Q1 Results include Record 11% revenue growth;
$14.7M in cash from operating activities; and 13% year-over-year
growth in Total ARR
Absolute Software Corporation (“Absolute” or the “Company”)
(TSX: ABST) (Nasdaq: ABST), a leader in Endpoint Resilience™
solutions, today announced its financial results for the three
months ended September 30, 2020. All dollar figures are stated in
U.S. dollars, unless otherwise indicated.
“Q1 was a solid start to the fiscal year, with increased
momentum as we see demand for persistent visibility, control, and
resilience accelerate across various segments in response to remote
and hybrid work and learning models,” said Christy Wyatt, President
and CEO at Absolute. “In addition, our recent listing on Nasdaq and
capital raise was a significant milestone for the company and
positions us well to be able to respond to the large market
opportunity in front of us.”
First Quarter Fiscal 2021 (“Q1-F2021”) Financial
Highlights
- Total revenue in Q1-F2021 was $28.5 million, representing a
year-over-year increase of 11%.
- Net income in Q1-F2021 was $2.6 million, representing a
year-over-year decrease of 25%.
- Total Annual Recurring Revenue (“ARR”) (refer to “Non-IFRS
Measures and Key Metrics” below) at September 30, 2020 was $111.7
million, representing an increase of 13% over the prior year
balance and a sequential increase of 3% as compared to June 30,
2020.
- The Enterprise & Government portions of Total ARR (refer to
“Non-IFRS Measures and Key Metrics” below) increased by 12%
annually and by 1% as compared to June 30, 2020. Enterprise &
Government sector customers represented 67% of Total ARR at
September 30, 2020.
- The Education sector portion of Total ARR (refer to “Non-IFRS
Measures and Key Metrics” below) increased by 14% annually and 7%
as compared to June 30, 2020. Education sector customers
represented 33% of Total ARR at September 30, 2020.
- Incremental ARR from New Customers (refer to “Non-IFRS Measures
and Key Metrics” below) was $1.8 million in Q1-F2021, compared to
$1.1 million in Q1-F2020.
- Net ARR Retention (refer to “Non-IFRS Measures and Key Metrics”
below) from existing customers was 102% in Q1-F2021, compared with
100% in Q1-F2020.
- Adjusted EBITDA (refer to “Non-IFRS Measures and Key Metrics”
below) in Q1-F2021 was $8.1 million, or 29% of revenue, up from
$7.1 million, or 28% of revenue, in Q1-F2020.
- Cash generated from operating activities in Q1-F2021 was $14.7
million, compared to $7.5 million in Q1-F2020.
- Absolute paid a quarterly dividend of CAD$0.08 per common share
during Q1-F2021.
First Quarter Fiscal 2021 Business Highlights
During Q1-F2021, Absolute had the following product and service
highlights:
- In August, we announced new platform capabilities enabling IT
and Security teams to automatically generate and distribute
scheduled reports to help ensure compliance across the enterprise;
easily monitor, manage, and secure missing endpoint devices at
scale; and understand if critical endpoint controls are healthy and
working effectively.
- In September, we were named a Leader in the G2 Summer 2020 Grid
Report for Endpoint Management, making this the fifth quarter in a
row we’ve been recognized by our customers based on our high levels
of customer satisfaction and their likeliness to “recommend”
Absolute.
- In September, we announced limited-time offers for customers to
purchase critical add-on capabilities, including Absolute's
Application Persistence™ service and Absolute Reach® portfolio,
previously available only with the Company’s top-tier Resilience
edition.
- In September, we also extended, through October 30, 2020, the
COVID-19 offers originally announced in April that provide existing
customers with the ability to self-heal existing virtual private
network (VPN) applications and more seamlessly secure, manage, and
patch remote devices at no additional cost.
- In September, we published our second annual Education Endpoint
Trends Report, titled ”Distance Learning’s Impact on Education IT.”
The research underscored the complexities of K-12 device and data
security amidst the sudden shift to remote learning in the wake of
the COVID-19 outbreak.
In Q1-F2021 and early in Q2-F2021, we had the following major
business and organizational developments:
- In August, we filed a short form base shelf prospectus with the
securities regulatory authorities in each of the provinces and
territories of Canada except Quebec.
- In October, we appointed Steven Gatoff as Chief Financial
Officer. Mr. Gatoff will take his position effective November 10,
2020, and will have responsibility for all global finance,
accounting, financial reporting, audit, tax, investor relations,
and capital planning functions.
