GuestLogix Inc.

GuestLogix Inc.

April 23, 2009 07:00 ET

GuestLogix Achieves 185% Revenue Growth and Record EBITDA in Q1 Fiscal 2009

TORONTO, ONTARIO--(Marketwire - April 23, 2009) - GuestLogix Inc. (TSX VENTURE:GXI), 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

Financial Summary Q1 F2009 Q4 F2008 Q1 F2008

Revenue $4,001,259 $2,826,010 $1,403,857
EBITDA(1) $ 828,998 $(1,048,729) $8,774
Net Income (Loss) $ (251,712) $(1,961,219) $ (540,904)
Net Income (Loss)/Share $ (0.00) $ (0.03) $ (0.01)

"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."

Q1 F2009 Operational Highlights: growing customer footprint

- Signed agreements with four U.S. air carriers, including Continental Airlines

- Signed and went live on-board first railway customer in North America, signaling the Company's entrance into the lucrative global rail sector

- Completed deployment on-board US Airways during the quarter and United Airlines subsequent to quarter end

- Commenced deployment on-board one of Europe's largest airlines which will use GXI's platform to transact duty-free and other merchandise purchases on-board

- Appointed American Airlines customer service veteran, Ralph Richardi, to Board of Directors to leverage Mr. Richardi's airline industry expertise and contacts to assist GXI in its efforts to gain new customers and expand revenue from existing clients

- Released next-generation, PCI PED 2.0 certified handheld devices and PA-DSS compliant Point-of-Sale (POS) software. GXI's platform is one of the few, if not the only, that meets the latest payment industry requirements - a prerequisite for on-board retail use in Europe and parts of Asia.

Q1 F2009 Operational Highlights: leveraging platform deployments

- Launched Airlines Solutions Group to further assist airline customers in maximizing their on-board retailing initiatives

- Signed agreement with a major U.S. theme park operator to market and sell tickets on-board GXI customer airlines' flights in the U.S.

- Subsequent to quarter end, signed an agreement with Heathrow Express to offer transfer vouchers on GXI customers' flights from New York, NY to London, UK

Mobile Virtual Store™ Q1 F2009 Q4 F2008 Q1 F2008
Footprint Metrics
(All figures presented on an
annualized basis)
Passenger trips under agreement at
quarter end 824 million 703 million 578 million

Passenger trips deployed at quarter end 456 million 395 million 175 million

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."

F2009 Outlook

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.

(1) See GuestLogix' MD&A and Financial Statement filed on April 23, 2009, for complete definition.

A complete set of financial statements and management's discussion and analysis for the first quarter ended February 28, 2009 will be available at or on the Company's website at

About GuestLogix

GuestLogix is the leading provider of on-board retail technology and solutions to the passenger travel industry. Through its de facto standard Mobile Virtual Store™ platform, the Company provides operators the tools and products to become successful on-board retailers, enhance service and drive ancillary revenue growth. With a customer base comprising seven of the top 10 global airlines the Company maintains agreements to serve more than 30 per cent of the world airline passenger traffic through its technology platform. Additional information about the Company can be found at

(C) 2009 GuestLogix. All Rights Reserved. All other trademarks and trade names are the property of their respective owners.

Forward-Looking Statements

This news release includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with GuestLogix' business and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", and similar expressions to the extent they relate to the Company or its management. The forward-looking statements are not historical facts, but reflect GuestLogix' current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risks and Uncertainties" in the Filing Statement filed on April 23, 2009 with the regulatory authorities. GuestLogix assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements.

Neither 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.

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