- Q1 2021 AssetCare™ revenues were C$7.3 million compared to C$3.1 million in Q1 2020, up 139%
year-over-year
- AssetCare Over Time recurring revenues in Q1 2021 were
C$6.2 million compared to
C$5.5 million in Q4 2020 and
C$1.0 million in Q1 2020, an increase
of 13% quarter-over-quarter and an increase of 524%
year-over-year
- Total revenues in Q1 2021 were C$8.4
million compared to C$6.6
million in Q1 2020, up 28% year-over-year
- Gross margins in Q1 2021 remained steady at 61%
- Total connected assets were 61,489 at Q1 2021 compared to
59,462 at Q4 2020, up 3% quarter-over-quarter
CALGARY, AB, May 25, 2021 /CNW/ - mCloud Technologies
Corp. (TSXV: MCLD) (OTCQB: MCLDF) ("mCloud" or the
"Company"), a leading provider of asset management and ESG
solutions combining IoT, cloud computing, and artificial
intelligence ("AI"), today announced its financial results for the
first quarter ended March 31, 2021
("Q1 2021").
"mCloud continued to grow its AssetCare business in the first
quarter of 2021, despite the challenges that persisted throughout
the quarter due to pandemic restrictions," said Russ McMeekin, mCloud President and CEO. "Our
pipeline and backlog remain very strong as we await the expected
lifting of these restrictions worldwide beginning in June."
"Global trends such as ESG and the decarbonization of industrial
assets, coupled with the surge in demand for indoor air quality
assurance as businesses seek a return to work, are among the major
growth drivers that give us strong confidence in our ability to
grow mCloud and AssetCare in 2021 and beyond," McMeekin added. "In
addition, we see further growth coming from strategic partnerships
recently announced with three North American utilities and Fidus
Global, which are additive to our growing backlog and
pipeline."
Q1 2021 Revenue Highlights
All figures in millions of Canadian dollars
For the three
months ended March 31,
|
2021
|
2020
|
AssetCare Over
Time
|
$
|
6.191
|
$
|
0.992
|
AssetCare
Initialization
|
1.149
|
2.073
|
Engineering
Services
|
1.041
|
3.493
|
Total
|
$
|
8.381
|
$
|
6.558
|
Gross
Profit
|
$
|
5.122
|
$
|
4.062
|
Gross
Margin
|
61%
|
62%
|
Direct
Expenses
|
|
|
Sales and Marketing
and Salaries, Wages, and Benefits
|
$
|
5.055
|
$
|
6.330
|
Research and
Development
|
0.749
|
--
|
General and
Administrative
|
1.337
|
1.147
|
Total Direct
Expenses
|
$
|
7.141
|
$
|
7.477
|
Operating
EBITDA
|
$
|
(2.019)
|
$
|
(3.415)
|
Professional and
Consulting
|
$
|
1.739
|
$
|
2.076
|
mCloud generated Q1 2021 revenues of C$8.4 million compared to revenues of
C$6.6 million in the fourth quarter
ended December 31, 2020 ("Q4 2020").
This represents a 28% year-over-year increase in revenues despite a
substantial decline in Engineering Services revenue that were the
result of ongoing pandemic restrictions. Gross margins were 61% on
total revenue in Q1 2021, remaining steady compared year-over-year
to the gross margins of 62% seen in the first quarter ended
January 31, 2020 ("Q1 2020").
AssetCare Over Time revenue continued to see high margins, offset
by third-party passthrough expenses present in AssetCare
Initialization revenue.
AssetCare Over Time revenue, which is the recurring component of
AssetCare revenues, was C$6.2 million
in Q1 2021, compared to C$5.5 million
in Q4 2020, representing 13% growth quarter-over-quarter and
compared to C$1.0 million in Q1 2020,
representing 524% growth year-over-year.
2,027 connected assets were added in Q1 2021, yielding a total
of 61,489 assets in the quarter compared to 59,462 at the end of Q4
2020. The Company noted most of these connected assets came from
existing customers, illustrating the inherent "stickiness" of
mCloud's commercial Software-as-a-Service ("SaaS") business model
and the Company's ability to organically grow its AssetCare
business through adding to customer Lifetime Value ("LTV") with
existing customers on an ongoing basis.
Operating EBITDA, defined as gross profit less all direct
expenses, improved in Q1 2021 by approximately C$1.4 million year-over-year compared to Q1 2020,
even with the addition of approximately C$0.7 miliion in research and development
expenses. This was due to the increase in gross profit and reduced
payroll expenses in the quarter. Professional and Consulting
expenses were approximately C$0.3
million lower in Q1 2020, a function of the timing of
certain corporate development activities.
