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

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/