- Reports Subscription 31% Revenue Growth and 30% Adjusted EBITDA -
OTTAWA, Nov. 6, 2014 /CNW/ - Kinaxis®TSX:KXS, provider of RapidResponse®, delivering cloud-based SCM and S&OP applications, reported results for its fiscal third quarter ended September 30, 2014. All figures are in U.S. dollars and, except for Adjusted EBITDA as described below under the heading "Non-IFRS Measures", have been prepared in accordance with International Financial Reporting Standards (IFRS).
Third Quarter 2014 Highlights
(Comparisons made between fiscal Q3 2014 and fiscal Q3 2013 results, unless otherwise noted)
- Subscription revenue was $13.3 million, up 31%
- Total revenue was $17.7 million, up 14%
- Gross profit was $12.8 million (73% of total revenue), up 7%
- Adjusted EBITDA totaled $5.2 million (30% of total revenue), up 10%
- Profit totaled $2.5 million or $0.10 per diluted share
"Our increasing subscription revenue and strong Adjusted EBITDA reflect the growth potential of our unique SaaS offering," said Doug Colbeth, President and CEO of Kinaxis. "Organizations demand effective supply chain management solutions in order to achieve material performance improvement. We are well positioned within our market and our superior product offering will allow us to continue to deliver strong results."
Fiscal Q3 2014 Financial Results
Total revenue for the three months ended September 30, 2014 (Q3 2014) was $17.7 million, an increase of 14% compared to the same period in 2013. For the nine month period ended September 30, 2014 (YTD), revenue was $51.2 million, an increase of 15% compared to the same year ago period.
Subscription revenue was $13.3 million in Q3 2014, an increase of 31% from $10.1 million for the same period in 2013. YTD subscription revenue was $37.3 million, an increase of 28% over the same period in 2013. The increase was due to additional revenue from contracts secured with new customers during the fourth quarter of 2013 and in the first half of 2014 as well as expansion of existing customer subscriptions.
Professional services revenue was $4.1 million in Q3 2014, compared to $4.9 million for the same period in 2013. YTD professional services revenue was $13.1 million as compared to $14.1 million in the same year ago period. The change was due to the end of a significant engagement with an existing customer in December of 2013, and was largely offset by services provided for deployment of new customers acquired in the second half of 2013 and first half of 2014.
Gross profit was $12.8 million in Q3 2014, compared to $10.9 million for the same period in 2013. YTD gross profit was $35.9 million compared to $31.1 million in the same year ago period. As a percentage of revenue, gross profit was 73% in the third quarter compared to 71% in the third quarter of 2013 and was 70% in the nine months ended September 30, 2014 and 2013. The increase in gross profit was due to growth in total revenue in the third quarter of 2014 compared to the third quarter of 2013.
Adjusted EBITDA was $5.2 million in Q3 2014 or 30% of total revenue, compared to Adjusted EBITDA of $4.4 million, or 29% of total revenue in the same period last year. Adjusted EBITDA in the current period reflects a higher than normal weighting of subscription revenue to professional services revenue in the quarter. Kinaxis expect this trend to persist through the end of 2014. YTD Adjusted EBITDA was $12.3 or 24% of revenue compared to $10.4 million or 24% of revenue in the prior year period. The change in Adjusted EBITDA during the periods was driven by an increase in profit from operations excluding the impact of an increase in share-based payment expenses for the third quarter and year to date 2014 compared to the same periods for 2013.
Profit for the third quarter of 2014 was $2.5 million or $0.11 per basic and $0.10 per diluted share in Q3 2014 compared to a net loss of $2.8 million or $0.16 per basic and diluted share for the same period in 2013. Year to date the loss decreased to $0.8 million or $0.05 per basic and diluted share from $8.9 million or $0.53 per basic and diluted share due to a lower fair value adjustment on the redeemable preferred share liability. The increase in profit was primarily driven by a lower fair value adjustment on the redeemable preferred shares which were converted to Common Shares at the time of our initial public offering in June 2014.
Cash generated by operating activities was $13.6 million for the first nine months of 2014 as compared to $12.1 million in the same period of 2014. The change was primarily the result of an increase in non-cash share-based compensation of $1.2 million, deferred revenue of $7.8 million and receivables of $4.7 million due to timing of subscription billings and a contract amendment with an existing customer. This increase was offset by the Part VI.1 tax of $4.0 million and non-resident withholding taxes of $1.7 million paid in the first quarter of 2014 which had been withheld from amounts payable on a share repurchase completed in the fourth quarter of 2013, and a lower non-cash loss due to the change in fair value of redeemable preferred shares of $6.8 million in the first nine months of 2014 compared to $15.2 million for the same period in 2013.