Progress since January
2021
Since January 2021, mCloud has
raised approximately C$20.4 million
from subsequent tranches of a convertible equity debenture
originally announced on December 7,
2020 and the close of a fully subscribed C$14.5 million overnight offering in April 2021. The Company also announced on
May 17 it had secured a C$5 million operating line from ATB Financial,
adding to mCloud's working capital to deploy AssetCare contracts
and accelerating the Company's growth plans internationally.
Q1 2021 saw the addition of Kim
Clauss, who joined mCloud as the Company's Executive Vice
President, HR and Global Talent announced on March 8, and Arnel
Santos, who will be joining mCloud shortly as the Company's
Executive Vice President and President, Americas announced on
May 5. A veteran Honeywell sales
leader, Derrill Meyer, also joined
the mCloud team in Q1 2021 to bolster mCloud's sales efforts in
North America.
On April 23, mCloud announced
partnerships with three utilities in the
United States and Canada
supporting the uptake of AssetCare solutions for Connected
Buildings centered around the delivery of HVAC energy efficiency
and indoor air quality ("IAQ") solutions with small- and mid-size
businesses.
In the month of May, the Company announced it had completed the
connection of its first buildings in New
York State through one of these partnerships. Also announced
was equipping the head office of a Raymond
James affiliate, Cadence Financial Group®, with an AssetCare
HVAC and IAQ solution. mCloud released its first annual ESG report
in May, which is now available for download through mCloud's Web
site.
2021 Look Ahead
mCloud noted it maintains a strong backlog and sales pipeline
capable of doubling the growth of AssetCare revenues with robust
gross margins over the course of 2021. The Company anticipates
seeing pandemic restrictions begin to ease in late June, which is
expected to enable the mCloud team across all segments to expand
its ability to work with customers, complete outstanding AssetCare
connections, and accelerate progress on backlog delivery.
Progress continues toward connecting 70,000 assets, the
milestone at which the Company expects recurring revenues from
AssetCare will sustain the Company's regular operations on an
ongoing basis. With the pace at which mCloud expects to see
pandemic restrictions lift, the Company is actively working toward
achieving the 70,000 connected asset milestone in the late summer
or early fall, at which point the Company will turn its focus
toward achieving its next growth target of 100,000 connections.
Changes to Board of Directors
Effective May 31, 2021,
Michael Sicuro, Co-Founder and
Chairman of the Board will retire from mCloud's Board of Directors.
Mr. Sicuro played a pivotal role in establishing the Company's
foundation as a business and establishing the sound governance that
mCloud will continue to build on going forward. Mike Allman will assume the position of Chairman
effective June 1, 2021.
Final Close of December 2020
Convertible Debenture
Further to its press release dated March
26, 2021, mCloud announced today it had closed the sixth and
final tranche of its private placement offering of convertible
unsecured subordinated debentures (the "Debentures") at a price of
US$100 per Debenture (the "Final
Tranche"). The aggregate gross proceeds received by mCloud under
the Final Tranche were US$1.916
million. In connection with the Final Tranche, the Company
paid a finder's fee to American Trust Investor Services, Inc. for
its services introducing certain purchasers to the Company under
the Final Tranche, being i) cash compensation of $148,580; and ii) 104,880 broker warrants, with
each broker warrant being exercisable for one common share of the
Company (a "Common Share") at a price of US$1.14 per Common Share.
The Debentures issued in the Final Tranche have a term of 36
months and bear interest at a rate of 8% per annum, calculated and
paid quarterly on the last day of March, June, September and
December of each year. Interest will be paid in Common Shares or
cash at the election of the Company. The first interest payment
will be due and payable on June 30,
2021.
The principal amount of the Debentures will be convertible into
Common Shares (each, a "Debenture Share") at the option of the
holder at any time prior to the close of business on the business
day immediately preceding the maturity date of the Debentures (the
"Maturity Date"). The conversion price per Debenture Share issuable
under the Final Tranche is US$1.14
per Debenture Share. The principal amount of Debentures outstanding
will be repayable in Common Shares or cash at the election of the
Company on the Maturity Date.
The net proceeds from the Final Tranche will be used for
working capital purposes. All securities issued under the Final
Tranche will be subject to a statutory four month hold period.
This news release does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities in the United States. The securities issued under
the Final Tranche have not been and will not be registered under
the United States Securities Act of 1933, as amended (the "U.S.
Securities Act") or any state securities laws, and may not be
offered or sold within the United
States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws, or an
exemption from such registration is available.
Q1 2021 Earnings Conference Call
The Company is hosting a conference call to discuss the
financial results for the first quarter at 10:00 a.m. ET tomorrow.
The conference call will include prepared remarks from
Russ McMeekin, Chief Executive
Officer, and Chantal Schutz, Chief
Financial Officer. After the prepared remarks, the Company will
accept questions.
