Computer Modelling Group Ltd. (“CMG Group” or the “Company”)
announces its financial results for the three and six months ended
September 30, 2024, and the approval by its Board of Directors (the
“Board”) of the payment of a cash dividend of $0.05 per Common
Share for the second quarter ended September 30, 2024.
SECOND QUARTER 2025 CONSOLIDATED HIGHLIGHTS
Select financial highlights for the three months
ended September 30, 2024
- Closed the Company’s second major
acquisition, Sharp Reflections GmbH (“SR” or “Sharp”), on November
12, 2024;
- Generated total revenue of $29.5
million in the second quarter of fiscal 2025, compared to $22.6
million in the prior year’s quarter, reflecting a 1% increase in
CMG’s revenue and a 29% contribution from BHV;
- Operating profit increased to $8.4
million, an increase of 9% from the same period of the previous
fiscal year, primarily due to a decrease in stock-based
compensation in the quarter as a result of the decrease in share
price. Adjusted operating profit decreased by 8% from the same
period of the previous fiscal year, with CMG contributing to 6% and
BHV contributing to 2% of the decrease;
- Adjusted EBITDA Margin was 34%,
compared to 47% in the same period of the previous fiscal year with
CMG generating 45% and BHV generating (2%) in Adjusted EBITDA
Margin;
- Net income during the period was
$3.8 million, a 42% decrease compared to the prior year’s quarter,
primarily due to a change in the fair value of contingent
consideration and FX loss incurred in the current year’s quarter,
partially offset by increased operating profit;
- Earnings per share was $0.05, a 38%
decrease compared to the prior year’s quarter;
- Reported Free Cash Flow of $0.07
per share, a decrease of 50%, primarily due to BHV generating
negative cash flows.
Select financial highlights for the six months
ended September 30, 2024
- Closed the Company’s second major
acquisition, Sharp Reflections GmbH (“SR” or “Sharp”), on November
12, 2024;
- Generated total revenue of $60.0
million for the second quarter fiscal 2025 year-to-date period,
compared to $43.4 million in the prior year-to-date period,
reflecting a 6% increase in CMG’s revenue and a 32% contribution
from BHV;
- Operating profit decreased to $14.1
million, a decrease of 19% from the same year-to-date period of the
previous fiscal year, primarily due to increased stock-based
compensation as a result of an increase in share price, as well as
increased operating expenses from having a full quarter of Bluware
operating expenses as compared to 5 days in the previous fiscal
year-to-date period. Adjusted operating profit decreased by 6% from
the same period of the previous fiscal year, with CMG contributing
to 4% and BHV contributing to 2% of the decrease;
- Adjusted EBITDA Margin was 32%,
compared to 48% in the same period of the previous fiscal year with
CMG generating 43% and BHV generating (3%) in Adjusted EBITDA
Margin;
- Net income during the period was
$7.7 million, a 42% decrease compared to the prior year-to-date
period;
- Earnings per share was $0.09, a 47%
decrease compared to the prior year-to-date period;
- Reported Free Cash Flow of $0.14
per share, a decrease of 39%, primarily due to BHV generating
negative cash flows.
MANAGEMENT COMMENTARY
Second Quarter
In the second quarter, total revenue grew by 30%
from the prior fiscal year to $29.5 million, reflecting the
acquisition of Bluware (“BHV”) which contributed 29%, and growth
within the CMG operating segment of 1%. Adjusted EBITDA Margin was
34% compared to 47% in the prior year period, reflecting the
acquisition of BHV which currently operates at a lower margin than
CMG, and a decline in Adjusted EBITDA compared to the prior year
period in the CMG operating segment, discussed below. Net income
for the quarter declined to $3.8 million from $6.5 million in the
prior year period, significantly impacted by a change in the fair
value of contingent consideration relating to the acquisition of
Bluware and foreign exchange losses. Free Cash Flow declined from
$0.14 per share in the prior period to $0.07 per share, impacted by
the lower Free Cash Flow generation at BHV resulting from
seasonality associated with revenue recognition. Free Cash Flow per
share remained constant from the first quarter of 2025. At
September 30, 2024, the cash balance was $61.4 million. The
effective tax rate for the quarter increased due to the
non-deductibility of the change in fair value of the acquisition
earnout.
