LIMERICK, Ireland, April 22, 2020 /CNW/ - kneat.com, inc. (TSXV:
KSI) ("Kneat") today announced its financial results for the
quarter and year ended December 31,
2019. All dollar amounts are presented in Canadian dollars
unless otherwise stated.
Fourth Quarter Highlights
- Revenue of $1.40 million was
recognized during the three-months ended December 31, 2019 representing an increase of
200% over the same period in 2018. Total revenue for the year ended
2019 was $3.95 million which was an
increase of 202% over the previous financial year.
- SaaS license fees for the three-months to December 31, 2019 were $0.34 million and this represents an increase of
620% compared with the fourth quarter 2018. The total SaaS license
fees for the year ended 2019 were $0.84
million which is an increase of 545% compared with the year
ended 2018.
- Annualized recurring revenue ("ARR"), which includes SaaS
license fees and maintenance fees, was $1.91
million at December 31, 2019.
This is an increase of 264% compared to the ARR at December 31, 2018.
- In November 2019 Kneat announced
that it had signed a five-year master service agreement with
another one of the world's largest pharmaceutical companies, to
digitalize key validation processes across its manufacturing sites.
This agreement allows the customer and its affiliates, with more
than 60,000 employees worldwide, to expand Kneat across all its
global sites.
- In December 2019, Kneat also
announced that it had signed a five-year master service agreement
with another one of the world's leading biopharmaceutical
companies. This company has over 10,000 employees and has
operations in over 30 countries represents a significant
opportunity for growth and expansion of the Kneat platform.
- Throughout the fourth quarter, Kneat continued to grow its
staff across all functions and signed a new lease agreement to
expand the company's footprint within the National Technology Park,
Limerick, Ireland. The additional
office space will accommodate up to 100 Kneat employees,
complimenting the existing Kneat offices at the Castletroy Business
Park, Limerick, Ireland.
Chief Executive Officer Commentary
"We are pleased to report continued strong revenue growth for
quarter four reflecting the growing number of tier one pharma
customers that are going live and expanding the use of our software
within their networks. The growth in our SaaS revenue is driven by
Kneat's focus on delivery of a SaaS first model. This focus on
SaaS, combined with our maintenance revenue stream has contributed
to the strong growth in our annual recurring revenue.
The long-term impact of COVID-19 on our business is difficult
to assess fully at this time and we continue to monitor the
situation closely. Generally, it is business as usual for the
majority of our customers and prospects. A small proportion
of our prospects are slowing their buying decisions temporarily but
on the other hand others are accelerating their decision to go
paperless because of the increased business continuity benefits
that it can deliver. We have received messages from several
customers highlighting the business continuity benefits of Kneat Gx
during this pandemic. Kneat Gx is enabling their staff to continue
many aspects of their validation activities remotely and allowing
global contributors to collaborate in the process in real time.
This has reinforced the benefits of Kneat Gx over the manual
paper-based systems that it has replaced for these
customers.
Our transition to remote working has been seamless. We
are very proud of our whole team as they continue to operate as
normal while working remotely.
Our plan for 2020 is to continue to add and deploy new
customers, and to expand to new work processes and new sites within
our existing customer base with a particular focus on our SaaS
platform."
-Eddie Ryan, Chief Executive
Officer of Kneat.
Financial Results Summary for the fourth Quarter
Revenue for the three-months ended December 31, 2019 was $1.40 million, an increase of 200% from
$0.47 million in the same period in
2018. This increase in revenue was the main driver of the increase
in gross margin to $0.65 million for
the three months ended December 31,
2019 from $0.17 million in the
same quarter in 2018.
Net loss for the fourth quarter of 2019 was $1.12 million as compared to a net loss of
$0.62 million for the same period in
2018. The increase in net loss was due primarily to increased
salaries and benefits related to higher headcount on the
professional services and development teams. In addition, the
amortization of the intangible asset, a non-cash expense, increased
over the prior year due to continued investment in our
platform.
Overview of Financial Results for the year ended December 31, 2019
For the year ended December 31,
2019 Kneat recorded $3.95
million in revenue, an increase of $2.64 million over the year ended December 31, 2018. This increase was driven
primarily by new customers going live on the platform and existing
customers scaling their use of Kneat Gx through the purchase of
additional licenses.
Cost of revenues for the year ended December 31, 2019 was $2.19 million compared to $0.98 million for the year ended December 31, 2018. This increase was due to
continued investment in our professional services team to support
existing customers and build our capacity to take on new customers,
and increased hosting costs associated with the SaaS platform.
