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CALGARY, Feb. 21, 2018 /CNW/ - Sylogist Ltd. (TSXV:SYZ) ("Sylogist" or the "Company"), a provider of enterprise information management solutions, is pleased to announce its unaudited financial results for the first quarter of the 2018 fiscal year, ended December 31, 2017.
Q1 2018 Summary (Comparisons are to Q1 2017, unless otherwise noted)
- Revenues were $8.8 million, compared to $7.8 million in the first quarter last year, an increase of 12%.
- Gross profit margins improved to 76% from 66%.
- Reported earnings were $3 million compared to $1.3 million in Q1 2017, an increase of 139%.
- Earnings per fully diluted common share increased 160% to $0.13 per share, up from $0.05 per share.
- Adjusted EBITDA(1) was $4.3 million, an increase of 56%, or $0.19 per fully diluted common share, up 58%.
- Adjusted EBITDA(1) margin was 48%, compared to 35%.
- Cash generated from operations totalled $3.4 million, up from $824 thousand in Q1 2017.
- The Company paid regular and special dividends to shareholders totalling $2.9 million during the quarter.
- Adjusted Working Capital(1) was $28.4 million an increase of 1%, or $1.26 per share, up 2%.
- Combined tax pools at the end of the first quarter 2018 were approximately $16.6 million (CDN).
- For the quarter ended December 31, 2017, the Company repurchased a total of 9,800 common shares at an average price of $10.12 for a total cost of $99 thousand.
- The Company's Board of Directors has approved a quarterly dividend of $0.08 per common share for shareholders of record as at March 1, 2018 to be paid on March 15, 2018, which is treated as an eligible dividend under the Income Tax Act (Canada).
Jim Wilson, President and CEO of the Company stated: "The first quarter was a good start to fiscal 2018 and consistent with the guidance we issued on November 21, 2017. Changes to our organizational structure and operating model in fiscal 2017 have dramatically improved efficiencies and focus, resulting in the gross profit margin for Q1 2018, improving to 76% compared to 66% in Q1 2017, while the adjusted EBITDA margin moved to 48% of revenue, significantly higher than 35% in Q1 2017. These margins are rewards for establishing an "economic moat" through significant competitive advantage and strong customer loyalty. In addition, our earnings will be positively impacted by the recently announced changes to the United States' federal statutory tax rate that has lowered the US Corporate federal tax rate from 35% to 21%.
Q1 included partial results from our late October, 2017 acquisition of K12 Enterprise and Sunpac Systems' assets, with full contributions commencing in subsequent quarters. We are encouraged by the customer and intellectual property opportunities this acquisition is creating. Sylogist is actively pursuing additional acquisition targets to further expand our public sector customer base."
Sylogist is a technology innovation company that, through strategic acquisitions, investments and operations management, provides intellectual property solutions to a wide range of Public Sector customers. We are an industry-leading publisher of mission-critical software products that satisfy the unique and sophisticated functionality requirements of Public Sector entities, including nonprofit organizations, educational institutions and government agencies, as well as public compliance driven and funded businesses. Our Company delivers highly scalable, multi-language, multi-currency software solutions, which serve the needs of an international clientele.
Full financial statements together with Management's Discussion and Analysis are available on SEDAR at www.sedar.com.
The Company's stock is traded on the TSX Venture Exchange under the symbol SYZ. Information about Sylogist can be found at http://www.sylogist.com.
Certain statements in this news release may be forward-looking statements within the meaning of applicable securities laws and regulations. These statements typically use words such as expect, believe, estimate, project, anticipate, plan, may, should, could and would, or the negative of these terms, variations thereof or similar terminology. Forward-looking information in this news release includes statements with respect to the impact to the Company's earnings from the recently announced changes to the United States' federal statutory tax rate and the Company's focus on growing its customer base and enhancing its existing technology portfolio and seeking growth opportunities in the United States' education market. By their very nature, forward-looking statements are based on assumptions and involve inherent risks and uncertainties, both general and specific in nature. It is therefore possible that the beliefs and plans and other forward-looking expectations expressed herein will not be achieved or will prove inaccurate. Although Sylogist believes that the expectations reflected in these forward-looking statements are reasonable, it provides no assurance that these expectations will prove to have been correct. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Additional information regarding some of these risks, uncertainties and other factors may be found under in the management's discussion and analysis for the quarter ended December 31, 2017 and other documents available on the Company's profile at www.sedar.com. Material assumptions and factors that could cause actual results to differ materially from such forward-looking information include Sylogist's ability to attract and retain customers and to realize on its investments. Although Sylogist believes that the material assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur. Sylogist disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
Certain information set out herein may be considered as "financial outlook" within the meaning of applicable securities laws. The purpose of this financial outlook is to provide readers with disclosure regarding Sylogist's reasonable expectations as to the anticipated results of its proposed business activities for the periods indicated. Readers are cautioned that the financial outlook may not be appropriate for other purposes.
Non-GAAP Financial Measures
(1) Adjusted EBITDA, Adjusted Earnings and Adjusted Working Capital are non-GAAP financial measures: Adjusted EBITDA is defined as: profit for the period before stock based compensation, foreign exchange gains or losses, interest expense, bargain purchase price on acquisition, income taxes, acquisition-related costs, depreciation and amortization. Adjusted Earnings is defined as profit for the period adjusted for certain non-cash expenses (income), such as amortization of intangible assets, stock based compensation, deferred income taxes as well as foreign exchange gains or losses and certain other expenses (income). Adjusted Working Capital is defined as current assets less current liabilities adjusted for deferred revenue.
This news release makes reference to certain non-GAAP measures. These measures are not recognized measures under Canadian GAAP, do not have a standardized meaning prescribed by Canadian GAAP and are therefore may not be comparable to similar measures presented by other issuers. These measures are provided as additional information to complement measures under GAAP by providing further understanding of the Company's expected results of operations from management's perspective. Accordingly, such measures should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under Canadian GAAP.
Adjusted EBITDA, Adjusted Earnings and Adjusted Working Capital are provided to investors as alternative methods for assessing the Company's operating results in a manner that is focused on the Company's ongoing operations and to provide a more consistent basis for comparison between periods. These measures should not be construed as alternatives to net profit (loss) or cash flow from operating activities determined in accordance with GAAP as an indicator of the Company's performance.
- Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release-
SOURCE Sylogist Ltd.
For further information: Jim Wilson, President and CEO or Xavier Shorter, Vice President, Finance and CFO or Andre Drouillard, Vice President, Business Development and Investor Relations, Sylogist Ltd., (403) 266-4808