In the CMG operating segment, total revenue was
up 1%, however, annuity/maintenance (“A/M”) revenue declined
compared to the second quarter of 2024. Delays occurred in the
closing of a sizeable new contract which would have been accretive
to A/M revenue in the second quarter. This was completed after
quarter-end and is expected to be recorded starting in the third
quarter. Given the timing of the new contract, it did not offset a
combination of variability in short-term contracts and the
non-renewal of one contract in the US which led to the modest
decline.
By geography, total software revenue grew in the
Eastern Hemisphere due to strong perpetual licenses, offset
primarily by lower A/M licenses in South America and the US, as
mentioned above.
Software revenue attributable to energy
transition was 19% in the quarter, compared to 22% in the
comparable prior year period and 28% in the first quarter of this
year. From a trend perspective, on a year-to-date basis, software
revenue attributable to energy transition was 24% compared to 22%
in the same period of the previous year, evidence of ongoing
demand. CMG operating segment operating profit in the second
quarter increased to $8.8 million, from $7.6 million in the prior
year period, driven by a reduction in stock-based compensation
expense due to lower share price, partially offset by increased
expenses including headcount and headcount related costs, increased
amortization of acquired IP, and other corporate costs.
Sequentially from Q1 2025, CMG operating segment Adjusted Operating
Profit increased by 3%. CMG operating segment Adjusted EBITDA
Margin in the quarter decreased to 45% from 48% in the prior fiscal
year, due primarily to higher expenses described above, but
represented a small sequential increase from 42% in the first
quarter of 2025. Maintaining our customary high renewal rates in
the fourth quarter will be critical to achieving our revenue and
profitability objectives.
In the BHV operating segment, total software
revenue and professional services revenue were materially unchanged
from the first quarter of 2025. A small decrease in operating
expenses resulted in an Adjusted EBITDA and Adjusted EBITDA Margin
of ($0.1 million), or (2%), a slight improvement from ($0.3
million) and (4%) respectively compared to the first quarter of
this year. We do not expect material growth in professional
services revenue throughout the balance of the year, however
software revenue is expected to increase in the second half of
2025, compared to the first half of 2025, as we begin contract
renewals in these quarters. The impact of this revenue recognition
is expected to drive a commensurate increase in profitability. This
pattern of revenue recognition and profitability aligns with our
reporting since acquiring BHV. We would continue to encourage
shareholders to evaluate BHV operating segment profitability on a
full-year basis.
SUMMARY OF FINANCIAL PERFORMANCE
|
CMG |
BHV |
Consolidated |
Three months
ended September 30,($ thousands,
except per share data) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Annuity/maintenance licenses |
16,794 |
|
17,441 |
|
1,508 |
|
169 |
|
18,302 |
|
17,610 |
|
Annuity license fee |
- |
|
- |
|
71 |
|
- |
|
71 |
|
- |
|
Perpetual licenses |
2,149 |
|
1,176 |
|
- |
|
- |
|
2,149 |
|
1,176 |
|
Total software license revenue |
18,943 |
|
18,617 |
|
1,579 |
|
169 |
|
20,522 |
|
18,786 |
|
Professional services |
3,382 |
|
3,452 |
|
5,563 |
|
395 |
|
8,945 |
|
3,847 |
|
Total revenue |
22,325 |
|
22,069 |