- In October, we completed a public offering of our common shares
in the United States and Canada for gross proceeds of approximately
$69 million and a corresponding cross-listing of our common shares
on the Nasdaq Global Select Market. Our common shares now trade on
both the Toronto Stock Exchange and Nasdaq under the symbol
“ABST.”
Partner and other highlights in Q1-F2021 included:
- In September, we announced the launch of the new Absolute
Partner Program designed to increase revenue opportunities across
the Company’s global network of channel partners, resellers,
distributors, managed service providers, and system
integrators.
- We saw several new market successes with our OEM
partners, including strong online
promotion with Lenovo as well as new product bundles.
- We saw significant growth in our emerging markets with HP in
the Education sector.
- Absolute launched the ‘Blueprint for Success’ program with Dell
– designed to help build pipeline across K-12 and higher education
opportunities.
Summary of Key Financial Metrics
USD Millions, except per share data
Q1
F2021
F2020
Change
Revenue
Commercial recurring(1)
$
27.6
$
24.6
12%
Other
$
0.9
$
1.1
(14%)
Total
$
28.5
$
25.7
11%
Net Income
$
2.6
$
3.5
(25%)
Per share (basic and diluted)
$
0.06
$
0.08
As a percentage of revenue
9%
13%
Adjusted EBITDA(2)
$
8.1
$
7.1
15%
As a percentage of revenue
29%
28%
Cash from operating activities
$
14.7
$
7.5
97%
Dividends paid
$
2.6
$
2.5
3%
Per share (CAD)
$
0.08
$
0.08
Cash, cash equivalents, and short-term
investments
$
58.2
$
38.9
50%
Total assets
$
136.7
$
106.3
29%
Deferred revenue
$
148.4
$
130.8
14%
Common shares outstanding
42.7
41.8
2%
Notes: 1.
Commercial recurring revenue represents
revenue derived from “Cloud Services” (as defined in our Q1-F2021
MD&A) and recurring managed professional services, both of
which are included as part of Total ARR (see “Non-IFRS Measures and
Key Metrics” in this press release). Other revenue represents
revenue derived from non-recurring professional services and
ancillary product lines, including consumer products.
2.
Throughout this press release, “Adjusted
EBITDA” is used as a profitability measure. Please refer to the
“Non-IFRS Measures and Key Metrics” section of this press release
for further discussion on this measure.
F2021 Financial Outlook
The Company is updating its previously disclosed financial
outlook for F2021 as follows:
- The Company is narrowing its outlook on revenue from $112
million to $118 million (representing 7% to 13% annual growth), to
$116 million to $118 million (representing 11% to 13% annual
growth).
- The Company is narrowing its outlook on Adjusted EBITDA from
20% to 24% of revenue, to 21% to 24% of revenue.
- The Company is narrowing its outlook on Cash from operating
activities from 22% to 34% of revenue, to 25% to 34% of
revenue.
- The Company is maintaining its outlook for capital expenditures
and expect them to be between $3.0 million and $4.0 million.
The foregoing outlook and expectations constitute
forward-looking statements and financial outlook and are qualified
in their entirety by the “Forward-Looking Statements” cautionary
statement below.
Quarterly Dividend
On October 19, 2020, the Company declared a quarterly dividend
of CAD$0.08 per share on its common shares, payable in cash on
November 30, 2020 to shareholders of record at the close of
business on November 13, 2020.
Quarterly Filings
Management’s Discussion and Analysis (“MD&A”) and
Consolidated Financial Statements and the notes thereto for the
fiscal period ended September 30, 2020 can be obtained today from
Absolute’s corporate website at www.absolute.com. The documents
will also be available under Absolute’s SEDAR profile at
www.sedar.com and on EDGAR at www.sec.gov.
Notice of Conference Call
Absolute will hold a conference call to discuss its Q1-F2021
financial results on Monday, November 9, 2020, at 5:00 p.m. ET
(2:00 p.m. PT). All interested parties can join the call by dialing
647-427-7450 or 1-888-231-8191. Please dial-in 15 minutes prior to
the call to secure a line. The conference call will be archived for
replay until Monday, November 16, 2020 at midnight ET. To access
the archived conference call, please dial 416-849-0833 or
1-855-859-2056 and enter the reservation code 9415737.
