Draganfly Inc. (NASDAQ: DPRO) (CSE: DPRO) (FSE: 3U8A) (“Draganfly”
or the “Company”), an award-winning, industry-leading drone
solutions and systems developer, is pleased to announce its third
quarter financial results.
Key Financial and Operational Highlights for Q3
2023:
- Revenue for Q3 of 2023 was
$2,138,017 up 14.0% from the same period last year and consists of
product sales of $1,653,111 and drone services of $484,906. This is
compared to Q3 revenue in 2022 of $1,876,221 made up of $1,359,986
of product sales and $516,235 from drone services.
- Gross profit for Q3 2023 was
$894,683 up 42.7% from the same period last year primarily driven
by higher product sales. Gross margin percentage for Q3 2023 was
41.8% compared to 33.4% in Q3 2022. The increase in gross margin
was primarily due to sales of inventory that had previously been
written off. Gross profit would have been $903,283 up 44.1% year
over year, and gross margin would have been 42.2%, not including a
one-time non-cash write down of inventory of $8,600.
- The Company recorded a
comprehensive loss of $5,530,248 in the third quarter of 2023
compared to $4,992,533 in the same period of 2022. The
comprehensive loss for the period includes a non-cash change
comprised of a write down of inventory of $8,600 and an impairment
of notes receivable of $104,780 and would otherwise have been a
loss of $5,416,868. The third quarter of 2022 comprehensive loss
for the three months ended September 30, 2022, include a gain in
fair value of derivative liability of $305,094 and would otherwise
be a loss of $5,297,627. Contributors to the year-over-year
increase in loss is last year had the benefit of a large foreign
exchange gain otherwise operating expenses were down year over
year.
- Cash balance on September 30, 2023
of $2,457,084 compared to $7,894,781 on December 31, 2022
- Subsequent to Q3 Draganfly closed a
financing of USD$3.5M, the majority of the proceeds of which will
be used for working capital.
- Draganfly secured its first defense
orders for its Commander 3 XL with the U.S. Military. The Commander
3 XL is being utilized to enhance mission success by enabling
confident and accurate navigation through unfamiliar terrain and
GPS denied environments. Securing these first orders is a
substantial milestone for the Company and the Commander 3 XL
platform.
- A leading energy research
association chose Draganfly's Commander 3XL Platform for inspection
standards operations. US-based energy organizations require NDAA
(National Defense Authorization Act) compliant drones primarily for
security and regulatory protocols. The NDAA compliance ensures that
these drones are not equipped with components or manufactured by
entities deemed to pose a national security risk. Being recognized
as an NDAA-compliant, North American-developed drone provider is a
significant distinction for Draganfly. This designation underscores
the company's commitment to adhering to the stringent security and
regulatory standards set forth by the National Defense
Authorization Act. It signifies that Draganfly's drones are
sourced, manufactured, and equipped with components that meet the
criteria deemed crucial for national security.
- A State Geological Survey selected
Draganfly's Commander 3 XL platform to enhance exploration and data
collection during geological research and surveying efforts. The
State Geological Survey offers geologic data to improve public
understanding of geology, hazards, and mineral resources.
Draganfly's UAV platform will aid in research and investigations
for not only general geology but also geologic resources,
environmental geology, and hazards, with results shared among
governmental agencies, private industry, and the general public.
The Commander 3 XL can maximize the State Geological Survey payload
capacity and allow for longer flight times while also meeting the
National Defense Authorization Act requirements.
- Draganfly is providing its drone
pilot crews and drone technology to a Canadian Provincial
Government to assist with firefighting mitigation, preparedness,
response, and recovery efforts. Draganfly is helping conduct
night-time missions, identify fire line breaches, and detect hidden
hot spots using thermal imaging technology. Draganfly’s services
will enhance the firefighting operations, which protect critical
infrastructure, towns, valuable natural resources, and help
mitigate air quality hazards from the devastating impact of these
wildfires.
- Draganfly officially opened its new
manufacturing and production facility in Saskatoon. The opening of
this new facility positions Draganfly to meet its commitments of
meet the increasing market potential and order book for its
products and solutions. The Saskatoon facility has been designed to
meet the rising demand for Draganfly’s UAV systems and components,
such as the Heavy Lift, Commander 3 XL, Commander XL Hybrid and its
new Precision Delivery System. This facility will help advance
manufacturing capabilities, streamline assembly processes, deepen
R&D capabilities, and optimize integration procedures.
