Avante Logixx Inc. (TSX.V: XX) (OTC: ALXXF) (“Avante” or the
“Company”) is pleased to announce its results for the third quarter
ended December 31, 2020 (all amounts in thousands of Canadian
dollars, unless otherwise indicated).
RESULTS FOR THE THIRD QUARTER ENDED
DECEMBER 31, 2020
|
Three Months
Ended(2) |
$ in thousands, unless otherwise noted |
31-Dec-19 |
30-Sep-20 |
31-Dec-20 |
Revenues |
$12,642 |
$23,602 |
$25,204 |
Gross profit (1) |
$2,818 |
$5,774 |
$5,584 |
Gross profit margin (1) |
22.3% |
24.5% |
22.2% |
Direct Operating Expenses
(2) |
$3,075 |
$4,034 |
$3,880 |
EBITDA (1) |
($1,298) |
$1,191 |
$108 |
Adjusted EBITDA from
Continuing Operations |
($377) |
$1,719 |
$1,633 |
Comprehensive income (loss)
attributed to Avante shareholders |
($1,687) |
($368) |
($1,493) |
Cash Flow from Operations
before Working Capital |
($1,163) |
$2,047 |
$1,236 |
|
|
|
|
(1) Adjusted
EBITDA, EBITDA, Gross Profit, Gross Profit Margin and Direct
Operating Expenses are non-IFRS measures. See Description of
Non-IFRS Measures. |
(2) Adjusted for
discontinued operations. |
“Our results today, especially during these uncertain times, are
demonstrable evidence that our initial investments in people,
processes and technology, coupled with our industry’s resiliency,
are the foundation of our strategy” said Craig Campbell, CEO and
Director of Avante. “Having transformed a small, regional company
into a diversified, multi platform national business, we continue
to deliver strong organic growth and improved sequential earnings.
Our teams at both Logixx Security and Avante Security are laser
focused and expect these trends to continue by providing
exceptional service, winning new customers, and growing our
platforms through organic and acquisitive growth.”
The reported year-over-year growth of
consolidated revenue of 99%, is not only due to timing of the
acquisition of ASAP Secured Inc. during the prior year’s third
quarter, as the Company delivered an impressive 42% estimated
organic growth in pro-forma consolidated revenues since that
acquisition.
Avante also continued to deliver strong and
growing recurring monthly revenue (“RMR”) and contractual revenue
streams, representing $17,213 of revenue from $15,400 in the prior
quarter (or 11.8% sequential growth) versus $9,741 in the
comparable period last year.
|
Q3 F20 |
|
Q4 F20 |
|
Q1 F21 |
|
Q2 F21 |
|
Q3 F21 |
Recurring Monthly Revenue |
$ |
1,917 |
|
$ |
2,055 |
|
$ |
2,094 |
|
$ |
2,137 |
|
$ |
2,194 |
Contractual Revenue |
$ |
7,824 |
|
$ |
12,586 |
|
$ |
12,102 |
|
$ |
13,263 |
|
$ |
15,019 |
Total recurring/
contractual revenue |
$ |
9,741 |
|
$ |
14,641 |
|
$ |
14,196 |
|
$ |
15,400 |
|
$ |
17,213 |
“We are pleased to post another record quarter
in revenue during Q3, with sequential growth of 6.8%” said Steve
Rotz, CFO. “We continue to hold the line on direct operating
expenses notwithstanding the growth in revenues while gross margins
returned to historical trends as Q3 absorbed seasonal costs. We are
particularly pleased with our strong year-over-year improvement in
quarterly Adjusted EBITDA combined with lower levels of senior debt
over the last nine months.”
THIRD QUARTER FISCAL 2021
HIGHLIGHTS
- Generated
record quarterly revenues from continuing operations of $25.2
million for the three-months ended December 31, 2020, representing
sequential growth of 6.8% and 99.4% YoY growth.