|
7,142 |
|
564 |
|
29,467 |
|
22,633 |
|
Total revenue growth |
1 |
% |
22 |
% |
1166 |
% |
|
|
30 |
% |
25 |
% |
Annuity/maintenance licenses growth |
(4 |
%) |
18 |
% |
792 |
% |
|
|
4 |
% |
19 |
% |
Cost of revenue |
2,332 |
|
2,271 |
|
3,360 |
|
222 |
|
5,692 |
|
2,493 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Sales & marketing |
3,363 |
|
3,362 |
|
866 |
|
22 |
|
4,229 |
|
3,384 |
|
Research and development |
4,463 |
|
4,651 |
|
1,965 |
|
116 |
|
6,428 |
|
4,767 |
|
General & administrative |
3,389 |
|
4,214 |
|
1,299 |
|
49 |
|
4,688 |
|
4,263 |
|
Operating expenses |
11,215 |
|
12,227 |
|
4,130 |
|
187 |
|
15,345 |
|
12,414 |
|
Operating profit |
8,778 |
|
7,571 |
|
(348 |
) |
155 |
|
8,430 |
|
7,726 |
|
Operating Margin |
39 |
% |
34 |
% |
(5 |
%) |
27 |
% |
29 |
% |
34 |
% |
Acquisition related expenses |
395 |
|
573 |
|
181 |
|
- |
|
576 |
|
573 |
|
Amortization of acquired intangible assets |
575 |
|
124 |
|
89 |
|
5 |
|
664 |
|
129 |
|
Stock-based compensation |
232 |
|
2,291 |
|
- |
|
- |
|
232 |
|
2,291 |
|
Adjusted operating
profit (1) |
9,980 |
|
10,559 |
|
(78 |
) |
160 |
|
9,902 |
|
10,719 |
|
Adjusted Operating Margin (1) |
45 |
% |
48 |
% |
(1 |
%) |
28 |
% |
34 |
% |
47 |
% |
Net income
(loss) |
4,630 |
|
6,423 |
|
(867 |
) |
93 |
|
3,763 |
|
6,516 |
|
Adjusted EBITDA (1) |
10,069 |
|
10,584 |
|
(132 |
) |
134 |
|
9,937 |
|
10,718 |
|
Adjusted EBITDA Margin (1) |
45 |
% |
48 |
% |
(2 |
%) |
24 |
% |
34 |
% |
47 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share – basic |
|
|
|
|
|
|
|
|
0.05 |
|
0.08 |
|
Free Cash Flow per share – basic (1) |
|
|
|
|
|
|
|
|
0.07 |
|
0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CMG |
BHV |
Consolidated |
Six months ended
September 30,($ thousands, except per share
data) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Annuity/maintenance licenses |
34,551 |
|
33,048 |
|
3,086 |
|
169 |
|
37,637 |
|
33,217 |
|
Annuity license fee |
- |
|
- |
|
249 |
|
- |
|
249 |
|
- |
|
Perpetual licenses |
4,259 |
|
3,025 |
|
- |
|
- |
|
4,259 |
|
3,025 |
|
Total software license revenue |
38,810 |
|
36,073 |
|
3,335 |
|
169 |
|
42,145 |
|
36,242 |
|
Professional services |
6,662 |
|
6,744 |
|
11,183 |
|
395 |
|
17,845 |
|
7,139 |
|
Total revenue |
45,472 |
|
42,817 |
|
14,518 |
|
564 |
|
59,990 |
|
43,381 |
|
Total revenue growth |
6 |
% |
25 |
% |
2474 |
% |
|
|
38 |
% |
27 |
% |
Annuity/maintenance licenses growth |
5 |
% |
17 |
% |
1726 |
% |
|
|
13 |
% |
17 |
% |
Cost of revenue |
4,952 |
|
4,176 |
|
6,932 |
|
222 |
|
11,884 |
|
4,398 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Sales & marketing |
7,504 |
|
5,717 |
|
1,656 |
|
22 |
|
9,160 |
|
5,739 |
|
Research and development |
10,514 |
|
8,703 |
|
4,159 |
|
116 |
|
14,673 |
|
8,819 |
|
General & administrative |
7,533 |
|
6,886 |
|
2,644 |
|
49 |
|
10,177 |
|
6,935 |
|
Operating expenses |
25,551 |
|
21,306 |
|
8,459 |
|
187 |
|
34,010 |
|
21,493 |
|
Operating profit |
14,969 |
|
17,335 |
|
(873 |
) |
155 |
|
14,096 |
|
17,490 |
|
Operating Margin |
33 |
% |
40 |
% |
(6 |
%) |
27 |
% |
23 |
% |
40 |
% |
Acquisition related expenses |
395 |
|
573 |
|
369 |
|
- |
|
764 |
|
573 |
|
Amortization of acquired intangible assets |
1,151 |
|
181 |
|
178 |
|
5 |
|
1,329 |
|
186 |
|
Stock-based compensation |
3,138 |
|
2,395 |
|
- |
|
- |
|
3,138 |
|
2,395 |
|
Adjusted operating
profit (1) |
19,653 |
|
20,484 |
|
(325 |
) |
160 |
|
19,327 |
|
20,644 |
|
Adjusted Operating Margin (1) |
43 |
% |
48 |
% |
(2 |
%) |
28 |
% |
32 |
% |
48 |
% |
Net income
