/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES./
CALGARY, Jan. 17, 2019 /CNW/ - Sylogist Ltd.
(TSXV:SYZ) ("Sylogist" or the "Company"), a provider of
enterprise information management solutions, is pleased to announce
its audited financial results for the fiscal year ended
September 30, 2018 and the
appointment of Ms. Donna Smiley,
Vice President, Operations.
Fiscal 2018 Highlights (Comparisons are to fiscal
2017, unless otherwise noted)
- Revenues were $38.2 million,
compared to $32.9 million, up
16%.
- Gross profit margins improved to 73% of revenue, compared to
71%.
- Reported earnings were $13.2
million ($0.59 per share)
compared to $7.2 million
($0.32 per share), an 84%
increase.
- Recorded a gain from a bargain purchase associated with the K12
Enterprise and Sunpac Systems acquisition of $2.7 million.
- Adjusted EBITDA(1) was $17
million ($0.76 per share),
compared to $13.4 million
($0.59 per share), an increase of
29%.
- Adjusted EBITDA Margin (1) was 44%, compared to
41%.
- Cash from operating activities (before non-cash changes in
working capital) was $15.7 million
($0.70 per share), compared to
$11.5 million ($0.51 per share), an increase of 36% and a per
share increase of 37%.
- Cash as at September 30, 2018
totalled $31.4 million. Sylogist has
no debt.
- Combined tax pools at the end of the fiscal year 2018 were
approximately $14.8 million
(CAD).
- The Company paid regular and special dividends to shareholders
totalling $8.3 million in fiscal
2018, compared to $7.5 million in
fiscal 2017.
- For the fiscal year ended September 30,
2018, the Company repurchased a total of 260,000 common
shares at an average price of $10.92
for a total cost of $2.8 million.
- There are currently 22 million Sylogist shares
outstanding.
Q4 2018 Summary (Comparisons are to Q4 2017, unless
otherwise noted)
- Revenues were $9.1 million,
compared to $8 million, an increase
of 13%.
- Reported earnings were $4.5
million (including a gain from bargain purchase associated
with the K12 Enterprise and Sunpac Systems acquisition of
$2.7 million) compared to
$1.9 million in Q4 2017, an increase
of 131%.
- Earnings per fully diluted common share increased 122% to
$0.20 per share, up from $0.09 per share.
- Adjusted EBITDA(1) was $3.4
million, an increase of 5%, or $0.15 per fully diluted common share, up 7%.
- Adjusted EBITDA Margin(1) was 37%, compared to
40%.
- Cash from operating activities (before non-cash changes in
working capital) totalled $3 million
($0.13 per share), up from
$2.6 million ($0.12 per share) in Q4 2017.
- The Company paid regular dividends to shareholders totalling
$1.8 million during the quarter.
- Adjusted Working Capital(1) was $33.1 million, or $1.49 per share, compared to $31.8 million, or $1.42 per share, in Q4 2017.
- For the quarter ended September 30,
2018, the Company repurchased 63,500 common shares at an
average price of $12.69 for a total
cost of $806 thousand.
Impact of Purchase Accounting on Annual and Q4 Results of
Operations
Purchase accounting adjustments associated with the acquisition
of Sunpac/K12 had a one-time impact on annual and Q4 reported
results. For our investors' benefit, the following tables
present selected historical consolidated financial data comparing
reported results with "normalized results" that exclude the impact
of the one-time purchase accounting adjustments, providing
information that facilitates comparison of operating results.
(Amounts are in
thousands of Canadian dollars, except percentages and per share
amounts.)
