Avante Logixx Inc. (TSX.V: XX) (OTC: ALXXF) (“Avante” or the
“Company”) is pleased to announce financial results for its first
fiscal quarter ended June 30, 2021 (all amounts in thousands of
Canadian dollars, unless otherwise indicated).
The Company is also announcing that its Board of
Directors (“the Board”) will consider and evaluate various
strategic alternatives available to the Company (the
“Strategic Review”).
RESULTS FOR THE THREE-MONTH PERIOD ENDED
JUNE 30, 2021
Avante’s Fiscal Year End is
March 31. |
Three Months Ended |
Expressed in C$ thousands, unless
otherwise noted |
30-Jun-20 |
|
31-Mar-21 |
|
30-Jun-21 |
|
Revenues |
$18,204 |
|
$24,706 |
|
$24,120 |
|
Gross profit (1) |
$4,123 |
|
$5,353 |
|
$5,894 |
|
Gross profit margin (1) |
|
22.6% |
|
|
21.7% |
|
|
24.4% |
|
Direct Operating Expenses
(1) |
$3,468 |
|
$3,538 |
|
$3,841 |
|
EBITDA (1) |
$212 |
|
$1,660 |
|
$1,799 |
|
Adjusted EBITDA (1) |
$637 |
|
$2,055 |
|
$2,008 |
|
Comprehensive income (loss)
attributed to Avante shareholders |
($1,256) |
|
$165 |
|
$277 |
|
Basic and fully diluted income
per share |
($0.059) |
|
$0.010 |
|
$0.013 |
|
Basic and fully diluted Adjusted
EBITDA per share (1) |
$0.030 |
|
$0.097 |
|
$0.095 |
|
Cash Flow from Operations before
Working Capital |
$178 |
|
$1,779 |
|
$1,370 |
|
“Building on the success of fiscal 2021 and our
strategy to acquire, build and generate cash, we are pleased with
the results of our first quarter with strong revenue and Adjusted
EBITDA growth versus the comparable period of last year,” said
Craig Campbell, CEO & Director of Avante. “I am very proud of
our team for their continued dedication to our clients. During the
first quarter, we grew revenues and expanded gross margins versus
the prior year. This result is due to a mix of both organic growth
in our contractual and recurring revenues with additional positive
benefits of incremental Covid-19 related work. We remain focused on
winning new customers within our residential and enterprise
business segments and improving margins through intelligent cost
containment.”
The Company reported year-over-year revenue
growth of 32.5%. Adjusted EBITDA grew from $0.64 million in Q1 F21
to positive $2.0 million during Q1 F22 or 215.2% YoY. Avante also
continued to deliver strong and growing recurring monthly revenue
(“RMR”) and contractual revenue streams, representing $16.6 million
of revenue during the first quarter of this year from $14.2 million
in the prior year’s first quarter, representing growth of
17.0%.
|
|
Q1 F21 |
|
Q2 F21 |
|
Q3 F21 |
|
Q4 F21 |
|
Q1 F22 |
|
Recurring Monthly Revenue |
|
$2,094 |
|
$2,137 |
|
$2,194 |
|
$2,380 |
|
$2,435 |
|
Contractual Revenue |
|
$12,102 |
|
$13,263 |
|
$15,019 |
|
$14,643 |
|
$14,171 |
|
Total recurring/
contractual revenue |
|
$ 14,196 |
|
$ 15,400 |
|
$ 17,213 |
|
$ 17,023 |
|
$ 16,606 |
|
% of total revenues |
|
|
77.0% |
|
|
65.3% |
|
|
68.3% |
|
|
68.9% |
|
|
68.9% |
|
“Avante Logixx had a solid first quarter, with
positive earnings and cash flow trends,” said Steve Rotz, CFO of
Avante. “We have a strong balance sheet, significant liquidity and
committed credit facilities to fund organic and strategic
growth. The ongoing COVID-19 pandemic, including its
new variants, a difficult labour environment and uncertainty of the
transition to a post-COVID business environment, creates a
challenging operating environment for our Company. We are aware of,
and are monitoring, these associated risks. The team has done a
tremendous job and will continue to work diligently to serve and
exceed customer satisfaction, as well as protecting revenues and
margins during these uncertain times.”
Q1 F22 HIGHLIGHTS
- Revenues of
$24.1 million for the quarter ended June 30, 2021, which
represented 32.5% YoY growth.
