Appoints Chief Operating Officer and Chief
Financial Officer
TORONTO, Oct. 19, 2018 /CNW/ - Pivot Technology
Solutions, Inc. (TSX: PTG) ("Pivot", or the "Company") today
announced its estimated third quarter revenue and gross profit
margin and made two executive appointments designed to strengthen
its leadership team in support of the delivery of the Company's
commercial transformation and value-creation strategies.
Chief Operating Officer
Matt Olson has been promoted to the
position of Chief Operating Officer. In this role, Mr. Olson will
be responsible for the Company's service delivery operations,
including the design of existing and new service and solution
offerings. He will report to Kevin
Shank, President and Chief Executive Officer. Mr. Olson
joined Pivot in February 2016 as Vice
President of Service Solutions and was appointed Chief Strategy
Officer in August 2016. Over the past
two years, Mr. Olson has led the development of Pivot's services
and solutions portfolio design and strategy. He brings close to 25
years of IT services experience to this important new role at
Pivot, including more than two decades at a multinational IT
services company where he led its development, growth and
performance in various leadership roles. Mr. Olson has a proven
track record in enterprise management, sales, field services,
service operations and managed services. He is a graduate of the
University of Wisconsin.
Chief Financial Officer
David Toews has been appointed as the Company's
Chief Financial Officer, after having served as Interim Chief
Financial Officer since June 2017.
Mr. Toews has more than 25 years of experience in senior financial
roles and a proven track record of success in the technology
sector, including several CFO roles with public companies such as
TSX-listed Leitch Technology Corporation. Over the past 16 months,
he has introduced new financial disciplines and controls to enhance
Pivot's business and operational effectiveness. Mr. Toews is a CPA,
CA and a graduate of McMaster
University.
Management Commentary
"These appointments are
important to align our leadership team to execute our strategy,"
said Mr. Shank. "In his new role, Matt will assist me in
accelerating our commercial transformation. By making Dave's
appointment permanent, we maintain stability within our finance
organization and ensure his expertise is available to us as we
strive to improve our performance. I congratulate both Matt and
Dave and very much look forward to continuing to leverage their
talents."
Business Update
The Company remains focused on
its strategy, which includes the following components: (i) continue
to build on Pivot's core business of selling IT solutions, both
products and services; (ii) enhance Pivot's service portfolio and
capabilities, specifically related to services that Pivot delivers;
(iii) continue the Company's commercial transformation to expand
Pivot's addressable opportunities with existing customers; (iv)
improve cost management; and (v) commercialize and monetize the
Smart Edge™ technology.
"We continuously review our strategy against market trends and
we plan to accelerate its adoption across the business," said Mr.
Shank. "This includes investing in our services portfolio to
drive stronger earnings in the future and further integrating our
operations for cost efficiencies. Based on our initial
analysis, we expect to remove over $5
million in annual costs through cost efficiencies to be
implemented over the next two quarters."
Second Half 2018 Outlook
Q3 results of
operations have yet to be finalized, however revenue is expected to
be approximately US$321 million
(compared to US$389 million in the
prior-year period) due primarily to the timing of sales to major
customers. Q3 gross profit margin is expected to be higher than the
prior-year period at over 12% compared to 11% in Q3 2017.
Despite the lower revenue, the Company expects to report positive
Adjusted EBITDA1 for the quarter. Pivot is unable to
comment further on its revenue and profitability for the third
quarter, however the Company's preliminary outlook for Q4, which is
historically the Company's strongest quarter, is for customers to
return to more traditional buying patterns. (1Non-IFRS
Measure. See Non-IFRS Measures section of this news release)
"Marketplace changes reinforce how important executing our
strategy is to the long-term growth plans of our company," said Mr.
Shank. "We remain confident that the approach we're taking is right
for our customers and shareholders and that today's management
appointments will help us accelerate our integration plans and
facilitate the ongoing commercial transformation."
Smart Edge
The Company continues to make
progress with Smart Edge™. Intel recently announced that Smart
Edge™ was named a Solution Plus Partner in Intel's Network
Builders Winners' Circle ("INBWC"). The INBWC is a program
focused on accelerating network transformation by delivering
technical innovation. "This award demonstrates the tremendous
potential of the Smart Edge™ solution in the marketplace," said Mr.
Shank. "We expect to receive orders for funded proof of
concept projects in the fourth quarter."
Smart Edge™ is an innovative developer platform designed to
support enterprise Multi-Access Edge Computing (MEC) solutions.
Through use cases to date, the Smart Edge™ solution has
demonstrated its ability to improve performance, enhance user
experiences and reduce ongoing edge total cost of ownership – all
key factors in customer adoption of 5G technologies. Revenue
generation is expected to grow with the adoption of 5G.
The Company will announce its third quarter results on or prior
to November 14, 2018 and will host a
conference call at that time to provide additional commentary on
the progress of the business.
NON-IFRS MEASURES
The term "Adjusted EBITDA" does not
have any standardized meaning prescribed within IFRS and therefore
may not be comparable to similar measures presented by other
companies. Such measures should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS such as net income. Adjusted EBITDA is defined as gross
profit less employee compensation and benefits and other selling,
general and administrative expenses, and corresponds to income
before income tax, depreciation and amortization, finance expense,
change in fair value of liabilities, and other (income)
expense.
Management believes Adjusted EBITDA is an important indicator
(as it excludes certain items that are non-cash expenses, items
that cannot be influenced by management in the short term, and
items that do not impact core operating performance), demonstrating
the Company's ability to generate liquidity through operating cash
flow to fund working capital needs, service outstanding debt and
fund future capital expenditures. Adjusted EBITDA is used by
some investors and analysts for the purposes of valuing an
issuer. The intent of Adjusted EBITDA is to provide
additional useful information to investors and analysts and is also
used by management as an internal performance measurement.
About Pivot Technology Solutions
Pivot is an industry
leading information technology services and solutions provider to
many of the world's most successful companies, including members of
the Fortune 1000, as well as governments and educational
institutions. By leveraging its extensive OEM partnerships and its
own fulfillment, professional, deployment, workforce and managed
services, Pivot supports the IT infrastructure needs of its
clients. For more information, visit www.pivotts.com.
Forward Looking Statements
This news release
contains statements that, to the extent they are not recitations of
historical fact, may constitute "forward-looking statements" within
the meaning of applicable Canadian securities laws. Pivot uses
words such as "may", "would", "could", "will", "likely", "expect",
"believe", "intend", "anticipate" and similar expressions to
identify forward-looking statements. Any such forward-looking
statements including statements about Q3 and Q4 results, cost
reductions and the timing of Smart Edge™ orders are based on
assumptions and analyses made by Pivot in light of its experience
and its perception of historical trends, current conditions and
expected future developments. However, whether actual results and
developments will conform to Pivot's expectations and predictions
is subject to any number of risks, assumptions and uncertainties,
including the risk that Q4 revenue and expenses will not meet
management's expectations and the risks detailed in the Company's
Annual Information Form for the year ended December 31, 2017 available at sedar.com. Many
factors could cause Pivot's actual results to differ materially
from those expressed or implied by the forward-looking statements
contained in this news release. The "forward-looking statements"
contained herein speak only as of the date of this news release
and, unless required by applicable law, the Company undertakes no
obligation to publicly update or revise such information, whether
as a result of new information, future events or otherwise.
SOURCE Pivot Technology Solutions, Inc