Q1-2024 Highlights
- Revenues increased 3.8% to $131.6
million, compared to $126.8
million for the same quarter last year.
- 82% of revenues were generated from clients which we had in the
same quarter last year.
- Gross margin increased 11.8% to $38.1
million, compared to $34.1
million for the same quarter last year.
- Gross margin as a percentage of revenues(1)
increased to 28.9%, compared to 26.9% for the same quarter last
year.
- Adjusted EBITDA(2) increased 46.1% to $9.1 million, or 6.9% of revenues, compared to
$6.2 million, or 4.9% of revenues,
for the same quarter last year.
- Net loss was $7.2 million, or
$0.08 per share, compared to a net
loss of $4.2 million, or $0.04 per share, for the same quarter last year.
The increased net loss is in part due to an impairment of property
and equipment and right-of use assets of $1.4 million, as part of an ongoing review of our
real estate strategy following changes in working conditions.
- Adjusted Net Earnings(2) decreased $1.0 million, or 38.3%, to $1.7 million, compared to $2.7 million for the same quarter last year. This
translated into Adjusted Net Earnings per Share of $0.02, compared to $0.03 for the same quarter last year.
- Net cash from operating activities was $7.6 million, representing an increase of
$17.4 million, from $9.8 million of cash used in operating activities
for the same quarter last year.
- Q1 bookings(1) reached $111.3
million, which translated into a book-to-bill
ratio(1) of 0.85. The book-to-bill ratio would be 0.99
if revenues from the two long-term contracts signed as part of an
acquisition in the first quarter of fiscal year 2022 were
excluded.
- Backlog(1) represented approximately 16 months of
trailing twelve-month revenues as at June 30, 2023.
- Signed 32 new clients.
- Alithya recognized in eight categories of the combined 2023
Microsoft Partner of the Year and Impact Awards, including Partner
of the Year Award in the Modern Work, Apps & Solutions category
for a fifth consecutive year.
MONTREAL, Aug. 10,
2023 /PRNewswire/ - Alithya Group inc. (TSX:
ALYA) (NASDAQ: ALYA) ("Alithya" or the "Company") reported today
its results for the first quarter fiscal 2024 ended June 30,
2023. All amounts are in Canadian dollars unless otherwise
stated.
Summary of the financial results for the first
quarter:
Financial
Highlights
(in thousands of $,
except for margin percentages)
|
F2024-Q1
|
F2023-Q1
|
Revenues
|
131,595
|
126,764
|
Gross Margin
|
38,093
|
34,064
|
Gross Margin
(%)
|
28.9 %
|
26.9 %
|
Selling, general and
administrative expenses
|
32,499
|
28,927
|
Selling, general and
administrative expenses (%)(1)
|
24.7 %
|
22.8 %
|
Adjusted
EBITDA(2)
|
9,055
|
6,198
|
Adjusted EBITDA
Margin(2) (%)
|
6.9 %
|
4.9 %
|
Net Loss
|
(7,245)
|
(4,164)
|
Basic and Diluted Loss
per Share
|
(0.08)
|
(0.04)
|
Adjusted Net
Earnings(2)
|
1,677
|
2,719
|
Adjusted Net Earnings
per Share(2)
|
0.02
|
0.03
|
(1)
|
These are other
financial measures without a standardized definition under
IFRS, which may not be comparable to similar measures used by other
issuers. See "Non-IFRS and Other Financial Measures"
below.
|
(2)
|
These are non-IFRS
financial measures without a standardized definition under IFRS,
which may not be comparable to similar measures used by other
issuers. Definition and quantitative reconciliation of Adjusted Net
Earnings and Adjusted EBITDA to the most directly comparable IFRS
measure is presented below under the caption "Non-IFRS and Other
Financial Measures". "Adjusted EBITDA Margin" refers to the
percentage of total revenue that Adjusted EBITDA represents for a
given period.
|
Quote by Paul Raymond,
President and CEO, Alithya:
"I am pleased to announce another quarter of year over year
global operations growth to begin our 2024 fiscal year. Despite
some slowdowns in our Canadian financial sector, our US and
international operations are continuing their growth. Our bookings
remain robust, our margins, cash generation, and days sales
outstanding keep improving, and we are adding new clients at a
solid pace, which gives us confidence for the future.
