/NOT FOR DISTRIBUTION TO US WIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED STATES
OF AMERICA/
Q3 Revenue of $37.6
million - Year-over-year growth of 48% in Q3 and 87% for the
nine months year-to-date
Q3 Adjusted
EBITDA1 of $3.9 million - Year-over-year growth of 30% in Q3
and 60% for the nine months
year-to-date
(All figures in US dollars, unless otherwise
indicated)
TORONTO, Nov. 27,
2023 /CNW/ - PopReach Corporation (dba
"Ionik", or the "Company") (TSXV: INIK) (OTCQX:
INIKF), a data-driven marketing technology company, announced its
financial results for the three and nine months ended September 30, 2023.
Financial Highlights for the Third Quarter 2023
- Revenue of $37.6 million,
compared to $39.1 million for the
three months ended June 30, 2023 and
$25.5 million for the three months
ended September 30, 2022, with growth
driven by the acquisition of Ubiquity in September 2022 and SCS and OpenMoves in
April 2023.
- Gross profit of $15.1 million,
compared to $16.2 million for the
three months ended June 30, 2023 and
$11.3 million for the three months
ended September 30, 2022.
- Adjusted EBITDA1 of $3.9
million, compared to $4.0
million for the three months ended June 30, 2023 and $3.0
million for the three months ended September 30, 2022.
- Adjusted Free Cash Flow1 of $2.0 million (51% Adjusted Free Cash Flow
conversion rate1), compared to $3.7 million (91% Adjusted Free Cash Flow
conversion rate1) for the three months ended
June 30, 2023 and $2.5 million (83% Adjusted Free Cash Flow
conversion rate1) for the three months ended
September 30, 2022. The reduction in
the third quarter of 2023 is primarily attributable to $1.4 million of 2022 cash taxes paid, which
changed the conversion rate from 87% to 51%.
- Net loss of $2.4 million, versus
$5.0 million net loss for the three
months ended June 30, 2023 and
$1.9 million net loss for the three
months ended September 30, 2022. The
decrease in quarter over quarter net loss was due to lower finance
and debt extinguishment costs related to the Company's new credit
facility which closed in May 2023.
The increase in year-over-year net loss was due to higher finance
costs associated with these financing arrangements.
- Cash as at September 30, 2023 was
$8.9 million compared to $8.4 million at June 30,
2023, an increase of $0.5
million. In the three months ended September 30, 2023 the Company generated cash
flow from operations of $5.9 million,
which was well in excess of principal and interest payments of
$4.0 million. At September 30, 2023, the Company had not drawn on
its revolving facility of $10.0
million and had available to it $48.5
million of its $105.0 million
term loan facility. Management believes that its current capital
position is sufficient to execute its current business and
operational strategies.
- Total undiscounted debt as at September
30, 2023 was $64.9 million,
including $54.4 million of senior
lender debt, $9.0 million of
convertible debt, and $1.5 million in
a vendor take-back loan, compared to $67.0
million in total debt as at June 30,
2023. The decrease results from principal payments made on
senior lender debt in the current quarter.
1 Please refer to
"Non-IFRS Measures" section of this press release
|
"Q3 was an eventful quarter which positioned us to complete a
meaningful acquisition post-quarter end with SHIFT44," said Ionik
CEO, Ted Hastings. "We made
$4 million in debt principal and
interest payments while increasing our cash position through the
quarter, which is a testament to our financially resilient business
model. We rebranded the company, and added two new executives soon
after the quarter which will accelerate our ability to achieve cost
savings integrations. As the industry deals with perennial
change, we're staying focused on our long-term vision of creating a
data-driven marketing technology company that is profitably
assembling a robust, proprietary, first party data warehouse which
will be a key element of our platform and our success."
Significant developments in Q3 2023 and subsequent to quarter
end
- On September 14, 2023, the
Company announced a rebranding and leadership transition. Moving
forward the Company will operate under the new, unified brand name
of Ionik. Ted Hastings was appointed
as Chief Executive Officer effective October
1, 2023, and Ben Colabrese
was appointed as Board Chair.
- On October 2, 2023, the Company
announced the appointment of Lois
Norris as Chief Financial Officer and Reena Bains as Chief People Officer.
- On November 20, 2023, the Company
acquired substantially all of the assets of S44 LLC "Shift44", a
first party data acquisition, lead generation and performance
marketing platform, for an aggregate purchase price of
approximately $40.0 million
Non-IFRS Measures
The Company prepares its financial statements in accordance with
International Financial Reporting Standards ("IFRS").
However, the Company considers certain non-IFRS financial measures
as useful additional information to assess its financial
performance. These measures, which it believes are widely used by
investors, securities analysts and other interested parties to
evaluate its performance, do not have a standardized meaning
prescribed by IFRS and therefore may not be comparable to similarly
titled measures presented by other publicly traded companies, nor
should they be construed as an alternative to financial measures
determined in accordance with IFRS. Non-IFRS measures include
"Adjusted EBITDA" and "Adjusted Free Cash Flow".
