Avante Logixx Inc. (TSX.V: XX) (OTC: ALXXF) (“Avante” or the
“Company”) is pleased to announce its results for the year ended
March 31, 2020 (all amounts in Canadian dollars, unless otherwise
indicated).
RESULTS FOR THE THREE-MONTH PERIOD &
YEAR ENDED MARCH 31, 2020
|
Year ended March 31, |
|
Quarter ended March 31, |
$ in thousands, unless otherwise noted |
|
2020 |
|
|
2019 |
|
|
2018 |
|
|
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
Revenues |
|
55,741 |
|
|
32,081 |
|
|
23,337 |
|
|
|
18,370 |
|
11,804 |
|
Gross profit 1 |
|
13,864 |
|
|
9,575 |
|
|
8,287 |
|
|
|
3,530 |
|
2,957 |
|
Gross profit margin 1 |
|
24.9 |
% |
|
29.8 |
% |
|
35.5 |
% |
|
|
19.2 |
% |
25.0 |
% |
Operating expenses2 |
|
13,935 |
|
|
10,396 |
|
|
5,912 |
|
|
|
3,765 |
|
3,535 |
|
EBITDA 1 |
|
(114 |
) |
|
(1,804 |
) |
|
1,567 |
|
|
|
744 |
|
(1,174 |
) |
Adjusted EBITDA 1 |
|
54 |
|
|
(220 |
) |
|
2,679 |
|
|
|
(458 |
) |
(385 |
) |
Net income (loss) attributable to Avante shareholders |
|
(2,649 |
) |
|
(2,229 |
) |
|
176 |
|
|
|
(245 |
) |
(549 |
) |
Comprehensive income (loss) attributed to Avante shareholders |
|
(3,192 |
) |
|
(2,642 |
) |
|
176 |
|
|
|
(256 |
) |
(962 |
) |
Basic and fully diluted income per share |
|
$(0.151 |
) |
|
$(0.131 |
) |
|
$0.011 |
|
|
|
$(0.012 |
) |
(0.110 |
) |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
1,340 |
|
|
2,176 |
|
|
4,078 |
|
|
|
|
Total assets |
|
49,095 |
|
|
34,174 |
|
|
21,075 |
|
|
|
|
Senior debt |
|
9,110 |
|
|
3,828 |
|
|
766 |
|
|
|
|
Total debt |
|
11,644 |
|
|
3,828 |
|
|
766 |
|
|
|
|
“During our fiscal year ended March 31, 2020, we
continued to execute our strategy and strengthen Avante through
both organic and acquisitive growth,” said Craig Campbell, CEO and
Director of Avante. “Since joining Avante, we have transformed the
business into a diversified multiplatform business with national
capabilities through acquisitions, most recently the acquisition of
A.S.A.P. Secured Inc (“ASAP”) in December 2019, which allows our
subsidiary Logixx Security to target national, multisite clients
and be the “one stop shop” security solutions provider for
customers who rely on security as a mission critical aspect of
their operations. After making four acquisitions during the past
two years, and focusing intensely on organic growth activities, we
now have three excellent platforms. We now have the right
teams in place to fully realize our identified strategy.”
The Company benefited from a strong and growing
recurring monthly revenue (“RMR”) stream, with 80.1% of our Q4
revenue in this category. Covid-19 is proving the resiliency of the
security industry and the business. The Company experienced stable,
growing revenue streams during the pandemic, and is now seeing
volumes exceeding pre-pandemic levels.
“We continue to progress toward fully
integrating past acquisitions completed over the last two years and
we expect to continue improving earnings as these acquisitions are
further integrated,” said Steve Rotz, CFO. “With these
transformational transactions behind us and the scale that we now
have in place, our focus will be on execution and operational
excellence. While we are open to completing acquisitions that
make sense from a value and strategic fit perspective, our focus
for the remainder of this year will be on organic opportunities to
win new customers, broaden services with existing customers,
simplify our operations, upgrade and consolidate technologies and
reduce costs. In Q4 fiscal 2020, we worked hard to achieve
and recognize many of the synergies identified during diligence, as
evidenced by our Q4 restructuring charge. We will continue
executing on our strategy of cross selling security services to our
clients with a focus on converting these clients to technology
enabled security solutions. We will also focus on positioning
ourselves to make strategic and accretive acquisitions when these
opportunities arise.”
FISCAL YEAR 2020 HIGHLIGHTS
- Generated record revenues of $55.7 million for the year ended
March 31, 2020 which represented 73.8% YoY growth.