(loss) |
9,995 |
|
13,327 |
|
(2,268 |
) |
93 |
|
7,727 |
|
13,420 |
|
Adjusted EBITDA (1) |
19,771 |
|
20,532 |
|
(397 |
) |
134 |
|
19,374 |
|
20,666 |
|
Adjusted EBITDA Margin (1) |
43 |
% |
48 |
% |
(3 |
%) |
24 |
% |
32 |
% |
48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share – basic |
|
|
|
|
|
|
|
|
0.09 |
|
0.17 |
|
Free Cash Flow per share – basic (1) |
|
|
|
|
|
|
|
|
0.14 |
|
0.23 |
|
(1) Non-IFRS financial measures are defined in the “Non-IFRS
Financial Measures” section of the MD&A. |
Q2 2025 Dividend
Computer Modelling Group’s Board approved a cash
dividend of $0.05 per Common Share. The dividend will be paid on
December 13, 2024, to shareholders of record at the close of
business on December 5, 2024.
All dividends paid by Computer Modelling Group
Ltd. to holders of Common Shares in the capital of the Company will
be treated as eligible dividends within the meaning of such term in
section 89(1) of the Income Tax Act (Canada), unless otherwise
indicated.
NON-IFRS FINANCIAL MEASURES AND
RECONCILIATION OF NON-IFRS MEASURES
Free Cash Flow Reconciliation to Funds
Flow from Operations
Free cash flow is a non-IFRS financial measure
that is calculated as funds flow from operations less capital
expenditures and repayment of lease liabilities. Free Cash Flow per
share is calculated by dividing free cash flow by the number of
weighted average outstanding shares during the period. Management
believes that this measure provides useful supplemental information
about operating performance and liquidity, as it represents cash
generated during the period, regardless of the timing of collection
of receivables and payment of payables, which may reduce
comparability between periods. Management uses free cash flow and
free cash flow per share to help measure the capacity of the
Company to pay dividends and invest in business growth
opportunities.
|
Fiscal 2023 |
Fiscal 2024 |
Fiscal 2025 |
($ thousands, unless otherwise stated) |
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Funds
flow from operations |
8,169 |
|
7,656 |
|
7,920 |
|
11,491 |
|
8,477 |
|
10,367 |
|
6,515 |
|
7,101 |
|
Capital
expenditures(1) |
(211 |
) |
(1,707 |
) |
(45 |
) |
(51 |
) |
(459 |
) |
(95 |
) |
(93 |
) |
(236 |
) |
Repayment of lease liabilities |
(413 |
) |
(553 |
) |
(412 |
) |
(412 |
) |
(728 |
) |
(803 |
) |
(743 |
) |
(769 |
) |
Free Cash Flow |
7,545 |
|
5,396 |
|
7,463 |
|
11,028 |
|
7,290 |
|
9,469 |
|
5,679 |
|
6,096 |
|
Weighted average shares – basic (thousands) |
80,511 |
|
80,603 |
|
80,685 |
|
80,834 |
|
81,067 |
|
81,314 |
|
81,476 |
|
81,887 |
|
Free Cash Flow per share - basic |
0.09 |
|
0.07 |
|
0.09 |
|
0.14 |
|
0.09 |
|
0.12 |
|
0.07 |
|
0.07 |
|
(1) Capital expenditures
include cash consideration for USI acquisition in Q4 2023.Free Cash
Flow per share has decreased by 50% and 39%, respectively, for the
three and six months ended September 30, 2024, compared to the same
periods of the previous fiscal year. The decrease in Free Cash Flow
is primarily a result of negative cash flow generated in the BHV
segment, which primarily relates to reduced net income in the
period due to revenue recognition being skewed towards the third
and fourth quarters of the fiscal year. Additionally, the repayment
of lease liabilities has increased compared to the prior year
comparative quarter as a result of the acquisition of BHV,
resulting in a further decrease in free cash flow for the three and
six months ended September 30, 2024, compared to the same periods
of the previous fiscal year.