Cash and cash equivalents were $55.9 million as at September 30, 2014 as compared to $13.8 million as at December 31, 2013. The increase is primarily due to the proceeds from our initial public offering net of repayment of our term loan, as well as cash from operations for the first nine months of 2014.
Please refer to the section regarding forward-looking statements which forms an integral part of this release. These results, along with the unaudited condensed consolidated interim financial statements and the company's unaudited MD&A, are available on the company's website at www.kinaxis.com and on SEDAR at www.sedar.com.
The company will host a conference call tomorrow (Friday, November 7, 2014) to discuss these results. Doug Colbeth, President & CEO and Richard Monkman, CFO will host the call starting at 8:30 a.m. Eastern time. A question and answer session will follow management's presentation.
Date: Friday, November 7, 2014
Time: 8:30 a.m. Eastern time
Dial-In Number: 1 (888) 231-8191
International: 1 (647) 427-7450
Conference ID#: 8255817
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.
A replay of the call will be available after 11:30 a.m. Eastern time on the same day through November 14, 2014.
Toll-Free Replay Number: 1 (855) 859-2056
International Replay Number: 1 (416) 849-0833
Replay PIN: 8255817
About Kinaxis Inc.
Kinaxis is a leading provider of cloud-based subscription software that enables our customers to improve and accelerate analysis and decision-making across their supply chain operations. The supply chain planning and analytics capabilities of our product, RapidResponse, create the foundation for managing multiple, interconnected supply chain management processes. By using the single RapidResponse product instead of combining individual disparate software solutions, our customers gain visibility across their supply chains, can respond quickly to changing conditions, and ultimately realize significant operating efficiencies.
This news release contains non-IFRS measures, specifically Adjusted EBITDA. We use Adjusted EBITDA to provide investors with a supplemental measure of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure and working capital requirements. Adjusted EBITDA is not a recognized, defined or standardized measure under IFRS. Our definition of Adjusted EBITDA will likely differ from that used by other companies (including our peers) and therefore comparability may be limited. Readers should also note that we have changed the composition of Adjusted EBITDA compared to previously disclosed Adjusted EBITDA, in order to better reflect the definition used by securities analysts. Adjusted EBITDA now includes a foreign exchange adjustment which is reflected in the "Foreign exchange loss (gain)" line item in the table below. Non-IFRS measures should not be considered a substitute for or in isolation from measures prepared in accordance with IFRS. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue reliance on non-IFRS measures and view them in conjunction with the most comparable IFRS financial measures.
We have reconciled Adjusted EBITDA to the most comparable IFRS financial measure as follows:
| Three months ended
| Nine months ended
|(In thousands of U.S. dollars)|
|Loss due to change in fair value of redeemable preferred shares||-||5,683||6,760||15,219|
|Income tax expense||1,358||1,244||3,050||2,806|
|Foreign exchange loss (gain)||262||(103)||134||160|
|Net finance (income) expense||(3)||(16)||507||(44)|
Certain statements in this release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements as to Kinaxis' growth opportunities and the potential benefits of, and markets and demand for, Kinaxis' products and services. These statements are subject to certain assumptions, risks and uncertainties, including our view of the relative position of Kinaxis' products and services compared to competitive offerings in the industry. Readers are cautioned not to place undue reliance on such statements. Kinaxis' actual results, performance, achievements and developments may differ materially from the results, performance, achievements or developments expressed or implied by such statements. Risk factors that may cause the actual results, performance, achievements or developments of Kinaxis to differ materially from the results, performance, achievements or developments expressed or implied by such statements can be found in the public documents filed by Kinaxis with Canadian securities regulatory authorities. Kinaxis assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.
| Kinaxis Inc.
Condensed Consolidated Interim Statements of Financial Position
| (Expressed in thousands of U.S. dollars)
|September 30,||December 31,|
|Cash and cash equivalents||$||55,928||$||13,804|
|Trade and other receivables||7,636||12,449|
|Investment tax credits receivable||1,811||1,330|
|Property and equipment||4,662||2,408|
|Investment tax credits recoverable||2,980||2,108|
|Deferred tax assets||7,210||8,166|
|Accounts payable and accrued liabilities||$||4,274||$||11,062|
|Current portion of long-term debt||̶||4,167|
|Redeemable preferred shares||̶||54,135|
|Shareholders' Equity (Deficiency)|
|Accumulated other comprehensive loss||(385)||(360)|
| Kinaxis Inc.