A live audio webcast of the conference call will be available at
www.absolute.com and here. Please connect at least 15 minutes prior
to the conference call to ensure adequate time for any software
download that may be required to join the webcast. An archived
replay of the webcast will be available for 90 days.
Non-IFRS Measures and Key Metrics
Throughout this press release, the Company refers to a number of
measures and metrics that the Company believes are meaningful in
the assessment of the Company’s performance. Many of these metrics
are non-standard measures under International Financial Reporting
Standards (“IFRS”), do not have any standardized meaning under
IFRS, and are unlikely to be comparable to similarly titled
measures reported by other companies. Readers are cautioned that
the disclosure of these items is meant to add to, and not replace,
the discussion of financial results or cash flows from operations
as determined in accordance with IFRS. For more complete discussion
of these non-IFRS measures, please refer to the Company’s MD&A
for the period ended September 30, 2020.
These measures and metrics, and their method of calculation or
reconciliation to IFRS measures, are as follows:
1) Total ARR, Net ARR Retention and ARR from New Customers
As the majority of the Company’s customer contracts are sold
under multiyear term licenses, there is a significant lag between
the timing of the billing and the associated revenue recognition.
As a result, the Company focuses on the aggregate annualized value
of its subscriptions under contract and generating revenue,
measured by Annual Recurring Revenue (“ARR”), as an indicator of
its future revenues.
Note that prior to Q4-F2020, we referred to ARR as Annual
Contract Value or “ACV”; however, we have changed the nomenclature
of this measure as we believe ARR is more aligned with industry
norms. There has been no change in the method by which this measure
(and related measures below) is calculated.
Total ARR measures the amount of recurring annual revenue
Absolute will receive from its commercial customers under contract
at a point in time, and therefore is an indicator of the Company’s
future revenue streams. Net ARR Retention measures the percentage
increase or decrease in Total ARR at the end of a period for the
customers that made up Total ARR at the beginning of the same
period. This metric provides insight into the effectiveness of
Absolute’s customer retention and expansion functions. ARR from New
Customers measures the addition to the Total ARR from sales to new
commercial customers during the period.
We believe that increases in the amount of ARR from New
Customers, and improvement in the Company’s Net ARR Retention, will
grow Total ARR and, in turn, our future revenues.
2) Adjusted EBITDA
Management believes that analyzing operating results exclusive
of significant non-cash items or items not controllable in the
period provides a useful measure of the Company’s performance. The
term Adjusted EBITDA refers to net income before adding/deducting
interest income or expense, income taxes, amortization of
intangible assets, property and equipment, and right of use assets,
foreign exchange gains or losses, share-based compensation, and
restructuring or reorganization charges and post-retirement
benefits.
The following table provides a reconciliation of our Net Income
under IFRS to Adjusted EBITDA:
Three months ended September
30,
(in millions)
2020
2019
Net income
$
2.6
$
3.5
Adjustments
Amortization of property and
equipment(1)
0.9
0.8
Amortization of right of use assets(2)
0.5
0.4
Share-based compensation(3)
2.6
1.2
Finance income, net(4)
(0.0
)
(0.1
)
Interest on lease liability(5)
0.1
0.1
Foreign exchange loss(6)
0.2
0.0
Income tax expense(7)
1.3
1.2
Adjusted EBITDA
$
8.1
$
7.1
Notes:
(1)
Amortization of property and equipment per
the Statement of Cash Flows.
(2)
Amortization of right of use assets per
the Statement of Cash Flows.
(3)
Share-based compensation per the Statement
of Operations.
(4)
Finance income, net per the Statement of
Operations.
(5)
Interest on lease liability per the
Statement of Operations.
(6)
Foreign exchange loss per the Statement of
Operations.
(7)
Income tax expense per the Statement of
Operations.
About Absolute
Absolute is a leader in Endpoint Resilience solutions and the
industry’s only undeletable defense platform embedded in over a
half-billion devices. Enabling a permanent digital tether between
the endpoint and the enterprise who distributed it, Absolute
provides IT and Security organizations with complete connectivity,
visibility, and control, whether a device is on or off the
corporate network and empowers them with Self-Healing Endpoint™
security to ensure mission-critical apps remain healthy and deliver
intended value.
©2020 Absolute Software Corporation. All rights reserved.
ABSOLUTE, the ABSOLUTE logo, and ABSOLUTE REACH are registered
trademarks of Absolute Software Corporation in the United States
and/or other countries. Other names or logos mentioned herein may
be the trademarks of Absolute or their respective owners. The
absence of the symbols ™ and ® in proximity to each trademark, or
at all, herein is not a disclaimer of ownership of the related
trademark.
