Nanalysis Scientific Corp. Provides Update on Security Services Business
Phase-In of Canada-Wide Coverage at All 89 Designated Airports Completed on January 11, 2024
CALGARY, AB, Jan. 30, 2024 /CNW/ - Nanalysis Scientific Corp. ("the Company" or "Nanalysis", TSXV: NSCI, OTCQX: NSCIF, FRA: 1N1), a leader in portable NMR machines, MRI technology for industrial and research applications, and detection equipment services, gives an update on its subsidiary K'(Prime) Technologies ("KPrime") security services business and the five-year $160 million contract with Canadian Air Transport Security Authority ("CATSA").
Sean Krakiwsky, Founder and CEO of Nanalysis, states: "With the announcement of the award of the CATSA contract back in May of 2022 to the Company's subsidiary KPrime, we significantly expanded our Security Services business, which, over time, will increase our capability to support our proprietary products in NMR and MRI technology. At the time of the award, we announced that there was an initial phase-in period for the project. This period involved our team hiring and training over 100 technicians and taking over all preventative and corrective maintenance services for passenger screening equipment at 89 airports in Canada from the incumbent service provider. We are happy to report we are through that phase-in period and are now in control of the basic service and maintenance of all 89 airports in Canada. The focus now is to start working on the backlog of additional projects and requirements that CATSA has for us. We will do this with the same workforce, and therefore, we are in a phase of the contract whereby the costs level off and revenue is expected to increase substantially."
"Having now taken over all preventative and corrective maintenance services for CATSA, we expect the project to begin generating positive EBITDA in Q1 2024*. As fixed costs have flattened while revenues are ramping up, I expect to maximize EBITDA throughout 2024 and for years to come."
Denis Perron, Senior Director, Screening Technology at CATSA, states: "We have been very pleased with KPrime's progress and congratulate them on achieving this important milestone through their ongoing commitment to building a very capable service team across Canada."
Sime Buric, President of KPrime, a subsidiary of Nanalysis, states: "I am very proud of everyone within the organization that worked tirelessly on this project. The team has been hard at work, in collaboration with CATSA, CATSA's equipment manufacturers, and the exiting incumbent service provider, to reach this major milestone. The team is adaptive and continuously looks for improvements. This approach will position us to expand the capabilities and opportunities for our Security Services business with other customers and partners."
Project Highlights:
- *Project EBITDA: As of January 2024, with the phase-in period's completion, the project is expected to generate positive EBITDA in Q1 2024, excluding final one-time training costs which will end March 31, 2024. EBITDA is expected to grow through 2024 and provide a stepped-up EBITDA contribution for the rest of the contract. Please see the note below regarding one-time and ongoing training obligations.
- Fully Executed Cutover Plan as of January 11, 2024: As a result of the hard and relentless work of the KPrime leadership team and local technicians, and with the support of CATSA's equipment manufacturers and the incumbent service provider, KPrime has now assumed all maintenance responsibilities for CATSA's fleet of imaging and detection equipment across all of Canada.
- Canada-Wide Coverage: KPrime now performs maintenance of CATSA imaging and detection equipment at all 89 designated airports and is now also providing additional authorized work support to CATSA.
- Training costs: Initial training costs for staff maintenance certifications were substantial in the phase-in period. While the Company has taken over all 89 airports, it is still expecting some initial training to occur in the first quarter of 2024 for its most recently hired team members. After completion of initial training, the Company expects lower ongoing training costs commensurate with ordinary staff turnover and ongoing certification maintenance.
Nanalysis Scientific Corp. operates two primary businesses: Scientific Equipment and Security Services. Within its Scientific Equipment business is what the Company terms "MRI and NMR for industry". The Company develops and manufactures portable Nuclear Magnetic Resonance (NMR) spectrometers or analyzers for laboratory and industrial markets. The NMReady-60™ was the first full-feature portable NMR spectrometer in a single compact enclosure requiring no liquid helium or any other cryogens. The Company has followed-up that initial offering with new products and continues to have a strong innovation pipeline. In 2020, the Company announced the launch of its 100MHz device, the most powerful and most advanced compact NMR device ever brought to market.
The Company's devices are used in many industries (oil and gas, chemical, mining, pharma, biotech, flavor and fragrances, agrochemicals, law enforcement, and more) as well as numerous government and university research labs around the world. The Company continues to exploit new global market opportunities independently and with partners. With its partners, the Company provides scientific equipment sales and maintenance services globally.
In 2022, through its subsidiary KPrime, the Company was awarded a five-year, $160 million contract with CATSA to provide maintenance services for passenger screening equipment in Canadian airports. This has resulted in the expansion of the Company's Security Services business. The Company is providing airport security equipment maintenance services for CATSA in each province and territory of Canada. In addition, the Company provides commercial security equipment installation and maintenance services to a variety of customers in North America.
This news release contains certain "forward-looking statements" within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as "anticipates", "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed", "positioned" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
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SOURCE Nanalysis Scientific Corp.
Matthew Selinger, Firm IR Group, 415-572-8152, [email protected]
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