We are particularly pleased with our gross margin performance in
the US, driven by the integration of recent acquisitions and
improved project mix and performance. We also continue to build on
our smart-shore operations, and we recently opened a new office in
Hyderabad, India.
With our finger on the pulse of complementary new technologies,
we are leveraging the power of artificial intelligence to bolster
our own intellectual property products, including our RapidSUITE
solutions. We also continue to harness leading edge automation,
both for our clients and internally, to reduce manual processes and
drive greater efficiencies. As a people-centric company, Alithya
continues to advance into the artificial intelligence realm with an
ethical, human-centered approach to harnessing the technology to
enhance existing processes.
The first quarter of fiscal 2024 was also filled with
prestigious global accolades validating our approach to building
relationships of trust with our clients, partners, and other
stakeholders. Alithya was nominated in eight categories of
Microsoft's Global, US, and Canadian awards programs. Of particular
note, we were honoured as Microsoft Partner of the Year in the
Modern Work, Apps & Solutions category. In May, we also
received a prestigious Mercuriades award in the Training and
Workforce Development category for our Alithya Leadership
Academy.
As we move forward into the second quarter of the 2024 fiscal
year, we will continue to focus on strong bookings, improved gross
margins, and increased cash generation."
First Quarter Results
Revenues
Revenues amounted to $131.6
million for the three months ended June 30, 2023,
including $5.9 million from Datum
Consulting Group, LLC and its affiliates ("Datum") (the "Datum
Acquisition"), following its acquisition by the Company on
July 1, 2022, representing an increase of $4.8 million, or 3.8%, from $126.8 million for the three months ended
June 30, 2022.
Revenues in Canada decreased by
$1.6 million, or 2.0%, to
$77.0 million for the three months
ended June 30, 2023, from $78.6
million for the three months ended June 30, 2022.
The decrease in revenues was mainly caused by current economic
conditions, and in particular, reduced business activities in the
banking sector.
U.S. revenues increased by $4.9
million, or 11.2%, to $49.2
million for the three months ended June 30, 2023,
from $44.3 million for the three
months ended June 30, 2022, due primarily to increased
revenues of $4.8 million from
the acquisition of Datum's U.S. business, partially offset by
decreased revenues from digital skilling and change enablement
services, which were particularly adversely affected by the current
economic conditions in the U.S. The increased revenues include a
favorable US$ exchange rate impact of $2.5 million between the two periods.
International revenues increased by $1.5
million, or 36.1%, to $5.4
million for the three months ended June 30, 2023,
from $3.9 million for the three
months ended June 30, 2022, mainly due to revenues of
$1.2 million from the
acquisition of Datum's international business. The increased
revenues include a favorable foreign exchange rate impact of
$0.4 million between the two
periods.
Gross Margin
Gross margin increased by $4.0
million, or 11.8%, to $38.1
million for the three months ended June 30, 2023,
from $34.1 million for the three
months ended June 30, 2022. Gross margin as a percentage
of revenues increased to 28.9% for the three months ended
June 30, 2023, from 26.9% for the three months ended
June 30, 2022. On a sequential basis, gross margin as a
percentage of revenues decreased only slightly, compared to 29.9%
for the fourth quarter of last year, despite salary increases that
came into effect at the beginning of this fiscal year.
In Canada, gross margin as a
percentage of revenues increased, compared to the same quarter last
year, due to higher average revenue per employee and increased
revenues from higher margin offerings.
In the U.S., gross margin as a percentage of revenues increased,
compared to the same quarter last year, as a result of a positive
margin impact from the acquisition of Datum's U.S. business, higher
average revenue per employee, and improved project performance in
other areas of the business. Gross margin as a percentage of
revenues also increased on a sequential basis, mainly due to
improved project performance in certain areas of the business,
compared to the fourth quarter of last year.
International gross margin as a percentage of revenues increased
compared to the same quarter last year, and on a sequential basis,
mainly as a result of a positive margin impact from the acquisition
of Datum's international business.
