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Renoworks reports sixth consecutive quarter
of record revenues
CALGARY, Nov. 29, 2017 /CNW/ - Renoworks
Software Inc. (TSXV: RW) ("Renoworks" or the
"Company") a leading provider of digital home imaging
software and web solutions for new home construction and existing
home renovations, today announced financial results for the third
quarter ended September 30, 2017.
Financial highlights for the third quarter 2017:
- Sixth consecutive quarter of record revenues.
- Record revenues of $800,356 for
the three months ended September 30,
2017 compared to $730,835 in
2016, an increase of 10%.
- Annual Recurring Revenue of $414,284 for the quarter ending September 30, 2017 increased from $392,217 for the same period in 2016, an increase
of 6%.
- 52% of the third quarter's revenue in 2017 is attributable to
annual recurring customer contracts.
- Gross margins continue to be strong at 73% and 72%,
respectively for the third quarter 2017 and the 9 months ended
September 2017.
- Long term debt continues to decline, from $241,284 at December 31,
2016 to $183,885 at
September 30,2017, a decrease of
$57,399. The Company sees no
additional borrowing needs in the near future as cash balances
allow the Company to execute its strategy.
- Working capital remains strong in 2017. At
September 30, 2017 working capital is
$848,412 compared to $328,795 at December 31,
2016 and $362,133 at
September 30, 2016. Cash
balances remain strong allowing the Company to continue executing
on its growth strategy.
- Deferred revenue increased to $535,480 from $392,904 at December
31, 2016. Of that total $293,000 is from annual client recurring
revenues. This has increased from $221,000 at September 30,
2016, an increase in recurring client balances of 25%.
These balances represent annual licensing billings to customers
that currently utilize our visualization solutions.
Doug Vickerson, CEO of Renoworks,
stated, "The past 9 months and sixth consecutive quarter of record
revenues underscores what we believe is a sustainable sales
momentum that should further springboard sales in the
4th quarter strengthening an already record year."
Mr. Vickerson continued, "Although we are very pleased with our
financial results year-to-date, we are even more pleased about the
investments we have made in our team to position us for growth in
2018. Over the last year we have added to both our
Development and Project Management Team in order to keep up with
the increase in demand for our solutions across all four business
units. For the remainder of the year we will also be
expanding our sales team. Coming into 2018, the Renoworks
business will be ready for growth."
Business highlights and activity for the
third quarter 2017:
Operational and Development Team Expansion - In
order to meet current market demand for Renoworks' solutions, the
Company has invested into its operational and development
team. During the third quarter of 2017 three new resources
were added. This is in addition to the fifteen resources
added since the beginning of 2017. With this increased
capacity Renoworks is now positioned to capitalize on market demand
and increase our financial performance in future quarters.
Platform R&D - The investment in adding
additional capacity has also allowed the Company to reallocate
resources into R&D activities that will benefit all business
units. During the fiscal year R&D expenses have
increased by 68% over the same period as last year. The
Company continues to make strategic investments into our
platform to allow us to scale both more efficiently
and effectively. In addition to performance
improvements, Renoworks is also making investments in new
technology that will be introduced to the market in future
quarters.
Enterprise Business Unit - The
demand for enterprise solutions continues to be high for new
clients. Given the recent investment in Research and Development,
the Company is realizing continued growth with existing clientele
with the advent of new and exciting products and solutions.
Strategies on expanding this segment continue to be a focus and the
Company expects to increase market share in 2018.
RW PRO Business Unit – Our
Renoworks PRO business unit is broken down into two categories –
remodel and new home construction. In the remodel category,
we continue to expand with contractors to provide both
visualization software and our newly expanded Design services
offering. In the builder category, we see this as a natural
move to expand our offering as most if not all our Enterprise
customers also have builders as a target market.
GSB Design Services Business
Unit – The Design Services offering will continue to
be a key area of focus for Renoworks in 2018. We are excited
about bringing on new customers to this expanded service offering
and continuing to grow this business unit.
Renoworks SDK Business Unit
– Renoworks continues to partner and speak with
potential partners on utilizing our visualization platform for new
industry solutions. We are currently working with a number of new
partners and look forward to seeing this business unit expand in
2018.
Mr. Vickerson added, "Our strategic decision to invest from an R
& D perspective into our solution platform will expand our
market reach in 2018. Partnerships and the Builder market
represent the area for market expansion."
