FY
2019 Highlights
|
Q1 2020
Highlights
|
- Full-year 2019
revenues were C$18.3 million compared to 2018 revenues of C$1.8
million, a 10-times increase year-over-year
- Connected assets
totalled 41,088 at YE 2019 compared to 28,408 at YE 2018
- Q4 2019 revenues
were C$10.0 million with more than 60% from AssetCare™️
solutions
|
- Q1 2020 revenues were C$6.6 million with a backlog of
further AssetCare implementations to come as COVID-19 restrictions
ease
- 63% of Q1 2020 revenues were from AssetCare
solutions
- Q1 2020 total
connected assets were 48,672, an 18% increase from Q4 2019, on
track to over 70,000 by year-end
|
VANCOUVER, May 26, 2020 /CNW/ - mCloud Technologies
Corp. (TSX-V: MCLD) (OTCQB: MCLDF) ("mCloud"
or the "Company"), a leading provider of asset
management solutions combining IoT, cloud computing, artificial
intelligence ("AI") and analytics, today announced its financial
results for the full year ended December 31,
2019 ("FY 2019") and the first quarter ended March 31, 2020 ("Q1 2020").
"Our strong top-line revenues and consistent margins made 2019 a
solid year of growth for mCloud," said Russ
McMeekin, mCloud President and CEO. "Our organic growth
remains strong, with over 12,000 new connected assets added in 2019
and over 7,500 added in Q1 2020."
"These new AssetCare connections and the performance of our
acquisitions have built a solid base for ongoing recurring
revenue," McMeekin continued. "Additionally, our ability to
continually attract top business development talent and tap into a
large serviceable obtainable market lets us scale our recurring
revenues in a way that makes mCloud directly comparable with peer
Software-as-a-Service ("SaaS") technology companies."
On mCloud's navigation of current market conditions, McMeekin
commented: "The headwinds created by COVID-19 and lower oil prices
impacted our project services revenue, but created unique
opportunities as seen through our Q1 2020 revenues of C$6.6 million with 63% from AssetCare solutions
and a backlog of new AssetCare implementations that will take place
as the movement restrictions around COVID-19 ease."
"Based on current customer activity and the gradual return of
economic activity over the year, we expect to connect at least
70,000 total assets, achieve full-year 2020 revenues of between
C$70-72 million, and attain gross
margins of more than 60%," McMeekin added. "We anticipate revenues
will accelerate in the second half of 2020, bolstered by the
contributions we expect to see from growth in our 3D Digital Twin
and Connected Worker solution segments with more than 65% of our
revenues to come from AssetCare solutions."
"At full capacity, our global business development team has the
capacity to add more than C$70
million in backlogged total contract value and over 30,000
connected assets annually."
"Going forward, mCloud's organic growth in recurring revenues
are expected to outpace the Company's non-recurring expenses
related to corporate development, including our market up-listing
activities and recent acquisitions," McMeekin noted. "That said, we
will continue to pursue highly targeted acquisitions that
accelerate our ability to deliver greater customer value through
technology and evolve our leadership position in the market."
"There is no doubt the current COVID-19 pandemic and economic
shocks worldwide have changed the way businesses assess risk,
especially as it relates to the disruptions organizations have seen
across the board," McMeekin concluded. "Our entire team is very
excited about the opportunities we have to help businesses
everywhere acclimate to a new normal through our remote
connectivity and asset management capabilities."
Full Year 2019 Highlights
- Added 12,680 connected assets including HVAC, lighting, and
indoor air quality zones in commercial buildings, wind turbines,
and strategic assets at oil and gas facilities exceeding our 2019
year-end objective of 40,000 connected assets
- Completed strategic transactions with Agnity Global Inc.
("Agnity"), which provides mCloud with mobile communication and
remote worker capabilities, and Autopro Automation Consultants Ltd.