Forward-Looking Statements
This press release contains certain forward-looking statements
and forward-looking information, as defined under applicable
securities laws, including, without limitation, the U.S. Private
Securities Litigation Reform Act of 1995 (collectively,
“forward-looking statements”), which relate to future events or
Absolute’s future business, operations, and financial performance
and condition. Forward-looking statements normally contain words
like “will”, “intend”, “anticipate”, “could”, “should”, “may”,
“might”, “expect”, “estimate”, “forecast”, “plan”, “potential”,
“project”, “assume”, “contemplate”, “believe”, “shall”,
“scheduled”, and similar terms and, within this press release,
include, without limitation, the information under the heading
“F2021 Financial Outlook” and any statements (express or implied)
respecting: Absolute’s future plans, strategies, and objectives,
including plans, strategies, and objectives arising out of the
COVID-19 pandemic; the impacts of the COVID-19 pandemic (including,
without limitation, greater/continued remote working and/or
distance learning) on Absolute’s business, operations, prospects,
and financial results; projected growth, revenues, margins,
Adjusted EBITDA, profitability, expenses, cash from operating
activities, capital expenditures, and earnings; existing and new
product functionality and suitability; PC OEM and other partner
activities and initiatives; and expectations for the size of the IT
security industry, including as a result of COVID-19.
Forward-looking statements, including the F2021 Financial Outlook,
are provided for the purpose of presenting information about
management’s current expectations and plans relating to the future
and allowing investors and others to get a better understanding of
our anticipated financial position, results of operations, and
operating environment. Readers are cautioned that such information
may not be appropriate for other purposes.
Forward-looking statements are not guarantees of future
performance, actions, or developments and are based on
expectations, assumptions and other factors that management
currently believes are relevant, reasonable, and appropriate in the
circumstances. The material expectations, assumptions, and other
factors used in developing the forward-looking statements set out
herein include or relate to the following, without limitation:
Absolute will be able to successfully execute its plans,
strategies, and objectives; Absolute will be able to successfully
manage cash flow, operating expenses, interest expenses, capital
expenditures, and working capital and credit, liquidity, and market
risks; Absolute will be able to leverage its past, current, and
planned investments to support growth and increase profitability;
there will continue to be a trend toward greater/continued remote
working and/or distance learning, in the short, medium, and/or
long-term, and a resulting market shift in the demand for endpoint
security and Absolute’s solutions; Absolute will be able to grow
revenue by selling to new customers and increasing subscriptions
with existing customers at or above the rates currently
anticipated; Absolute will be able to renew customers’
subscriptions more efficiently and cost effectively, including
through its ServiceSource partnership; the size of the IT security
industry will be in line with industry experts’ and Absolute’s
expectations; Absolute will maintain and enhance its competitive
advantages within its industry and certain markets; Absolute will
keep pace with or outpace the growth, direction, and technological
advancement in its industry; industry data and projections are
accurate and reliable; Absolute will be able to adapt its
technology to be compatible with changes to existing, and new,
operating systems such as Microsoft Windows; Absolute will be able
to maintain and develop its PC OEM and other partner networks;
Absolute’s current and future (if any) PC OEM partners will
continue to provide embedded firmware and distribution and resale
support; Absolute’s existing and new products will function as
intended and will be suitable for the intended end users; Absolute
will be able to design, develop, and release new products,
features, and services and enhance its existing products and
services; Absolute will be able to protect against the improper
disclosure of data it may process, store, and/or manage; Absolute’s
revenues will not become subject to increased seasonality; Absolute
will use the proceeds of the recent public equity offering as
intended; future financing will be available to Absolute on
favourable terms if and when required; Absolute will be in a
financial position to issue dividends in the future; fluctuations
in applicable tax rates, foreign exchange rates, and interest rates
will not have a material impact on Absolute; certain tax credits
will remain or become available to Absolute; Absolute will be able
to attract and retain key personnel; Absolute will be successful in
its brand awareness and other marketing initiatives; Absolute will
be able to successfully integrate businesses, intellectual
property, products, personnel, and/or technologies that it may
acquire (if any); Absolute will be able to maintain and enhance its
intellectual property portfolio; Absolute’s protection of its
intellectual property will be sufficient and its technology does
not and will not materially infringe third party intellectual
property rights; Absolute will be able to obtain any necessary
third party licenses on favourable terms; Absolute will be able to
successfully manage the additional expenses, regulatory
obligations, and legal exposures resulting from its SEC
registration and Nasdaq listing; Absolute will not become involved
in material litigation; Absolute will not face any material
unexpected costs related to product liability or warranties;
foreign jurisdictions will not impose unexpected risks; Absolute
will maintain or enhance its accounting policies and standards and
internal controls over financial reporting; and economic and market
conditions (including, without limitation, as affected by the
COVID-19 pandemic) will not impose unexpected risks or
challenges.