- Revenue1 by
segment during the third quarter was as follows:
|
For the 3 Months Ended |
|
December 31, 2020 |
$ thousands |
Revenue |
% of Total |
Logixx Security |
$20,876 |
82.8% |
Avante Security |
$4,328 |
17.2% |
Total |
$ 25,204 |
100.0 % |
- Generated
gross profit from continuing operations of $5.6 million during the
three-months ended December 31, 2020.
- Direct
Operating Expenses from continuing operations improved to 15.4% of
revenue during Q3 2021 from 24.3% in Q3 2020.
- Generated
Adjusted EBITDA during Q3 2021 of $1.6 million, or 6.5% of revenue,
and a YoY improvement of $2.0 million.
- Generated
$1.24 million in cash flow from operations (before changes in
working capital) during Q3 2021. For the nine months ended December
31, 2020, the Company has generated $3.50 million of cash flow from
operations before changes in working capital.
- The Company
reduced senior funded debt by $0.4 million during the third quarter
and by $1.4 million over the first nine months of this fiscal
year.
- IFRS reported
net loss and EBITDA reflected a loss on the derivative component of
the Convertible Debentures of $1.4 million during Q3. IFRS reported
net loss during Q3 also reflected amortization of intangible assets
of $0.9 million, which will decline significantly starting next
fiscal year after the Logixx Security trade name assets are fully
amortized by March 31, 2021.
- Board and
Named Executive Officers (“NEOs”) increased ownership by 3.9% since
September 30, 2020 (12.5% since March 31, 2020) to 3,440,350 shares
or 16.2% of total shares outstanding.
CONFERENCE CALL
Avante will be hosting a conference call to discuss the above
financial results on Friday, February 26, 2021, at 8:30 AM EST.
Dial in details are as
follows:
Local: (+1)
416-764-8658 Toll
Free: (+1)
888-886-7786 Conference
ID: 36447111
Playback details below, available until March 26,
2021:
Local: (+1)
416-764-8692 Toll
Free: (+1)
877-674-7070 Playback
Pin: 447111#
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, Adjusted EBITDA, Gross Profit and Direct Operating
Expenses. 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, and CWL’s discontinued operations. References
to Direct Operating Expenses are net of interest expense, accretion
interest expense, depreciation, amortization and share based
payments. EBITDA, Adjusted EBITDA, Gross Profit and Direct
Operating Expenses are not earnings measures 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.
Covid-19
In March 2020, the World Health Organization
declared, the outbreak of the novel strain of coronavirus,
specifically identified as “COVID-19”, a pandemic. This has
resulted in governments worldwide enacting emergency measures to
limit the spread of the virus, including closure of non-essential
businesses. As of the date of this press release, the
majority of the Company’s operations are considered essential in
all provinces in which the Company operates. As such, to date
the Company has been able to continue operating with no material
impact to operations.
To date, there have been no material revisions
to the nature and amount of estimates and judgments made in respect
of the Company’s financial statements of prior periods.
However, the effects of COVID-19 have required significant
judgements and estimates to be made in the preparation of the
Company’s financial statements.
Additionally, the effects of COVID-19 may
require revisions to estimates of expected credit losses attributed
to accounts receivable arising from sales to customers on credit
terms, including the incorporation of forward-looking information
to supplement historical credit loss rates as well as other
estimates and judgement used in the preparation of the Company’s
financial statements. Due to rapid developments and
uncertainty surrounding COVID-19, it is not possible to predict the
impact that COVID-19 will have on the Company’s operations or
financial results, its suppliers, and its customers.
Additionally, it is possible the Company’s operations and
consolidated financial results will change in the near term as a
result of COVID-19.
____________________________
1 Net of intercompany eliminations
Avante (TSXV:XX)
Historical Stock Chart
From Feb 2024 to Mar 2024
Avante (TSXV:XX)
Historical Stock Chart
From Mar 2023 to Mar 2024