/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES./
CALGARY, April 29, 2020 /CNW/ - Sylogist Ltd.
(TSXV:SYZ) ("Sylogist" or the "Company"), a provider of
enterprise information management solutions, is pleased to announce
its unaudited financial results for the second quarter of the 2020
fiscal year, ended March 31,
2020.
Q2 2020 Summary (Comparisons are to Q2 2019, unless
otherwise noted)
- Recurring revenues from subscriptions and maintenance grew by
9% to $7.2 million, compared to
$6.6 million for the second quarter
of 2019.
- Revenues were $9.4 million,
compared to $9.5 million.
- Gross profit margins of 75%, compared to 73% in Q2 2019.
- Profit before income taxes of $3.9
million, compared to $3.2
million, an increase of 20%.
- Reported earnings were $2.8
million, compared to $2.4
million in Q2 2019, an increase of 19%.
- Earnings per fully diluted common share of $0.12 per share, an increase of 10% compared to
Q2 2019.
- Adjusted EBITDA(1) was $5.6
million, or $0.24 per fully
diluted common share, an increase of 34%.
- Adjusted EBITDA Margin(1) was 60%, compared to
44%.
- Cash flow from operations was $6M
compared to $4.4M, an increase of
36%.
- The Company paid regular dividends to shareholders totalling
$2.4 million during the quarter,
compared to $2.1 million in the same
period last year, an increase of 14%.
- Adjusted Working Capital(1) increased 35% to
$47.3 million, or $1.99 per share.
- Combined tax pools at the end of the second quarter 2020 were
approximately $18.6 million
(CAD).
- Given the strong and growing cash generating ability of the
Company, its Board of Directors has approved a 10% increase in its
quarterly dividend to $0.11 per
common share for shareholders of record as at May 29, 2020 to be paid on June 10, 2019, which is treated as an eligible
dividend under the Income Tax Act (Canada).
First half of fiscal 2020 (Comparisons are to the
first half of fiscal 2019, unless otherwise noted)
- Recurring revenues from subscriptions and maintenance were
$14.1 million, an increase of 7%
compared to $13.1 million for the
first half of 2019.
- Revenues were $18.3 million,
compared to $18.9 million.
- Gross profit margins were 76% of revenue, compared to 75% for
the first half of fiscal 2019.
- Adjusted EBITDA(1) was $10.9
million ($0.46 per share),
compared to $8.7 million
($0.40 per share).
- Adjusted EBITDA Margin (1) was 59%, compared to
46%.
- The Company paid regular dividends to shareholders totalling
$4.8 million during the first half of
fiscal 2020, compared to $4.2 million
in the same period in 2019.
- For the six months ended March 31,
2020, the Company repurchased 30,000 common shares at an
average price of $7.97 for a total
cost of $239 thousand.
Jim Wilson, President and Chief
Executive Officer of Sylogist commented, "We continue to see growth
in profitability and are pleased to announce record Adjusted
EBITDA, operating earnings and cash flow. Our Adjusted EBITDA
margin was 60%, up substantially from 44%, as a result of our
continued discipline and focus on operating efficiencies. Due to
the Company's work and client base, Sylogist is an essential
industry in this time of the global COVID-19 pandemic. For
years we have operated remotely, part of our efficiency model, and
remain fortunate that our operations have experienced only minor
impacts from recent events. We did see understandable delays in
some smaller upgrade projects for our not-for-profit and NGO
clients involved in healthcare and community support. These delays
reduced both revenue and Adjusted EBITDA in Q2 by an estimated
3%.
Towards the end of our last fiscal year we introduced our
pay-per-use version of our NaviPayroll product. Take-up was
initially slow in Q4 of fiscal 2019, but then demonstrated very
positive growth in Q1 of 2020. In Q2 2020 we witnessed
greater than 200% growth in NaviPayroll subscriptions over Q1, with
a positive outlook for continuing the growth trend over the
remainder of fiscal 2020. With Microsoft's encouragement and
funding, we are expanding our payroll application to Microsoft's
AppSource marketplace, which will make NaviPayroll easily available
to a broad base of Microsoft customers, providing further
opportunities for organic growth. We anticipate NaviPayroll
becoming available on AppSource later in Q3 2020.
On April 21, 2020, Sylogist was
pleased to announce the acquisition of Information Strategies, Inc.
("InfoStrat), for total cash consideration of approximately
$3.5M, including $740 thousand in working capital, subject to the
settlement of customary holdbacks. InfoStrat, based in Washington, DC, is a long established,
profitable business and a Microsoft Gold partner, catering to
federal and state government and not-for-profit/NGO organizations
throughout the United States. It
provides software solutions and professional services based on its
proprietary intellectual property that uses Microsoft Dynamics 365
CRM and Sharepoint at its core. The acquisition extends Sylogist's
public sector footprint to US federal and state governments,
strengthens our relationship with Microsoft and provides
complementary IP and delivery capabilities to better serve our
customers. InfoStrat's revenue in 2019 was approximately
$5.5 million.