Although management believes that the forward-looking statements
herein are reasonable, actual results could be substantially
different due to the risks and uncertainties associated with and
inherent to Absolute’s business, including the following risks (as
more particularly described in the “Risk and Uncertainties” section
of Absolute’s Q1-F2021 Management’s Discussion and Analysis, which
is available at www.absolute.com and under Absolute’s SEDAR profile
at www.sedar.com and on EDGAR at www.sec.gov): risks related to the
COVID-19 pandemic and its impact on Absolute; that Absolute may not
be able to accurately predict its rate of growth and profitability;
that Absolute’s estimates of market opportunity and market and
revenue growth may be inaccurate or Absolute may fail to grow at
its estimated rates; that Absolute may need or elect to use the
proceeds of the recent public equity offering other than as
currently intended and disclosed; Absolute’s dependence for sales
on PC OEM partners and other distribution channels; that Absolute
is heavily dependent on its ability to maintain its embedded
firmware with its current PC OEM partners; risks related to
economic and political uncertainty; that Absolute may be unable to
attract new customers or its existing customers may not renew or
expand their existing commercial relationship with Absolute; that
Absolute may be unable to adapt its technology to be compatible
with new operating systems; that changing buying patterns in the
education vertical may adversely impact Absolute’s business; that
changing contracting or fiscal policies of government organization
may adversely affect Absolute’s business and operations; risks
relating to the evolving nature of the market for Absolute’s
products; that Absolute’s software services may contain errors,
vulnerabilities or defects; that Absolute could suffer security
breaches impacting the third-party data that Absolute stores and
the other risks associated with data security and hacking; that
Absolute’s reputation may be damaged, and its financial results
negatively affected, if its internal networks, systems or data are
perceived to have been compromised; that customers may expose
Absolute to potential violations of applicable privacy laws if the
customer does not comply with such laws; that continued sales
growth may cause operating challenges for Absolute; that Absolute’s
focus on larger enterprise customers could result in greater costs,
less favourable commercial terms, and other adverse impacts to
Absolute; risks associated with any failure by Absolute to
successfully promote and protect its brands; that Absolute’s
business may be impacted by business cycles; risks associated with
the competition Absolute faces within its industry; that Absolute’s
research and development efforts may not be successful; risks
resulting from interruptions or delays from third-party hosting
facilities; that Absolute’s business may suffer if it cannot
continue to protect its intellectual property rights; that Absolute
may be unable to obtain patent or other proprietary or statutory
protection for new or improved technologies or products; risks
related to Absolute’s technology incorporating “open source”
software; that Absolute may be unable to maintain technology
licenses from third-parties; risks related to fluctuating foreign
exchange rates; that the price of Absolute’s common shares may be
subject to wide fluctuations; risks related to Absolute’s SEC
registration and Nasdaq listing; that Absolute is reliant on its
key personnel; that Absolute may be subject to litigation or
dispute resolution from time-to-time; risks related to Absolute’s
foreign operations; that Absolute may be unable to successfully
manage and integrate acquisitions (or may be unable to successfully
complete dispositions) of companies, businesses, products or
technologies; risks related to Absolute’s amortization of revenue
over the term of its customer subscriptions; risks related to
Absolute’s reliance on its reseller and other partners for
billings; income tax related risks; Absolute may become subject to
product liability claims; and risks related to Absolute’s reliance
on copyrights, trademarks, trade secrets, and confidentiality
procedures and similar contractual provisions. Additional material
risks and uncertainties applicable to the forward-looking
statements herein include, without limitation, unforeseen events,
developments, or factors causing any of the aforesaid expectations,
assumptions, and other factors ultimately being inaccurate or
irrelevant. Many of these factors are beyond the control of
Absolute.
All forward-looking statements included in this press release
are expressly qualified in their entirety by these cautionary
statements. The forward-looking statements contained in this press
release are made as at the date hereof and Absolute undertakes no
obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as may be required by
applicable securities laws.
