GuestLogix Inc.
TSX : GXI

GuestLogix Inc.

March 16, 2015 16:00 ET

GuestLogix Announces Fourth Quarter and Fiscal Year 2014 Results

Company Achieves 21% Revenue Growth Year-Over-Year as it Enters Transformative Year after Acquiring Dublin-based OpenJaw Technologies

TORONTO, ONTARIO--(Marketwired - March 16, 2015) - GuestLogix Inc. (TSX:GXI), the leading global provider of ancillary-focused merchandising, payment and business intelligence technology to airlines and the passenger travel industry, today announced its financial and operational results for the quarter and 12-month period ended December 31, 2014. All financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS") and reported in U.S. dollars.

F2014 Financial Highlights

  • Revenues of $36.8 million
  • EBITDA of $1.7 million
  • Net operating loss of $6.6 million
  • Cash and cash equivalents of $11.6 million as at December 31, 2014

"Throughout 2014, we achieved solid success against our established growth strategy which translated into a 21% growth in our revenue line and 142% increase in our adjusted EBITDA line on a year-over-year basis," said Brett Proud, President & Chief Executive Officer of GuestLogix. "As we head into 2015, we are enthusiastic about our strengthened market and financial position following the successful acquisition of OpenJaw Technologies, who are based in Dublin. We now have a broadened solution offering covering all touch points in the travel journey and are able to amplify any travel operator's ancillary revenue program across their entire operation, making GuestLogix the first independent end-to-end ancillary revenue and retailing platform for both onboard and off board channels."

In 2014, GuestLogix also achieved an 18% growth in recurring revenue. As stated in previous material, key to GuestLogix' growth strategy is the increase in percentage of revenue derived from software-based transactions which substantially improves margins. GuestLogix bolstered this strategy through the acquisition of OpenJaw Technologies, as this business unit's revenues are 100% software based.

Highly Strategic and Transformative Acquisition of OpenJaw Leads to Strengthened Market Position

Key to GuestLogix' 2014 growth strategy has been to extend its presence beyond the aircraft cabin and into additional touch points in the travel journey, to provide a more holistic offering to ancillary revenue programs with travel operators. GuestLogix reinforced this strategy with the successful acquisition of Dublin-based OpenJaw Technologies Ltd (OpenJaw) on December 23rd, 2014. OpenJaw is a leader in providing advanced web-based merchandising solutions to travel companies that are intent on improving online retailing capabilities through booking engines and other travel-related channels.

With the acquisition of OpenJaw, GuestLogix welcomed an additional 30+ international travel brands to its customer base and gained immediate presence into several new travel verticals such as hotels, online travel agencies, car rental companies and loyalty programs. New clients include Four Seasons Hotels & Resorts, Aeroplan, AIR MILES, British Airways, Avis Budget Group Europe and voyages-SNCF.com.

By combining GuestLogix' leading onboard retail and PCI-certified payment technologies with OpenJaw's leading online, ecommerce retailing technology platform, the new entity makes way for the industry's first, pure-play, end-to-end ancillary revenue and retailing platform. The transaction value, which is expected to be immediately accretive on all key metrics, was US$41.2 million plus performance considerations and adjustments for OpenJaw's cash balance.

In order to partially finance the cash consideration of the acquisition, GuestLogix successfully closed an offering of subscription receipts, convertible debentures and a private placement of subscription receipts for aggregate proceeds of CA$49 million.

F2014 Operational Highlights

Gross Transaction Value Processed ("GTV")

In 2014, GuestLogix processed a total of $1 billion in GTV.

Growth Driver #1 - Increase (and Protect) Number of Transactions

Throughout the year, GuestLogix increased and protected the total number of transactions it is able to process through both net new and renewed customer agreements. Each of our four regions (Americas, EMEA, Asia Pacific and Ground Transportation) were successful in this regard.

In total, GuestLogix signed multi-year agreements with eight (8) airlines and renewal agreements with four (4) airlines. Our Ground Transportation division signed multi-year agreements with two (2) operators and renewed its agreement with one (1).

Additionally, GuestLogix successfully extended its presence off board through a multi-year agreement with Priority Travel Group - the world's largest independent airport lounge group - to support both lounge access sales and membership verification.