Research and development expenses for the year ended
December 31, 2019 were $3.46 million compared to $2.56 million for the year ended December 31, 2018. The increase was a result of
additional headcount on the development team and increased non-cash
amortization of the intangible asset.
Sales and marketing expenses for the year ended December 31, 2019 were $1.60 million and remained consistent when
compared to the $1.64 million expense
for the year ended December 31,
2018.
General and administrative expenses for the year ended
December 31, 2019 were $1.78 million compared to $1.30 million for the year ended December 31, 2018. The increase over the prior
year was due primarily to an increased headcount on the
administrative team and an increase in professional fees.
This press release should be read in conjunction with the
audited consolidated financial statements and management's
discussion and analysis for the year ended December 31, 2019 which have been filed on SEDAR
at www.sedar.com and Kneat's website
at www.kneat.com
Conference Call
Mr. Eddie Ryan, Chief Executive
Officer of Kneat, and Mr. Hugh
Kavanagh, Chief Financial Officer of Kneat, will host a
conference call and Q&A for analysts via webcast on
Thursday, April 23, 2020 at
09:00 EDT (14:00 BST).
Interested parties can register for the live webcast via the
following link: https://bit.ly/2VCiKZr
Or, attend via teleconference:
Ireland: +353 15 360 736
Canada: +1 (647) 497-9368
USA: +1 (213) 929-4221
United Kingdom: +44 20 3713
5022
The 2019 Annual Financial Statements will be available from the
Financial Information section of the Investors page on the Kneat
Solutions website, at: https://kneat.com/investors/
About Kneat
Kneat, a Canadian company with operational headquarters in
Limerick, Ireland, develops and
markets the next generation Kneat Gx software platform. Multiple
business work processes can be configured on the platform from
equipment to computer system validation, through to quality
document management. Kneat's software allows users to author,
review, approve, execute testing online, manage any exceptions and
post approve final deliverables in a controlled FDA 21 CFR Part 11/
Eudralex Annex 11 compliant platform. Macro and micro report
dashboards enable powerful oversight into all systems, projects,
and processes globally. Customer case studies are reporting
productivity improvements in excess of 100% and a higher data
integrity and compliance standard. For more information
visit www.kneat.com.
Non-GAAP measure
Annualized recurring revenues is used by Kneat to assess the
expected annual recurring revenue from the customers that are live
on Kneat Gx at the end of the period. Annualized recurring revenue
is calculated as the licenses delivered to customers at the period
end, multiplied by the expected customer retention rate of 100% and
multiplied by the contracted annual SaaS license fee or maintenance
fee at the related quarter end. Since many of the customer
contracts are in currencies other than the Canadian dollar, the
Canadian dollar equivalent is calculated using the related period
end exchange rate multiplied by the contracted currency amount.
Cautionary and Forward-Looking Statements
Except for the statements of historical fact contained herein,
certain information presented constitutes "forward-looking
information" within the meaning of applicable Canadian securities
laws. Such forward-looking information, includes, but is not
limited to, the relationship between Kneat and the customer,
Kneat's business development activities, the use and implementation
timelines of Kneat's software within the customer's validation
processes, the ability and intent of the customer to scale the use
of Kneat's software within the customer's organization and the
compliance of Kneat's platform under regulatory audit and
inspection. While such forward-looking statements are expressed by
Kneat, as stated in this release, in good faith and believed by
Kneat to have a reasonable basis, they are subject to important
risks and uncertainties. As a result of these risks and
uncertainties, the events predicted in these forward-looking
statements may differ materially from actual results or events.
These forward-looking statements are not guarantees of future
performance, given that they involve risks and uncertainties. The
forward-looking information in this press release does not include
a full assessment or reflection of the unprecedented impacts of the
COVID-19 pandemic occurring in the first quarter of 2020 and the
ongoing and developing resulting indirect global and regional
economic impacts. This has resulted in significant economic
uncertainty and even though the company has to date experienced no
significant impact to its operations, any potential impact on our
future is difficult to understand or measure at this time.
Kneat does not undertake any obligation to release publicly
revisions to any forward-looking statement, except as may be
required under applicable securities laws. Investors should not
assume that any lack of update to a previously issued
forward-looking statement constitutes a reaffirmation of that
statement. Continued reliance on forward-looking statements is at
an investors' own risk
Neither the 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.
SOURCE kneat.com, inc.