Draganfly's newly expanded manufacturing and production facility
signifies a significant step in the company's continuous dedication
to contributing to the advancement of Saskatchewan's technology
sector.
- Draganfly unveiled its newest
product the Commander 3 XL Hybrid. This drone leverages the North
American built highly modular and highly adaptable Commander 3 XL
airframe. This cutting-edge system significantly extends flight
duration, allowing operators to achieve more in a single flight
than ever before Like the Commander 3 XL, the Commander 3 XL Hybrid
maintains the Swiss army like versatility, accommodating a wide
range of payloads, including Draganfly’s Precision Delivery System.
The liquid-cooled powertrain efficiently drives all UAV systems,
resulting in an increase in flight endurance with the ability to
fly a payload of up to 4kg or 8.8 lb for up to 3 hours, making this
the ideal system to support almost any operation.
- Draganfly hosted the first
Draganflyer Xperience: First Responder User Conference at
Draganfly’s Joint A.I.R Center in Spring Branch, Texas. The
Draganflyer Xperience: First Responder User Conference embodied
Draganfly's commitment to innovation in the service of public
safety. By working with influential agencies, forward-thinking
customers, and industry experts in one location, Draganfly
facilitated a dynamic exchange of ideas, experiences, and expertise
to accelerate the adoption and utilization of drones in emergency
response. The event not only illuminated the exploration of
cutting-edge drone technology but also provided an immersive
journey into the future of first responder operations. With its
live demonstrations, hands-on sessions, partner presentations, and
use case workshops, the Draganflyer Xperience: First Responder User
Conference helped to shape the trajectory of drone-assisted
emergency response for years.
- Draganfly’s President and CEO,
Cameron Chell, Presented at a Webinar on "Disaster Risk Reduction
in the Digital Transformation Age: Leveraging emerging
technologies.” Mr. Chell shared his expertise and insights on how
Draganfly's drone technology has played a role in improving
disaster management efforts, particularly in response to floods and
wildfires. Draganfly's UAV platforms have bolstered disaster risk
reduction by swiftly conducting aerial assessments, aiding in
survivor search and rescue operations, mapping, and surveying
tasks, and offering wildfire services, especially during hot and
dry seasons.
- Draganfly was awarded a contract to
provide its Vital Intelligence technology to a state corrections
agency to its facilities enhance security and efficiency for the
benefit of the community, the staff, and the inmates. The
partnering state agency, responsible for corrections across the
region, oversees 21 correctional facilities that house
approximately 16,000 individuals. With a dedicated workforce of
around 4,500 employees, the agency has maintained the lowest
recidivism rate in the nation since 2021.
Draganfly will hold a shareholder update and
earnings call on November 9, 2023, at 2:30 p.m. PDT / 5:30 p.m.
EDT. Registration for the call can be done here:
https://bit.ly/47mfTqr
Selected financial information is outlined below
and should be read with Draganfly’s consolidated financial
statements for the quarter ended September 30, 2023 and associated
management discussion and analysis, which will be available under
the Company's profile on SEDAR at www.sedar.com and filed on EDGAR
at www.sec.gov.
|
|
Three months
ended September 30, |
|
|
Nine months ended
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Total revenues |
|
$ |
2,138,017 |
|
|
$ |
1,876,221 |
|
|
$ |
5,638,542 |
|
|
$ |
6,290,898 |
|
Gross Margin (as a % of revenues) (1) |
|
|
41.8 |
% |
|
|
33.4 |
% |
|
|
32.0 |
% |
|
|
39.4 |
% |
Net income (loss) |
|
|
(5,446,885 |
) |
|
|
(5,340,815 |
) |
|
|
(19,423,475 |
) |
|
|
(11,069,835 |
) |
Net income (loss) per share ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic |
|
|
(0.13 |
) |
|
|
(0.16 |
) |
|
|
(0.48 |
) |
|
|
(0.33 |
) |
-
Diluted |
|
|
(0.13 |
) |
|
|
(0.16 |
) |
|
|
(0.48 |
) |
|
|
(0.33 |
) |
Comprehensive income (loss) |
|
|
(5,530,248 |
) |
|
|
(4,992,533 |
) |
|
|
(19,518,055 |
) |
|
|
(10,644,703 |
) |
Comprehensive income (loss) per share ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic |
|
|
(0.13 |
) |
|
|
(0.15 |
) |
|
|
(0.48 |
) |
|
|
(0.32 |
) |
-
Diluted |
|
|
(0.13 |
) |
|
|
(0.15 |
) |
|
|
(0.48 |
) |
|
|
(0.32 |
) |
Change in cash and cash equivalents |
|
$ |
(4,264,040 |
) |
|
$ |
(4,497,511 |
) |
|
$ |
(5,437,697 |
) |
|
$ |
(11,351,378 |
) |
(1) Gross Profit (as a % of revenues) would have
been 42.2% and 35.7% not including a one-time non-cash write down
of inventory for $8,600 and $208,247 respectively for the three and
nine month period ending September 30, 2023.