|
|
|
|
|
|
|
|
|
|
Twelve months ended September 30,
|
|
|
|
Reported
|
Purchase
Accounting
Adjustments (2)
|
Normalized
|
Reported
|
2018 Normalized
vs
2017 Reported
Period-Over-Period
Change
|
|
2018
|
|
2018
|
2017
|
$
|
%
|
|
|
|
|
|
|
|
Revenue
|
38,192
|
482
|
38,674
|
32,928
|
5,746
|
17%
|
Subscription and maintenance revenue
|
24,028
|
482
|
24,510
|
21,564
|
2,946
|
14%
|
Amortization of intangible assets
|
3,859
|
(651)
|
3,208
|
2,516
|
692
|
28%
|
Gain from bargain purchase
|
(2,697)
|
2,697
|
-
|
-
|
-
|
n/m
|
Profit for the period
|
13,172
|
(2,491)
|
10,681
|
7,219
|
3,462
|
48%
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
16,989
|
376
|
17,365
|
13,375
|
3,990
|
30%
|
|
|
|
|
|
|
|
Profit per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
0.59
|
(0.11)
|
0.48
|
0.32
|
0.16
|
50%
|
|
|
|
|
|
|
|
Diluted
|
0.58
|
(0.11)
|
0.47
|
0.32
|
0.15
|
47%
|
|
|
|
|
|
|
|
Adjusted EBITDA per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
0.76
|
0.02
|
0.78
|
0.59
|
0.19
|
32%
|
|
|
|
|
|
|
|
Diluted
|
0.75
|
0.02
|
0.77
|
0.59
|
0.18
|
31%
|
|
|
|
|
|
Three months ended September 30,
|
|
|
|
Reported
|
Purchase
Accounting
Adjustments (2)
|
Normalized
|
Reported
|
2018 Normalized
vs
2017 Reported
Period-Over-Period
Change
|
|
2018
|
|
2018
|
2017
|
$
|
%
|
|
|
|
|
|
|
|
Revenue
|
9,095
|
482
|
9,577
|
8,045
|
1,532
|
19%
|
|
|
|
|
|
|
|
Subscription and
maintenance revenue
|
5,732
|
482
|
6,214
|
5,279
|
935
|
18%
|
|
|
|
|
|
|
|
Amortization of
intangible assets
|
1,425
|
(651)
|
774
|
630
|
144
|
23%
|
|
|
|
|
|
|
|
Gain from bargain
purchase
|
(2,697)
|
2,697
|
-
|
-
|
-
|
n/m
|
|
|
|
|
|
|
|
Profit for the
period
|
4,473
|
(2,491)
|
1,982
|
1,933
|
49
|
3%
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
3,383
|
376
|
3,759
|
3,210
|
549
|
17%
|
|
|
|
|
|
|
|
Profit per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
0.20
|
(0.11)
|
0.09
|
0.09
|
-
|
n/m
|
|
|
|
|
|
|
|
Diluted
|
0.20
|
(0.11)
|
0.09
|
0.09
|
-
|
n/m
|
|
|
|
|
|
|
|
Adjusted EBITDA per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
0.15
|
0.02
|
0.17
|
0.14
|
0.03
|
21%
|
|
|
|
|
|
|
|
Diluted
|
0.15
|
0.01
|
0.16
|
0.14
|
0.02
|
14%
|
n/m - "Not
Meaningful"
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|
1)
|
Adjusted EBITDA is
a non-IFRS measure, defined as: profit for the period before stock
based compensation, foreign exchange gains or losses, interest
expense, bargain purchase price on acquisition, income taxes,
acquisition-related costs, depreciation and
amortization.
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2)
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In accordance with
the fair value provisions applicable to the accounting for business
combinations, acquired deferred revenue relating to acquisitions
was recorded on the opening balance sheet at an amount that was
lower than the historical carrying value. In addition, the
estimated fair values of the acquired net assets of K12 Enterprise
& Sunpac Systems as of the acquisition date was greater than
the cash consideration paid resulting in a one-time gain on bargain
purchase. Although the purchase accounting adjustments have no
impact on the Company's business or cash flow, they had an impact
on the Company's "reported" IFRS financial statements in the
reporting periods following the acquisition. In order to provide
investors with financial information that facilitates comparison of
results, the Company provides "normalized" non-IFRS financial
measures which exclude the impact of the purchase accounting
adjustments. Purchase accounting adjustments for the year-ended
September 30, 2018, relate to the October 2017 acquisition of K12
Enterprise & Sunpac Systems.
|
Jim Wilson, President & Chief
Executive Officer of Sylogist, stated, "We're pleased with the
progress achieved in fiscal 2018. Our reported revenues increased
to $38.2 million ($38.7 million, normalized), which was above the
top-end range of our 2018 guidance provided in November 2017. Reported earnings per share were
up 84% (50% on a normalized basis) from the previous year. With
attractive opportunities in the educational space, we enhanced our
investment by $850 thousand to
develop resources, improve products and solidify customer
relationships in the U.S. K12 market. Our Adjusted EBITDA per share
increased 29% (32% when normalized for purchase accounting) and
EBITDA margins improved from 41% to 44% compared to the prior year,
while cash from operating activities improved by 36% over fiscal
2017. The bargain purchase gain of $2.7 million recorded on the Sunpac/K12E
acquisition substantiated the opportunities we see ahead in the US
educational market.
In November, Sylogist announced an 18.75% dividend increase that
speaks to the growth opportunities we envision in fiscal 2019 and
beyond. The outlook, given our solid foundation and strategic focus
on near term organic and non-organic growth initiatives remains
very positive." concluded Mr. Wilson.
Executive Appointment
Sylogist is pleased to announce the appointment of Donna Smiley, as its Vice President, Operations.