- Revenue3 by
segment during the first quarter of Fiscal 2022 was as
follows:
|
For the Quarter Ended |
|
30-Jun-21 |
$ in thousands |
Revenue(2) |
% of Total |
Logixx Security |
$20,160 |
83.6% |
Avante Security |
$3,960 |
16.4% |
Total |
$ 24,120 |
100.0% |
- Gross profit
of $5.9 million for the quarter ended June 30, 2021, which
represented 42.9% YoY growth.
- Direct
Operating Expenses from continuing operations improved to 15.9% of
revenue during Q1 F22 from 19.1% in Q1 F21.
- Adjusted
EBITDA during Q1 F22 of $2.0 million, or 8.3% of revenue, and a YoY
improvement of $1.4 million.
- Generated
Adjusted EBITDA per share of $0.095 in Q1 F22 and $0.35 for the
trailing twelve-month period.
- Generated
$1.37 million in cash flow from operations (before changes in
working capital) during Q1 F22.
- IFRS reported
net profit and EBITDA reflected a gain on the derivative component
of the Convertible Debentures of $0.175 million during the Q1
Fiscal 2022. This gain is removed in the calculation of the
quarter’s Adjusted EBITDA.
- IFRS reported
Net Income of $0.28 million or $0.013 per share.
- On June 30, 2021, the Company
entered into a credit agreement with The Bank of Nova Scotia
replacing its credit facilities with another bank. The new credit
agreement currently provides an $8.0 million revolving credit
facility, a $6.0 million non-revolving term loan, and a $3.0
million delayed-draw non-revolving term loan, each with a maturity
date ending May 19, 2024.
STRATEGIC REVIEW
The Company is also announcing that its Board
has resolved to consider and evaluate various strategic
alternatives available to the Company.
The Board will oversee the Strategic Review
process and has engaged Canaccord Genuity Corp. as a financial
advisor and Norton Rose Fulbright Canada LLP as legal counsel.
Although the Board has not initiated the Strategic Review in
response to any specific proposal, the Company, from time to time,
receives inbound unsolicited inquiries and coupled with recent
industry developments, the Board is initiating the Strategic Review
process so it may consider all of the alternatives available to the
Company in the pursuit of maximizing shareholder value.
The Strategic Review will explore, review and evaluate a broad
range of alternatives available to the Company, with a focus on
unlocking shareholder value, which could include but are not
limited to further acquisitions, a sale of one or more divisions, a
business combination, a merger or reverse merger with another party
or parties, introduction of a new significant strategic shareholder
and other alternatives for potentially enhancing shareholder value.
The Strategic Review will also evaluate the Company continuing as
currently operating under its articulated organic and strategic
plans as a public company.
Sam Duboc, Chair of the Board of the Company,
stated: “Our Board has determined that it is prudent at this time
to undertake the Strategic Review to ensure that all alternatives
available to the Company are being evaluated to maximize value for
our shareholders. As the Board conducts its review, Avante’s
management team remains focused on executing our current strategy
and continuing day-to-day operations in the ordinary course.”
The Company has not made any decisions related
to strategic alternatives at this time, and there can be no
assurance that the Strategic Review will result in any transaction
or change in strategy and, if a transaction or change in strategy
is undertaken, its term or timing. The Company and the Board have
not established a definitive timeline for completion of the
Strategic Review. The Company does not intend to comment further on
the Strategic Review unless and until the Board has approved a
specific course of action or the Company has determined that
further disclosure is appropriate or required.
CONFERENCE CALL
Avante will be hosting a conference call to discuss the above
financial results on Thursday August 26, 2021, at 8:30 AM EDT.
Dial in details are as follows: |
|
|
|
Local: (+1) 416-764-8658 |
|
Toll Free: (+1)
888-886-7786 |
|
Conference ID: 75645725 |
|
|
|
|
|
Playback
details below, available until September 26, 2021: |
|
|
Local: (+1) 416-764-8692 |
|
Toll Free: (+1)
877-674-7070 |
|
Playback Pin: 645725# |
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, the expected trajectory of corporate costs as
a percentage of revenue and the unwinding of Covid-19 related
revenue benefits and the normalization of pre-pandemic customer
revenues. This forward-looking information also includes statements
with respect to, among other things, information or statements
about Avante’s strategy, future operations, its review of strategic
alternatives, any transactions arising from the Strategic Review
and statements regarding Avante’s work with a strategic advisor.
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,
the effects of the ongoing Covid-19 pandemic 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.
__________________________(2) Net of
intercompany eliminations
Avante (TSXV:XX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Avante (TSXV:XX)
Historical Stock Chart
From Apr 2023 to Apr 2024