All amounts are stated in United States dollars unless otherwise
indicated
- 77% Gross Margin, representing record level compared to 72% in
Q1'20
- Net income of $16.7 million
compared to $0.8 million in Q1'20.
Net Income of $3.7 million excluding
impact of warrant valuation compared to net loss of $11.7 million for the same time period last
year
- Adjusted EBITDA of $5.0 million
versus loss of $5.3 million in Q1'20,
representing the third consecutive quarter of Adjusted EBITDA
margin above 25%
- Balance sheet strengthened by $20
million private placement
TORONTO, May 11, 2021 /CNW/ - Optiva Inc. ("Optiva"
or "the Company") (TSX: OPT), a leading provider of
mission-critical, cloud-native revenue management software for the
telecommunications industry, today released its first quarter
financial results for the three-month period ended March 31, 2021.
"I am pleased with our Q1 results. We continue to build a solid
foundation designed to support consistent, long-term, profitable
growth. We are laser focused on running an efficient, optimized
business, so we continue to scrutinize costs and implement new and
improved operational processes. Our strong Adjusted EBITDA results
in the last three quarters are a byproduct of this effort."
"The heart of our rejuvenated company is and always will be our
customers, and we challenge each other to demonstrate this daily
not only in our words but in our actions as well. I remain
confident that the telecom industry will continue to transition its
business model, BSS products and applications to the cloud and that
we will be well positioned to capitalize on that transition. We are
investing aggressively in providing a seamless, improved pathway to
the cloud — whether public, private or hybrid — for both current
and future customers alike. We believe we are at the forefront of
developing and introducing innovative BSS solutions that optimize
service agility within a cloud-native architecture in a way that
enables our customers to succeed by helping them grow
revenue-generating services all while accelerating business
velocity. Customer feedback has been reassuring and
enthusiastic so far. And I expect this enthusiasm to grow as
Optiva's value proposition is realized by current and prospective
customers in our growing sales pipeline. Optiva's momentum is
growing, and to capitalize on this trend, we are continuing to
strengthen and build our in-house R&D and Sales teams," said
John Giere, President and Chief
Executive Officer of Optiva.
Business Highlights
- Subsequent to quarter end, the Company strengthened its balance
sheet by completing a private placement of subordinate voting
shares, resulting in 834,500 shares being issued by the Company at
a price of CDN$30.00 per Share for
aggregate gross proceeds of approximately $20 million. This will help sustain operational
momentum, accelerate product development efforts and build up cash
on the balance sheet to pursue acquisition discussions in the
future.
- ESW Capital, LLC ("ESW") sold all of its subordinate voting
shares of Optiva in a private sale to OceanLink Management Ltd.,
EdgePoint Investment Group Inc., Maple Rock Capital Partners and
Meson Capital. ESW and the Company also terminated all of the
related party agreements between them, and ESW agreed to waive
certain provisions of the warrants to acquire subordinate voting
shares held directly or indirectly by ESW.
- As previously announced, Matthew
Halligan joined Optiva as Chief Technology Officer. Under
Mr. Halligan's leadership, the Company has eliminated fully its
reliance on related parties for R&D expertise and has full
control of its engineering and product development functions.
Optiva continues to invest in our in-house R&D team, with
in-house R&D staff increasing by 16% quarter over quarter.
- Dean Liming joined Optiva as
Global Leader of Managed Services and Support. With this
appointment, we continue to intensify our customer focus, enhance
our MSS touchpoints and pursue a strategic engagement with our
customers for the purpose of strengthening our partnerships as we,
our customers and the market overall navigate in the direction of a
cloud-based business model.
- Optiva is investing in strengthening and building its sales
team as bookings, customer retention, contract renewals, service
enhancement and delivery growth become a strategic focus. Optiva
has significantly intensified its marketing efforts and visibility
including the launch of a new website, which contains fresh new
product content, use cases, articles, blogs, whitepapers and
in-depth value propositions www.optiva.com.