Donna, who currently manages the Company's Serenic Software
division, has 25 years of experience providing Enterprise solutions
in the NPO/NGO, Education, and Municipal markets, which was built
upon her 10 years of accounting and financial management experience
in Environmental Engineering, Non-Profit, and Software
companies. Donna's Enterprise resource planning ("ERP")
background covers a breadth of functional areas within the software
industry including Accounting, Support, Professional Services,
Product Management and Development, all of which give her a
holistic perspective on the best way to serve our Customers,
Partners, and Employees. Most recently, Donna served as the
Company's Managing Director, Operations. Concurrent with her
appointment, the board of directors of the Company granted Ms.
Smiley 15,000 additional stock options to acquire common shares, at
the current market price and in accordance with its Stock Option
Plan.
About Sylogist
Sylogist is a software company that, through strategic
acquisitions, investments and operations management, provides
comprehensive, mission-critical ERP solutions, including fund
accounting, grant management and payroll to public service
organizations. Sylogist's public service customers include
local governments, nonprofit organizations, non-governmental
organizations, educational institutions and government agencies, as
well as public compliance driven and funded. Our Company delivers
highly scalable, multi-language, multi-currency software solutions,
which serve the needs of an international clientele.
Full financial statements together with Management's Discussion
and Analysis are available on SEDAR at www.sedar.com.
The Company's stock is traded on the TSX Venture Exchange under
the symbol SYZ. Information about Sylogist can be found at
http://www.sylogist.com.
Forward-looking Statements
Certain statements in this news release may be
forward-looking statements within the meaning of applicable
securities laws and regulations. These statements
typically use words such as expect, believe, estimate, project,
anticipate, plan, may, should, could and would, or the negative of
these terms, variations thereof or similar terminology.
Forward-looking information in this news release includes
statements with respect to the Company being encouraged by its 2019
and beyond positive outlook given its solid foundation and
strategic focus on near term organic and non-organic growth
initiatives. By their very nature, forward-looking statements are
based on assumptions and involve inherent risks and uncertainties,
both general and specific in nature. It is therefore possible
that the beliefs and plans and other forward-looking expectations
expressed herein will not be achieved or will prove
inaccurate. Although Sylogist believes that the expectations
reflected in these forward-looking statements are reasonable, it
provides no assurance that these expectations will prove to have
been correct. Forward-looking information involves risks,
uncertainties and other factors that could cause actual events,
results, performance, prospects and opportunities to differ
materially from those expressed or implied by such forward-looking
information. Additional information regarding some of these risks,
uncertainties and other factors may be found under in the
management's discussion and analysis for the year ended
September 30, 2018, and other
documents available on the Company's profile at www.sedar.com.
Material assumptions and factors that could cause actual
results to differ materially from such forward-looking information
include Sylogist's ability to attract and retain customers and
to realize on its investments. Although Sylogist believes that the
material assumptions and factors used in preparing the
forward-looking information in this news release are reasonable,
undue reliance should not be placed on such information, which only
applies as of the date of this news release, and no assurance can
be given that such events will occur. Sylogist disclaims any
intention or obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, other than as required by law.
Certain information set out herein may be considered as
"financial outlook" within the meaning of applicable securities
laws. The purpose of this financial outlook is to provide readers
with disclosure regarding Sylogist's reasonable expectations as to
the anticipated results of its proposed business activities for the
periods indicated. Readers are cautioned that the financial outlook
may not be appropriate for other purposes.
Non-GAAP Financial Measures
(1) Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted
Working Capital are non-GAAP financial measures: Adjusted EBITDA is
defined as: profit for the period before stock based compensation,
foreign exchange gains or losses, interest expense, bargain
purchase price on acquisition, income taxes, acquisition-related
costs, depreciation and amortization. Adjusted EBITDA Margin refers
to Adjusted EBITDA as a percentage of revenue. Adjusted Working
Capital is defined as current assets less current liabilities
adjusted for deferred revenue.
This news release makes reference to certain non-GAAP
measures. These measures are not recognized measures under
Canadian GAAP, do not have a standardized meaning prescribed by
Canadian GAAP and are therefore may not be comparable to similar
measures presented by other issuers. These measures are provided as
additional information to complement measures under GAAP by
providing further understanding of the Company's expected results
of operations from management's perspective. Accordingly, such
measures should not be considered in isolation nor as a substitute
for analysis of the Company's financial information reported under
Canadian GAAP.
Adjusted EBITDA, Adjusted EBITDA
Margin and Adjusted Working Capital are provided
to investors as alternative methods for assessing the Company's
operating results in a manner that is focused on the Company's
ongoing operations and to provide a more consistent basis for
comparison between periods. These measures should not be construed
as alternatives to net profit (loss) or cash flow from operating
activities determined in accordance with GAAP as an indicator of
the Company's performance.
- 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 Sylogist Ltd.