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Track Group Reports Second Quarter 2017 Results

ROMEOVILLE, Illinois — May 12, 2017 — Track Group today announced financial results for its fiscal 2017 second-quarter ended March 31, 2017. Consolidation and focus on core judicial business positions the company for improved efficiencies, growth and financial performance.

Second Quarter Highlights

  • Net cash provided by operating activities is up 144% from a year ago
  • Revenue from core judicial customers is up 9.5%
  • Extended maturity of Sapinda Asia loan agreement from 9/2017 to 9/2020
  • Generated net proceeds of $510,000 from sale of non-core, hardware asset
  • Global headquarters consolidated to the Chicago area from Salt Lake City, Utah including monitoring center

“Q2 was a strong quarter demonstrated by our growth in revenue, gross profit and cash flow,” said Guy Dubois, Chairman and CEO of Track Group. “I’m pleased with our progress and the improving strength and stability of our business heading into the second half of the year.”

Key Financial Results

  • Revenue increased 9.5% – For the three months ended March 31, 2017, the Company recognized revenue from operations of $7,220,043 compared to $6,592,039 for the three months ended March 31, 2016, an increase of $628,004 or 9.5%. The increase in revenue was principally the result of (i) expansion and growth of offender monitoring in Chile, and (ii) growth of our North American monitoring operations driven by Marion County Community Corrections, and by the Virginia Department of Corrections.
  • Gross profit increased 7.3% – For the three months ended March 31, 2017, gross profit totaled $4,050,164 compared to $3,773,967 for the three months ended March 31, 2016, an increase of $276,197 or 7.3%.
  • Loss from operations decreased $234,394 or 18.8% – For the three months ended March 31, 2017, the loss from operations was ($1,011,814) compared to ($1,246,208) for the three months ended March 31, 2016.
  • Net loss of $1,585,497 – The Company had a net loss of $1,585,497 for the three months ended March 31, 2017, compared to a net loss of $1,920,689 for the three months ended March 31, 2016, a narrowing of $335,192.
  • Cash from operations increased 144% – Net cash provided by operations improved to $1,996,957 for the six months ended March 31, 2017 compared to $817,077 for the same period in 2016 largely due to gains in working capital.
  • Adjusted EBITDA increased 11% – Adjusted EBITDA for the second quarter of 2017 increased approximately 11% to $643,000 up from $580,000 in the same period in 2016.

The Company is also adjusting its outlook from its December 22, 2016 news release indicating FY2017 revenue of $33-35 million and adjusted EBITDA margin of 15-20% to Revenue of $30-33 million and adjusted EBITDA margin of 12-15%.

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