/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES./
CALGARY, AB, July 30, 2020 /CNW/ - Sylogist Ltd. (TSXV:
SYZ) ("Sylogist" or the "Company"), a leading provider of cloud
based ERP and CRM software solutions to the public sector, is
pleased to announce its unaudited financial results for the third
quarter of the 2020 fiscal year, ended June
30, 2020.
Q3 2020 Summary (Comparisons are to Q3 2019, unless
otherwise noted)
- Recurring revenues from subscriptions and maintenance grew by
8% to $7.2 million, compared to
$6.7 million for the third quarter of
2019.
- Professional services revenue grew by 47% to $2.6 million, up from $1.8
million. The increase was largely due to the acquisition of
Information Strategies, Inc. part way through Q3 2020.
- Revenues were $10 million,
compared to $9.8 million.
- Gross profit margins were 73% in the quarter, compared to 76%
in Q3 2019.
- Profit before income taxes of $3.8
million, compared to $3.5
million, increased 8%.
- Reported earnings were $3.2
million, compared to $2.7
million in Q3 2019, an increase of 19%.
- Earnings per fully diluted common share of $0.13 per share, represent a 13% increase
compared to Q3 2019.
- Adjusted EBITDA(1) was $5.7
million, or $0.24 per fully
diluted common share, an increase of 27%.
- Adjusted EBITDA Margin(1) was 57%, compared to
46%.
- Cash flow from operations of $5.1
million in the quarter, compared to $1.8 million in Q3 2019, an increase of 185%.
- The Company paid regular dividends to shareholders totalling
$2.6 million during the quarter,
compared to $2.1 million in the same
period last year.
- Combined tax pools at the end of the third quarter 2020 were
approximately $10 million (CAD).
- The Company's Board of Directors has approved an increased
quarterly dividend of $0.125 per
common share for shareholders of record as at August 31, 2020 to be paid on September 10, 2020, which is to be treated as an
eligible dividend under the Income Tax Act (Canada).
First nine months of fiscal 2020 (Comparisons are to
the first nine months of fiscal 2019, unless otherwise
noted)
- Recurring revenues from subscriptions and maintenance were
$21.3 million, an increase of 8%
compared to $19.8 million for the
first nine months of 2019.
- Professional services revenue grew by 2% to $6.3 million, compared to $6.1 million for the third quarter of 2019. The
increase was mainly due to acquisition of Information Strategies,
Inc. which accounted for $1.1
million.
- Revenues were $28.3 million,
compared to $28.7 million. Reduced
new customer and client project access due to COVID-19 negatively
impacted revenue.
- Gross profit margins were consistent at 75% of revenue,
compared to the same period in the prior year.
- Adjusted EBITDA(1) was $16.5
million ($0.69 per share),
compared to $13.2 million
($0.59 per share), an increase of
25%.
- Adjusted EBITDA Margin (1) was 59%, compared to
46%.
- The Company paid regular dividends to shareholders totalling
$7.4 million during the first nine
months of fiscal 2020, compared to $6.3
million in the same period in 2019.
- For the nine months ended June 30,
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 solid
growth in our recurring revenue, while we drive historic levels of
profitability and cash flows. Our Adjusted EBITDA margin was 57%,
up substantially from 46%, resulting from our continued focus on
operating efficiencies. We are also seeing increased professional
services revenues as we start integrating our recent acquisition
completed during the third quarter. The InfoStrat acquisition
broadens our ERP platform to include CRM capabilities and expands
our market to include state level governments. We did see an
estimated 10% reduction to our quarterly revenue and Adjusted
EBITDA targets as customer organizational demands due to the
pandemic response placed heavy loads on some of our not-for-profit
and NGO clients. These clients have temporarily postponed some of
their projects and new license purchases until equilibrium in the
COVID response in achieved.
We successfully launched our NaviPayroll product on Microsoft's
AppSource in Q3 2020. This broadens our base of Microsoft customers
and provides opportunities for organic growth. During fiscal 2020
we have progressed on a major foundational upgrade to our
technology that will reduce support costs and facilitate data
integration with point applications. This upgrade has broadened our
opportunities in targeting acquisitions that will add value to our
platform.
In addition, subsequent to the quarter end, the government of
Alberta reduced the provincial
corporate tax rate by 2% effective July 1,
2020. On July 16, the Company
signed a commitment letter with a Canadian chartered bank for a
$40 million credit facility at prime
interest rates, primarily targeted as capital for acquisitions. The
credit facility combined with our current cash position
($42.5 Million) and our strong cash
flow, provides ample capital at very conservative leverage and cost
to rapidly grow the business.
Given the Company's strong performance and opportunities for
further growth, the Board of Directors has approved an increased
eligible quarterly dividend of 12.5
cents per share," 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.
To access the Company's investor presentations, including the
most current results through June 30,
2020, please visit www.sylogist.com/investors.
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 Company's strong performance and opportunities for
growth, the Company's credit facility, combined with
its current cash position and our strong cash flow, providing ample
capital at very conservative leverage and cost to rapidly grow the
business, the InfoStrat acquisition broadening the Company's
ERP platform and expanding its market to include state level
governments and certain clients having temporarily postponed some
projects and new license purchases until equilibrium in the COVID
response in achieved. 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
June 30, 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's ability to expand into new markets and the Company
continuing to experience only minor impacts from recent events.
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.
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.