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CALGARY, May 14, 2019 /CNW/ - Sylogist Ltd.
(TSXV:SYZ) ("Sylogist" or the "Company"), a provider of
enterprise information management solutions, is pleased to announce
its unaudited financial results for the second quarter of the 2019
fiscal year, ended March 31,
2019.
Q2 2019 Summary (Comparisons are to Q2 2018, unless
otherwise noted)
- Revenues were $9.5 million,
compared to $9.3 million, an increase
of 2%.
- Recurring revenues from subscriptions and maintenance grew
organically by 9% to $6.6 million,
compared to $6 million for the second
quarter of 2018.
- Gross profit margins of 73%.
- Profit before income taxes of $3.2
million.
- Reported earnings were $2.4
million compared to $2.5
million in Q2 2018.
- Earnings per fully diluted common share of $0.11 per share, consistent with Q2 2018.
- Adjusted EBITDA(1) was $4.2
million, or $0.19 per fully
diluted common share.
- Adjusted EBITDA Margin(1) was 44%, compared to
48%.
- The Company paid regular dividends to shareholders totalling
$2.1 million during the quarter,
compared to $1.8 million in the same
period last year, an increase of 17%.
- Adjusted Working Capital(1) was $35.1 million, an increase of 9%, or $1.59 per share.
- Combined tax pools at the end of the second quarter 2019 were
approximately $14.7 million
(CAD).
- The Company's Board of Directors has approved a quarterly
dividend of $0.095 per common share
for shareholders of record as at May 31,
2019 to be paid on June 12,
2019, which is treated as an eligible dividend under the
Income Tax Act (Canada).
First half of fiscal 2019 (Comparisons are to the
first half of fiscal 2018, unless otherwise noted)
- Revenues were $18.9 million,
compared to $18.1 million, up
4%.
- Recurring revenues from subscriptions and maintenance were
$13.1 million, an increase of 9%
compared to $12 million for the first
half of 2018.
- Gross profit margins were 75% of revenue, consistent with the
first half of fiscal 2018.
- Reported earnings were $5.0
million ($0.23 per share)
compared to $5.5 million
($0.25 per share).
- Adjusted EBITDA(1) was $8.7
million ($0.40 per share),
compared to $8.7 million
($0.39 per share).
- Adjusted EBITDA Margin (1) was 46%, compared to
48%.
- The Company paid regular dividends to shareholders totalling
$4.2 million during the first half of
fiscal 2019.
- For the first six months ended March 31,
2019, the Company repurchased 191,900 common shares at an
average price of $12.81 for a total
cost of $2.5 million.
Jim Wilson, President & Chief
Executive Officer of Sylogist, commented, "We continued to see
good growth in recurring revenue, up 9%, while our margins remained
strong. Our revenues grew to $9.5
million while our Adjusted EBITDA was $4.2 million, our Adjusted EBITDA margin was
44%. Fully diluted earnings of $0.11 per common share were consistent with Q2
2018. Adjusted EBITDA and earnings were negatively impacted by
seasonal expense factors including front ended payments related to
employee benefits, carrying of US based K12 professional services
capacity and timing of cash tax payments that impacted before tax
cash flow resulting in higher executive bonus costs in Q2. These
seasonal factors accounted for $524
thousand of expenses in the quarter. Our trailing twelve
months revenue totaled $39 million
while EDITDA stood at $17 million for
the same 12-month period. Adjusted working capital increased 9% to
$35.1 million or $1.59 per share. Recurring revenues from
subscription and maintenance increased by 9% to $6.6 million driven primarily by the educational
sector business. A $3M contract
services related to a customer in the not-for-profit segment was
signed in the latter part of Q2. The new contract may be
expanded later in the fiscal year. Increased general and
administrative expenses were reflective of an expanded corporate
development team as part of our growth strategy.
As previously announced, the compensation committee is reviewing
the executive compensation with a goal to reduce cash bonus
payments through a one-time adjustment that will result in
accretive earnings per share going forward into the next fiscal
year.
As noted in our press release on May 1,
2019, we have initiated our comprehensive plan to improve
shareholder value by taking proactive steps to improve our overall
business performance through workforce efficiency gains. The
contemplated workforce changes have been made prior to this
earnings news release, resulting in a $1.8
million annual reduction in operating expenses. In addition,
we have started the rollout of our pay-per-use payroll platform
through our partner channel. The results of this pay-per-use
initiative will be fully realized by this time next year. We
also anticipate meaningful revenue and margin growth in the
educational market commencing Q4 of this fiscal year." concluded
Mr. Wilson.
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's quarterly dividend for
shareholders of record as of May 31,
2019 to be paid on June 12,
2019, the Company's improvement in its overall business
performance through workforce efficiency gains, the Company's plans
to reduce cash bonus payments through a one-time adjustment that
will result in accretive earning per share going forward, the
Company's new customer contract that may be expanded later in the
fiscal year, the realization of the pay-per-use initiative by this
time next year and the Company's anticipate meaningful revenue and
margin growth in the educational market commencing Q4 of this
fiscal year. 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
period ended March 31, 2019, 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.