Quisitive Technology Solutions Inc.
(“Quisitive” or the “Company”) (TSXV: QUIS, OTCQX:
QUISF), a premier Microsoft solutions provider and
payments solutions provider, today reported financial results for
the first quarter ended March 31, 2023.
Management Commentary“Our first
quarter showcased the benefit of our dual-pronged business as
sequential and year-over-year top line revenue growth driven by the
strength in our Global Payments Solutions division,” said Quisitive
CEO Mike Reinhart. “We continue to make progress on the PayiQ front
and look forward to providing a platform demo at our Investor Day,
showcasing a live customer transaction. Our team is just months
away from commercialization as we will slowly start onboarding
merchants onto our platform. On our Global Cloud Solutions segment,
our Managed Services and licensing and software sales were up both
sequentially and year-over-year following our efforts to build a
stronger base of recurring revenues. We continue to partner with
Microsoft and make strides in innovation to drive value to
customers.”
First Quarter 2023 Financial
ResultsThe Company’s condensed consolidated interim
financial statements for the three months ended March 31, 2023, and
related management’s discussion and analysis can be found on the
Company’s website and the Company’s issuer profile on SEDAR
at www.sedar.com. All figures are expressed in United States
dollars unless otherwise stated.
- Revenue increased 8% to $48.3 million compared to $44.9 million
for the quarter ended March 31, 2022.
- Gross profit increased 1% to $18.2 million compared to $17.9
million for the quarter ended March 31, 2022.
- Adjusted EBITDA increased 10% to $7.0 million compared to $6.4
million for the quarter ended March 31, 2022.
- Global Cloud Solutions revenue was $31.8 million compared to
$33.7 million for the quarter ended March 31, 2022.
- Global Payment Solutions revenue increased to $16.5 million
compared to $11.2 million for the quarter ended March 31,
2022.
- The Company’s total senior debt to Adjusted EBITDA ratio was
2.50:1.00 at March 31, 2023.
First Quarter 2023 Recent Operational
Highlights
- Announced the Company will host an
Investor Day on Wednesday, June 14, 2023, at the Microsoft
Technology Center in Toronto, Ontario.
- Announced its successes in
delivering innovation across platforms and business needs for
manufacturing firms.
- Secured several major new contracts
for the Spyglass security solution with customers spanning
municipalities and enterprise retailers.
- Included on The Globe and Mail’s
2023 Report on Business magazine’s Women Lead Here list; an
editorial benchmark that identifies top-notch Canadian businesses
with the highest executive gender diversity.
- Recognized as one of the top
performers on the TSX Venture Exchange over the last year; a list
of 50 companies from 5 different sectors, recognizing the strongest
performance on the exchange.
- Achieved all six out of six
available Microsoft Cloud Partner Program solution designations,
earning the recognition of Microsoft Cloud Solutions Partner.
Amendment to Credit
Facility
- On March 31, 2023, the Corporation
amended the BMO Loan Agreement to reduce the minimum fixed charge
coverage ratio covenant, as defined therein, from 1.25:1.00 to
1.10:1.00 through December 31, 2023. The minimum fixed charge
coverage ratio will return to 1.25:1.00 for the quarter ending
March 31, 2024. As part of the amendment, additional financing
costs were capitalized and will be expensed over the life of the
loan.
Conference CallQuisitive
management will hold a conference call tomorrow (May 16, 2023) at
8:30 a.m. Eastern time (5:30 a.m. Pacific time) to discuss these
results.
Company CEO Mike Reinhart and CFO Scott Meriwether will host the
call, followed by a question-and-answer period.
Toll Free dial-in: 1-877-704-4453International dial-in:
1-201-389-0920Webcast Link: Here
Please call the conference telephone number 10 minutes prior to
the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Gateway Investor Relations at
949-574-3860.
A telephonic replay of the conference call will be available
after 11:30 a.m. Eastern time on the same day and will expire after
May 30, 2023.
Toll-free replay number: 1-844-512-2921International replay
number: 1-412-317-6671Replay ID: 13738727
For additional information, please visit the Investor Relations
section of Quisitive’s website
at: https://quisitive.com/investor-relations/.
The following table summarizes results for the fourth quarter
ended March 31, 2023 and 2022:
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
Revenue |
$ |
48,311 |
|
|
$ |
44,928 |
|
|
Cost of
Revenue |
|
30,143 |
|
|
|
27,020 |
|
|
Gross
Margin |
|
18,168 |
|
|
|
17,908 |
|
|
Operating Expenses |
|
|
|
|
Sales and
marketing expense |
|
3,849 |
|
|
|
3,513 |
|
|
General and
administrative |
|
7,283 |
|
|
|
8,013 |
|
|
Development |
|
114 |
|
|
|
100 |
|
|
Share-based
compensation |
|
1,951 |
|
|
|
422 |
|
|
Interest
expense |
|
1,639 |
|
|
|
963 |
|
|
Amortization |
|
4,179 |
|
|
|
4,270 |
|
|
Earn-out
settlement loss |
|
- |
|
|
|
72 |
|
|
Acquisition
related compensation |
|
609 |
|
|
|
765 |
|
|
Depreciation |
|
469 |
|
|
|
512 |
|
|
Foreign
exchange loss |
|
18 |
|
|
|
310 |
|
|
Acquisition-related, transaction and other expenses |
|
528 |
|
|
|
362 |
|
|
Other
Income |
|
(19 |
) |
|
|
- |
|
|
Loss
Before Income Taxes |
|
(2,452 |
) |
|
|
(1,394 |
) |
|
Income tax
expense — current |
|
1,360 |
|
|
|
1,237 |
|
|
Deferred
income tax expense (recovery) |
|
(1,225 |
) |
|
|
(1,181 |
) |
|
Net
Loss for the Period |
$ |
(2,587 |
) |
|
$ |
(1,450 |
) |
|
|
|
|
|
|
About Quisitive:Quisitive (TSXV: QUIS, OTCQX:
QUISF) is a premier, global Microsoft partner that harnesses the
Microsoft cloud platform and complementary technologies, including
custom solutions and first-party offerings, to generate
transformational impact for enterprise customers. Our Cloud
Solutions business focuses on helping enterprises move, operate,
and innovate in the three Microsoft clouds. Our Payments Solutions
division leverages the PayiQ platform powered by Microsoft Azure to
transform the payment processing industry into an entirely new
source of customer engagement and consumer value. Quisitive serves
clients globally from seventeen employee hubs across the world. For
more information, visit www.Quisitive.com and follow
@BeQuisitive.