- As previously disclosed, Tele2, a European telecommunications
group serving millions of customers, extended its partnership with
the Company in Sweden and the
Baltics. The five-year agreement includes support services and
updates for its Optiva Charging Engine with an upgrade option to
Optiva's private-cloud offering, enabling innovative new services
and monetizing 5G. Optiva also previously disclosed that Mobily, a
tier one telecom and one of the most advanced operators in the
Middle East, went live with the
Optiva payment solution on Mobily private cloud, increasing its
business and operational agility, flexibility and responsiveness to
meet digital market demands, seize new revenue opportunities and
increase platform performance that will deliver operating expense
(OPEX) savings.
|
|
Q1 Fiscal 2021
Highlights
|
Three Months
Ended
|
($ US Thousands,
except per share information)
|
March
31,
|
(Unaudited)
|
2021
|
2020
|
Revenue
|
16,091
|
19,037
|
Net income
|
16,698
|
808
|
Earnings Per
Share
|
$ 3.14
|
$ 0.15
|
Adjusted
EBITDA
|
$ 4,994
|
$(5,294)
|
Cash used in
operating activities
|
(3,352)
|
(240)
|
Total cash, including
restricted cash
|
10,637
|
30,286
|
- Revenue decreased by $2.9
million, to $16.1 million,
driven by known attritions while showing early indication of
stabilizing at current levels. The year-over-year decrease in
revenue was primarily due to the discontinuation of software,
support and subscription sales to customers who had previously
notified Optiva of their exit.
- Gross margin reached a record level at 77% in the first quarter
of 2021, increasing 5% over the 72% gross margin achieved during
the corresponding period in 2020. This increase was mainly
attributable to strict cost management and operational
efficiencies.
- General and administrative expenses decreased to $4.5 million when compared to $5.5 million during the same period in 2020. The
decrease in the quarter was mainly due to the reversal of a
provision related to an intellectual property claim of $1.3 million. Excluding the provision reversal,
the G&A expenditures increased by $0.3
million compared to the same comparative period last
year.
- Earnings before interest, taxes, depreciation and amortization
("EBITDA")[1] for the first quarter of 2021 was
$6.7 million compared to a loss of
$5.5 million during the same period
in 2020. Adjusted EBITDA[1] ("Adjusted EBITDA") for the
first quarter of 2021 amounted to $5.0
million, as compared to a loss of $5.3 million during the same period in 2020.
- Net income for the first quarter was $16.7 million compared to $0.8 million during the corresponding period in
2020. The increase in net income is mainly attributable to decrease
in value of warrants by $13.7 million
and lower operating costs.
[1] EBITDA and
Adjusted EBITDA are non-IFRS measures. These measures are defined
in the "Non-IFRS Financial Measures" section of this news
release.
|
Non-IFRS Measures
"EBITDA" and "Adjusted EBITDA", are not financial measures
calculated and presented in accordance with International Financial
Reporting Standards (IFRS), and should not be considered in
isolation or as a substitute to net income (loss), operating income
or any other financial measures of performance calculated and
presented in accordance with IFRS, or as an alternative to cash
flow from operating activities as a measure of liquidity. The
Company defines EBITDA as net income (loss) excluding amounts for
depreciation and amortization, other income, finance costs, finance
income, income tax expense (recovery), foreign exchange gain (loss)
and share-based compensation. The Company defines "Adjusted EBITDA"
as EBITDA (as defined above), excluding restructuring costs,
one-time provision amounts, and any one-time transaction costs
associated with shareholder conflict. The Company believes that
Adjusted EBITDA is a metric that investors may find useful in
understanding the Company's financial position. The following table
provides a reconciliation of Net Income to EBITDA and Adjusted
EBITDA.
|
Three months ended
March 31,
|
|
2021
|
2020
|
Net income for the
period
|
$
|
16,698,371
|
$
|
807,649
|
|
|
|
Add back /
(substract):
|
|
|
Amortization of
intangible assets
|
362,763
|
2,488,329
|
Finance
income
|
(71,694)
|
(85,736)
|
Finance
recovery
|
(11,193,469)
|
(9,762,938)
|
Income tax
expense
|
528,228
|
312,205
|
Foreign exchange loss
(gain)
|
(307,328)
|
1,883,340
|
Share-based
compensation
|
722,598
|
(1,244,048)
|
EBITDA
|
6,739,469
|
(5,601,199)
|
|
|
|
Restructuring
costs
|
-
|
116,284
|
Change in other
provisions
|
(1,313,725)
|
-
|
One-time costs
(recovery) related to shareholder conflict
|
|
|
and Debenture
financing
|
(433,610)
|
191,325
|
|
|
|
Adjusted
EBITDA
|
$
|
4,992,134
|
$
|
(5,293,590)
|
|
|
|
About Optiva
Optiva Inc. is a leading provider of mission-critical,
cloud-native revenue management software for the telecommunications
industry. Its products are delivered globally on the private and
public cloud. The Company's solutions help service providers
maximize digital, 5G, IoT and emerging market opportunities to
achieve business success. Established in 1999, Optiva Inc. is on
the Toronto Stock Exchange (TSX: OPT). For more information, visit
www.optiva.com.