The net income (loss) and comprehensive income
(loss) for the three and nine months ended September 30, 2023,
includes non-cash changes comprised of a change in fair value of
derivative liability of $nil and $57,314, a write down of inventory
of $8,600 and $208,247, and an impairment loss on notes receivable
of $104,780 and $104,780 respectively. The net income (loss) and
comprehensive income (loss) for the three and nine months period
ended September 30, 2023 would otherwise have been a loss of
$5,333,505 for the net income (loss), and a loss of $5,416,868 for
the comprehensive income (loss), and a loss of $19,167,762 for the
net income (loss), and a loss of $19,262,342 for the comprehensive
income (loss), respectively.
As at |
|
September 30,2023 |
|
|
December 31, 2022 |
|
Total assets |
|
$ |
9,137,920 |
|
|
$ |
14,638,533 |
|
Working capital |
|
|
2,666,375 |
|
|
|
10,168,800 |
|
Total non-current liabilities |
|
|
606,087 |
|
|
|
249,740 |
|
Shareholders’ equity |
|
$ |
3,927,124 |
|
|
$ |
11,040,881 |
|
|
|
|
|
|
|
|
|
|
Number of shares outstanding |
|
|
43,850,243 |
|
|
|
34,270,579 |
|
|
|
2023 Q3 |
|
|
2023 Q2 |
|
|
2022 Q3 |
|
Revenue |
|
$ |
2,138,017 |
|
|
$ |
1,899,039 |
|
|
$ |
1,876,221 |
|
Cost of
goods sold(2) |
|
$ |
(1,243,334 |
) |
|
$ |
(1,431,922 |
) |
|
$ |
(1,249,313 |
) |
Gross
profit(3) |
|
$ |
894,683 |
|
|
$ |
467,117 |
|
|
$ |
626,908 |
|
Gross
margin – percentage |
|
|
41.8 |
% |
|
|
24.6 |
% |
|
|
33.4 |
% |
Operating
expenses |
|
$ |
(6,356,139 |
) |
|
$ |
(7,234,035 |
) |
|
$ |
(7,007,691 |
) |
Operating
income (loss) |
|
$ |
(5,461,456 |
) |
|
$ |
(6,766,918 |
) |
|
$ |
(6,380,783 |
) |
Operating loss per share - basic |
|
$ |
(0.13 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.19 |
) |
Operating loss per share - diluted |
|
$ |
(0.13 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.19 |
) |
Other
income (expense) |
|
$ |
14,571 |
|
|
$ |
(142,046 |
) |
|
$ |
1,039,968 |
|
Change in
fair value of derivative liability (1) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
305,094 |
|
Other
comprehensive income (loss) |
|
$ |
(83,363 |
) |
|
$ |
18,152 |
|
|
$ |
348,282 |
|
Comprehensive income (loss) |
|
$ |
(5,530,248 |
) |
|
$ |
(6,890,812 |
) |
|
$ |
(4,992,533 |
) |
Comprehensive income (loss) per share - basic |
|
$ |
(0.13 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.15 |
|
Comprehensive income (loss) per share - diluted |
|
$ |
(0.13 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.15 |
) |
(1) Included in other income (expense).(2) Cost
of goods sold would have been $1,234,734 not including a one-time
non-cash write down of inventory for $8,600 for Q3 2023.(3) Gross
profit would have been $903,283 not including a one-time non-cash
write down of inventory for $8,600 for Q3 2023.
About Draganfly
Draganfly Inc. (NASDAQ: DPRO; CSE: DPRO; FSE:
3U8A) is the creator of quality, cutting-edge drone solutions,
software, and AI systems that revolutionize the way organizations
can do business and service their stakeholders. Recognized as being
at the forefront of technology for over 24 years, Draganfly is an
award-winning industry leader serving the public safety, public
health, mining, agriculture, industrial inspections, security,
mapping, and surveying markets. Draganfly is a company driven by
passion, ingenuity, and the need to provide efficient solutions and
first-class services to its customers around the world with the
goal of saving time, money, and lives.