- In fiscal 2021 and beyond, the Company will be transitioning to
providing financial information based on its divisions, rather than
reporting based on service types. See below for revenue
breakdown by division:
|
For the Year Ended |
|
March 31, 2020 |
|
Revenue |
% of Total |
|
Logixx Security |
|
$32,761 |
58.8 |
% |
Avante Security |
|
$17,093 |
30.7 |
% |
City Wide |
|
$5,887 |
10.5 |
% |
Total |
|
$55,741 |
100 |
% |
- Generated gross profit of $13.9 million for the year ended
March 31, 2020, which represented 44.8% YoY growth.
- Operating expenses (net of depreciation, amortization, and
share based payments) declined to 20.5% of revenue during Q4 2020
from 29.9% in Q4 2019.
- Generated Adjusted EBITDA during fiscal 2020 of $0.54 million
or 0.1% of revenues.
- Issuance of $8.3 million of convertible debentures in November
2019 and establishment of undrawn convertible debenture facility of
approximately $9.7 million.
- Completed the acquisition of ASAP on December 1, 2019, adding a
national platform in which to cross sell security services to new
and existing commercial clients. This is now rebranded as
Logixx Security, and fully integrated with two prior acquisitions
completed during fiscal 2019.
- At the end of Q4, the Company recorded a restructuring charge
of $0.8 million, which was related primarily to a reduction of head
count from realized synergies and is expected to yield ongoing
savings of approximately $1.3 million per year.
Covid-19 Update & Q1 F21 guidance
“Given the
unprecedented global impact of Covid-19 on so many companies, and
the fact that many of our shareholders have been asking for
preliminary information about how Avante is being impacted, we have
decided to provide preliminary financial highlights for our first
quarter of Fiscal 2021 ending June 30, 2020. This guidance will not
set a precedent for future quarters,” said Craig Campbell. “We are
extremely proud of our results, and especially our staff for
continuing to provide exceptional service and driving the business
forward during extremely challenging times. We want to extend a big
thank you to all employees of Avante for doing what they do best
and continuing to secure peace of mind for our
customers. Despite these uncertainties we believe that
the Company is well positioned to weather the business challenges
created by the Pandemic.”
During the early days of the Pandemic, the Company’s management
moved decisively, taking prudent action to minimize expenses while
ensuring that all customer requirements were met and that staff
were protected with appropriate equipment.
We also ensured that our Company was well positioned financially
during the Crisis:
- Temporary salary reductions were implemented for employees in
early April, with the highest cuts (20%) absorbed by the CEO, the
Company’s executive team and Board of Directors. Such cuts
were made voluntarily to proactively insulate the Company as the
outcome of the Pandemic at that time was unknown. These cuts
are expected to be unwound during the balance of fiscal 2021,
beginning with our front-line staff;
- Implemented a hiring freeze and moratorium on expenses;
- Avante continues to operate in as close to a “business as
normal” manner, as is possible under these conditions, as we were
an “Essential Service” under applicable government rules;
- Significant work by the operations teams ensured that were able
to continue providing services to all of our customers;
- Transitioned seamlessly to work-from-home for many of the
non-frontline staff and ensured that constant communication with
customers occurred.
Given the resiliency of the business, management is able to
provide guidance with respect to financial results of the Company’s
first quarter ending June 30, 2020, which the Company will release
in late August.
- Revenues during Q1 are expected to be between $19 to $20
million;
- Gross profit margins are expected to be between 21% and 24%
and;
- Adjusted operating expenses are anticipated to be less than
what is being reported today in respect of Q4 of fiscal 2020.
CONFERENCE CALL
Avante will be hosting a conference call to discuss the Fiscal
2020 financial results on Thursday, July 30, 2020, at 8:30 AM
EST.
Dial in details are as
follows: Local: (+1)
416-764-8658
Toll Free: (+1)
888-886-7786
Conference ID: 47284588
Playback details below, available until August 20,
2020:Local: (+1)
416-764-8692
Toll Free: (+1)
877-674-7070
Playback Pin: 284588 #
This news release shall not constitute
an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of the securities described herein in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. This news release does
not constitute an offer of securities for sale in the United
States. The securities described herein have not been, nor will
they be, registered under the United States Securities Act of 1933,
as amended, and such securities may not be offered or sold within
the United States absent registration under U.S. federal and state
securities laws or an applicable exemption from such U.S.
registration requirements.
About Avante Logixx Inc.
Avante Logixx Inc. (TSXV: XX) is a Toronto based
provider of high-end security services. We acquire, manage and
build industry leading businesses which provide specialized,
mission-critical solutions that address the needs of our customers.
