Hydrix Limited (ASX: HYD), based in Mulgrave, Australia, is a product design and engineering company that designs, develops, and commercializes transformative technologies in medical technology, consumer and industrial products, and safety critical applications for clients across Australia as well as other countries worldwide.
On April 23rd, 2019, the company released its report for the third quarter of FY2019 ended March 31st, 2019 as it witnessed continued strong growth during the period particularly a good performance of the medical and consumer businesses due to international marketing.
Hydrix achieved a record revenue of $ 3.5 million, which is 12% higher relative to 2Q19 and 76% increase in revenue compared to 3Q18. This marked the sixth successive quarter of revenue growth.
During the concerned period, Hydrix won a diverse range of new projects with total aggregate potential value of more than $ 1.5 million, in hearing impairment, critical site protection and mining technology innovation, as well as secured contracts for follow on stages of work on several current projects. Moreover, the aggregate total potential contract value stands at over $ 21 million and the pipeline of qualified opportunities are in excess of $ 40 million.
Besides, Hydrix recently launched the new medical device regulatory consulting initiative which gained traction over the quarter. The company also introduced a new Hydrix branding that better resonates with their strategic initiatives and provides a modern and cohesive brand image for use across their global markets.
The cash outflow from operating activities reduced by $ 1 million relative to 2Q19. The net cash and cash equivalents for the period amounted to AUD 854K. There were net cash outflows of AUD 215K from operating activities and AUD 11K from investing activities balanced over and above by net cash inflows of AUD 960K from financing activities primarily due to large proceeds of AUD 1.4 million from borrowings. The company estimates that the net cash outflows for the next quarter would be around AUD 4.2 million. Going forward, Hydrix would target improved cash flow for the next quarter and the Board has affirmed to have sufficient funding in place to drive and deliver its ongoing organic growth plans.
According to Hydrix’ half yearly results for the six months to December 31st, 2019, the revenue from ordinary activities amounted to ~ $ 6.02 million, which is 237.7% higher than the prior corresponding period (pcp) ended December 31st, 2019. Besides, the loss from ordinary activities stood at around $ 3.45 million, up 160% on $ 1.33 million in the pcp.
The company outstandingly exceeded all of its performance milestones at the end of the half year as the revenue growth exceeded minimum 15% and the engineering services capacity increased by 25%. Moreover, Hydrix secured three new significant and high-dollar value projects and implemented the ‘Buy, Build, Invest’ strategy to broaden revenue sources. In line with the initiative, the company acquired equity in Gyder Surgical, a company commercialising assistive hip replacement technology.
Company’s performance on 2H19 milestone aspirations
Source: Company’s ASX announcement on 23 April’19
To date, Hydrix’ market valuation stands at AUD 14.05 million with ~ 669.12 million outstanding shares. On April 23rd, 2019, the HYD stock price closed the market trading at AUD 0.022, up 4.76% with ~ 2.575 million outstanding shares.