ABSOLUTE SOFTWARE CORPORATION
Condensed Consolidated Statements of
Financial Position
(Expressed in United States dollars)
(Unaudited)
September 30, 2020
June 30, 2020
ASSETS
CURRENT
Cash and cash equivalents
$
51,295,830
$
29,727,498
Short-term investments
6,945,633
17,350,152
Trade and other receivables
23,944,861
28,990,235
Income tax receivable
135,657
111,769
Prepaid expenses and other
4,071,404
2,541,183
Contract acquisition assets – current
7,595,928
7,501,339
93,989,313
86,222,176
PROPERTY AND EQUIPMENT
5,090,115
5,563,327
RIGHT OF USE ASSETS
8,692,116
9,181,927
DEFERRED INCOME TAX ASSETS
21,762,745
22,278,745
CONTRACT ACQUISITION ASSETS
6,047,812
5,842,845
GOODWILL
1,100,000
1,100,000
$
136,682,101
$
130,189,020
LIABILITIES
CURRENT
Trade and other payables
$
18,634,592
$
19,996,253
Income tax payable
157,892
382,041
Accrued warranty
101,409
133,000
Lease liabilities – current
1,890,344
1,724,730
Deferred revenue – current
82,949,122
80,843,795
103,733,359
103,079,819
LEASE LIABILITIES
7,941,090
8,411,101
DEFERRED REVENUE
65,494,797
61,759,629
177,169,246
173,250,549
CONTINGENCIES
SHAREHOLDERS’ DEFICIENCY
Share capital
83,042,897
81,890,311
Equity reserve
39,893,838
38,523,835
Treasury shares
(263,840
)
(263,840
)
Accumulated other comprehensive income
30,227
-
Deficit
(163,190,267
)
(163,211,835
)
(40,487,145
)
(43,061,529
)
$
136,682,101
$
130,189,020
ABSOLUTE SOFTWARE CORPORATION
Condensed Consolidated Statements of
Operations and Comprehensive Income
Three months ended September 30, 2020
and 2019
(Expressed in United States dollars)
(Unaudited)
2020
2019
REVENUE
$
28,495,557
$
25,652,489
COST OF REVENUE
3,115,407
3,233,367
GROSS MARGIN
25,380,150
22,419,122
OPERATING EXPENSES
Sales and marketing
10,083,539
9,518,785
Research and development
5,061,693
3,739,586
General and administration
3,443,030
3,324,857
Share-based compensation
2,593,005
1,166,801
21,181,267
17,750,029
OPERATING INCOME
4,198,883
4,669,093
OTHER EXPENSE
Finance income, net
21,936
112,141
Interest expense – lease liability
(138,649
)
(131,201
)
Foreign exchange loss
(186,226
)
(12,819
)
(302,939
)
(31,879
)
NET INCOME BEFORE INCOME TAXES
3,895,944
4,637,214
INCOME TAX EXPENSE
(1,294,000
)
(1,186,000
)
NET INCOME
2,601,944
3,451,214
UNREALIZED GAIN ON DERIVATIVES, NET OF
TAX
30,227
-
COMPREHENSIVE INCOME
$
2,632,171
$
3,451,214
BASIC AND DILUTED INCOME PER
SHARE
$
0.06
$
0.08
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
BASIC
42,626,572
41,722,849
DILUTED
45,831,759
44,169,505
ABSOLUTE SOFTWARE CORPORATION
Condensed Consolidated Statement of
Changes in Shareholders’ Deficiency
(Expressed in United States dollars)
(Unaudited)
Share Capital
Number of Common
shares
Amount
Equity reserve
Treasury shares
Accumulated Other
Comprehensive Income
Deficit
Total
BALANCE, JUNE 30, 2019
41,645,552
$
76,778,014
$
36,744,933
$
(359,973
)
-
$
(163,778,642
)
$
(50,615,668
)
Shares issued on options exercised
6,688
43,625
(7,726
)
-
-
-
35,899
Shares issued under Employee Share
Purchase Plan
35,963
180,842
-
-
-
-
180,842
Shares issued under Performance and
Restricted Share Unit plan
128,297
619,978
(619,978
)
-
-
-
-
Share-based compensation
-
-
1,032,614
-
-
-
1,032,614
Dividends paid
-
-
-
-
-
(2,509,243
)
(2,509,243
)
Net income and total comprehensive
income
-
-
-
-
-
3,451,214
3,451,214
BALANCE, SEPTEMBER 30, 2019
41,816,500
$
77,622,459
$
37,149,843
$
(359,973
)
-
$
(162,836,671