Adjusted EBITDA and Adjusted EBITDA Margin
|
CMG |
BHV |
Consolidated |
Three months
ended September 30,($
thousands) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
4,630 |
|
6,423 |
|
(867 |
) |
93 |
|
3,763 |
|
6,516 |
|
Add (deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
1,539 |
|
1,014 |
|
408 |
|
7 |
|
1,947 |
|
1,021 |
|
Stock-based compensation |
232 |
|
2,291 |
|
- |
|
- |
|
232 |
|
2,291 |
|
Acquisition related expenses |
395 |
|
573 |
|
181 |
|
- |
|
576 |
|
573 |
|
Loss on contingent consideration |
2,112 |
|
- |
|
- |
|
- |
|
2,112 |
|
- |
|
Income and other tax expense |
1,802 |
|
2,239 |
|
442 |
|
38 |
|
2,244 |
|
2,277 |
|
Interest income |
(680 |
) |
(692 |
) |
(81 |
) |
- |
|
(761 |
) |
(692 |
) |
Foreign exchange loss (gain) |
453 |
|
(856 |
) |
140 |
|
- |
|
593 |
|
(856 |
) |
Repayment of lease liabilities |
(414 |
) |
(408 |
) |
(355 |
) |
(4 |
) |
(769 |
) |
(412 |
) |
Adjusted EBITDA (1) |
10,069 |
|
10,584 |
|
(132 |
) |
134 |
|
9,937 |
|
10,718 |
|
Adjusted EBITDA Margin (1) |
45 |
% |
48 |
% |
(2 |
%) |
24 |
% |
34 |
% |
47 |
% |
(1) This is a non-IFRS financial measure. Refer to
definition of the measures above.
|
CMG |
BHV |
Consolidated |
Six months ended
September 30,($ thousands) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
9,995 |
|
13,327 |
|
(2,268 |
) |
93 |
|
7,727 |
|
13,420 |
|
Add (deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
3,037 |
|
1,975 |
|
793 |
|
7 |
|
3,830 |
|
1,982 |
|
Stock-based compensation |
3,138 |
|
2,395 |
|
- |
|
- |
|
3,138 |
|
2,395 |
|
Acquisition related expenses |
395 |
|
573 |
|
369 |
|
- |
|
764 |
|
573 |
|
Loss on contingent consideration |
1,913 |
|
- |
|
- |
|
- |
|
1,913 |
|
- |
|
Income and other tax expense |
3,416 |
|
4,483 |
|
1,316 |
|
38 |
|
4,732 |
|
4,521 |
|
Interest income |
(1,460 |
) |
(1,452 |
) |
(179 |
) |
- |
|
(1,639 |
) |
(1,452 |
) |
Foreign exchange loss (gain) |
198 |
|
51 |
|
223 |
|
- |
|
421 |
|
51 |
|
Repayment of lease liabilities |
(861 |
) |
(820 |
) |
(651 |
) |
(4 |
) |
(1,512 |
) |
(824 |
) |
Adjusted EBITDA (1) |
19,771 |
|
20,532 |
|
(397 |
) |
134 |
|
19,374 |
|
20,666 |
|
Adjusted EBITDA Margin (1) |
43 |
% |
48 |
% |
(3 |
%) |
24 |
% |
32 |
% |
48 |
% |
(1) This is a non-IFRS financial
measure. Refer to definition of the measures above.
Adjusted EBITDA Margin was 34% and 32% for both
the three and six months ended September 30, 2024, respectively, a
decrease from 47% and 48%, respectively for the three and six
months ended September 30, 2023.