Adjusted EBITDA and Adjusted Free Cash Flow
Consolidated adjusted earnings before interest, taxes,
depreciation and amortization ("Adjusted EBITDA") is a
non-IFRS measure of financial performance. Company management
defines Adjusted EBITDA as IFRS Net income (loss) adding back
finance costs, income taxes, depreciation amortization, gain/loss
on disposal of assets and extinguishment of loans, fair value
gain/loss on financial liabilities and contingent consideration,
and excludes discontinued operations and the effects of significant
items of income and expenditure which may have an impact on the
quality of earnings, such as impairments where the impairment is
the result of an isolated, non-recurring event. It also excludes
the effects of equity-settled share-based payments, foreign
exchange gains/losses, changes in deferred revenues, changes in
deferred cost of sales, and other extraordinary one-time expenses,
such as transaction costs and other severance and restructuring
costs. See reconciliation of Adjusted EBITDA in the table
below.
Company management defines "Adjusted Free Cash Flow" as
Adjusted EBITDA less capital expenditures, such as acquisition of
property and equipment and additions to intangibles, and income
taxes paid during the applicable period. Similarly, Company
management defines "Adjusted Free Cash Flow conversion rate"
as Adjusted Free Cash Flow divided by Adjusted EBITDA. See
reconciliation of Adjusted Free Cash Flow in the table
below.
The presentation of these non-IFRS financial measures are not
intended to be considered in isolation from, as a substitute for,
or superior to, the financial information prepared and presented in
accordance with IFRS and may be different from non-IFRS financial
measures used by other companies.
Management believes Adjusted EBITDA and Adjusted Free Cash Flow
are useful financial metrics to assess its operating performance on
a cash basis before the impact of non-cash and extraordinary
one-time items.
The following tables presents the Company's calculation of
Adjusted EBITDA and Adjusted Free Cash Flow for each period:
|
|
For the three months
ended
|
|
|
|
September
30,
|
|
|
June
30,
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2023
|
|
|
2023
|
|
|
2023
|
|
|
2022
|
|
Net loss
|
|
$
|
(2,446)
|
|
|
$
|
(4,979)
|
|
|
$
|
(4,204)
|
|
|
$
|
(17,974)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance
costs
|
|
|
2,053
|
|
|
|
3,359
|
|
|
|
1,269
|
|
|
|
1,274
|
|
Income tax
expense
|
|
|
113
|
|
|
|
80
|
|
|
|
91
|
|
|
|
526
|
|
Depreciation and
amortization
|
|
|
3,713
|
|
|
|
3,523
|
|
|
|
3,183
|
|
|
|
3,698
|
|
Impairment loss
on intangibles and goodwill
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
17,548
|
|
Fair value loss
(gain) on financial liabilities
|
|
|
—
|
|
|
|
—
|
|
|
|
1,782
|
|
|
|
(530)
|
|
Loss (gain) on
disposal of property and equipment
|
|
|
(8)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
Loss on
modification/extinguishment of loan
|
|
|
—
|
|
|
|
1,129
|
|
|
|
—
|
|
|
|
—
|
|
Share-based
compensation expense
|
|
|
242
|
|
|
|
296
|
|
|
|
400
|
|
|
|
386
|
|
Change in
deferred revenue of in-app purchases
|
|
|
(280)
|
|
|
|
(56)
|
|
|
|
126
|
|
|
|
225
|
|
Change in
deferred cost of sales
|
|
|
12
|
|
|
|
6
|
|
|
|
(45)
|
|
|
|
(110)
|
|
Extraordinary
one-time expenses
|
|
|
372
|
|
|
|
576
|
|
|
|
184
|
|
|
|
187
|
|
Foreign exchange
loss (gain)
|
|
|
86
|
|
|
|
89
|
|
|
|
229
|
|
|
|
(95)
|
|
Loan
forgiveness
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(617)
|
|
Non-recurring
income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2)
|
|
Adjusted
EBITDA
|
|
$
|
3,857
|
|
|
$
|
4,023
|
|
|
$
|
3,015
|
|
|
$
|
4,517
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of
property and equipment
|
|
|
(52)
|
|
|
|
(36)
|
|
|
|
(34)
|
|
|
|
(38)
|
|
Additions to
intangible assets
|
|
|
(456)
|
|
|
|
(305)
|
|
|
|
(521)
|
|
|
|
(544)
|
|
Taxes
paid
|
|
|
(1,374)
|
|
|
|
(32)
|
|
|
|
(22)
|
|
|
|
(76)
|
|
Adjusted Free Cash
Flow
|
|
$
|
1,975
|
|
|
$
|
3,650
|
|
|
$
|
2,438
|
|
|
$
|
3,859
|
|
|
|
For the three months
ended
|
|
|
|
September
30,
|
|
|
June
30,
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2022
|
|
|
2022
|
|
|
2022
|
|
|
2021
|
|
Net loss
|
|