Growth Driver #2 - Increase Average Transaction Value

Throughout the year, several of GuestLogix' new signings and deployments that were implemented by its customers centered around merchandising strategies that generate higher average transaction values than traditional food & beverage and even duty-free programs. For example, one new Rail Operator will utilize GuestLogix' technology to sell rail tickets and Priority Travel Group will be selling lounge access - both higher valued items than traditional food & beverage.

Southwest and a leading North American bus operator are now selling destination content through GuestLogix' OnTouch® Merchandising Platform - both with significantly higher average transaction values than traditional food & beverage and duty free items.

Also, and significantly, GuestLogix' newly acquired subsidiary OpenJaw Technologies focuses on ground ancillaries such as hotels and car rentals as well as other high-valued ancillaries such as seat upgrades and baggage fees - all which hold a very high average transaction value.

Growth Driver #3 - Earn More Fees Per Transaction

GuestLogix earns more fees per transaction through the broadening of its solution offerings and including new solutions within each account. Throughout the year, eight (8) airlines either amended agreements to have access to new solutions or opted into these new solutions which in turn increased the total deal value as compared to GuestLogix' standard engagements.

In 2014, five (5) airlines extended agreements to include our business intelligence platform, Ancillary Insights™ while four (4) opted to include Global Payment Gateway ™. Both of these services enables GuestLogix to earn more fees per transaction that we process.

Also, our Travel Retail Performance Management (Travel RPM) consultancy arm was engaged throughout one deployment, allowing GuestLogix to earn additional revenue to an increase in total deal value at that account.

Strengthening our Operations & Finances

Throughout the year, GuestLogix had several successes in strengthening the Company's market, operational and financial position.

As announced on July 24, GuestLogix was issued its second patent from the US Patent & Trademark Office related to its core payment software - further securing the value of its intellectual property. Also, the Company received PCI accreditation for its next-generation payment peripheral designed for consumer-grade smartphone and tablet devices.

GuestLogix also arranged a CA$2.5 million term loan with a Canadian Chartered Bank and successfully closed an offering of subscription receipts, convertible debentures and a private placement of subscription receipts for aggregate gross proceeds of CA$49 million.

On December 23rd, GuestLogix announced the successful completion of the acquisition of Dublin-based OpenJaw Technologies, which added more than 30 new customers in an array of new travel verticals such loyalty, hotel, online travel agencies and car rentals.

F2014 Conference Call

GuestLogix will host a live conference call on Monday, March 16, 2015 at 4:30 pm ET to discuss its fiscal 2014 financial and operational results as well as the Company's outlook for fiscal 2015. To access the conference call, please dial 1-888-428-7458 or 1-862-255-5400. A taped replay of the call will be available at http://www.guestlogix.com/investors/investor-events/.

About GuestLogix

GuestLogix Inc. (TSX:GXI), is a global leader in comprehensive merchandising, payment and business intelligence technology delivered to the passenger travel industry, both onboard and off-board. Bringing over a decade of expertise as the industry's most trusted onboard transaction processing partner to airlines, rail operators and elsewhere in the passenger travel industry, GuestLogix powers the industry's growing reliance on ancillary revenue generation. Both direct to operators as well as through partnerships with global leaders in catering, duty-free, inflight entertainment and self-service retail experts, the Company provides the payment services touching over 1 billion travelling consumers each year. On December 23, 2014, GuestLogix announced the acquisition of OpenJaw Technologies, a Dublin-based technology company focused on travel retailing innovation in the e-commerce segment. GuestLogix' global headquarters and centre for product innovation is located in Toronto, with regional head offices located in Dallas, London and Hong Kong, and a Product Innovation Lab located in Moncton. More information is available at www.guestlogix.com and www.openjawtech.com.

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 March 16, 2015 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. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, stock-based compensation and other (income) expenses. Other (income) expenses includes acquisition costs related to the OpenJaw acquisition, restructuring charges, foreign exchange and change in fair value of derivative warrant liability and derivative liability. EBITDA is used by many investors to evaluate companies in this industry on the basis of operating results and the ability to incur and service debt. EBITDA does not have a standardized meaning prescribed by GAAP or IFRS and may not be comparable to similar measures presented by other companies. The disclosure of Adjusted EBITDA is not intended to replace, but only augment, the discussion of financial results from operations or cash flows.

©2015 GuestLogix Inc. All Rights Reserved.

Contact Information

  • Media & Investor Relations
    GuestLogix
    Dan Thompson
    SVP, Marketing, Communications & Investor Relations
    416-849-1566
    dthompson@guestlogix.com