CALGARY, AB, Aug. 12, 2021 /CNW/ - Sylogist Ltd. (TSX:
SYZ) ("Sylogist" or the "Company"), a provider of
enterprise information management solutions, is pleased to announce
its unaudited financial results for the third quarter of the 2021
fiscal year, ended June 30, 2021.
Bill Wood, President and CEO of
Sylogist commented, "we are very pleased with our progress this
quarter. We continued to make strategic investments to accelerate
the Company's growth and build capacity to enable top-line
expansion. Much of this is focused on go-to-market, earning
customer advocacy, and innovation. We have strategically added
talent companywide, reorganized the Company to align behind shared
goals and value creation, and broken down divisional silos that
have existed for some time. We also have now fully transitioned to
an Agile product development methodology in which we release
desired features and innovation on a faster, approximately monthly,
cadence. These changes will help support accelerated growth in the
coming quarters, strengthen customer connections, bolster our
competitive position and improve operational excellence to support
both organic and inorganic expansion going forward.
More specifically, we are investing in sales, marketing, and
account management, with a view to enlisting and activating
customer advocacy, driving high quality leads and expanding our
thought leadership in the markets we serve. Happy customers and
increased market awareness will drive word-of-mouth referrals and
new bookings opportunities. We're beginning to see these
investments translate into new wins, which is expected to drive
top-line growth through the balance of this calendar year, and
beyond.
Critical to these efforts is attracting, motivating, and
retaining top talent in an increasingly competitive market. For
that reason, the Board of Directors and its Compensation Committee
have approved a new employee performance management framework. This
includes individual and collective goal-setting, regular feedback,
individualized professional development and a companywide
performance bonus plan in which employees are eligible for bonuses
depending on their individual performance and that of Sylogist as a
whole; all aligned with value creation. The plan's recent approval
has required us to book a retroactive, estimated $1.2 million bonus accrual in Q3 covering the
first nine months of FY2021. This accrual results in a one-time,
outsized impact to Adjusted EBITDA in Q3. We expect this commitment
to our most valuable asset, our people, will further motivate and
reward our already exceptionally strong team, while continuing to
attract the best and brightest to Sylogist.
As I've said on prior calls, quite simply, strategic investment
in the business and our people was overdue; and, will be our power
source to take Sylogist to new heights going forward.
We also maintained strong financial performance in Q3. Although
the above-mentioned investments compressed Adjusted EBITDA margins,
core recurring revenue rose substantially in the wake of the MAS
acquisition. This occurred despite material currency headwinds, to
which we are heavily exposed, due to the vast majority of our
revenue coming from the US. To illustrate the impact of FX on our
Q3 numbers, total revenue would have been 9% higher under the same
USD/CAD rates as Q3 2020. In total, year to date FY2021 revenue
would have been $1.3 million higher,
representing a 5% increase, on a YOY constant currency basis.
COVID-19 also continued to adversely affect bookings and
professional services revenue, with many nonprofits delaying
decisions and implementations. However, we are seeing this begin to
shift, delayed deals are matriculating and we expect bookings and
related project services to recover in the coming months.
Even with these investments in the Company and our employees,
I'm confident in the Company's ability to maintain well above
average free cash flows and a Rule of 40 posture going forward.
Lastly, I want to highlight that our M&A team has been
further expanded and strategic deal discussions and activity is
very encouraging.
Again, I am confident in the investments we're making, the
progress we have made in executing against our strategy and growth
plan, and I'm excited by the positive signals and new bookings
activity we're seeing." concluded Mr. Wood.
Q3 2021 Summary (Comparisons are to Q3 2020, unless
otherwise noted)
- Revenues of approximately $9.5
million, compared to approximately $10.0 million in the third quarter of fiscal
2020, a decrease of 4%; on a year-over-year common currency basis,
Q3 2021 revenue would have been approximately $10.4 million.
- Recurring revenues from subscriptions and maintenance grew by
10% to $7.9 million, compared to
$7.2 million for the third quarter of
2020.
- Gross Profit of $6.7 million,
compared to $7.2 million in the same
period last fiscal year, a decrease of 7%.
- Gross Profit Margin of 70%, compared to 73% in third quarter of
2020.
- Loss before income tax of $0.2
million, compared to profit before income tax of
$3.8 million in the third quarter
last year.
- Adjusted EBITDA(1) of $3.0
million, compared to $5.7
million for the same period last year; on a year-over-year
constant currency basis, Q3 2021 Adjusted EBITDA would have been
approximately $3.7 million.
- Adjusted EBITDA Margin(1) of 32%, compared to 57% in
Q3 2020; on a year-over-year constant currency basis, Q3 2021
Adjusted EBITDA Margin would have been approximately 35%.
