LIMERICK, Ireland, Aug. 26, 2020 /CNW/ - kneat.com, inc.
(TSXV: KSI) ("Kneat") today announced its
financial results for the period ended June
30, 2020. All dollar amounts are presented in Canadian
dollars unless otherwise stated.
Second Quarter Highlights
- Revenue of $1.55 million was
recognized during the three-months ended June 30, 2020, representing an increase of 192%
when compared to the second quarter in 2019.
- SaaS license fees for the three-months to June 30, 2020 were $0.64
million representing an increase of 206% compared with the
same period in 2019.
- Annualized recurring revenue ("ARR"), which includes SaaS
license fees and maintenance fees, was $3.31
million at June 30,
2020. This is an increase of 215% compared to the ARR at
June 30, 2019. More
specifically, ARR from SaaS license fees increased by 271% and ARR
from maintenance fees increased by 108% from June 30, 2019.
- In June 2020, the Company
announced that it signed a three-year master services agreement
with one of the world's largest biopharmaceutical companies.
This top ten R&D driven biopharmaceutical, with more than
45,000 employees across its multiple operations worldwide, has
selected Kneat's SaaS platform to digitize its validation
process. This agreement allows the customer to expand Kneat
across its global network to its many sites and multiple work
processes worldwide.
- More recently, in August Kneat announced that it has signed a
three-year master services agreement with a tier one consumer
products company. This global company employs more than
30,000 staff in the manufacture and distribution of leading
consumer brands across multiple categories from household to health
and personal care. It selected Kneat's SaaS platform to digitize
its validation processes globally. Initially the customer
will focus on facilities, utilities and equipment validation in
several lead US sites. This agreement allows the customer to deploy
Kneat Gx across its global network.
- Due to the COVID-19 pandemic, we have seen a small proportion
of companies deferring their purchasing decisions temporarily, as
they remain focused on business continuity activities. For a large
proportion however, it has been business as usual, including those
that have begun to deploy our software or are already using Kneat
at their sites.
Chief Executive Officer Commentary
We are pleased to report strong revenue growth for quarter
two, in particular our SaaS revenue which has increased by 206%
compared with the same quarter last year. New big pharma
customers and the recently announced leading consumer products
customer have all adopted the Kneat Gx SaaS platform. This focus on
SaaS, combined with our maintenance revenue stream has contributed
to strong growth in our overall annual recurring revenue.
While the long-term impact of COVID-19 on our business is
still difficult to fully assess, our employees continue to work
remotely and all our operations from software development through
to product release, delivery and customer service continue to
operate effectively. Our customers are telling us how our
technology is aiding their business continuity efforts, because it
allows them to manage a large proportion of their validation
processes remotely.
We are very proud of our team as they continue to fulfil our
mission to help life sciences deliver therapies to their patients
to the highest safety standard, while working in a challenging
remote environment.
Our plan for the remainder of 2020 is to continue to add and
deploy new SaaS customers, continue to expand to new work processes
and new sites with our existing customers and continue to develop
our technology to deliver increasing value for all
customers".
-Eddie Ryan, Chief Executive
Officer of Kneat.
Financial Results Summary for the Second Quarter
Revenue for the three-months ended June
30, 2020 was $1.55 million, an
increase of 192% from $0.53 million
for the same period in 2019. Gross margin of $0.51 million, compared to $0.13 million in the second quarter of 2019
reflects a growth in revenue offset by an increase in cost of
revenues. Cost of revenues and professional services costs
incurred during the second quarter were expensed during the
period. These included costs associated with professional
services of $0.5 million billed
during the quarter for which revenue will be recognized in future
periods. The increase in cost of revenues to $1.03m compared to $0.39
million for the second quarter of 2019, reflects increases
in salaries and benefits related to additional headcount in the
professional services team and increased hosting costs.
Net loss for the second quarter of 2020 was $2.3 million as compared to a net loss of
$1.75 million for the same period in
2019. The increase in net loss reflects the impact of the
increased revenues offset by additional salaries and benefits
related to higher headcount on the professional services
and R&D teams, increased amortization of the intangible
asset and unfavourable foreign currency movements.
This press release should be read in conjunction with the
unaudited condensed interim consolidated financial statements and
management's discussion and analysis for the period ended
June 30, 2020 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, August 27, 2020 at
09:00 EDT (14:00 BST).
Interested parties can register for the live webcast via the
following link: https://bit.ly/3iVbn9p
Or, attend via teleconference
Ireland +353 15 360 736
Canada +1 (647) 497-9429
United States +1 (415)
930-5229
United Kingdom +44 20 3713
5022
The unaudited condensed interim consolidated financial
statements for the period ended June 30,
2020 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 since 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.