Given the Company's strong performance and opportunities for
further growth, the Board of Directors has approved a 10% increase
in Sylogist's quarterly dividend." concluded Mr. Wilson.
About Sylogist
Sylogist is a software company that, through strategic
acquisitions, investments and operations management, provides
comprehensive, mission-critical ERP and CRM solutions, including
fund accounting, case management, grant management and payroll, to
public service organizations. Sylogist's public service
customers include all levels of government, nonprofit
organizations, non-governmental organizations, educational
institutions as well as public compliance driven and funded
companies. Our Company delivers highly scalable, multi-language,
multi-currency software solutions, which serve the needs of an
international clientele.
Full financial statements together with Management's Discussion
and Analysis are available on SEDAR at www.sedar.com.
The Company's stock is traded on the TSX Venture Exchange under
the symbol SYZ. Information about Sylogist can be found at
http://www.sylogist.com.
Forward-looking Statements
Certain statements in this news release may be
forward-looking statements within the meaning of applicable
securities laws and regulations. These statements
typically use words such as expect, believe, estimate, project,
anticipate, plan, may, should, could and would, or the negative of
these terms, variations thereof or similar terminology.
Forward-looking information in this news release includes
statements with respect to the strong and growing cash
generating ability of the Company, the Company's work
and client base meaning Sylogist is an essential industry in this
time of the global COVID-19 pandemic, the Company remaining
fortunate that its operations have experienced only minor impacts
from recent events, the Company, in Q2 2020, having witnessed
greater than 200% growth in NaviPayroll subscriptions over Q1, with
a positive outlook for continuing the growth trend over the
remainder of fiscal 2020 and expansion of the Company's payroll
application to Microsoft's AppSource marketplace and the timing
thereof. By their very nature, forward-looking
statements are based on assumptions and involve inherent risks and
uncertainties, both general and specific in nature. It is
therefore possible that the beliefs and plans and other
forward-looking expectations expressed herein will not be achieved
or will prove inaccurate. Although Sylogist believes
that the expectations reflected in these forward-looking statements
are reasonable, it provides no assurance that these expectations
will prove to have been correct. Forward-looking information
involves risks, uncertainties and other factors that could cause
actual events, results, performance, prospects and opportunities to
differ materially from those expressed or implied by such
forward-looking information. Additional information regarding some
of these risks, uncertainties and other factors may be found under
in the management's discussion and analysis for the period ended
March 31, 2020, and other documents
available on the Company's profile at www.sedar.com. Material
assumptions and factors that could cause actual results to differ
materially from such forward-looking information include
Sylogist's ability to continue generating cash flow, the
Company remaining an essential industry and continuing to
experience only minor impacts resulting from the COVID-19 pandemic.
Although Sylogist believes that the material assumptions and
factors used in preparing the forward-looking information in this
news release are reasonable, undue reliance should not be placed on
such information, which only applies as of the date of this news
release, and no assurance can be given that such events will occur.
Sylogist disclaims any intention or obligation to update or revise
any forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by
law.
Certain information set out herein may be considered as
"financial outlook" within the meaning of applicable securities
laws. The purpose of this financial outlook is to provide readers
with disclosure regarding Sylogist's reasonable expectations as to
the anticipated results of its proposed business activities for the
periods indicated. Readers are cautioned that the financial outlook
may not be appropriate for other purposes.
Non-GAAP Financial Measures
(1) Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted
Working Capital are non-GAAP financial measures: Adjusted EBITDA is
defined as: profit for the period before stock based compensation,
foreign exchange gains or losses, interest expense, bargain
purchase price on acquisition, income taxes, acquisition-related
costs, depreciation and amortization. Adjusted EBITDA Margin refers
to Adjusted EBITDA as a percentage of revenue. Adjusted Working
Capital is defined as current assets less current liabilities
adjusted for deferred revenue.
This news release makes reference to certain non-GAAP
measures. These measures are not recognized measures under
Canadian GAAP, do not have a standardized meaning prescribed by
Canadian GAAP and are therefore may not be comparable to similar
measures presented by other issuers. These measures are provided as
additional information to complement measures under GAAP by
providing further understanding of the Company's expected results
of operations from management's perspective. Accordingly, such
measures should not be considered in isolation nor as a substitute
for analysis of the Company's financial information reported under
Canadian GAAP. For a reconciliation of these non-GAAP measures to
their nearest Canadian GAAP measure, please see the Company's
Management's Discussion and Analysis for the three and six months
ended March 31, 2020 and 2019 that is
available on SEDAR at www.sedar.com.
Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Working
Capital are provided to investors as alternative methods for
assessing the Company's operating results in a manner that is
focused on the Company's ongoing operations and to provide a more
consistent basis for comparison between periods. These measures
should not be construed as alternatives to net profit (loss) or
cash flow from operating activities determined in accordance with
GAAP as an indicator of the Company's performance.
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 Sylogist Ltd.