Solium Releases 2017 First Quarter Financial Results

  • Revenue increased by 15%
  • Adjusted EBITDA increased by 33%
  • Cash position strong at $64.8 million

CALGARY, May 4, 2017 /CNW/ - Solium Capital Inc. (TSX: SUM) ("Solium" or the "Company") today announced its financial results for the first quarter ended March 31, 2017.

Financial and operating highlights for the first quarter ended March 31, 2017, compared to the same period in 2016:

  • Revenue increased by 15% to $21.3 million in the first quarter of 2017;

  • Adjusted EBITDA1 increased by 33% to $4.3 million in the first quarter of 2017;

  • Earnings from operations increased by 49% to $3.4 million in the first quarter of 2017;

  • Net earnings increased by 87% to $2.5 million in the first quarter of 2017; and

  • Cash on hand as at March 31, 2017 totaled $64.8 million.

Key factors affecting financial results in the first quarter ended March 31, 2017:

  • License revenue – License and subscription fees increased by $0.1 million or 1% during the first quarter of 2017 compared to the same period in 2016. Based on local currencies, the growth was 1% between the comparable quarters. Growth in license revenue from new sales was offset by a decrease in participant counts in some of the Company's energy sector clients due to the downturn in that industry.

  • Transaction activity – In addition to the recurring license revenue that Solium collects for the use of its Shareworks platform, the Company also collects re-occurring transaction based revenue. Transaction based revenue increased by $2.3 million or 44% during the first quarter of 2017 compared to the same period in 2016. The per participant trading activity was 39% higher in the first quarter of 2017 compared to the same period in 2016 and 5% higher than the historical five-year Q1 average.

  • Global expansion – Operating expenses increased by $1.6 million or 10% during the first quarter of 2017 when compared to the same period in 2016, primarily as a result of planned hiring to support the Morgan Stanley partnership. The Company had 553 full-time equivalent employees (FTEs) at the end of the first quarter of 2017 compared to 467 FTEs at the end of the first quarter of 2016.

  • Foreign exchange – The Canadian dollar (CAD) strengthened against the U.S. dollar (USD) during the first quarter of 2017 compared to the same period in 2016. This had a positive impact on the Company's overall financial results due to the translation of CAD financial results into USD for consolidated financial reporting purposes for the first quarter of 2017.

Selected financial information for the first quarter ended March 31, 2017:
(Expressed in thousands of U.S. dollars except per share amounts)




Three Months Ended March 31,


2017

$

2016

$

%

Change

Revenue

21,266

18,555

15%

Operating Expenses

17,893

16,290

10%

Adjusted EBITDA1

4,344

3,275

33%

Earnings from operations

3,373

2,265

49%

Net earnings

2,544

1,361

87%





Net earnings per share2





Basic

0.051

0.028

82%


Diluted

0.050

0.027

85%





Issued and outstanding





Common shares

50,330

49,224

2%


Diluted3

53,677

52,975

1%

 

Regional breakdown of results (expressed in thousands of U.S. dollars):


Three Months Ended March 31,


Canada

U.S.

International

Consolidated


2017

2016

2017

2016

2017

2016

2017

2016

Revenues

7,978

6,529

9,592

9,003

3,696

3,023

21,266

18,555

Adjusted EBITDA1

2,092

1,730

2,114

1,941

138

(396)

4,344

3,275

Adjusted EBITDA %1

26%

26%

22%

22%

4%

(13%)

20%

18%

Earnings (loss) from operations

1,837

1,512

1,504

1,254

32

(501)

3,373

2,265

 

Basic net earnings per share was $0.051 in the first quarter of 2017 (2016: $0.028). 

During the quarter ended March 31, 2017, the Company had an overall net cash inflow of $1.1 million (2016: $1.9 million). Funds generated from operations were $5.3 million during the quarter ended March 31, 2017 (2016: $3.2 million). Changes in working capital and cash tax payments brought total cash inflow from operations to $1.5 million during the three months ended March 31, 2017 (2016: outflow of $1.0 million).

Working capital as at March 31, 2017 was $65.8 million (December 31, 2016: $63.2 million).  Included in working capital was trade and other receivables of $16.0 million (December 31, 2016: $16.4 million).

Outlook

In Q4 2016, Solium entered into a license agreement with Morgan Stanley to provide technology to support Morgan Stanley's Global Stock Plan Services business. In order to execute on this agreement, Solium has added headcount and committed additional resources to ensure the success of this project. By the end of Q1 2017, Solium had hired the majority of the employees necessary to support the Morgan Stanley implementation. However, the full financial impact of these new hires will not be fully reflected in the Company's financial results until the second half of 2017.

Solium remains committed to investing for future revenue growth over the course of 2017, leading to near-term pressure on profitability. The Company continues to methodically invest in its capabilities and infrastructure – ensuring best-in-class technology and service – to drive long term investor returns.

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, foreign exchange gain or loss (on translation of working capital), gain on derecognition of liability, sales tax adjustment, and change in estimate of scientific research and experimental development ("SRED") investment tax credits. 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,


2017

2016

Adjusted EBITDA

4,344

3,275

Foreign exchange gain (loss)

397

(600)

Gain on derecognition of liability

-

445

Sales tax adjustment

-

(80)

EBITDA

4,741

3,040

 

Finance income

188

141

Amortization

(971)

(930)

Income tax

(1,414)

(890)

Net earnings

2,544

1,361





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 common shares issuable pursuant to outstanding stock options and restricted share units.

 

About Solium Capital Inc.

Solium Capital Inc. (TSX: SUM) provides cloud-enabled services for global equity administration, financial reporting and compliance.  From offices in the United States, Canada, the United Kingdom, Europe, Australia and Hong Kong, 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 the project with Morgan Stanley including the financial impact of new hires and plans to hire additional employees, the Company's investment strategy, and the adoption of the Company's stock plan administration platform. 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, the competitive environment in which the Company operates, and the Company's ability to realize the anticipated benefits from its investment in the partnership with Morgan Stanley. 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 quarter ended March 31, 2017 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, NATIONAL | Equicom, 416.586.1951, cseguin@national.ca


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890