Selling, General and Administrative Expenses
Selling, general and administrative expenses totaled $32.5
million for the three months ended June 30, 2023,
representing an increase of $3.6
million, or 12.3%, from $28.9 million for the three
months ended June 30, 2022. Selling, general and
administrative expenses, as a percentage of revenues, amounted to
24.7% for the three months ended June 30, 2023, compared
to 22.8% for the three months ended June 30, 2022, driven
mostly by a $1.4 million
impairment of property and equipment and right-of-use assets, a
$1.0 million increase in
non-cash share-based compensation, $0.8
million in expenses from Datum, and an unfavorable US$
exchange rate impact of $0.7 million,
partially offset by reductions in other expense categories. On a
sequential basis, selling, general and administrative expenses
decreased by $3.5 million and as a
percentage of revenues, compared to $36.0
million, or 26.4% of revenues, for the fourth quarter of
last year.
Adjusted EBITDA
Adjusted EBITDA amounted to $9.1
million for the three months ended June 30, 2023,
representing an increase of $2.9
million, or 46.1%, from $6.2
million for the three months ended June 30, 2022.
As explained above, increased gross margin and the contribution
from the acquisition of Datum were partially offset by increased
selling, general and administrative expenses. Adjusted EBITDA
Margin was 6.9% for the three months ended June 30, 2023,
compared to 4.9% for the three months ended
June 30, 2022.
Net Loss
Net loss for the three months ended June 30, 2023 was
$7.2 million, representing an
increase of $3.1 million, from
$4.2 million for the three months
ended June 30, 2022. The increased loss was driven by
increased selling, general and administrative expenses, including
an impairment charge of $1.4 million
on property and equipment and right-of-use assets, increased net
financial expenses, increased depreciation and amortization, and
increased income tax expense, partially offset by increased gross
margin and decreased business acquisition, integration and
reorganization costs in the three months ended
June 30, 2023, compared to the three months ended
June 30, 2022. On a per share basis, this translated into
a basic and diluted net loss per share of $0.08 for the three months ended
June 30, 2023, compared to a net loss of $0.04 per share for the three months ended
June 30, 2022.
Adjusted Net Earnings
Adjusted Net Earnings amounted to $1.7
million for the three months ended June 30, 2023,
representing a decrease of $1.0
million, or 38.3%, from $2.7
million for the three months ended June 30, 2022.
As explained above, increased gross margin and the contribution
from the acquisition of Datum were partially offset by increased
selling, general and administrative expenses, increased
depreciation of property and equipment and right-of-use assets,
increased income tax expense and increased net financial expenses.
This translated into Adjusted Net Earnings per Share of
$0.02 for the three months ended
June 30, 2023, compared to $0.03 for the three months ended
June 30, 2022.
Liquidity and Capital Resources
For the three months ended June 30, 2023, net cash
from operating activities was $7.6 million, representing an
increase of $17.4 million,
from $9.8 million of cash used in operating activities for the
three months ended June 30, 2022. The cash flows for the
three months ended June 30, 2023 resulted primarily from
the net loss of $7.2 million, plus $14.0 million of non-cash adjustments to the
net loss, consisting primarily of depreciation and amortization,
net financial expenses, share-based compensation, and impairment of
property and equipment and right-of-use assets, partially offset by
the cash settlement of Restricted Share Units ("RSUs") and
unrealized foreign exchange gain, and $0.8 million in favorable changes in
non-cash working capital items. In comparison, the cash flows for
the three months ended June 30, 2022 resulted primarily
from the net loss of $4.2 million, plus $8.2 million of non-cash adjustments to the
net loss, consisting primarily of depreciation and amortization,
net financial expenses, and share-based compensation, partially
offset by deferred taxes and unrealized foreign exchange gain, and
$13.8 million in unfavorable
changes in non-cash working capital items.
Outlook
Notwithstanding the ongoing global uncertainties, the Company
maintains focus on its long-term strategic plan, which sets as a
goal to consolidate its position to become a trusted leader in
digital transformation.
According to this plan, Alithya's consolidated scale and scope
should allow it to leverage its geographies, expertise, integrated
offerings and position on the value chain to target the fastest
growing IT services segments. Alithya's specialization in digital
technologies and the flexibility to deploy enterprise solutions and
deliver solutions tailored to specific business objectives responds
directly to client expectations. More specifically, Alithya has
established a three-pronged plan focusing on:
- Increasing scale through organic growth and complementary
acquisitions;
- Achieving best-in-class employee engagement;
- Providing its investors, partners and stakeholders with
long-term growing return on investment.