$
|
(1,886)
|
|
|
$
|
(1,443)
|
|
|
$
|
(820)
|
|
|
$
|
(1,736)
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance
costs
|
|
|
688
|
|
|
|
673
|
|
|
|
688
|
|
|
|
864
|
|
Income tax
expense (recovery)
|
|
|
282)
|
|
|
|
(356)
|
|
|
|
(672)
|
|
|
|
275
|
|
Depreciation and
amortization
|
|
|
3,070
|
|
|
|
2,396
|
|
|
|
1,718
|
|
|
|
1,623
|
|
Fair value loss
(gain) on financial liabilities
|
|
|
(33)
|
|
|
|
(5)
|
|
|
|
—
|
|
|
|
33
|
|
Gain on disposal
of property and equipment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1)
|
|
Loss on
extinguishment of loan
|
|
|
—
|
|
|
|
1,216
|
|
|
|
—
|
|
|
|
—
|
|
Share-based
compensation expense
|
|
|
353
|
|
|
|
131
|
|
|
|
—
|
|
|
|
—
|
|
Change in
deferred revenue of in-app purchases
|
|
|
262
|
|
|
|
(62)
|
|
|
|
—
|
|
|
|
—
|
|
Change in
deferred cost of sales
|
|
|
(56)
|
|
|
|
(100)
|
|
|
|
—
|
|
|
|
—
|
|
Extraordinary
one-time expenses
|
|
|
245
|
|
|
|
469
|
|
|
|
518
|
|
|
|
1,688
|
|
Foreign exchange
losses (gains)
|
|
|
39
|
|
|
|
(110)
|
|
|
|
(37)
|
|
|
|
44
|
|
Non-recurring
income
|
|
|
—
|
|
|
|
—
|
|
|
|
(378)
|
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
2,970
|
|
|
$
|
2,809
|
|
|
$
|
1,017
|
|
|
$
|
2,790
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of
property and equipment
|
|
|
(21)
|
|
|
|
(13)
|
|
|
|
(15)
|
|
|
|
(6)
|
|
Additions to
intangible assets
|
|
|
(466)
|
|
|
|
(202)
|
|
|
|
—
|
|
|
|
—
|
|
Taxes
paid
|
|
|
(27)
|
|
|
|
(510)
|
|
|
|
—
|
|
|
|
(11)
|
|
Adjusted Free Cash
Flow
|
|
$
|
2,456
|
|
|
$
|
2,084
|
|
|
$
|
1,002
|
|
|
$
|
2,773
|
|
Financial Statements and MD&A
Ionik's Financial Statements for the three months and nine
months ended September 30, 2023, and
Management's Discussion and Analysis for the same period, are
posted on its corporate website at www.popreach.com and
available on the Company's profile on SEDAR+ at
www.sedarplus.ca.
About Ionik
Ionik, a Tier 1 Issuer on the TSX Venture Exchange, with shares
also trading on the OTCQX Best Market, is a data driven marketing
technology company focused on assembling the most effective and
complete suite of advertising, marketing and monetization solutions
for brands, advertisers and publishers while building an extensive
proprietary repository of opted-in first party data.
Additional information about the Company is available at
www.sedarplus.ca.
Neither the 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.
Cautionary Statement Regarding Forward-Looking
Information
Certain information in this news release
constitutes forward-looking statements and forward-looking
information under applicable Canadian securities legislation
(collectively, "forward-looking information"). Forward-looking
information include, but are not limited to, statements with
respect to and the business, financials and operations of the
Company. Statements containing forward-looking information are not
historical facts but instead represent management's expectations,
estimates and projections regarding future events. Forward looking
information is necessarily based on a number of opinions,
assumptions and estimates that, while considered reasonable by the
Company as of the date of this news release, are subject to known
and unknown risks, uncertainties, assumptions and other factors
that may cause the actual results, level of activity, performance
or achievements and future events to be materially different from
those expressed or implied by such forward-looking information,
including but not limited to the factors described in greater
detail in the public documents of the Company available at
www.sedar.com. Although the Company has attempted to identify
important risks, uncertainties and factors which could cause actual
results to differ materially, there may be others that cause
results not to be as anticipated, estimated or intended. Investors
are cautioned that undue reliance should not be placed on any such
information, as unknown or unpredictable factors could have
material adverse effects on future results, performance or
achievements of the Company. The Company does not intend, and does
not assume any obligation, to update this forward-looking
information except as otherwise required by applicable law.
SOURCE PopReach Corporation