CMG’s Adjusted EBITDA Margin is 45% and 43% for
the three and six months ended September 30, 2024, respectively,
compared to 48% for both the three and six months ended September
30, 2023, primarily due to an increase in operating expenses as a
result of an increase in headcount and headcount related costs and
other corporate costs. Refer to the “Operating Expenses” section of
the MD&A for further detail on the increase in operating
expenses by category.
BHV’s Adjusted EBITDA Margin for the three and
six months ended September 30, 2024, is (2%) and (3%),
respectively, compared to 24% for the three and six months ended
September 30, 2023. Contract renewals at BHV typically occur in the
third and fourth quarters, resulting in Adjusted EBITDA fluctuation
on a quarterly basis. As a result of annuity license fee revenue
recognition being skewed towards the last two quarters of the
fiscal year, Adjusted EBITDA is expected to be lower in the first
and second quarters of the fiscal year.
Condensed Consolidated Statements of Financial Position
UNAUDITED (thousands of Canadian $) |
September 30, 2024 |
|
March 31, 2024 |
|
April 1, 2023 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash |
61,373 |
|
63,083 |
|
66,850 |
|
Restricted cash |
96 |
|
142 |
|
- |
|
Trade and other receivables |
34,704 |
|
36,550 |
|
23,910 |
|
Prepaid expenses |
2,213 |
|
2,321 |
|
1,060 |
|
Prepaid income taxes |
986 |
|
3,841 |
|
444 |
|
|
99,372 |
|
105,937 |
|
92,264 |
|
Intangible assets |
22,354 |
|
23,683 |
|
1,321 |
|
Right-of-use assets |
29,628 |
|
29,072 |
|
30,733 |
|
Property and equipment |
9,496 |
|
9,877 |
|
10,366 |
|
Goodwill |
4,426 |
|
4,399 |
|
- |
|
Deferred tax asset |
136 |
|
- |
|
2,444 |
|
Total assets |
165,412 |
|
172,968 |
|
137,128 |
|
Liabilities and
shareholders’ equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Trade payables and accrued liabilities |
13,920 |
|
18,551 |
|
11,126 |
|
Income taxes payable |
1,422 |
|
2,136 |
|
33 |
|
Acquisition holdback payable |
2,288 |
|
2,292 |
|
- |
|
Acquisition earnout |
3,416 |
|
- |
|
- |
|
Deferred revenue |
32,274 |
|
41,120 |
|
34,797 |
|
Lease liabilities |
2,263 |
|
2,566 |
|
1,829 |
|
|
55,583 |
|
66,665 |
|
47,785 |
|
Lease liabilities |
35,521 |
|
34,395 |
|
36,151 |
|
Stock-based compensation
liabilities |
253 |
|
624 |
|
742 |
|
Acquisition earnout |
- |
|
1,503 |
|
- |
|
Other long-term liabilities |
200 |
|
305 |
|
- |
|
Deferred tax liabilities |
1,776 |
|
1,661 |
|
- |
|
Total liabilities |
93,333 |
|
105,153 |
|
84,678 |
|
Shareholders’ equity: |
|
|
|
|
|
|
Share capital |
91,083 |
|
87,304 |
|
81,820 |
|
Contributed surplus |
15,892 |
|
15,667 |
|
15,471 |
|
Cumulative translation adjustment |
343 |
|
(367 |
) |
- |
|
Deficit |
(35,239 |
) |
(34,789 |
) |
(44,841 |
) |
Total shareholders’ equity |
72,079 |
|
67,815 |
|
52,450 |
|
Total liabilities
and shareholders'
equity |
165,412 |
|
172,968 |
|
137,128 |
|
Condensed Consolidated
Statements of
Operations and
Comprehensive Income
|
Three months endedSeptember 30 |
|
Six months endedSeptember 30 |
|
UNAUDITED (thousands of Canadian $ except per share amounts) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
Revenue Cost of revenue |
29,4675,692 |
|
22,6332,493 |
|
59,99011,884 |
|
43,3814,398 |
|
Gross
profit |
23,775 |
|
20,140 |
|
48,106 |
|
38,983 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
Sales and marketing |
4,229 |
|
3,384 |
|
9,160 |
|
5,739 |
|
Research and development |
6,428 |