- Adjusted EBITDA per share(1) of $0.12 per share, compared to $0.24 per share in the third quarter of 2020; on
a year-over-year constant currency basis, Q3 2021 Adjusted EBITDA
per share would have been approximately $0.15.
- Adjusted Working Capital(1) was $3.1 million as at June
30, 2021, compared to $45.2
million as at September 30,
2020.
- Adjusted Working Capital(1) per share of
$0.13 per share, compared to
$1.84 per share in Q3 2020.
- The Company paid regular dividends to shareholders of
$3.0 million in the third quarter of
2021, compared to $2.6 million in the
third quarter of 2020, an increase of 14%.
- Cash and cash equivalents totaled $22.3
million compared to $42.8
million as at September 30,
2020.
- Cash generated from operations totaled $3.8 million, compared to cash generated from
operations of $5.1 million in the
third quarter of fiscal 2020.
- Combined tax pools at the end of the third quarter 2021 were
approximately $12.2 million
(CAD).
- The Company's Board of Directors has approved a quarterly
dividend to $0.125 per common share
for shareholders of record as at August 31,
2021 to be paid on September 8,
2021, which is treated as an eligible dividend under the
Income Tax Act (Canada).
First nine months of fiscal 2021 (Comparisons are to
the first nine months of fiscal 2020, unless otherwise
noted)
- Revenues were $27.9 million,
compared to $28.2 million; on a
year-over-year common currency basis, YTD 2021 revenue would have
been approximately $29.2
million.
- Recurring revenues from subscriptions and maintenance were
$21.9 million compared to
$21.3 million for the first nine
months of 2020, an increase of 3%.
- Gross profit margins were 71% of revenue, compared to 75% for
the same period in the prior year.
- Adjusted EBITDA(1) was $12.4
million ($0.51 per share),
compared to $16.5 million
($0.69 per share); on a
year-over-year common currency basis, YTD 2021 Adjusted EBITDA
would have been approximately $13.3
million ($0.55 per
share).
- Adjusted EBITDA Margin (1) was 44%, compared to 59%;
on a year-over-year common currency basis, YTD 2021 Adjusted EBITDA
Margin would have been approximately 45%.
- The Company paid regular dividends to shareholders totaling
$8.9 million during the first nine
months of fiscal 2021, compared to $7.4
million in the same period in 2020.
- For the nine months ended June 30,
2021, the Company repurchased 118,400 common shares at an
average price of $10.96 for a total
cost of $1.3 million.
About Sylogist
Sylogist is a software company that, through strategic
acquisitions, investments and operations management, provides
comprehensive, mission-critical ERP and fund accounting, case
management, grant management and payroll, to public service
organizations. Sylogist's customers include all levels of
government, nonprofit organizations, non-governmental
organizations, K-12 educational institutions as well as public
compliance driven and funded companies. The Company delivers highly
scalable, multi-language, multi-currency software solutions which
serve the needs of North American and international clientele.
Full financial statements together with Management's Discussion
and Analysis are available on SEDAR at www.sedar.com
The Company's stock is traded on the Toronto Stock Exchange
under the symbol SYZ. Information about Sylogist can be found
at www.sylogist.com.
This news release is not for distribution to United States
Newswire Services or for dissemination in the United States.
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 changes helping to support accelerated growth, to
strengthen customer connections, and to strengthen the Company's
competitive position; and the Company's investments in sales and
marketing, enlisting and activating customer advocacy, driving high
quality leads, and expanding its thought leadership; the recovery
of bookings and related project services; and the Company
maintaining above average free cash flows and a Rule of 40 posture.
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, including
its inability to attract key employees in sales and marketing, to
enlist customer support, continuing headwinds from COVID-19, and
economic turmoil. Additional information regarding some of these
risks, uncertainties and other factors may be found in the
Company's Annual Information Form for the fiscal period ended
September 30, 2020
and in the management's discussion and analysis for the
three and nine months ended June
30, 2021, 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 attract and retain
employees and customers and to realize on its investments, the
ability to expand technology partner and customer relationships and
the acceleration of organic and inorganic growth. 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, Adjusted EBITDA per
share and Adjusted Working Capital, and Adjusted Working Capital
per Share are non-GAAP financial measures: Adjusted EBITDA is
defined as: profit for the period before stock-based compensation,
share-based payments, 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 EBITDA per share refers to Adjusted EBITDA per basic
weighted average number of shares outstanding. Adjusted Working
Capital is defined as current assets less current liabilities
adjusted for deferred revenue. Adjusted Working Capital per share
refers to Adjusted Working Capital per basic weighted average
number of shares outstanding.
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, Adjusted EBITDA per
share, Adjusted Working Capital, and Adjusted Working
Capital per share 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. For further information
regarding non-GAAP measures used by the Company, please refer to
the management's discussion and analysis of the Company, copies of
which are available on Sylogist's SEDAR profile at
www.sedar.com.
SOURCE Sylogist Ltd.