For more information on Draganfly, please visit us at
www.draganfly.com.For additional investor information, visit
https://www.thecse.com/en/listings/technology/draganfly-inc,
https://www.nasdaq.com/market-activity/stocks/dpro or
https://www.boerse-frankfurt.de/equity/draganfly-inc-1.
Media ContactArian HopkinsEmail:
media@draganfly.com
Company ContactEmail: info@draganfly.com
Note Regarding Non-GAAP
Measures
In this press release we describe certain income
and expense items that are unusual or non-recurring. There are
terms not defined by International Financial Reporting Standards
(IFRS). Our usage of these terms may vary from the usage adopted by
other companies. Specifically, gross profit and gross margin are
undefined terms by IFRS that may be referenced herein. We provide
this detail so that readers have a better understanding of the
significant events and transactions that have had an impact on our
results.
Throughout this release, reference is made to
“gross profit,” and “gross margin,” which are non-IFRS measures.
Management believes that gross profit, defined as revenue less
operating expenses, is a useful supplemental measure of operations.
Gross profit helps provide an understanding on the level of costs
needed to create revenue. Gross margin illustrates the gross profit
as a percentage of revenue. Readers are cautioned that these
non-IFRS measures may not be comparable to similar measures used by
other companies. Readers are also cautioned not to view these
non-IFRS financial measures as an alternative to financial measures
calculated in accordance with International Financial Reporting
Standards (“IFRS”). For more information with respect to financial
measures which have not been defined by GAAP, including
reconciliations to the closest comparable GAAP measure, see the
"Non-GAAP Measures and Additional GAAP Measures" section of the
Company’s most recent MD&A which is available on SEDAR.
Forward-Looking Statements
This release contains certain “forward looking
statements” and certain “forward-looking information” as defined
under applicable securities laws. Forward-looking statements and
information can generally be identified by the use of
forward-looking terminology such as “may”, “will”, “expect”,
“intend”, “estimate”, “anticipate”, “believe”, “continue”,
“plans” or similar terminology. Forward-looking statements and
information are based on forecasts of future results, estimates of
amounts not yet determinable and assumptions that, while believed
by management to be reasonable, are inherently subject to
significant business, economic and competitive uncertainties and
contingencies. Forward-looking statements and information are
subject to various known and unknown risks and uncertainties, many
of which are beyond the ability of the Company to control or
predict, that may cause the Company’s actual results, performance
or achievements to be materially different from those expressed or
implied thereby, and are developed based on assumptions about such
risks, uncertainties and other factors set out here in, including
but not limited to: the ability of the Commander 3 XL to enhance
mission success by enabling confident and accurate navigation
through unfamiliar terrain and GPS denied environments; the NDAA
designation signifying that Draganfly's drones are sourced,
manufactured, and equipped with components that meet the criteria
deemed crucial for national security; the Commander 3 XL’s ability
to maximize the State Geological Survey payload capacity and allow
for longer flight times while also meeting the NDAA
requirements;the Commander 3XL Hybrid’s increase in flight
endurance and payload size, making it the ideal system to support
almost any operation; its hosting of the first Draganflyer
Xperience: First Responder User Conference, helping to shape the
trajectory of drone-assisted emergency response for years;
Draganfly’s wildfire services enhancing firefighting operations,
which protect critical infrastructure, towns, valuable natural
resources, and help mitigate air quality hazards from the
devastating impact of wildfires; Draganfly’s new facility helping
Draganfly achieve its commitment to meet the increasing market
potential for its products and solutions; Draganfly's drone
technology playing a role in improving disaster management efforts,
particularly in response to floods and wildfires; Vital
Intelligence technology’s ability to enhance security and
efficiency for the benefit of the correctional facility’s
community, staff, and inmates; and financial condition, the
successful integration of technology, the inherent risks involved
in the general securities markets; uncertainties relating to the
availability and costs of financing needed in the future; the
inherent uncertainty of cost estimates and the potential for
unexpected costs and expenses, currency fluctuations; regulatory
restrictions, liability, competition, loss of key employees and
other related risks and uncertainties disclosed under the heading
“Risk Factors“ in the Company’s most recent filings filed with
securities regulators in Canada on the SEDAR website at
www.sedar.com. The Company undertakes no obligation to update
forward-looking information except as required by applicable law.
Such forward-looking information represents managements’ best
judgment based on information currently available. No
forward-looking statement can be guaranteed and actual future
results may vary materially. Accordingly, readers are advised not
to place undue reliance on forward-looking statements or
information.
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