)
$
(48,424,342
)
Shares issued on options exercised
279,580
2,018,160
(408,511
)
-
-
-
1,609,649
Shares issued under Employee Share
Purchase Plan
36,060
188,230
-
-
-
-
188,230
Shares issued under Performance and
Restricted Share Unit plan
412,055
2,077,371
(2,175,273
)
96,133
-
-
(1,769
)
Shares repurchased and cancelled under the
Normal Course Issuer Bid
(8,700
)
(48,828
)
-
-
-
-
(48,828
)
Share Repurchase Adjustment
-
32,919
-
-
-
(32,919
)
-
Share-based compensation expense
-
-
3,957,776
-
-
-
3,957,776
Dividends paid
-
-
-
-
-
(7,525,740
)
(7,525,740
)
Net income and total comprehensive
income
-
-
-
-
-
7,183,495
7,183,495
BALANCE, JUNE 30, 2020
42,535,495
$
81,890,311
$
38,523,835
$
(263,840
)
-
$
(163,211,835
)
$
(43,061,529
)
Shares issued on options exercised
49,682
361,689
(65,322
)
-
-
-
296,367
Shares issued under Employee Share
Purchase Plan
30,508
165,662
-
-
-
-
165,662
Shares issued under Performance and
Restricted Share Unit plan
113,960
625,235
(625,235
)
-
-
-
-
Share-based compensation
-
-
2,060,560
-
-
-
2,060,560
Dividends paid
-
-
-
-
-
(2,580,376
)
(2,580,376
)
Unrealized gain on derivatives, net
-
-
-
-
30,227
-
30,227
Net income
-
-
-
-
-
2,601,944
2,601,944
BALANCE, SEPTEMBER 30, 2020
42,729,645
$
83,042,897
$
39,893,838
$
(263,840
)
$
30,227
$
(163,190,267
)
$
(40,487,145
)
ABSOLUTE SOFTWARE CORPORATION
Condensed Consolidated Statements of
Cash Flows
Three months ended September 30, 2020
and 2019
(Expressed in United States dollars)
(Unaudited)
2020
2019
OPERATING ACTIVITIES
Net income
$
2,601,944
$
3,451,214
Items not involving cash
Amortization of property and equipment
866,213
825,144
Amortization of right of use assets
489,811
413,337
Amortization of contract acquisition
assets
2,540,065
2,249,295
Share-based compensation
2,593,005
1,032,614
Deferred income taxes
516,000
(367,781
)
Unrealized gain on short-term
investments
(28,663
)
(99,106
)
Unrealized foreign exchange loss
156,564
-
Change in non-cash working capital
Trade and other receivables
5,045,374
6,547,368
Income tax receivable
(23,888
)
514,740
Prepaid expenses and other
(1,530,221
)
353,817
Contract acquisition assets incurred
(2,839,621
)
(1,423,246
)
Trade and other payables
(1,264,078
)
(2,467,068
)
Income tax payable
(224,149
)
13,660
Accrued warranty
(31,591
)
79,500
Deferred revenue
5,840,495
(3,645,811
)
CASH FROM OPERATING ACTIVITIES
14,707,260
7,477,677
INVESTING ACTIVITIES
Purchase of property and equipment
(945,871
)
(1,649,153
)
Proceeds from maturities of short-term
investments
10,433,182
6,870,000
Purchase of short-term investments
-
(11,785,502
)
CASH FROM (USED IN) INVESTING
ACTIVITIES
9,487,311
(6,564,655
)
FINANCING ACTIVITIES
Dividends paid
(2,580,376
)
(2,509,243
)
Issuance of common shares
376,331
151,126
Payment of lease liabilities
(460,960
)
(409,865
)
CASH USED IN FINANCING ACTIVITIES
(2,665,005
)
(2,767,982
)
FOREIGN EXCHANGE EFFECT ON CASH
38,766
(10,931
)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
21,568,332
(1,865,891
)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
29,727,498
18,690,539
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
51,295,830
$
16,824,648
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201109006098/en/
Media Relations Shannon Tierney press@absolute.com
408-313-9974
Investor Relations Joo-Hun Kim IR@absolute.com
212-868-6760
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