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DISSEMINATION IN THE UNITED
STATES./
CALGARY, AB, May 13, 2021 /CNW/ - Sylogist Ltd. (TSX:
SYZ) ("Sylogist" or the "Company"), a provider of enterprise
information management solutions, is pleased to announce its
unaudited financial results for the second quarter of the 2021
fiscal year, ended March 31,
2021.
Bill Wood, President and CEO of
Sylogist commented, "Despite the material headwinds from COVID-19
on the public service markets we serve and the unfavorable currency
exchange rate due to a weakened US dollar, we are pleased with our
performance this quarter. We focused on serving our customer
communities and the successful protection of our recurring revenue
base. We also began to make foundational changes and investments in
strategic initiatives across the company aimed at operational
excellence and accelerating future organic growth.
Revenue was impacted primarily from a weakened US dollar and
from continued purchase delays due to COVID. While a weakened US
dollar unfavorably affects our shorter term performance it also
enhances our prospects for additional US acquisitions. Our sales
and acquisition pipelines remain intact and we expect to see demand
begin to recover in the back-half of calendar 2021, possibly
sooner.
Throughout Q2, we began taking strategic steps to improve
alignment, processes and our products. For instance, we began to
strengthen and better align our development and product management
teams and are continuing to build capability and capacity where
needed.
In March, we closed on the acquisition of Municipal Accounting
Systems, Inc. ("MAS"). This was a strong value creation accelerator
as we gained valuable IP, a talented team, an expanded K-12
customer footprint and gained a dominant position in the Oklahoma
K-12 market, and a significant increase in revenue and
profitability. MAS is highly complementary, and we have identified
opportunities to offer a broader, integrated platform offering to
our customers, which expands the options related to transitioning
our legacy Bellamy and SunPac customers to a modern platform, and
it creates greater leverage and scale for our go-to-market
strategy.
Simultaneously with the acquisition of MAS, we announced the
expansion of our credit facility to $75
million CAD. This provides additional resources to pursue
other strategic and transformative acquisitions.
Lastly, at the end of Q2, Sylogist's common shares began trading
on the Toronto Stock Exchange (the "TSX"). Graduating to the TSX
from the TSX Venture Exchange was an important milestone for
the Company and provides us with greater exposure to investors and
a potential source of further growth capital.
Again, I am pleased with the Company's Q2 results in these
extraordinary times and excited about the outlook and our path
forward," concluded Mr. Wood.
Q2 2021 Summary (Comparisons are to Q2 2020, unless
otherwise noted)
- The Company acquired Municipal Accounting Systems Inc. on
March 17th, 2021; the deal
was immediately accretive and provided Sylogist with valuable IP, a
talented team, ~85% market share among Oklahoma K-12 school
districts, and further growth opportunities.
- The Company's common shares began trading on the Toronto Stock
Exchange on March 31st,
2021.
- Revenues were $8.9 million,
compared to $9.4 million, a decrease
of 6%.
- Gross profit margins of 71%, compared to 75% in Q2 2020.
- Profit before income taxes of $1.7
million, compared to $3.9
million in the second quarter last year.
- Reported earnings were $1.1
million, compared to $2.8
million in Q2 2020.
- Earnings per fully diluted common share of $0.05 per share, compared to $0.12 in Q2 2020.
- Adjusted EBITDA(1) was $4.4
million, or $0.18 per fully
diluted common share, compared to $0.24 per fully diluted common share in the
second quarter of 2020.
- Adjusted EBITDA Margin(1) was 50%, compared to
60%.
- Cash flow from operations was $4.9M compared to $6M, a decrease of 19%.
- The Company paid regular dividends to shareholders totaling
$3 million during the quarter,
compared to $2.4 million in the same
period last year, an increase of 25%.
- Adjusted Working Capital(1) was $6.9 million ($0.29
per share) compared to $45.2 million
($1.99 per share) in the same period
last year.
- Combined tax pools at the end of the second quarter 2021 were
approximately $13.5 million
(CAD).
- Given the strong and growing cash generating ability of the
Company, its Board of Directors has approved a quarterly dividend
to $0.125 per common share for
shareholders of record as at May 28,
2021 to be paid on June 9,
2021, which is treated as an eligible dividend under the
Income Tax Act (Canada).
First half of fiscal 2021 (Comparisons are to the
first half of fiscal 2020, unless otherwise noted)
- Revenues increased to $18.4
million, compared to $18.3
million.
- Recurring revenues from subscriptions and maintenance were
$14 million compared to $14.1 million for the first half of 2020.
- Gross profit margins were 72% of revenue, compared to 76% for
the first half of fiscal 2020.
- Adjusted EBITDA(1) was $9.4
million ($0.39 per share),
compared to $10.9 million
($0.46 per share).
- Adjusted EBITDA Margin (1) was 51%, compared to
59%.
- The Company paid regular dividends to shareholders totaling
$5.9 million during the first half of
fiscal 2021, compared to $4.8 million
in the same period in 2020.
- For the six months ended March 31,
2021, the Company repurchased 118,400 common shares at an
average price of $10.96 for a total
cost of $1.3 million.
About Sylogist
Sylogist is a software company that, through strategic
acquisitions, investments and operations management, provides
comprehensive, mission-critical enterprise resource planning (ERP)
and constituent relationship management (CRM) solutions, including
fund accounting, case management, grant management and payroll, to
public service organizations. Sylogist's customers include all
levels of government, non-profit organizations, non-governmental
organizations, educational institutions as well as public
compliance driven and funded companies. The 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 Toronto Stock Exchange
under the symbol SYZ. Information about Sylogist can be found
at www.sylogist.com.
Forward-looking Statements
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 Company's pipeline and anticipated demand for its products,
its acquisition pipeline, opportunities with respect to MAS, and
the TSX's ability to provide additional investor exposure and
potential growth capital. 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, including headwinds from COVID-19 and economic
turmoil, customer delays and the availability of growth prospects.
Additional information regarding some of these risks, uncertainties
and other factors may be found in the Company's Annual Information
Form for the fiscal period ended September
30, 2020 and in the management's
discussion and analysis for the three months ended
March 31, 2021, 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, the ability to expand
technology partner and customer relationships and the acceleration
of organic and inorganic growth. 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 EBITDA Margin, Adjusted EBITDA
per share and Adjusted Working Capital are non-GAAP financial
measures: Adjusted EBITDA is defined as: profit for the period
before stock-based compensation, share-based payments, foreign
exchange gains or losses, interest expense, bargain purchase price
on acquisition, income taxes, acquisition-related costs,
depreciation and amortization. Adjusted EBITDA Margin refers to
Adjusted EBITDA as a percentage of revenue. Adjusted EBITDA per
share refers to Adjusted EBITDA per basic weighted average number
of shares outstanding. 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 EBITDA Margin, Adjusted EBITDA per
share 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. For
further information regarding non-GAAP measures used by the
Company, please refer to the management's discussion and analysis
of the Company, copies of which are available on Sylogist's SEDAR
profile at www.sedar.com.
SOURCE Sylogist Ltd.