Our businesses continuously develop innovative solutions that
enable our customers to achieve their objectives. With an
experienced team and a proven track record of solid growth, we are
taking steps to establish a broad portfolio of security businesses
to provide our customers and shareholders with exceptional returns.
Please visit our website at www.avantelogixx.com and consider
joining our investor email list.
Avante Logixx Inc.
Craig CampbellCEO(416)
923-6984craig@avantelogixx.com
Forward-Looking Information
All statements in this press release, other than
statements of historical fact, may constitute “forward looking
information” with respect to Avante within the meaning of
applicable securities laws. Forward-looking information is often,
but not always, identified by the use of words such as “seek”,
“anticipate”, “plan”, “continue”, “planned”, “expect”, “project”,
“predict”, “potential”, “targeting”, “intends”, “believe”,
“potential”, and similar expressions, or describes a “goal”, or a
variation of such words and phrases or state that certain actions,
events or results “may”, “should”, “could”, “would”, “might” or
“will” be taken, occur or be achieved. This forward-looking
information includes statements with respect to, among other
things, the intention to create a platform capable of supporting a
business with significantly greater scale, Avante’s strategic plan,
Avante’s intentions to engage in mergers and acquisitions in the
near term, Avante’s intentions to identify, acquire and integrate
suitable targets for mergers and acquisitions, the ability to
achieve operational efficiencies and provide a better overall
customer experience, Avante’s run- rate, opportunities to grow
Avante’s revenue and Adjusted EBITDA profile, investments in
corporate infrastructure, Avante’s ability to execute and integrate
larger acquisitions, and the expected trajectory of corporate costs
as a percentage of revenue. Forward-looking information is subject
to a variety of known and unknown risks, uncertainties and other
factors that could cause actual events or results to differ from
those expressed or implied by the forward looking information,
including, without limitation, the ability to identify, acquire and
integrate suitable targets for mergers and acquisitions, the
ability to control corporate costs, and the list of risk factors
identified in Avante’s Management Discussion & Analysis
(MD&A), Annual Information Form (AIF) and other continuous
disclosure, which list is not exhaustive of the factors that may
affect any of Avante’s forward-looking information. In connection
with the forward-looking statements contained in this and
subsequent press releases, Avante has made certain assumptions
about its business and the industry in which it operates and has
also assumed that no significant events occur outside of Avante’s
normal course of business. Although management believes that the
assumptions inherent in the forward-looking statements are
reasonable as of the date the statements are made, forward-looking
statements are not guarantees of future performance and,
accordingly, undue reliance should not be put on such statements
due to the inherent uncertainty therein. Avante’s forward-looking
information is based on the beliefs, expectations and opinions of
management on the date the statements are made, and Avante does not
assume any obligation to update forward-looking information,
whether as a result of new information, future events or otherwise,
other than as required by applicable law. For the reasons set forth
above, readers should not place undue reliance on forward-looking
information.
Non-IFRS Financial Measures
This press release includes certain measures which have not been
prepared in accordance with IFRS such as EBITDA and Adjusted
EBITDA. These non-IFRS measures are not recognized under IFRS and,
accordingly, users are cautioned that these measures should not be
construed as alternatives to net income determined in accordance
with IFRS. The non-IFRS measures presented are unlikely to be
comparable to similar measures presented by other issuers.
References to EBITDA are to net income before interest, taxes,
depreciation and amortization. References to Adjusted EBITDA are to
net income before interest, taxes, depreciation, amortization of
intangibles & capitalized commissions, share-based payments,
acquisition, integration and / or reorganization costs, deferred
financing costs, loss (gain) in fair value of derivative liability,
expensing of CWL fair value adjustment per IFRS less
non-controlling interest’s share. Neither EBITDA nor Adjusted
EBITDA is an earnings measure recognized by International Financial
Reporting Standards (“IFRS”) and do not have a standardized meaning
prescribed by IFRS. Management believes that Adjusted EBITDA is an
appropriate measure in evaluating Avante’s performance. Readers are
cautioned that neither EBITDA nor Adjusted EBITDA should be
construed as an alternative to net income (as determined under
IFRS), as an indicator of financial performance or to cash flow
from operating activities (as determined under IFRS) or as a
measure of liquidity and cash flow. Avante’s method of calculating
Adjusted EBITDA may differ from methods used by other issuers and,
accordingly, Avante’s Adjusted EBITDA may not be comparable to
similar measures used by other issuers.
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.
________________________________1 Adjusted
EBITDA, EBITDA. Gross Profit and Gross Profit Margin are non-IFRS
measures. See Description of Non-IFRS Measures2 Operating
expenses are net of depreciation, amortization, interest expense,
accretion interest expense, and share based payments
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