New: Company name, ticker symbol, share price,
website, corporate presentation
REGINA, SK, Oct. 4, 2021 /CNW/ - SSC Security Services Corp.
(formerly Input Capital Corp.) ("SSC" or the
"Company) (TSXV: SECU) (US: INPCF) is pleased to present the
following letter to shareholders from our Chairman, President &
CEO Doug Emsley.
Dear Shareholders;
If you have looked at your brokerage account since October 1, you will have noticed that our Company
now has a new name, trades under a new ticker symbol on the TSX
Venture Exchange (SECU), that our share price is 3x higher
than it was on September 30, and that
you own 1/3rd as many shares of the Company as you did
prior. These are all a result of recent initiatives we have
undertaken to change the direction of our Company. That's what this
letter is about, and I'd like to take this opportunity to tell you
more about your Company and where we are headed.
Input Capital is now SSC Security Services Corp.
We started a new fiscal year on October
1, so it is fitting that this also marks a fresh start in
the direction of the Company. What was previously Input Capital
Corp. ("Input") is now SSC Security Services Corp. ("SSC"),
a leading provider of physical and cyber security services to
corporate and public sector clients across Canada.
Two Acquisitions Completed in the last Eight Months
These changes are the culmination of a lot of work undertaken by
our team over the last year. Part of that work includes two
acquisitions that are now completed:
- On February 1, 2021, we acquired
privately-held SRG Security Resource Group Inc. ("SRG"), which has
a long profitable history offering physical and cyber security
services to corporate and public sector clients across Canada. At the time, SRG had about 415
employees, primarily in Western
Canada, but spread across the country from Newfoundland to Vancouver Island.
- On July 10, 2021, we funded SRG's
acquisition of the regional operations of privately-held Impact
Security Group, adding about 215 employees to SRG's physical
security division, bringing our total headcount to about 625
employees today.
- These are just the first of what we hope will be several more
acquisitions in the months ahead. Stay tuned!
Wrapping Up the Legacy Agriculture Business
While those acquisitions were going on, our long-standing Input
team was also busy wrapping up many contracts related to our legacy
agriculture business, converting them into cash. This process has
gone so well that even though we used cash to complete the
acquisitions above, to pay for ongoing operating expenses, to make
significant repayments against our long-term debt, and to keep
paying our regular quarterly dividend, our cash position has
continued to increase and improve, providing us with excellent
liquidity. This means we can fund our own receivables rather than
turning to banks or factoring firms to finance working capital,
which is often what smaller less-well-capitalized companies in this
industry do.
I commit to you that we will always maintain a strong cash
position to go with our strong aversion to debt as we set SSC up
for a successful future. We still have more ag contracts to wrap
up, but there is every indication that this process will continue
to progress smoothly and profitably as we complete our exit from
the agriculture industry. As our legacy agriculture business
becomes smaller and smaller, you will notice that we talk less and
less about it, and more and more about security.
Our Backstory
I know that many of you think of our team as being agriculture
specialists. Which might make you wonder what we know about the
security industry and running security companies.
You will be reassured to know that I have been in the security
business since 1988, when I co-founded a predecessor company to SRG
with Blair Ross, our Chief Operating
Officer. Blair and I have been business partners in the security
business since that time, building that first company up to over
1,000 employees before selling it to the largest security company
in the world. We ran the Western Canadian operations of that large
company for a couple of years, leaving to pursue other
opportunities.
That's when Blair and I started SRG, building a new security
company from scratch. And around that same time, I got
involved in the agriculture business with Brad Farquhar, our Chief Financial Officer, and
with Gord Nystuen, Vice President. After we sold the first ag
business to the Canada Pension Plan Investment Board, the same team
ramped up Input into what it eventually became.
Last year, when we determined that an exit from the ag industry
was the right thing for the Company. We concluded that putting
Input's balance sheet together with SRG and growing in the security
business would be the right thing to do. The resulting
company would have a strong, cohesive leadership team that has
worked together for decades, and a large balance sheet that could
support an ambitious plan to build a strong national physical and
cyber security company both organically and via acquisition. It
made sense then, and it makes even more sense today.
Our Plan
The security business is a highly fragmented business. There are
some big international public companies like the one Blair and I
sold to about 20 years ago. There are some mid-sized national
firms like SRG, most of which are also privately held. And there
are a large number of smaller companies, many of which are owned by
their founders and their families. Blair and I know many of these
owner/operators from our long history in the security industry, and
we believe there are many opportunities for us to acquire some of
them as the owners look to move on or plan for
retirement.
Our stated goal is to use SSC as the public holding company that
will acquire and/or fund the growth and development of a number of
wholly-owned operating companies, products and brands in the
security business over the next 3-5 years. In that time, we believe
we can become a group of companies with $200 to $300
million in annual revenue, producing $15 to $20 million
in annual EBITDA. Growing our earnings and EBITDA will enhance our
ability to grow with internally generated resources, as well as to
increase our ability to pay dividends over time.