Quisitive Investor ContactMatt Glover and John
YiGateway Investor RelationsQUIS@gatewayir.com 949-574-3860
Tami AndersChief of
Stafftami.anders@quisitive.com 972.573.0995
Reconciliation of Non-GAAP Financial Measures - Adjusted
EBITDA and Adjusted EBITDA as a percentage of revenue
Financial Measures and Adjusted
EBITDAThere are measures included in this news release
that do not have a standardized meaning under generally accepted
accounting principles (GAAP) and therefore may not be comparable to
similarly titled measures and metrics presented by other publicly
traded companies. The Company includes these measures because it
believes certain investors use these measures and metrics as a
means of assessing financial performance. EBITDA (earnings before
interest, taxes, depreciation and amortization is calculated as net
earnings before finance costs (net of finance income), income tax
expense, and depreciation and amortization of intangibles) is a
non-GAAP financial measure that does not have any standardized
meaning prescribed by IFRS and may not be comparable to similar
measures presented by other companies.
We prepare and release quarterly unaudited and
annual audited financial statements prepared in accordance with
IFRS. We also disclose and discuss certain non-GAAP financial
information, used to evaluate our performance, in this and other
earnings releases and investor conference calls as a complement to
results provided in accordance with IFRS. We believe that current
shareholders and potential investors in the Company use non-GAAP
financial measures, such as Adjusted EBITDA and Adjusted EBITDA as
a percentage of revenues, in making investment decisions about the
Company and measuring our operational results.
The term "Adjusted EBITDA" refers to a financial
measure that we define as earnings before certain charges that
management considers to be non-operating expenses and which consist
of interest, taxes, depreciation, amortization, stock-based
compensation (for which we include related fees and taxes), changes
in fair value of derivatives, transaction and acquisition-related
expenses, US payroll protection plan loan forgiveness, earn-out
settlement losses and non-recurring development costs associated
with obtaining bank sponsorship and operational certifications
required to complete PayiQ. Adjusted EBITDA as a percentage of
revenues divides Adjusted EBITDA for a period by the revenues for
the corresponding period and expresses the quotient as a
percentage.
Management considers these non-operating
expenses to be outside the scope of Quisitive's ongoing operations
and the related expenses are not used by management to measure
operations. Accordingly, these expenses are excluded from Adjusted
EBITDA, which we reference to both measure our operations and as a
basis of comparison of our operations from period-to-period.
Management believes that investors and financial
analysts measure our business on the same basis, and we are
providing the Adjusted EBITDA financial metric to assist in this
evaluation and to provide a higher level of transparency into how
we measure our own business. However, Adjusted EBITDA and Adjusted
EBITDA as a percentage of revenues are non-GAAP financial measures
and may not be comparable to similarly titled measures reported by
other companies. Adjusted EBITDA and Adjusted EBITDA as a
percentage of revenues should not be construed as a substitute for
net income determined in accordance with IFRS or other non-GAAP
measures that may be used by other companies, such as EBITDA. The
use of Adjusted EBITDA and Adjusted EBITDA as a percentage of
revenues does have limitations. As these acquisition-related
expenses charges may continue as we pursue our consolidation
strategy, some investors may consider these charges and expenses as
a recurring part of operations rather than expenses that are not
part of operations.
Cautionary Note Regarding Forward Looking
Information
This news release contains certain “forward‐looking information”
and “forward‐looking statements” (collectively, “forward‐ looking
statements”) within the meaning of applicable Canadian securities
legislation regarding Quisitive and its business. Any statement
that involves discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions,
future events or performance (often but not always using phrases
such as “expects”, or “does not expect”, “is expected”,
“anticipates” or “does not anticipate”, “plans”, “budget”,
“scheduled”, “forecasts”, “estimates”, “believes” or “intends” or
variations of such words and phrases or stating that certain
actions, events or results “may” or “could, “would”, “might” or
“will” be taken to occur or be achieved) are not statements of
historical fact and may be forward‐looking statements. Forward‐
looking statements are necessarily based upon a number of estimates
and assumptions that, while considered reasonable, are subject to
known and unknown risks, uncertainties, and other factors which may
cause the actual results and future events to differ materially
from those expressed or implied by such forward‐looking statements.
These forward-looking statements include, but are not limited to,
statements relating to: internal business integrations, full
commercialization and success of the PayiQ platform, expectations
regarding go-to-market strategy and growing partnerships in the
payments business, growth prospects, projected milestones and
timelines.
The risks and uncertainties that may affect forward-looking
statements, or the material factors or assumptions used to develop
such forward-looking information, are described under the heading
"Risks Factors" in the Company's annual information form dated June
23, 2022, which are available under the Company’s issuer profile on
SEDAR at www.sedar.com. There can be no assurance that
forward-looking information, or the material factors or assumptions
used to develop such forward-looking information, will prove to be
accurate. The Company does not undertake any obligations to release
publicly any revisions for updating any voluntary forward-looking
statements, except as required by applicable securities law.
Neither the 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.
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