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Sylogist First Quarter Fiscal 2020 Results: Executive compensation restructured; Dividend Declared.
[February 13, 2020]

Sylogist First Quarter Fiscal 2020 Results: Executive compensation restructured; Dividend Declared.


CALGARY, Feb. 13, 2020 /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 2020 fiscal year, ended December 31, 2019.

Sylogist Ltd. (CNW Group/Sylogist Ltd.)

Q1 2020 Summary (Comparisons are to Q1 2019, unless otherwise noted)

  • Core recurring revenue increased 6% to $6.9 million or 78% of total revenue.
  • Total revenues were $8.8 million, compared to $9.4 million.
  • Gross profit margin was 77%, up from 76% in the first quarter of fiscal 2019.
  • Restructured executive compensation with one-time payout, giving rise to loss before income tax of $8.6 million (loss per fully diluted common share was $0.27 per share, compared to earnings of $0.12 per share).
  • Adjusted EBITDA(1) of $5.2 million, compared to $4.5 million in the same period last year.
  • Adjusted EBITDA Margin(1) of 59%, compared to 48% in the first quarter of 2019.
  • Adjusted EBITDA per share(1) of $0.22 per share, compared to $0.20 per share in the first quarter of fiscal 2019.
  • Cash used in operating activities (before non-cash changes in working capital) totalled $6.7 million ($0.28 per share), compared to cash from operations of $4.6 million ($0.21 per share) in Q1 2019.
  • The Company paid regular dividends to shareholders totalling $2.4 million during the quarter, compared to $2.1 million in same period of fiscal 2019, an increase of 13%.
  • Adjusted Working Capital(1) was $40.8 million, or $1.71 per share, compared to $1.45 per share in Q1 2019, an increase of 18%.
  • Combined tax pools at the end of the first quarter 2020 increased by $6.9 million due to the tax deductibility of the executive bonus compensation change and now total approximately $20.7 million (CAD).
  • During the three-month period ended December 31, 2019, the Company did not repurchase any shares.
  • The Company's Board of Directors has approved a quarterly dividend of $0.10 per common share for shareholders of record as at February 28, 2020 to be paid on March 11, 2020, which is to be treated as an eligible dividend under the Income Tax Act (Canada).

Jim Wilson, President and CEO or Sylogist commented, "We continue to see recurring revenue growth and gains from our workforce efficiency initiatives as our gross profit and Adjusted EBITDA margins(1) have expanded. The Company continues to be aggressive in pursuing acquisitions that meet its acquisition thesis. We are also focused on several organic initiatives to boost recurring high-margin revenues.

This quarter also marks a transition in our executive bonus compensation agreements that are now based primarily on incremental improvements in consolidated revenue and Adjusted EBITDA(1) with the high watermark resetting every fiscal year end. To facilitate this change and for the Company to realize sigificantly enhanced Adjusted EBITDA(1) in the future, the Company paid executives a one-time payment of $12 million in Q1 2020. We believe that these new compensation agreements will be highly accretive to shareholder interests as Adjusted EBITDA(1) will continue to expand.  As a result of this change, we saw Adjusted EBITDA(1) and Adjusted EBITDA margins(1) reach record levels in the quarter".   

About Sylogist

Sylogist is a software company that, through strategic acquisitions, investments and operations management, provides comprehensive, mission-critical ERP solutions, including fund accounting, grant management and payroll, to public service organizations.  Sylogist's public service customers include local governments, nonprofit organizations, non-governmental organizations, educational institutions and government agencies, as well as public compliance driven and funded entities. 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

The Company's stock is traded on the TSX Venture Exchange under the symbol SYZ. Information about Sylogist can be found at

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 seeing efficiency gains from its workforce efficiency initiatives as its gross profit and EBITDA margins expand,  new executive compensation agreements being highly accretive to shareholder interests as Adjusted EBITDA continues to expand and the Company focusing on several organic initiatives to boost recurring high-margin revenues.  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 year ended September 30, 2019, and other documents available on the Company's profile at  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 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, 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

- 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.

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