Forward-Looking Statements
This press release contains statements that may constitute
"forward-looking information" within the meaning of applicable
Canadian securities laws and "forward-looking statements" within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995 and other applicable U.S. safe harbours (collectively
"forward-looking statements"). Statements that do not exclusively
relate to historical facts, as well as statements relating to
management's expectations regarding the future growth, results of
operations, performance and business prospects of Alithya, and
other information related to Alithya's business strategy and future
plans or which refer to the characterizations of future events or
circumstances represent forward-looking statements. Such statements
often contain the words "anticipates," "expects," "intends,"
"plans," "predicts," "believes," "seeks," "estimates," "could,"
"would," "will," "may," "can," "continue," "potential," "should,"
"project," "target," and similar expressions and variations
thereof, although not all forward-looking statements contain these
identifying words.
Forward-looking statements in this press release include, among
other things, information or statements about: (i) our ability to
generate sufficient earnings to support our operations; (ii) our
ability to take advantage of business opportunities and meet our
goals set in our three-year strategic plan; (iii) our ability to
maintain and develop our business, including by broadening the
scope of our service offerings, entering into new contracts and
penetrating new markets; (iv) our strategy, future operations, and
prospects, including our expectations regarding future revenue
resulting from bookings and backlog; (v) our ability to service our
debt and raise additional capital and our estimates regarding our
financial performance, including our revenues, profitability,
research and development, costs and expenses, gross margins,
liquidity, capital resources, and capital expenditures; (vi) our
ability to realize the expected synergies or cost savings relating
to the integration of our business acquisitions, and (vii) the
potential return to pre-COVID-19 pandemic operations.
Forward-looking statements are presented for the sole purpose of
assisting investors and others in understanding Alithya's
objectives, strategies and business outlook as well as its
anticipated operating environment and may not be appropriate for
other purposes. Although management believes the expectations
reflected in Alithya's forward-looking statements were reasonable
as at the date they were made, forward-looking statements are based
on the opinions, assumptions and estimates of management and, as
such, are subject to a variety of risks and uncertainties and other
factors, many of which are beyond Alithya's control, and which
could cause actual events or results to differ materially from
those expressed or implied in such statements. Such risks and
uncertainties include but are not limited to those discussed in the
section titled "Risks and Uncertainties" of Alithya's Management
Discussion and Analysis for the quarter ended June 30, 2023 and Management's Discussion and
Analysis for the year ended March 31,
2023, as well as in Alithya's other materials made public,
including documents filed with Canadian and U.S. securities
regulatory authorities from time to time and which are available on
SEDAR+ at www.sedarplus.com and EDGAR at
www.sec.gov. Additional risks and uncertainties not currently
known to Alithya or that Alithya currently deems to be immaterial
could also have a material adverse effect on its financial
position, financial performance, cash flows, business or
reputation.
Forward-looking statements contained in this press release are
qualified by these cautionary statements and are made only as of
the date of this press release. Alithya expressly disclaims any
obligation to update or alter any forward-looking statements, or
the factors or assumptions underlying them, whether as a result of
new information, future events or otherwise, except as required by
applicable law. Investors are cautioned not to place undue reliance
on forward-looking statements since actual results may vary
materially from them.
Non-IFRS and Other Financial Measures
This press release includes certain measures which have not been
prepared in accordance with IFRS and other financial measures.
Adjusted Net Earnings, Adjusted Net Earnings per Share, EBITDA,
EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin, are
non-IFRS measures and Bookings, Book-to-Bill Ratio, Backlog, DSO,
Gross Margin as a Percentage of Revenues and Selling, General and
Administrative as a Percentage of Revenues are other financial
measures used in this press release. These measures do not have any
standardized meaning prescribed by IFRS and are therefore unlikely
to be comparable to similar measures presented by other companies.
These measures should be considered as supplemental in nature and
not as a substitute for the related financial information prepared
in accordance with IFRS. Additional details for these non-IFRS and
other financial measures can be found in section 5,"Non-IFRS
and Other Financial Measures", of Alithya's MD&A for the
quarter ended June 30, 2023, filed on
SEDAR+ at www.sedarplus.com and EDGAR at www.sec.gov, and are
incorporated by reference in this press release, which includes
explanations of the composition and usefulness of these non IFRS
financial measures and non IFRS ratios.
