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Optiva Inc. Reports Financial Results for the Three-Month Period Ended December 31, 2019 and Fiscal 2019 Financial Results

Optiva Canada Inc. (CNW Group/Optiva Inc.)

News provided by

Optiva Inc.

09 Mar, 2020, 19:54 ET

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TORONTO, March 9, 2020 /CNW/ - Optiva Inc. ("Optiva" or "the Company") (TSX:OPT), the leader in providing communications service providers (CSPs) worldwide with cloud-native revenue management software on the public cloud, released its financial results today for the three-month period ended December 31, 2019 and fiscal year ended December 31, 2019. As previously announced on December 12, 2018, Optiva changed its fiscal year end from September 30 to December 31 to better align the Company's year-end reporting cycle with its business operations. The Company's transition to a December 31 year-end in fiscal 2019 will include five fiscal quarters.






Q5 Fiscal 2019 Highlights

Three Months Ended


Fifteen Months Ended

Twelve Months Ended

($ US Thousands, except per share information)

December 31,


December 31,

September 30,

(Unaudited)

2019

2018


2019

2018

Revenue

20,530

27,617


120,883

121,627

Net income (loss)

(16,874)

538


(13,751)

(92,592)

Earnings (loss) Per Share

$(3.17)

$ 0.10


$(2.60)

$(17.69)

Cash generated from (used in) operating activities

(2,966)

(1,917)


(2,259)

(61,011)

Total cash, including restricted cash

32,699

35,385


32,699

39,683

Fifth Quarter 2019 Financial Results for the Period Ended December 31, 2019

  • Revenues decreased by $7.1 million relative to the corresponding quarter of 2018, primarily due to the discontinuation of support and subscription sales to customers who had previously notified Optiva of their exit.
  • Optiva's cost of revenue and operating expenses declined by $6.9 million relative to the same period in 2018 as a result of Optiva's ongoing focus on operational efficiencies, cost management and lower non-cloud research and development expenses.
  • Fifth quarter 2019 research and development expenses included $4.4 million of investments in cloud innovation, which brings the total spent in fiscal 2019, to $14.2 million. Since the beginning of 2018, Optiva has invested a total of $28.2 million in cloud innovation and will continue to spend up to another $72 million over the course of the next two to three years, as per its stated cloud-driven growth strategy.
  • Net loss for the quarter increased to $16.9 million compared to net income of $0.5 million during the corresponding period in 2018. The lower earnings were mainly attributable to a decrease in revenues and higher finance costs and income tax expense during the reported period.
  • Optiva consumed $3.0 million in cash from operating activities in the fifth quarter of 2019, versus consuming $1.9 million of cash in the corresponding period in 2018.
  • Continued focus and investments in cloud innovation remain at the forefront of the Company's growth strategy.

Business Highlights:

  • Optiva announced its objective to raise as much as US$100 million for the acceleration of its strategic plan consisting of increasing pace and amount of investments in order to maintain its leadership position in the cloud opportunity, while withstanding near term losses in order to aggressively invest in long-term, sustainable, profitable growth.
  • The Customer Success metric is showing improvement for the period July to December, increasing to just over 50%.
  • Subsequent to quarter-end, Vodafone Idea Ltd (VIL), announced it had gone live with a pilot deployment of cloud-native Optiva Charging EngineTM on VIL's Universal Cloud, catering to over four million subscribers and over 1,000 transaction units per second (TPS) traffic for online charging data.
  • Optiva is named a market disruptor by GlobalData, a world-leading analytics company and one of the largest data and insights solution providers, citing Optiva's leadership in the telecom industry in its journey to the public cloud.

Conference Call

Optiva Inc. will hold an analyst call on March 10, 2020, to discuss its quarterly financial for the three-month period ended December 31, 2019. CEO Danielle Royston and Interim CFO Anin Basu will host the call starting at 8:30 a.m. Eastern time. A question and answer session will follow management's discussion.

Date: Tuesday, March 10, 2020
Time: 8:30 a.m. Eastern Time 
Toll-free (Canada/US):  1-888-204-4368 
International:  1-720-543-0214
Reference number: 8661099

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 via Optiva's website (www.optiva.com/investors/)  Media Inquiries: [email protected]

About Optiva Inc.
Optiva Inc. is the leader in providing communication service providers (CSPs) worldwide with cloud-native revenue management software on the public cloud. MNOs and MVNOs can integrate our best-of-breed charging engine into a BSS stack or deploy our fully managed, end-to-end, SaaS platform. Optiva products offer unmatched speed, scale, security and savings. Our market knowledge, analytical insights and unique Customer Success Program ensure telecoms are equipped to achieve their strategic business goals. Established in 1999, Optiva Inc. is on the Toronto Stock Exchange (TSX: OPT). For more information, visit www.optiva.com.

Caution Concerning Forward-Looking Statement 
Certain statements in this document may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this document, such statements use such words as "may," "will," "expect," "continue," "believe," "plan," "intend," "would," "could," "should," "anticipate" and other similar terminology. These statements are forward-looking as they are based on our current expectations, as at March 9, 2020, about our business and the markets we operate in, and on various estimates and assumptions. Our actual results could materially differ from our expectations if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. As a result, there is no assurance that any forward-looking statements will materialize. Risks that could cause our results to differ materially from our current expectations are discussed in the Company's most recent Annual Information Form, both of which are available on SEDAR at www.sedar.com and on Optiva's website at www.optiva.com/investors/. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Optiva does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

OPTIVA Inc.
Consolidated Statements of Financial Position
(Expressed in U.S. dollars)

As at December 31, 2019 and September 30, 2018



2019


2018






Assets










Current assets:






