Despite COVID-19, GTX reports another profitable quarter
LOS ANGELES CALIFORNIA, August 18, 2020GTX Corp (OTCQB: GTXO) (“the Company”), a pioneer in the field of wearable GPS, people and asset tracking Location-Based Services (LBS) and Real-Time Location Systems (RTLS), today announced financial results for the Second Quarter ended June 30, 2020 and provided the following corporate summary.
Second Quarter Financial Highlights (3 months):
- GTX showed a net profit for the 2nd quarter in a row.
- Product revenue increased 399% over the 2019 comparable period.
- Total operating expenses decreased 19% from 2019, including:
- Total quarterly revenue for the comparable period declined 44% primarily due to a one-time transaction in the same quarter in 2019.
- Retired more than $155,000 in convertible debt.
2020 Year-to-Date Financial Highlights (6 months):
- GTX showed a net profit for the 2nd consecutive quarter.
- Product revenue increased 336% over 2019 comparable period.
- Total operating expenses decreased 32% from 2019, including:
- Salaries and Wages decreased 11%
- Professional Fees decreased 55%
- G&A decreased 36%
- Retired more than $285,000 in short and long-term debt.
Second Quarter 2020 Business Highlights and Developments
- Expanded our Health & Safety product line to include Personal Protective Equipment and supplies.
- Strong U.S. product sales despite COVID-19.
- Member of the Southern California Biomedical Counsel COVID-19 Supplies Taskforce.
- Several products approved and listed on Amazon.com.
- Several of our medical supplies approved and listed on GSA schedule.
- Made significant design enhancements to 4G SmartSole.
- Started a nationwide marketing and advertising campaign.
- Launched a PPE specific website www.gtxmask.com
Management commentary: Patrick Bertagna, GTX Corp CEO.
COVID-19 had a mixed impact on our second quarter of 2020. Like many companies, we experienced supply chain interruptions, many of our customers and suppliers experienced a slowdown in productivity, and inbound and outbound shipments were delayed. We had our share of local disruptions from lockdowns and new social distancing workplace policies. Our building was closed periodically due to State and City mandated shelter-in-place orders and again during the protests, however despite all of that, we managed to earn a profit for the second quarter in a row in 2020.
Due to our pivot in early March to expand our health and safety product line into the Personal Protective Equipment (“PPE”) business, during the second quarter of 2020, we saw a 399% increase in product sales, added hundreds of new customers, from which we are now seeing close to 40% of them placing reorders and looking into some of the other products and services we offer and we elevated our product and brand awareness in the U.S. across multiple channels. However, our total revenues were lower, a large part of the reduction on a year-over-year basis was attributable to the one-time IP transaction that we closed in the second quarter of 2019, and the fact that IP licensing revenues were down because businesses, law firms and courts were not operating at full capacity during the entire second quarter of 2020. We also had approximately 10% fewer subscriptions due to customers asking for some temporary financial relief. We believe the subscription setbacks and IP campaign will gradually revert to normal as the global economy regains momentum.
Even with all the uncertainty, chaos and panic that ensued in March, we still managed to build out our health and safety business, whereby we sold and donated hundreds of thousands of PPE items to a wide range of entities such as essential businesses, assisted living facilities, pharmacies, Fortune 1,000 companies, hospitals, police departments, nonprofits, and local, state and federal government agencies in every State across the U.S. We launched a PPE specific website www.gtxmask.com, and within weeks, we recognized a greater than 500% increase in website traffic, a 300% increase in consumer orders, a 67% increase in the average size per order and over a 50% increase in the number of items purchased per order. GTX is now well positioned as a trusted health and safety supplier by providing a wide variety of high-quality products, excellent customer service and reliable same or next day shipping, all of which is contributing to an increase in our brand awareness and favorable customer testimonials and reviews. Since we are now addressing a much broader potential customer audience, we started a nationwide advertising campaign, and based on the results so far, we expect to maintain focus on the campaign during the 3rd quarter. We were able to pay for the services with our common stock to preserve our cash for funding our operations and inventory requirements. While we did have some dilution this quarter, we have already paid for our advertising campaign until the end of the year.