|
4,767 |
|
14,673 |
|
8,819 |
|
General and administrative |
4,688 |
|
4,263 |
|
10,177 |
|
6,935 |
|
|
15,345 |
|
12,414 |
|
34,010 |
|
21,493 |
|
Operating
profit |
8,430 |
|
7,726 |
|
14,096 |
|
17,490 |
|
|
|
|
|
|
|
|
|
|
Finance income |
761 |
|
1,548 |
|
1,639 |
|
1,452 |
|
Finance costs |
(1,072 |
) |
(481 |
) |
(1,363 |
) |
(1,001 |
) |
Change in fair value of
contingent consideration |
(2,112 |
) |
- |
|
(1,913 |
) |
- |
|
Profit before income and other taxes |
6,007 |
|
8,793 |
|
12,459 |
|
17,941 |
|
Income
and other taxes |
2,244 |
|
2,277 |
|
4,732 |
|
4,521 |
|
|
|
|
|
|
|
|
|
|
Net income for the period |
3,763 |
|
6,516 |
|
7,727 |
|
13,420 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income: |
|
|
|
|
|
|
|
|
Foreign
currency translation adjustment |
(189 |
) |
4 |
|
710 |
|
4 |
|
Other comprehensive income |
(189 |
) |
4 |
|
710 |
|
4 |
|
Total comprehensive income |
3,574 |
|
6,520 |
|
8,437 |
|
13,424 |
|
|
|
|
|
|
|
|
|
|
Net income per share –
basic |
0.05 |
|
0.08 |
|
0.09 |
|
0.17 |
|
Net income per share –
diluted |
0.05 |
|
0.08 |
|
0.09 |
|
0.16 |
|
Dividend per share |
0.05 |
|
0.05 |
|
0.10 |
|
0.10 |
|
Condensed Consolidated
Statements of
Cash Flows
|
Three months endedSeptember 30 |
|
Six months endedSeptember 30 |
|
UNAUDITED (thousands of Canadian $) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
Operating
activities |
|
|
|
|
|
|
|
|
Net income |
3,763 |
|
6,516 |
|
7,727 |
|
13,420 |
|
Adjustments for: |
|
|
|
|
|
|
|
|
Depreciation and amortization of property, equipment, right-of use
assets |
1,283 |
|
892 |
|
2,501 |
|
1,796 |
|
Amortization of intangible assets |
664 |
|
129 |
|
1,329 |
|
186 |
|
Deferred income tax expense (recovery) |
575 |
|
2,028 |
|
(78 |
) |
1,978 |
|
Stock-based compensation |
(2,106 |
) |
1,604 |
|
(214 |
) |
1,709 |
|
Foreign exchange and other non-cash items |
810 |
|
322 |
|
438 |
|
322 |
|
Change in fair value of contingent consideration |
2,112 |
|
- |
|
1,913 |
|
- |
|
Funds flow from operations |
7,101 |
|
11,491 |
|
13,616 |
|
19,411 |
|
Movement in non-cash working
capital: |
|
|
|
|
|
|
|
|
Trade and other receivables |
(11,965 |
) |
(581 |
) |
1,846 |
|
3,301 |
|
Trade payables and accrued liabilities |
264 |
|
405 |
|
(3,067 |
) |
(2,389 |
) |
Prepaid expenses and other assets |
74 |
|
291 |
|
108 |
|
290 |
|
Income taxes receivable (payable) |
687 |
|
(1,612 |
) |
2,111 |
|
(1,251 |
) |
Deferred revenue |
1,384 |
|
3,044 |
|
(8,846 |
) |
(5,137 |
) |
Change in non-cash working capital |
(9,556 |
) |
1,547 |
|
(7,848 |
) |
(5,186 |
) |
Net cash provided by (used in) operating
activities |
(2,455 |
) |
13,038 |
|
5,768 |
|
14,225 |
|
|
|
|
|
|
|
|
|
|
Financing
activities |
|
|
|
|
|
|
|
|
Repayment of acquired line of
credit |
- |
|
(2,012 |
) |
- |
|
(2,012 |
) |
Proceeds from issuance of
common shares |
480 |
|
512 |
|
2,729 |
|
1,213 |
|
Repayment of lease
liabilities |
(769 |
) |
(412 |
) |
(1,512 |
) |
(824 |
) |
Dividends paid |
(4,101 |
) |
(4,042 |
) |
(8,177 |
) |
(8,081 |
) |
Net cash used in financing activities |
(4,390 |
) |
(5,954 |
) |
(6,960 |
) |
(9,704 |
) |
|
|
|
|
|
|
|
|
|
Investing
activities |
|
|
|
|
|
|
|
|
Corporate acquisition, net of
cash acquired |
- |
|
(23,050 |
) |
- |
|
(23,050 |
) |
Property and equipment additions |
(236 |
) |
(51 |
) |
(329 |
) |
(96 |
) |
Net cash used in investing activities |
(236 |
) |
(23,101 |
) |
(329 |
) |
(23,146 |
) |
|
|
|
|
|
|
|
|
|
Increase (decrease) in
cash |