Our Value
The market capitalization of our Company is less than the
value of our cash and tangible legacy assets (which are converting
to cash very quickly), which means that buyers of the Company's
shares are getting our 625-employee security company for
free! With a very tangible book value of about
$3.75 per share, I believe our shares
are deeply undervalued, and it doesn't take too much imagination to
conclude that our growth plan will produce substantial benefits to
all of us as shareholders.
You should know that we don't run the company as a hired
managers. Rather, we run it as if we own it – because we do. Our
management team, board and employees own approximately 33.8% of the
shares of the Company. And every head office employee and
management team member automatically buys more shares every
payday.
I believe our Company is the best capitalized security company
in the country, and we are poised to deploy that capital into
growing significantly larger over the next several years. The
following numbers are approximate because we haven't closed the
books for the Sept 30 year end yet,
but they help you understand our financial strength and how well we
are positioned to grow:
Cash = $28.8 million (and growing rapidly)
Ag Assets = $20+ million (and turning to cash rapidly)
Long-Term Debt = $2.8 million
(and declining rapidly)
Plus, we own a multi million-dollar security company with over
600 employees that is profitable and throwing off strong cash
flow.
Our Dividend
Some of you have asked about our dividend policy going forward.
On August 17, 2021, we announced a
cash dividend of $0.01 per common share for the quarter
ending September 30, 2021. The dividend is payable
on October 15, 2021 to shareholders of record
on September 30, 2021 (based on pre-consolidation share
holdings).
After the dividend is paid on October
15, we plan to maintain our dividend at the same level (but
adjusted for the consolidation, of course). This means that the
quarterly dividend payments will become $0.03 per post-consolidation common share
($0.12 annualized) beginning with the
dividend payable to shareholders in January
2022. In a well-capitalized security company, we generate
cash and our dividend is easily sustainable.
I invite you to come with us on this journey. Whether you own 10
shares or 1 million shares of SSC, we're all partners in this
enterprise, and we will own a much larger company together in just
a few years.
What Else is Ahead?
We often get calls from investors in the United States who are frustrated by their
brokers not making smaller TSX Venture Exchange companies available
to them. Over the next few months, we will be taking steps to
enhance the availability of our shares to US investors of all
sizes. Gaining access to more investors should be good for us all
as shareholders, providing greater liquidity and access to the
largest pool of capital in the world.
In the past, we have won awards for Investor Relations. While we
haven't had a lot of exciting news to talk about over the past few
years, that has now changed. We now plan a renewed investor
outreach program, getting back to some of the kinds of IR
activities that served us well in the past, as well as some new
ideas.
Conclusion
So, as you can see, we're not sitting still. We have big plans
for the company and the path is now open for us to execute on our
plans. We believe good things are ahead and look forward to going
on that journey with you.
Sincerely Yours,
Doug Emsley
Chairman, President & CEO
PS. Stay in Touch & Keep Current
You can track our progress by receiving our press releases and
updates via email. If you haven't already subscribed, be sure
to do so at: https://securityservicescorp.ca/subscribe/
We have a new website located at www.securityservicescorp.ca,
where you will find more information about the Company and links to
the websites of our operating subsidiaries like SRG.
I also invite any shareholders with questions about anything
regarding the security business, or our strategy, to give me a
call. My phone number below rings straight through to my desk, and
I always like talking to shareholders.
ABOUT SSC
SSC Security Services Corp. is a leading provider of physical
and cyber security services to corporate and public sector clients
across Canada. Our leadership team
has decades of experience in the security industry. Combined with
our very strong balance sheet, we plan to rapidly grow into a much
larger security services firm via incremental organic growth, by
acquisition, and via expansion into new service lines within the
security sector. On February 1, 2021,
we acquired SRG Security Resource Group Inc., and in July 2021, we funded SRG's acquisition of a
regional security business. As of October 1,
2021, SSC and its subsidiaries have approximately 625
employees across Canada. For more
information, please visit www.securityservicescorp.ca.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE
EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF
THIS RELEASE.
Forward Looking Statements
This release includes forward-looking statements regarding
SSC and its business. Such statements are based on the current
expectations and views of future events of SSC's management. In
some cases the forward-looking statements can be identified by
words or phrases such as "may", "will", "expect", "plan",
"anticipate", "intend", "potential", "estimate", "believe" or the
negative of these terms, or other similar expressions intended to
identify forward-looking statements. The forward-looking events and
circumstances discussed in this release may not occur and could
differ materially as a result of known and unknown risk factors and
uncertainties affecting SSC, including risks regarding the security
industry, the agricultural industry, economic factors and the
equity markets generally and many other factors beyond the control
of SSC. No forward-looking statement can be guaranteed.
Forward-looking statements and information by their nature are
based on assumptions and 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 statement or
information. Accordingly, readers should not place undue reliance
on any forward-looking statements or information. Except as
required by applicable securities laws, forward-looking statements
speak only as of the date on which they are made and SSC undertakes
no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
SOURCE SSC Security Services Corp.