("Autopro"), establishing mCloud as Western Canada's leading process automation
provider with world-class process industry expertise
- Launched three new technology offerings via the Company's
flagship AssetCare platform, including an innovative offering for
3D Digital Twins, a Connected Worker solution using intrinsically
safe smart glasses, and a Connected Industry solution enabling the
predictive maintenance of numerous critical, underserved assets at
oil and gas facilities
- As announced on March 12, 2019,
delivered new AI-powered capabilities to small-box retail and
restaurant operators to improve building energy efficiency –
driving up to 50% improvements in daily cost of energy for these
operators
- As announced on October 3, 2019,
new wind turbine connections for power curve optimization and
digital blade inspection in China
and Europe, which were bolstered
by the acquisition of assets from Airfusion, Inc. as announced on
February 10, 2020
- Added business development talent for international customer
expansion as seen through the growth in initial customer engagement
across Canada, the United States, the United Kingdom, Continental Europe, and
China
- Initiated a private placement of special warrants for
$10 million in December, which was
increased to C$13.3 million and
closed in January 2020
- Made preparations to list on the NASDAQ and graduate to the TSX
senior board in 2020; the process is advancing as the Company's
advisors and stakeholders continue working remotely
- As announced on March 24, 2020,
the Company estimated its asset connectivity has helped reduce the
annual carbon footprint of its customers by 80,000 tons in 2019, or
the same amount of greenhouse gases emitted by approximately 17,000
passenger vehicles driven for one year
Full Year 2019 and Q1 2020 Summary
All figures in
Canadian dollars
|
|
|
|
Q1
2020
|
FY
2019
|
Revenues
|
$6,558,204
|
$18,340,249
|
Cost of Goods
Sold
|
2,496,392
|
7,583,127
|
Gross
Profit
|
4,061,812
62%
|
10,757,122
59%
|
Operating
Expenses
|
11,966,945
|
27,137,556
|
Net
Loss
|
(9,353,397)
|
(28,709,834)
|
Add: Current
Taxes
|
(150,215)
|
181,895
|
Deduct: Deferred Tax
Recovery
|
573,683
|
(1,877,313)
|
Add: Depreciation and
Amortization
|
1,573,516
|
4,044,142
|
Add: Share-Based
Compensation
|
400,862
|
1,468,361
|
Add: Finance
Costs
|
1,465,266
|
3,217,500
|
Add: Business
Acquisition Costs
|
73,107
|
9,880,170
|
Add: Foreign Exchange
Loss
|
501,474
|
494,404
|
Deduct: Finance
Income
|
(12,103)
|
(167,913)
|
Add: Salaries, Wages,
and Benefits
|
2,404,198
|
3,094,141
|
Add: Professional
Services and Consulting1
|
1,671,001
|
2,611,087
|
Adjusted
EBITDA2
|
(852,609)
|
(5,763,360)
|
|
1
Management does not include certain expenses as part of its
account of regular operations.
|
2This release contains reference
to "Adjusted EBITDA," which is a non-GAAP measure. See "Non-GAAP
Measures" below.
|
Q4 2019 Financial Highlights
In Q4 2019, revenues were approximately C$10.0 million with gross margins of 63%,
reflecting the blended contribution of revenues from new customer
engagements driven by AssetCare alongside the reductions in legacy
technical project services revenue, which are based on lower margin
professional services.
These revenues do not reflect any contribution from the
Company's acquisition of Construction Systems Associates, Inc.
("CSA"), which did not close until January
27, 2020.
Compared to historical norms, mCloud saw approximately
C$7 million less in legacy technical
project services revenue, a traditional mainstay of the Autopro
business the Company acquired in 2019. This shortfall was replaced
by approximately C$8 million in
AssetCare-related multi-year subscriptions whose revenues are
recognized on an ongoing basis.
Q1 2020 Financial Highlights
Even with the movement restrictions put in place as a result of
the global response to the COVID-19 pandemic, the Company added
7,584 connected assets to its portfolio to reach a total of 48,672
in Q1 2020. A substantial backlog of new AssetCare implementations
developed in Q1 2020, with revenues from these implementations
awaiting the completion of certain onsite installations, many at
heavy industry and process manufacturing sites where onsite access
has been substantially limited. The Company expects many of these
installations will see completion shortly after pandemic
restrictions ease across the board.
Due to the Company's revenue recognition policies, AssetCare
revenues attributed to technologies from mCloud's acquisitions were
lower in Q1 2020 as compared to Q4 2019. Consistent with the
trajectory seen in 2019, these revenues are expected to continually
increase over the course of the year with the largest contribution
to come in Q4 2020.
The Company's count of connected assets grew by 18% from Q4 2019
to Q1 2020 and is expected to continue growing as the Company
secures new business.
Approximately 63% of Q1 2020 revenues were derived from
AssetCare solutions.
FY 2020 Outlook
As a result of current market conditions, revenues from the
Company's legacy technical project services are expected to remain
light until at least the middle of 2020. As mCloud continues to
target a total of more than 70,000 connected assets in FY 2020,
revenue estimates notwithstanding any further substantial changes
due to the influence of COVID-19, are anticipated to reach an FY
2020 total of between C$70-72 million
with accompanying margins of greater than 60%.
In 2H 2020, the 3D Digital Twin and Connected Worker segments of
the Company's business are expected to be significant contributors
to overall revenues as they add high-margin recurring revenue
growth. New capabilities drawn from mCloud's transactions with
Agnity, CSA, and Airfusion, along with a new regional office
serving the UK, Europe, the
Middle East, and Africa, are also expected to contribute to the
Company's performance later in the year. Select M&A activity
will continue to expand the Company's technology, geography, and
market footprint.
The influence of COVID-19 on heavy industry operations worldwide
is emerging as a catalyst for new revenue growth opportunities,
especially in the 3D Digital Twin, and Connected Worker segments.
This is also the case in the Company's Connected Building segment,
where retail locations and restaurants seek to reassure their
customers that their establishments are safe to visit. As announced
on April 28, 2020, the Company is
deploying an extension to AssetCare for Connected Buildings that
will help businesses improve indoor air quality, food safety, and
comply with local physical distancing guidelines through the use of
advanced occupancy analytics, including demand-based response. The
Company expects the success of this offering will be a key
contributor to mCloud's target of more than 70,000 connected assets
by year-end.
At the end of 2020, the Company expects AssetCare solutions will
represent more than 65% of full-year revenues, with the majority
generated from multi-year recurring subscriptions.
