers has revealed that 50% of passengers will buy destination-based products and services on-board for convenience reasons. Building on these findings, GuestLogix and its partners will introduce on-board catalogue shopping, with the convenience of home delivery, and the sale of airport transfers in the coming quarters.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