Financial results from operations for the third quarter 2017
with comparatives for 2016 are as follows:
|
Three Months Ended
September 30
|
2017
|
2016
|
Revenue
|
$800,356
|
$730,835
|
Gross
Margin
|
$584,795
|
$560,063
|
Expenses
|
$800,392
|
$465,956
|
Profit
(Loss)
|
($295,410)
|
$87,697
|
Earnings (loss) per
share
|
($0.01)
|
$0.00
|
Adjusted
EBITDA*
|
($240,704)
|
$119,764
|
Weighted Average
Shares Outstanding
|
33,562,810
|
29,332,185
|
Financial results from operations for the year to date 2017 with
comparatives for 2016 are as follows:
|
Nine Months Ended
September 30
|
2017
|
2016
|
Revenue
|
$2,234,806
|
$2,055,983
|
Gross
Margin
|
$1,604,086
|
$1,594,116
|
Expenses
|
$2,180,004
|
$1,573,976
|
Profit
(Loss)
|
($634,376)
|
($48,862)
|
Earnings (loss) per
share
|
($0.02)
|
$0.00
|
Adjusted
EBITDA*
|
($514,534)
|
$32,510
|
Weighted Average
Shares
Outstanding
|
33,368,317
|
28,842,428
|
Cash used in
operations
|
$472,900
|
$109,085
|
The Company's financial position as of September 30, 2017 with comparatives from 2016 is
as follows:
|
September 30, 2017
|
September 30, 2016
|
Cash
Balance
|
$916,397
|
$389,085
|
Accounts
Receivable
|
$518,699
|
$575,611
|
Working
Capital
|
$848,412
|
$362,133
|
Deferred
Revenue
|
$535,480
|
$481,640
|
Long- term
liabilities
|
$100,371
|
$183,885
|
Shareholder's
Equity
|
$800,850
|
$229,024
|
Deficit
|
($6,062,873)
|
($5,367,611)
|
Total
Assets
|
$1,585,382
|
$1,074,937
|
About Renoworks
Renoworks Software Inc. develops and
sells unique digital visualization software for the remodelling and
new home construction industry, primarily in the United States and Canada. Delivered
online, as a custom developed app or desktop software, Renoworks
provides its technology to manufacturers, contractors, builders and
retailers offering the solution to one of the home remodelling
industry's greatest challenges: enabling customers to see how their
product choices will look in a realistic, virtual environment –
even in their own home – before they make a purchase
decision.Renoworks markets its software as a cost-effective lead
generation tool and generates revenues from four main business
lines: Enterprise, Renoworks PRO, Renoworks GSB and Renoworks SDK
(Software Development Kit). For more information, visit
www.renoworks.com
*Non-IFRS Measures
Adjusted EBITDA is a measure not
recognized under IFRS. However, management of Renoworks believes
that most shareholders, creditors, other stakeholders and
investment analysts prefer to have these measures included as
reported measures of operating performance, a proxy for cash flow,
and to facilitate valuation analysis. Adjusted EBITDA is defined as
earnings before interest income, taxes, depreciation and
amortization, stock based compensation, restructuring costs,
impairment charges and other non-recurring gains or losses.
Management believes Adjusted EBITDA is a useful measure that
facilitates period-to-period operating comparisons.
Adjusted EBITDA does not have any standardized meanings
prescribed by IFRS and therefore may not be comparable to similar
measures presented by other issuers. Readers are cautioned that
Adjusted EBITDA is not an alternative to measures determined in
accordance with IFRS and should not, on its own, be construed as
indicators of performance, cash flow or profitability. References
to the Renoworks' Adjusted EBITDA should be read in conjunction
with the financial statements and management's discussion and
analysis of Renoworks posted on SEDAR (www.sedar.com).
Forward Looking Information
Certain statements in
this news release, other than statements of historical fact, are
forward looking information that involves various risks and
uncertainties. Such statements relating to, among other things, the
prospects for the company to enhance operating results, are
necessarily subject to risks and uncertainties, some of which are
significant in scope and nature. These uncertainties may cause
actual results to differ from information contained herein. There
can be no assurance that such statements will prove to be accurate.
Actual results and future events could differ materially from those
anticipated in such statements. These and all subsequent written
and oral forward looking statements are based on the estimates and
opinions of the management on the dates they are made and expressly
qualified in their entirety by this notice. The Company assumes no
obligation to update forward-looking statements should
circumstances or management's estimates or opinions change.
The TSX Venture Exchange does not accept responsibility for
the adequacy or accuracy of this release.
SOURCE RenoWorks Software Inc.