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
| (Expressed in thousands of U.S. dollars, except share and per share data)
|For the three months||For the nine months|
|ended September 30,||ended September 30,|
|Cost of revenue||4,855||4,556||15,312||13,413|
|Selling and marketing||3,014||3,413||10,021||11,528|
|Research and development||3,545||1,732||10,067||5,724|
|General and administrative||2,138||1,723||6,188||4,571|
|Other income (expense):|
| Loss due to change in fair value of redeemable
|Foreign exchange (loss) gain||(262)||103||(134)||(160)|
|Net finance income (expense)||3||16||(507)||44|
|Profit (Loss) before income taxes||3,870||(1,537)||2,245||(6,074)|
|Income tax expense:|
|Other comprehensive income (loss)|
| Items that are or may be reclassified subsequently
to profit or loss:
| Foreign currency translation differences
- foreign operations
|Total comprehensive income (loss)||$||2,463||$||(2,741)||$||(830)||$||(8,904)|
|Basic earnings (loss) per share||$||0.11||$||(0.16)||$||(0.05)||$||(0.53)|
|Weighted average number of basic Common Shares||23,594,556||16,891,970||17,530,210||16,838,280|
|Diluted earnings (loss) per share||$||0.10||$||(0.16)||$||(0.05)||$||(0.53)|
|Weighted average number of diluted Common Shares||24,758,532||16,891,970||17,530,210||16,838,280|
| Kinaxis Inc.
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity (Deficiency)
| (Expressed in thousands of U.S. dollars)
|Balance, December 31, 2012||$||11,176||$||2,923||$||(297)||$||(29,508)||$||(15,706)|
|Other comprehensive loss||̶||̶||(24)||̶||(24)|
|Total comprehensive loss||̶||̶||(24)||(8,880)||(8,904)|
|Share purchase plan subscriptions||228||̶||̶||̶||228|
|Share options exercised||41||̶||̶||̶||41|
|Share based payments||̶||658||̶||̶||658|
|Interest on receivable for share sale||5||17||̶||̶||22|
|Total shareholder transactions||274||675||̶||̶||949|
|Balance, September 30, 2013||$||11,450||$||3,598||$||(321)||$||(38,388)||$||(23,661)|
|Balance, December 31, 2013||$||9,902||$||3,948||$||(360)||$||(87,070)||$||(73,580)|
|Other comprehensive loss||̶||̶||(25)||̶||(25)|
|Total comprehensive loss||̶||̶||(25)||(805)||(830)|
| Conversion of Class A preferred shares
to Common Shares
|Shares issued per offering||59,562||̶||̶||̶||59,562|
|Share issuance costs||(3,837)||̶||̶||̶||(3,837)|
|Reduction of share capital||(41,010)||̶||̶||41,010||̶|
|Shares issued for cash||585||̶||̶||̶||585|
|Share options exercised||570||(61)||̶||̶||509|
|Share based payments||̶||1,813||̶||̶||1,813|
|Total shareholder transactions||76,765||1,752||̶||41,010||119,527|
|Balance, September 30, 2014||$||86,667||$||5,700||$||(385)||$||(46,865)||$||45,117|
| Kinaxis Inc.
Condensed Consolidated Interim Statements of Cash Flows
| (Expressed in thousands of U.S. dollars)
|For the nine months ended September 30,||2014||2013|
|Cash flows from (used in) operating activities:|
|Items not affecting cash:|
|Depreciation of property and equipment||817||616|
|Loss due to change in fair value of redeemable preferred shares||6,760||15,219|
|Amortization of lease inducement||(35)||(35)|
|Long-term investment tax credits recoverable||(872)||(663)|
|Income tax expense||3,050||2,806|
|Change in operating assets and liabilities||8,167||2,857|
|Income taxes paid||(4,790)||(510)|
|Cash flows from (used in) investing activities:|
|Purchase of property and equipment||(3,071)||(814)|
|Cash flows from (used in) financing activities:|
|Non-Voting Common Shares issued and share subscriptions received||991||291|
|Common Shares issued||103||̶|
|Common Shares issued per offering||59,562||̶|
|Share issuance cost net of tax||(3,837)||̶|
|Issuance of long-term debt||5,000||̶|
|Repayment of long-term debt||(30,000)||̶|
|Payment of finance lease obligations||̶||(32)|
|Increase in cash and cash equivalents||42,322||11,511|
|Cash and cash equivalents, beginning of period||13,804||48,801|
|Effects of exchange rates on cash and cash equivalents||(198)||(438)|
|Cash and cash equivalents, end of period||$||55,928||$||59,874|
SOURCE: Kinaxis Inc.
For further information:
T: (416) 815-0700 ext. 253