Combined Full Year 2019, Q4 2019, and Q1 2020 Conference
Call
The Company is hosting a conference call to discuss the
financial results for the fourth quarter and full-year 2019 at
5:30 p.m. ET today. The conference
call will include prepared remarks, including a virtual
presentation, from Russ McMeekin,
Chief Executive Officer, and Chantal
Schutz, Chief Financial Officer. After the prepared remarks,
the Company will accept questions.
To access the conference call by telephone, dial 647-427-7450 or
1-888-231-8191. Please connect approximately 10 minutes prior to
the beginning of the call to ensure participation. The conference
call will be archived for replay by telephone until June 2, 2020, at midnight (ET). To access the
archived conference call, dial 1-855-859-2056 and enter the
reservation number 7668729.
A live audio webcast of the conference call will be available at
https://bit.ly/2W9FUYI. Please connect at least 15 minutes prior to
the conference call to ensure adequate time for any software
download that may be required to join the webcast. The
webcast will be archived at the above website for one year.
About mCloud Technologies Corp.
mCloud is creating a more efficient future with the use of AI
and analytics, curbing energy waste, maximizing energy production,
and getting the most out of critical energy infrastructure. Through
mCloud's AI-powered AssetCare™ platform, mCloud offers complete
asset management solutions in five distinct segments: commercial
buildings, renewable energy, healthcare, heavy industry, and
connected workers. IoT sensors bring data from connected assets
into the cloud, where AI and analytics are applied to maximize
their performance.
Headquartered in Vancouver,
Canada with offices in twelve locations worldwide, the
mCloud family includes an ecosystem of operating subsidiaries that
deliver high-performance IoT, AI, 3D, and mobile capabilities to
customers, all integrated into AssetCare. With over 100 blue-chip
customers and more than 48,000 assets connected in thousands of
locations worldwide, mCloud is changing the way energy assets are
managed.
mCloud's common shares trade on the TSX Venture Exchange under
the symbol MCLD and on the OTCQB under the symbol MCLDF. mCloud's
convertible debentures trade on the TSX Venture Exchange under the
symbol MCLD.DB. For more information, visit www.mcloudcorp.com.
Non-GAAP Measure
Selected financial information for the three month period ended
March 31, 2020 and fiscal year ended
December 31, 2019, set out above
includes reference to "Adjusted EBITDA," which is not recognized
under International Financial Reporting Standards and is a
non-generally accepted accounting principle ("Non-GAAP") measure.
This information should be read in conjunction with the
unaudited interim consolidated financial statements for the three
months ended March 31, 2020 and
audited consolidated financial statements and notes thereto for the
year ended December 31, 2019 along
with mCloud's MD&As for the corresponding periods, which are
available under mCloud's profile on SEDAR at www.sedar.com. Further
information regarding this Non-GAAP measure is contained in
mCloud's annual MD&A for the period ended December 31, 2019.
Forward-Looking Information and Statements
This press release contains certain "forward-looking
information" within the meaning of applicable Canadian securities
legislation and may also contain statements that may constitute
"forward-looking statements" within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Such forward-looking information and forward-looking
statements are not representative of historical facts or
information or current condition, but instead represent only the
Company's beliefs regarding future events, plans or objectives,
many of which, by their nature, are inherently uncertain and
outside of the Company's control. Generally, such forward-looking
information or forward-looking statements can be identified by the
use of forward-looking terminology such as "plans", "expects" or
"does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or may contain statements that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "will
continue", "will occur" or "will be achieved". The forward-looking
information contained herein may include information related to
expected recurring revenue, expectations of government-enforced
COVID-19 restrictions being lifted, expectations of future economic
activity as a result of COVID-19, future listing of securities on
the NASDAQ and the TSX, the number of future connected assets,
business prospects and potential revenue of the Company in
2020.
By identifying such information and statements in this manner,
the Company is alerting the reader that such information and
statements are subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of the Company to be
materially different from those expressed or implied by such
information and statements.
An investment in securities of the Company is speculative and
subject to several risks as discussed under the heading "Risk
Factors" on pages 29 to 46 of the Company's filing statement dated
October 5, 2017. Although the Company
has attempted to identify important factors that could cause actual
results to differ materially from those contained in the
forward-looking information and forward-looking statements, there
may be other factors that cause results not to be as anticipated,
estimated or intended.
In connection with the forward-looking information and
forward-looking statements contained in this press release, the
Company has made certain assumptions. Although the Company believes
that the assumptions and factors used in preparing, and the
expectations contained in, the forward-looking information and
statements are reasonable, undue reliance should not be placed on
such information and statements, and no assurance or guarantee can
be given that such forward-looking information and statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such information and
statements. The forward-looking information and forward-looking
statements contained in this press release are made as of the date
of this press release, and the Company does not undertake to update
any forward-looking information and/or forward-looking statements
that are contained or referenced herein, except in accordance with
applicable securities laws. All subsequent written and oral
forward- looking information and statements attributable to the
Company or persons acting on its behalf is expressly qualified in
its entirety by this notice.
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 mCloud Technologies Corp.