Caution Concerning Forward-Looking Statement
Certain statements in this document may constitute
"forward-looking" statements which involve known and unknown risks,
uncertainties and other factors which may cause our actual results,
performance or achievements, or industry results, to be materially
different from any future results, performance or achievements
expressed or implied by such forward looking statements. When used
in this document, such statements use such words as "may," "will,"
"expect," "continue," "believe," "plan," "intend," "would,"
"could," "should," "anticipate" and other similar terminology.
These statements are forward-looking as they are based on our
current expectations, as at March 3,
2021, about our business and the markets we operate in, and
on various estimates and assumptions. Our actual results could
materially differ from our expectations if known or unknown risks
affect our business, or if our estimates or assumptions turn out to
be inaccurate. As a result, there is no assurance that any
forward-looking statements will materialize. Risks that could cause
our results to differ materially from our current expectations are
discussed in the Company's most recent Annual Information Form,
which is available on SEDAR at www.sedar.com and on Optiva's
website at www.optiva.com/investors/. Other unknown or
unpredictable factors or underlying assumptions subsequently
proving to be incorrect could cause actual results to differ
materially from those in the forward-looking statements. Optiva
does not undertake or accept any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statements to reflect any change in its expectations or any change
in events, conditions or circumstances on which any such statement
is based, except as required by law.
OPTIVA
Inc.
|
|
|
Condensed
Consolidated Interim Statements of Financial Position
|
(Expressed in U.S.
dollars)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
March 31,
|
December
31,
|
|
2021
|
2020
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$
|
9,964,263
|
$
|
17,663,998
|
Trade accounts and
other receivables
|
12,687,011
|
7,868,501
|
Unbilled
revenue
|
2,536,842
|
4,086,395
|
Prepaid
expenses
|
2,449,651
|
2,752,304
|
Income taxes
receivable
|
4,813,289
|
4,281,673
|
Other
assets
|
717,439
|
222,101
|
Total current
assets
|
33,168,495
|
36,874,972
|
|
|
|
Restricted
cash
|
673,191
|
625,692
|
Long-term unbilled
revenue
|
3,269,265
|
3,520,177
|
Deferred income
taxes
|
242,920
|
208,237
|
Other
assets
|
604,125
|
624,134
|
Intangible
assets
|
2,892,719
|
3,255,482
|
Goodwill
|
32,271,078
|
32,271,078
|
|
|
|
Total
assets
|
$
|
73,121,793
|
$
|
77,379,772
|
|
|
|
Liabilities and
Shareholders' Deficit
|
|
|
|
|
Current
liabilities:
|
|
|
Trade
payables
|
$
|
6,164,801
|
$
|
8,811,407
|
Accrued
liabilities
|
8,502,155
|
9,677,245
|
Provisions
|
4,223,028
|
5,555,373
|
Income taxes
payable
|
4,227,190
|
4,932,157
|
Deferred
revenue
|
4,874,189
|
4,894,195
|
Total current
liabilities
|
27,991,363
|
33,870,377
|
|
|
|
Deferred
revenue
|
575,231
|
661,837
|
Other
liabilities
|
2,223,708
|
2,797,836
|
Pension and other
long-term employment benefit plans
|
14,157,326
|
15,582,459
|
Debentures
|
86,492,516
|
86,338,367
|
Series A
Warrant
|
3,702,846
|
16,662,808
|
Standby
Warrant
|
317,150
|
-
|
Deferred income
taxes
|
873,962
|
898,146
|
Total
liabilities
|
136,334,102
|
156,811,830
|
|
|
|
Shareholders'
deficit:
|
|
|
Share
capital
|
250,904,013
|
250,904,013
|
Standby
Warrant
|
-
|
997,500
|
Contributed
surplus
|
11,925,692
|
11,406,814
|
Deficit
|
(319,143,878)
|
(335,842,249)
|
Accumulated other
comprehensive loss
|
(6,898,136)
|
(6,898,136)
|
Total shareholders'
deficit
|
(63,212,309)
|
(79,432,058)
|
|
|
|
Total liabilities and
shareholders' equity (deficit)
|
$
|
73,121,793
|
$
|
77,379,772
|
OPTIVA
Inc.
