Sylogist Q3 Fiscal 2020 Results: Adjusted EBITDA increases 27% to record level as Revenue in the quarter rises; Increased Dividend Declared
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CALGARY, AB, July 30, 2020 /CNW/ - Sylogist Ltd. (TSXV: SYZ) ("Sylogist" or the "Company"), a leading provider of cloud based ERP and CRM software solutions to the public sector, is pleased to announce its unaudited financial results for the third quarter of the 2020 fiscal year, ended June 30, 2020.
Q3 2020 Summary (Comparisons are to Q3 2019, unless otherwise noted)
First nine months of fiscal 2020 (Comparisons are to the first nine months of fiscal 2019, unless otherwise noted)
Jim Wilson, President and Chief Executive Officer of Sylogist commented, "We continue to see solid growth in our recurring revenue, while we drive historic levels of profitability and cash flows. Our Adjusted EBITDA margin was 57%, up substantially from 46%, resulting from our continued focus on operating efficiencies. We are also seeing increased professional services revenues as we start integrating our recent acquisition completed during the third quarter. The InfoStrat acquisition broadens our ERP platform to include CRM capabilities and expands our market to include state level governments. We did see an estimated 10% reduction to our quarterly revenue and Adjusted EBITDA targets as customer organizational demands due to the pandemic response placed heavy loads on some of our not-for-profit and NGO clients. These clients have temporarily postponed some of their projects and new license purchases until equilibrium in the COVID response in achieved.
We successfully launched our NaviPayroll product on Microsoft's AppSource in Q3 2020. This broadens our base of Microsoft customers and provides opportunities for organic growth. During fiscal 2020 we have progressed on a major foundational upgrade to our technology that will reduce support costs and facilitate data integration with point applications. This upgrade has broadened our opportunities in targeting acquisitions that will add value to our platform.
In addition, subsequent to the quarter end, the government of Alberta reduced the provincial corporate tax rate by 2% effective July 1, 2020. On July 16, the Company signed a commitment letter with a Canadian chartered bank for a $40 million credit facility at prime interest rates, primarily targeted as capital for acquisitions. The credit facility combined with our current cash position ($42.5 Million) and our strong cash flow, provides ample capital at very conservative leverage and cost to rapidly grow the business.
Given the Company's strong performance and opportunities for further growth, the Board of Directors has approved an increased eligible quarterly dividend of 12.5 cents per share," concluded Mr. Wilson.
Sylogist is a software company that, through strategic acquisitions, investments and operations management, provides comprehensive, mission-critical ERP and CRM solutions, including fund accounting, case management, grant management and payroll, to public service organizations. Sylogist's public service customers include all levels of government, nonprofit organizations, non-governmental organizations, educational institutions as well as public compliance driven and funded companies. 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.
To access the Company's investor presentations, including the most current results through June 30, 2020, please visit www.sylogist.com/investors.
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 Company's strong performance and opportunities for growth, the Company's credit facility, combined with its current cash position and our strong cash flow, providing ample capital at very conservative leverage and cost to rapidly grow the business, the InfoStrat acquisition broadening the Company's ERP platform and expanding its market to include state level governments and certain clients having temporarily postponed some projects and new license purchases until equilibrium in the COVID response in achieved. 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 period ended June 30, 2020, 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 continue generating cash flow, the Company's ability to expand into new markets and the Company continuing to experience only minor impacts from recent events. 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 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 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 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.
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