Cash and cash equivalents

$

31,747,993

$

36,174,863


Trade accounts and other receivables


7,808,293


14,954,291


Unbilled revenue


4,468,014


12,908,847


Prepaid expenses


1,983,391


1,833,105


Income taxes receivable


4,105,144


5,173,450


Other assets


243,199


253,517


Inventories 


473,201


1,111,782


Total current assets


50,829,235


72,409,855






Restricted cash


951,291


3,507,759

Property and equipment 


–


541,861

Deferred income taxes


217,423


2,093,716

Investment tax credits


358,309


361,810

Long-term unbilled revenue 


4,676,597


1,531,062

Intangible assets


12,215,598


18,044,530

Goodwill


32,271,078


32,271,078






Total assets

$

101,519,531

$

130,761,671






Liabilities and Shareholders' Equity (Deficit)






Current liabilities:






Trade payables

$

7,350,942

$

21,568,158


Accrued liabilities


10,518,015


12,832,812


Provisions  


3,630,550


7,655,199


Income taxes payable


3,644,752


500,489


Deferred revenue 


6,363,724


13,445,746


Total current liabilities


31,507,983


56,002,404






Deferred revenue 


702,143


1,512,863

Other liabilities 


2,628,408


1,272,488

Pension and other long-term employment benefit plans


12,486,732


16,900,821

Provisions


36,611


5,662,009

Preferred shares


66,345,563


57,862,418

Series A Warrant


22,679,934


21,754,223

Deferred income taxes


753,036


120,000

Total liabilities


137,140,410


161,087,226






Shareholders' equity (deficit):






Share capital 


250,893,223


248,680,325


Standby Warrant


997,500


997,500


Contributed surplus


11,291,632


13,386,978


Deficit


(294,322,038)


(285,318,990)


Accumulated other comprehensive loss 


(4,481,196)


(8,071,368)


Total shareholders' equity (deficit) 


(35,620,879)


(30,325,555)






Total liabilities and shareholders' equity (deficit) 

$

101,519,531

$

130,761,671

OPTIVA Inc.
Consolidated Statements of Comprehensive Loss
(Expressed in U.S. dollars, except per share and share amounts)

Fifteen months ended December 31, 2019 and Twelve months ended September 30, 2018



2019


2018











Revenue:






Support and subscription

$

86,859,693

$

84,747,291


Software licenses, services and other


34,022,831


36,879,413



120,882,524


121,626,704






Cost of revenue


39,351,285


50,711,612






Gross profit


81,531,239


70,915,092






Operating expenses:






Sales and marketing


12,552,570


11,331,769


General and administrative


22,585,631


31,076,334


Research and development


35,156,577


61,515,108


Restructuring costs (recovery)


(1,715,241)


51,775,138



68,579,537


155,698,349






Income (loss) from operations


12,951,702


(84,783,257)






Foreign exchange loss


(1,475,908)


(317,823)

Finance income  


604,885


523,718

Finance costs


(14,190,135)


(2,572,010)






Loss before income taxes


(2,109,456)


(87,149,372)






Income tax expense:






Current 


9,162,706


5,391,880


Deferred 


2,478,943


50,404



11,641,649


5,442,284






Loss for the year


(13,751,105)


(92,591,656)






Other comprehensive income:






Items that will not be reclassified to net income:







Actuarial gain on pension and non-pension

post-employment benefit plans, net of income

tax expense of nil (2018 - nil)


3,590,172


390,055






Total comprehensive loss 

$

(10,160,933)

$

(92,201,601)






Loss per common share:






Basic

$

(2.60)

$

(17.69)


Diluted


(2.60)


(17.69)











Weighted average number of common shares:






Basic 


5,280,662


5,233,047


Diluted


5,280,662


5,233,047






OPTIVA Inc.
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)

Fifteen months ended December 31, 2019 and Twelve months ended September 30, 2018



2019


2018











Cash provided by (used in):










Operating activities:







Loss for the year

$

(13,751,105)

$

(92,591,656)



Adjustments for:








Depreciation of property and equipment


166,698


2,505,018




Amortization of intangible assets


5,828,932


7,487,034




Finance income


(604,885)


(523,718)




Finance costs 


14,190,135


2,572,010




Income tax expense


11,641,649


5,442,284




Unrealized foreign exchange loss


39,847


3,073,740




Share-based compensation


2,175,412


2,776,008




Pensions


(684,984)


(595,754)




Provisions 


(9,650,047)


(6,161,235)




Loss on disposal of property and equipment


307,707


421,610



Change in non-cash operating working capital


(7,094,600)


20,708,948



2,564,759


(54,885,711)



Interest paid 


(77,487)


(185,333)



Interest received 


281,776


512,379



Income taxes paid


(5,028,410)


(6,452,848)



(2,259,362)


(61,011,513)






Financing activities:







Dividends paid


(4,264,969)


(11,640,670)



(4,264,969)


(11,640,670)






Investing activities:







Sale (Purchase) of property and equipment  


67,456


(5,538)



Purchase of intangible assets


–


(9,985)



Decrease in restricted cash 


2,556,468


1,045,864



2,623,924


1,030,341






Effect of foreign exchange rate changes






on cash and cash equivalents


(526,463)


(3,095,039)






Decrease in cash and cash equivalents


(4,426,870)


(74,716,881)






Cash and cash equivalents, beginning of year 


36,174,863


110,891,744






Cash and cash equivalents, end of year  

$

31,747,993

$

36,174,863

                                                             

SOURCE Optiva Inc.

For further information: Media Inquiries: Kristin Donelson, T: 905-625-2190, [email protected]; Investor Relations: Ali Mahdavi, [email protected]

Related Links

http://optiva.com/

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Optiva Inc.

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