We cannot accurately predict how long the PPE business will remain robust, however, based on the current events, we believe it is unlikely to decline this year. The entry into this business has also enabled us to broaden our product line, garner many new customers, all of which we believe has expanded our visibility in the wearable technology GPS tracking space. We are starting to experience cross selling among our product lines and we are seeing a noticeable increase in inquiries from our distributors for wearable tracking and monitoring solutions, which is the cornerstone of our business. We intend to leverage the increase in our brand awareness and expanded product line along with our increased customer base to introduce several new tracking solutions both for people and assets in the coming months.
Overall, during the second quarter of 2020, we had a large increase in product sales, maintained close to 50% profit margin, reduced our expenses by 19%, had over $220k in fully paid inventory at the end of the quarter, while we continued to reduce our debt and clean up our balance sheet.
As we enter our sixth month of unprecedented times, we are cautiously optimistic, seeing encouraging signs, hearing from our European customers that they are almost fully operational and at the same time, many parts of the U.S. and other countries are opening back up for business. But one thing is for certain; there is an exciting demand in the marketplace for innovation and new solutions for tracking and tracing GPS wearable technology, given COVID-19. GTX has been at the forefront of many these innovative technologies, we pivoted early into the PPE business and built an entire new business unit under extremely challenging conditions. We are confident this will strengthen our foundation and continue to push us forward.
For now, we hope all our stakeholders are safe and healthy and we will continue to provide updates through our weekly podcast, press releases and newsletters.
Most widely known for its patented GPS SmartSole and Smartphone GPS Tracking App, GTX also owns and licenses a large portfolio of patents in the GPS and wearable technology space, is a U.S. military contractor, has several other consumer products available on its online store and Amazon and most recently soft launched its new NRBz and NFC Veritap solution. To find out more how you can buy or become an authorized reseller contact info@gtxcorp.com business development.
About GTX Corp GTX Corp (OTC: GTXO) is a pioneer in smart, mobile and wearable GPS tracking and recovery location-based solutions, supported through a proprietary IoT enterprise monitoring platform and intellectual property portfolio. GTX offers a global end-to-end solution of hardware, software and connectivity and develops two-way GPS tracking technologies, which seamlessly integrate with consumer products and enterprise applications. GTX utilizes the latest in miniaturized, low power consumption GPS, Cellular, RF, NFC and BLE technology, enabling subscribers to track in real time the whereabouts of people or high value assets. GTX is known for its game-changing and award-winning patented GPS SmartSole® — think Dr. Scholl’s meets LoJack, the world’s first invisible wearable technology tracking device created for those at risk of wandering due to Alzheimer’s, dementia, autism and traumatic brain injury. GTX’s business model is built around technology innovation and holds over 85 patents, with many issued patents in the area of GPS tracking. The company has international distributors servicing customers in over 35 countries and is a U.S. Military Government contractor. Other customers include public health authorities and municipalities, emergency and law enforcement, private schools, assisted living facilities, NGOs, small business enterprises, senior care homes, and consumers.
GTXCorp.com Track My Workforce GPS SmartSole.com
GTX Corp United Kingdom
In the UK, GTX Corp operates from its London office. Please contact: Nelson Skip Riddle
Email: NSRiddle@GTXCorp.com Tel: +44 7785 364100
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Forward Looking Statements
This news release contains forward-looking statements. The terms and phrases “expects,” “would,” “will,” “believes,” and similar terms and phrases are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by GTX considering its experience and its perception of current conditions and expected future developments, as well as other factors that GTX believes are appropriate in the circumstances. Many factors could cause GTX’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. Certain risk factors that may cause actual results to differ are set forth in GTX’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (which may be obtained on the SEC Website). These factors should be considered carefully, and readers should not place undue reliance on GTX’s forward-looking statements. GTX has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required.