|
|
|
Condensed
Consolidated Interim Statements of Comprehensive Income
(Loss)
|
(Expressed in U.S.
dollars, except share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three months ended,
March 31
|
|
2021
|
2020
|
|
|
|
Revenue:
|
|
|
Support and
subscription
|
$
|
12,787,675
|
$
|
15,115,811
|
Software licenses,
services and other
|
3,303,408
|
3,920,935
|
|
16,091,083
|
19,036,746
|
|
|
|
Cost of
revenue
|
3,674,948
|
5,354,176
|
|
|
|
Gross
profit
|
12,416,135
|
13,682,570
|
|
|
|
Operating
expenses:
|
|
|
Sales and
marketing
|
1,787,168
|
3,023,462
|
General and
administrative
|
4,458,089
|
5,464,180
|
Research and
development
|
516,770
|
11,924,124
|
Restructuring
costs
|
-
|
116,284
|
|
6,762,027
|
20,528,050
|
|
|
|
Income (loss) from
operations
|
5,654,108
|
(6,845,480)
|
|
|
|
Foreign exchange gain
(loss)
|
307,328
|
(1,883,340)
|
Finance
income
|
71,694
|
85,736
|
Finance
recovery
|
11,193,469
|
9,762,938
|
|
|
|
Income before income
taxes
|
17,226,599
|
1,119,854
|
|
|
|
Income tax expense
(recovery)
|
|
|
Current
|
565,922
|
309,187
|
Deferred
|
(37,694)
|
3,018
|
|
528,228
|
312,205
|
|
|
|
Total net income and
comprehensive income
|
$
|
16,698,371
|
$
|
807,649
|
|
|
|
Income per
subordinate voting share
|
|
Basic
|
$
|
3.14
|
$
|
0.15
|
Diluted
|
3.01
|
0.14
|
|
|
|
|
|
|
Weighted average
number of
|
|
|
subordinate voting
shares
|
|
|
Basic
|
5,316,057
|
5,315,757
|
Diluted
|
5,543,600
|
5,632,065
|
|
|
|
OPTIVA
Inc.
|
Consolidated
Statements of Cash Flows
|
(Expressed in U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
Three months ended,
March 31
|
|
2021
|
2020
|
|
|
|
Cash used
in:
|
|
|
|
|
|
Operating
activities:
|
|
|
Income for the
period
|
$
|
16,698,371
|
$
|
807,649
|
Adjustments
for:
|
|
|
Amortization of
intangible assets
|
362,763
|
2,488,329
|
Finance
income
|
(71,694)
|
(85,736)
|
Finance
recovery
|
(11,193,469)
|
(9,762,938)
|
Pension
|
(937,134)
|
4,222
|
Income tax
expense
|
528,228
|
312,205
|
Unrealized foreign
exchange gain
|
(657,610)
|
(794,533)
|
Share-based
compensation
|
722,598
|
(1,244,048)
|
Change in
provisions
|
(1,332,345)
|
(450,501)
|
Change in non-cash
operating working capital
|
(5,743,267)
|
9,419,643
|
|
(1,623,559)
|
694,292
|
Interest
paid
|
(38,319)
|
(22,417)
|
Interest
received
|
1,587
|
54,779
|
Income taxes
paid
|
(1,691,380)
|
(966,408)
|
|
(3,351,671)
|
(239,754)
|
|
|
|
Financing
activities:
|
|
|
Payment of
dividends
|
-
|
(2,209,426)
|
Payment of interest
on loans and borrowings
|
(4,412,723)
|
-
|
|
(4,412,723)
|
(2,209,426)
|
|
|
|
Investing
activities:
|
|
|
Increase / (decrease)
in restricted cash
|
(47,499)
|
30,694
|
|
(47,499)
|
30,694
|
|
|
|
Effect of foreign
exchange rate changes
|
|
on cash and cash
equivalents
|
112,158
|
35,786
|
|
|
|
(Decrease) in
cash and cash equivalents
|
(7,699,735)
|
(2,382,700)
|
|
|
|
Cash and cash
equivalents, beginning of period
|
17,663,998
|
31,747,993
|
|
|
|
Cash and cash
equivalents, end of period
|
$
|
9,964,263
|
$
|
29,365,293
|
SOURCE Optiva Inc.