The following table reconciles net loss to Adjusted Net
Earnings:
|
|
For the three months
ended June 30,
|
(in $
thousands)
|
|
2023
|
|
2022
|
|
|
$
|
|
$
|
Net
loss
|
|
(7,245)
|
|
(4,164)
|
Business acquisition,
integration and reorganization costs
|
|
1,105
|
|
1,882
|
Amortization of
intangibles
|
|
6,824
|
|
4,699
|
Share-based
compensation
|
|
2,078
|
|
1,061
|
Impairment of property
and equipment and right-of-use assets
|
|
1,383
|
|
—
|
Income tax expense
related to above items
|
|
(2,468)
|
|
(759)
|
Adjusted Net
Earnings (1)
|
|
1,677
|
|
2,719
|
Basic and diluted loss
per share
|
|
(0.08)
|
|
(0.04)
|
Adjusted Net Earnings
per Share (1)
|
|
0.02
|
|
0.03
|
|
|
|
|
|
(1) Non-IFRS measure. See section 5
titled "Non-IFRS and Other Financial Measures" of Alithya's
MD&A for the quarter ended June 30, 2023, filed on SEDAR+
at www.sedarplus.com and on EDGAR at www.sec.gov.
|
The following table reconciles net loss to EBITDA and Adjusted
EBITDA:
|
|
For the three months
ended June 30,
|
(in $
thousands)
|
|
2023
|
|
2022
|
|
|
$
|
|
$
|
Revenues
|
|
131,595
|
|
126,764
|
Net
loss
|
|
(7,245)
|
|
(4,164)
|
Net financial
expenses
|
|
3,220
|
|
1,793
|
Income tax expense
(recovery)
|
|
150
|
|
(488)
|
Depreciation
|
|
1,668
|
|
1,579
|
Amortization of
intangibles
|
|
6,824
|
|
4,699
|
EBITDA
(1)
|
|
4,617
|
|
3,419
|
EBITDA Margin
(1)
|
|
3.5 %
|
|
2.7 %
|
Adjusted
for:
|
|
|
|
|
Foreign exchange
gain
|
|
(128)
|
|
(164)
|
Share-based
compensation
|
|
2,078
|
|
1,061
|
Business acquisition,
integration and reorganization costs
|
|
1,105
|
|
1,882
|
Impairment of property
and equipment and right-of-use assets
|
|
1,383
|
|
—
|
Adjusted EBITDA
(1)
|
|
9,055
|
|
6,198
|
Adjusted EBITDA Margin
(1)
|
|
6.9 %
|
|
4.9 %
|
|
|
|
|
|
(1) Non-IFRS measure. See section 5
titled "Non-IFRS and Other Financial Measures" of Alithya's
MD&A for the quarter ended June 30, 2023, filed on SEDAR+ at
www.sedarplus.com and on EDGAR at www.sec.gov.
|
Conference Call
Alithya will hold a conference call to discuss these results on
August 10, 2023, at 9:00 AM Eastern Time. Interested parties can join
the call by dialing 888 396 8049, conference ID 70109125, or via
webcast at https://www.icastpro.ca/ko7yqc. The conference call
recording can be accessed via the same URL link until September 10, 2023.
About Alithya
Empowered by the passion and enthusiasm of a talented global
workforce, Alithya is positioned on the crest of the digital wave
as a trusted advisor in strategy and digital technology services.
Transforming the world one digital step at a time, Alithya
leverages collective intelligence and expertise to develop
practical IT solutions tailored to complex business challenges. As
shared stewards of its clients' success, Alithya accompanies them
through the full cycle of their digital evolutions, paving new
roads to the future of their businesses.
Living up to its name, meaning truth, Alithya embraces a
business model that avoids industry buzzwords and technical jargon
to deliver straight talk provided by collaborative teams focused on
five main pillars: business strategy, business applications
implementation, application services, data and analytics, and
digital skilling and change enablement.
With two gender parity certifications obtained in Canada and the
United States, and in pursuit of indigenous relations and
carbon neutral certifications, Alithya strives to balance its
desire to do the right thing with its commitment to doing things
right.
Note to readers: Management's Discussion and Analysis and
the interim consolidated financial statements and notes for the
three months ended June 30, 2023 are
available on SEDAR+ at www.sedarplus.com, on EDGAR at
www.sec.gov and on the Company's website at www.alithya.com.
Shareholders may, upon request, receive a hard copy of these
documents free of charge.
View original
content:https://www.prnewswire.com/news-releases/alithya-reports-first-quarter-fiscal-2024-results-301897525.html
SOURCE Alithya