Solium Releases 2014 First Quarter Financial Results

  • Revenue increased by 20%
  • Adjusted EBITDA increased by 34%
  • Cash position strong at $43.4 million

CALGARY, May 6, 2014 /CNW/ - Solium Capital Inc. ("Solium" or the "Company") today announced its financial results for the first quarter ended March 31, 2014.

Financial and operating highlights for the first quarter ended March 31, 2014:

  • Revenue increased by 20% to $21.7 million in the first quarter of 2014;
  • Earnings from operations increased by 42% to $6.0 million in the first quarter of 2014;
  • Adjusted EBITDA1 increased by 34% to $7.3 million in the first quarter of 2014;
  • Net earnings increased by 71% to $4.6 million in the first quarter of 2014;
  • Cash on hand and short-term investments as at March 31, 2014 totaled $43.4 million;
  • On January 10, 2014, the Company completed the acquisition of GlobalSharePlans (rebranded to Solium GSP).

Key factors affecting financial results for the first quarter ended March 31, 2014:

Organic growth and strong trading activity - The Company experienced increased license and subscription fees through organic growth since the first quarter of 2013.  In addition, the Company experienced stronger participant share trading activity and corresponding transaction based revenue in the three months ended March 31, 2014 as compared to the three months ended March 31, 2013.  Certain seasonal factors typically contribute to higher transaction based revenue in the first quarter of a given year.

Foreign exchange - The strength of the U.S. dollar (USD) against the Canadian dollar (CAD) increased during the three months ended March 31, 2014 compared to the same period in 2013. This had a positive impact on the Company's overall financial results due to the translation of USD financial results into CAD for consolidated financial reporting purposes.

Acquisitions - GlobalSharePlans (rebranded to Solium GSP), a leading online provider of regulatory and tax information for companies with global equity incentive plans was acquired in exchange for cash and 176,493 common shares at the beginning of the first quarter of 2014. A small amount of revenue, expenses and a small net loss were recorded from the acquired business in the three months ended March 31, 2014 compared to no revenue or expenses in the first quarter of 2013.

Selected financial information for the first quarter ended March 31, 2014:

         
  Three Months Ended March 31,
2014 2013 % Change
Revenue $21,742 $18,151 20%
Operating Expenses $15,714 $13,909 13%
Earnings from operations $6,027 $4,242 42%
Adjusted EBITDA1 $7,254 $5,413 34%
Net earnings $4,571 $2,673 71%
       
Net earnings per share      
  Basic $0.097 $0.063 54%
  Diluted2 $0.092 $0.061 51%
       
Issued and outstanding      
  Common shares 47,198,753 42,690,013 11%
  Diluted3 51,510,075 46,984,009 10%
         

Revenue was $21.7 million in the first quarter of 2014 (2013: $18.2 million).

Adjusted EBITDA1 was $7.3 million in the first quarter of 2014 (2013: $5.4 million).

Net earnings were $4.6 million in the first quarter of 2014 (2013: $2.7 million).

The effective income tax rate relative to accounting income increased from 31.6% in the first quarter of 2013 to 35.3% in the first quarter of 2014.

Net earnings per share were $0.097 in the first quarter of 2014 (2013: $0.063).

During the first quarter of 2014, the Company had a net cash outflow of $3.0 million (2013: outflow $0.07 million).  Funds from operations were $6.6 million (2013: $4.9 million).  The payment of employee staff bonuses for 2013 that occurred in the first quarter of 2014 as well as income tax payments and instalments contributed to the overall net cash outflow. In addition, net cash outflow from investing activities was $3.4 million during the quarter ended March 31, 2014 (2013: $0.6 million) mainly due to the acquisition of Solium GSP. Working capital as at March 31, 2014 was $45.4 million (December 31, 2013: $41.9 million).

Outlook

Solium will continue to invest significantly in Shareworks, the first and only equity administration platform with end-to-end global capabilities on a single platform, and will accelerate investment into the expansion of international operations which are gaining traction in the marketplace.

On January 10, 2014, the Company completed the acquisition of GlobalSharePlans (rebranded to Solium GSP), a leading online provider of regulatory and tax information for companies with global equity incentive plans. Based in Spain, Solium GSP has a base of established Fortune 500 clients.  The Company will develop additional revenue-generating opportunities from this acquisition by integrating Solium GSP's expertise in global tax and regulatory compliance into the Shareworks platform and associated services ecosystem. The Company will also introduce the Solium GSP tax and compliance datasets and toolsets to current and future Shareworks clients in all geographies.  Solium GSP is expected to be accretive to earnings over time.

Notes:

1. Earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA are non-IFRS financial measures which do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers.  EBITDA and Adjusted EBITDA provide useful information to users as they reflect the net earnings prior to the effect of non-operating expenses such as finance costs, income tax, amortization, and foreign exchange gain or loss (on translation of working capital assets).  Management uses Adjusted EBITDA in measuring the financial performance of the Company.  Management monitors Adjusted EBITDA against budget and past results on a regular basis. The measure is a component in determining the annual bonus pool for staff and management.
   
  The following is a reconciliation of Adjusted EBITDA to net earnings:

      Three months ended March 31  
             
      2014 2013  
    Adjusted EBITDA 7,254 5,413  
    Foreign exchange gain (loss) 898 (234)  
    EBITDA 8,152 5,179  
             
    Finance income (costs) 136 (100)  
    Amortization expense (1,227) (1,171)  
    Income tax expense (2,490) (1,235)  
             
    Net earnings 4,571 2,673  
             

2. Diluted net earnings per share is calculated using the treasury stock method.
   
3. Diluted shares as presented equals issued and outstanding common shares plus outstanding stock options, restricted share units and shares to be issued on conversion of the convertible notes.
   

About Solium Capital Inc.

Solium Capital Inc. (TSX: SUM) provides cloud-enabled services for global equity administration, financial reporting and compliance.  From operation centers in the United States, Canada, the United Kingdom, Spain and Australia, our innovative software-as-a-service (SaaS) technology powers share plan administration and equity transactions for more than 3,000 corporate clients with employee participants in more than 100 countries.  Follow us @Solium and visit us at solium.com.

Certain statements included or incorporated by reference in this press release constitute forward-looking statements or forward-looking information under applicable securities legislation. Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", or similar words suggesting future outcomes or statements regarding an outlook. Specific forward-looking statements in this press release include statements with respect to continued investment in Shareworks, and the growth of international operations and international markets. Such forward-looking statements or information are based on a number of assumptions which may prove to be incorrect, including assumptions with respect to the ability of the Company to identify, hire, train, motivate and retain qualified personnel, the Company's ability to maintain or accurately forecast revenue from its products and services, and the competitive environment in which the Company operates.  Although Solium believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements or information because Solium can give no assurance that such expectations will prove to be correct. The forward-looking statements and information are based on Solium's current expectations, estimates and projections, and are subject to a number of significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including general business and economic conditions, actions of competitors and partners, the regulatory environment and product capability and acceptance. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

The Management's Discussion and Analysis and the condensed consolidated interim financial statements for the three months ended March 31, 2014 referred to herein will be available on SEDAR at www.sedar.com under Solium Capital Inc., or at www.solium.com.

SOURCE Solium Capital Inc.

For further information:

Investor relations

Conrad Seguin
TMX | Equicom
416.815.0700 x 251
cseguin@tmxequicom.com