To access the conference call by telephone, dial 647-427-7450 or
1-888-231-8191. Please connect approximately 10 minutes prior to
the beginning of the call to ensure participation. The conference
call will be archived for replay by telephone until Wednesday, June 2, 2021 at midnight (ET). To
access the archived conference call, dial 1-855-859-2056 and enter
the reservation number 1266114.
A live audio webcast of the conference call will be available at
https://bit.ly/33Ai1vV. 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. The
webcast will be archived at the above website for one year.
About mCloud Technologies Corp.
mCloud is unlocking the untapped potential of energy intensive
assets with AI and analytics, curbing energy waste, maximizing
energy production, and getting the most out of critical energy
infrastructure. Through mCloud's AI-powered AssetCare™ platform,
mCloud offers complete asset management solutions for commercial
buildings, renewable energy, healthcare, heavy industry, and
connected workers. IoT sensors bring data from connected assets
into the cloud, where AI and analytics are applied to maximize
their performance.
Headquartered in Canada with
offices worldwide, the mCloud family includes an ecosystem of
operating subsidiaries that deliver high-performance IoT, AI, 3D,
and mobile capabilities to customers, all integrated into
AssetCare. With over 100 blue-chip customers and more than 61,000
assets connected in thousands of locations worldwide, mCloud is
changing the way energy assets are managed.
mCloud's common shares trade on the TSX Venture Exchange under
the symbol MCLD and on the OTCQB under the symbol MCLDF. mCloud's
convertible debentures trade on the TSX Venture Exchange under the
symbol MCLD.DB. For more information, visit
www.mcloudcorp.com.
Non-GAAP Measure
Selected financial information for the three-month periods ended
March 31, 2021 and March 31, 2020 set out above include reference to
"Operating EBITDA," which is not recognized under International
Financial Reporting Standards and is a non-generally accepted
accounting principle ("Non-GAAP") measure.
The Company defines Operating EBITDA attributed to shareholders
as gross profit less all expenses related to sales and marketing,
wages, salaries, and benefits, research and development, and
general and administrative activities.
The Company believes Operating EBITDA is a useful measure as it
provides important and relevant information to management about the
operating and financial performance of the Company. Operating
EBITDA enables management to assess its ability to generate
operating cash flow to fund future working capital needs, and to
support future growth.
This information should be read in conjunction with the
unaudited interim consolidated financial statements for the three
months ended March 31, 2021 and
audited consolidated financial statements and notes thereto for the
year ended December 31, 2020 along
with mCloud's MD&As for the corresponding periods, which are
available under mCloud's profile on SEDAR at www.sedar.com.
Forward-Looking Information and Statements
This press release contains certain "forward-looking
information" within the meaning of applicable Canadian securities
legislation and may also contain statements that may constitute
"forward-looking statements" within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Such forward-looking information and forward-looking
statements are not representative of historical facts or
information or current condition, but instead represent only the
Company's beliefs regarding future events, plans or objectives,
many of which, by their nature, are inherently uncertain and
outside of the Company's control. Generally, such forward-looking
information or forward-looking statements can be identified by the
use of forward-looking terminology such as "plans", "expects" or
"does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or may contain statements that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "will
continue", "will occur" or "will be achieved". The forward-looking
information contained herein may include information related to the
timing of easing of pandemic restrictions, acceleration of
onboarding new AssetCare customers, business growth from strategic
partnerships, the growth of mCloud's business in 2021, and the
point at which recurring revenues will sustain regular Company
operations.
By identifying such information and statements in this manner,
the Company is alerting the reader that such information and
statements are subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of the Company to be
materially different from those expressed or implied by such
information and statements.
An investment in securities of the Company is speculative and
subject to several risks as discussed under the heading "Risk
Factors" on pages 29 to 46 of the Company's filing statement dated
October 5, 2017. Although the Company
has attempted to identify important factors that could cause actual
results to differ materially from those contained in the
forward-looking information and forward-looking statements, there
may be other factors that cause results not to be as anticipated,
estimated or intended.
In connection with the forward-looking information and
forward-looking statements contained in this press release, the
Company has made certain assumptions. Although the Company believes
that the assumptions and factors used in preparing, and the
expectations contained in, the forward-looking information and
statements are reasonable, undue reliance should not be placed on
such information and statements, and no assurance or guarantee can
be given that such forward-looking information and statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such information and
statements. The forward-looking information and forward-looking
statements contained in this press release are made as of the date
of this press release, and the Company does not undertake to update
any forward-looking information and/or forward-looking statements
that are contained or referenced herein, except in accordance with
applicable securities laws. All subsequent written and oral
forward- looking information and statements attributable to the
Company or persons acting on its behalf is expressly qualified in
its entirety by this notice.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE mCloud Technologies Corp.