(7,081 |
) |
(16,017 |
) |
(1,521 |
) |
(18,625 |
) |
Effect of foreign exchange on
cash |
(638 |
) |
- |
|
(189 |
) |
- |
|
Cash,
beginning of period |
69,092 |
|
64,242 |
|
63,083 |
|
66,850 |
|
Cash, end of period |
61,373 |
|
48,225 |
|
61,373 |
|
48,225 |
|
|
|
|
|
|
|
|
|
|
Supplementary cash
flow information |
|
|
|
|
|
|
|
|
Interest received |
761 |
|
692 |
|
1,639 |
|
1,452 |
|
Interest paid |
479 |
|
481 |
|
942 |
|
950 |
|
Income
taxes paid |
4,229 |
|
2,580 |
|
5,725 |
|
4,358 |
|
CORPORATE PROFILE
CMG Group (TSX:CMG) is a global software and
consulting company that combines science and technology with deep
industry expertise to solve complex subsurface and surface
challenges for the new energy industry around the world. The
Company is headquartered in Calgary, AB, with offices in Houston,
Oslo, Stavanger, Kaiserslautern, Oxford, Dubai, Bogota, Rio de
Janeiro, Bengaluru, and Kuala Lumpur. For more information, please
visit www.cmgl.ca.
QUARTERLY FILINGS AND RELATED QUARTERLY FINANCIAL
INFORMATION
Management’s Discussion and Analysis
(“MD&A”) and condensed consolidated interim financial
statements and the notes thereto for the three and six months ended
September 30, 2024, can be obtained from our website www.cmgl.ca.
The documents will also be available under CMG Group’s SEDAR
profile www.sedarplus.ca.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains "forward-looking
statements". Forward-looking statements can be identified by words
such as: "anticipate", "intend", "plan", "goal", "seek", "believe",
"project", "estimate", "expect", "strategy", "future", "likely",
"may", "should", "will", and similar references to future periods.
Examples of forward-looking statements include, among others,
statements we make regarding the benefits of the acquired
technology, the ongoing development thereof; and the ability of
data analytics to improve efficiency, cut costs and reduce
risks.
Forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
they are based only on our current beliefs, expectations, and
assumptions regarding the future of our business, future plans and
strategies, projections, anticipated events and trends, the economy
and other future conditions. Because forward-looking statements
relate to the future, they are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict
and many of which are outside of our control. Our actual results
and financial condition may differ materially from those indicated
in the forward-looking statements. Therefore, you should not rely
on any of these forward-looking statements. Important factors that
could cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
are detailed in the companies’ public filings.
Any forward-looking statement made by us in this
press release is based only on information currently available to
us and speaks only as of the date on which it is made. Except as
required by applicable securities laws, we undertake no obligation
to publicly update any forward-looking statement, whether written
or oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise.
For further information, please contact:
Pramod Jain
Chief Executive Officer
(403) 531-1300
pramod.jain@cmgl.ca
or
Sandra Balic
Vice President, Finance & CFO
(403) 531-1300
sandra.balic@cmgl.ca
For investor inquiries, please contact:
Kim MacEachern
Director, Investor Relations
cmg-investors@cmgl.ca
For media inquiries, please contact:
marketing@cmgl.ca
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