152% Revenue Growth and 272% Adjusted EBITDA Growth for Q3
2020 versus Q3 2019
TORONTO, Nov. 24, 2020 /CNW/ -- Quisitive
Technology Solutions Inc. ("Quisitive" or the
"Company") (TSXV: QUIS), a premier Microsoft Solutions
Provider, today reported financial results for the third quarter
ended September 30, 2020.
Management Commentary
"Our performance for the third quarter was strong, especially given
the headwinds and challenges from the global pandemic,
demonstrating the resiliency of our business," said Quisitive CEO
Mike Reinhart. "Operationally, our
execution on our strategic initiatives during Q3 is reflected by
our expanded relationship with Microsoft, increased number of
partnerships with customers on the cloud solutions front, and the
continued progress towards the general availability of LedgerPay,
our cloud-based payment processing platform, in early 2021.
Additionally, as we continue to navigate these unprecedented times,
we remain focused on our M&A roadmap, looking for synergistic
businesses with the right valuation metrics that further augment
our cloud solutions offerings and technological capabilities. In
conjunction with our operations, we also remain in a strong
position financially, as we have ample cash on the balance sheet
and enough flexibility to support our working capital and growth
initiatives going forward. With the cloud solutions and fintech
markets constantly growing, we are well positioned to capitalize on
the opportunity through both organic and M&A growth."
Third Quarter 2020 Financial Results
The Company's unaudited financial statements for the quarter
ended September 30, 2020 and related
management's discussion and analysis can be found on the Company's
website and on the Company's issuer profile on SEDAR
at www.sedar.com. All figures are expressed in United States dollars unless otherwise
stated.
- Revenue for the quarter ended September
30, 2020 was $12.7 million
compared to $5.0 million for the
quarter ended September 30, 2019. The
increase in revenue was driven by the addition of Menlo revenues in
2020 as well as additional revenues from LedgerPay and strong
organic growth within the Quisitive customer and recurring revenue
base.
- Gross profit increased to $5.1
million (40% of revenue) as compared to $2.3 million (45% of revenue) for the quarter
ended September 30, 2019. The
increase in gross profit dollars was primarily due to top line
revenue growth.
- Adjusted EBITDA for the three months ended September 30, 2020 increased to $2 million (or 16% of revenue) as compared to an
Adjusted EBITDA of $0.6 million (or
11% of revenue) for the three months ended September 30, 2019. The increase in adjusted
EBITDA was primarily driven by the increase in scale and revenues
provided by the Menlo acquisition, organic growth, and high margin
revenues from LedgerPay.
- Net loss was $1.8 million or a
loss of $(0.01) per share compared
with net loss of $0.8 million or a
loss of $(0.01) per share.
- As of September 30, 2020, the
Company had $12.3 million in
cash.
Third Quarter 2020 and Recent Operational Highlights
- Joined the Microsoft Cloud Native Accelerate Program, an
initiative designed for select partners that provide cloud-native
application development services to enhance or extend their
existing practices on Azure.
- Engaged Horizontal Digital as its exclusive Microsoft Cloud
Solution Provider and strategic channel partner. Quisitive will
manage Horizontal's licensing subscriptions and cloud services for
its internal operational needs, and ultimately empower Horizontal
to optimize their Microsoft spend, Microsoft productivity, and
collaboration tools.
- Selected as Grant Thornton's
strategic application development partner to accelerate and
automate a unique and industry-differentiated platform for System
and Organization Controls reporting, by tapping into the power of
the Microsoft cloud.
- Partnered with Essilor, the world's leading ophthalmic lens
manufacturer, to rollout a virtual appointment application system
to help eye care offices safely reopen around the globe.
- Appointed Sue Darrow as Senior
Vice President, Human Resources & Culture to spearhead
Quisitive's initiative of engaging new talent and creating a
profound workplace culture.
- Recognized by Microsoft for achieving the Advanced
Specialization certification in Modernizing Web Applications. Only
a few Microsoft partners worldwide have achieved this certification
by passing a rigorous audit process.
Conference Call
Quisitive management will hold a conference call today
(November 24, 2020) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these
results.
Company CEO Mike Reinhart and CFO
Michael Murphy will host the call,
followed by a question and answer period.
Canada/U.S.: 1-800-319-4610
Toronto Toll: 1-416-915-3239
Please dial-in approximately 10 minutes beforehand and ask to
join the Quisitive conference call. If you have any difficulty
connecting with the conference call, please contact Gateway
Investor Relations at 949-574-3860.
A replay of the conference call will be available following the
call by dialing:
Canada/U.S.: 1-800-319-6413
International Toll: 1-604-638-9010
Replay Access Code: 5601
For additional information, please visit the Investor Relations
section of Quisitive's website
at: https://quisitive.com/investor-relations/.
About Quisitive
Quisitive is a premier Microsoft solutions provider that helps
enterprise organizations move, operate, and innovate in the
Microsoft cloud: Microsoft Azure, Microsoft Dynamics and Microsoft
365. Quisitive also provides proprietary Software as a Service
("SaaS") solutions such as CRG emPerform™ and Quisitive LedgerPay
that complement the Microsoft platform. Quisitive serves clients
globally with offices in Austin,
TX; Dallas, TX;
Denver, CO; Minneapolis, MN; Los
Altos, CA; Washington, DC;
Ottawa, ON; Toronto, ON and Hyderabad, India. For more information, visit
www.Quisitive.com. TSXV: QUIS.
Reconciliation of Non-GAAP Financial Measures - Adjusted
EBITDA and Adjusted EBITDA as a percentage of revenue
Financial Measures and Adjusted EBITDA
There are measures included in this news release that do not have a
standardized meaning under generally accepted accounting principles
(GAAP) and therefore may not be comparable to similarly titled
measures and metrics presented by other publicly traded companies.
The Company includes these measures because it believes certain
investors use these measures and metrics as a means of assessing
financial performance. EBITDA (earnings before interest, taxes,
depreciation and amortization is calculated as net earnings before
finance costs (net of finance income), income tax expense, and
depreciation and amortization of intangibles) is a non-GAAP
financial measure that does not have any standardized meaning
prescribed by IFRS and may not be comparable to similar measures
presented by other companies.
We prepare and release quarterly unaudited and annual audited
financial statements prepared in accordance with IFRS. We also
disclose and discuss certain non-GAAP financial information, used
to evaluate our performance, in this and other earnings releases
and investor conference calls as a complement to results provided
in accordance with IFRS. We believe that current shareholders and
potential investors in the Company use non-GAAP financial measures,
such as Adjusted EBITDA and Adjusted EBITDA as a percentage of
revenues, in making investment decisions about the Company and
measuring our operational results.
The term "Adjusted EBITDA" refers to a financial measure that we
define as earnings before certain charges that management considers
to be non-operating expenses and which consist of interest, taxes,
depreciation, amortization, stock-based compensation (for which we
include related fees and taxes), changes in fair value of
derivatives, transaction and acquisition-related expenses, and
earn-out settlement losses. Adjusted EBITDA as a percentage of
revenues divides Adjusted EBITDA for a period by the revenues for
the corresponding period and expresses the quotient as a
percentage.
Management considers these non-operating expenses to be outside
the scope of Quisitive' ongoing operations and the related expenses
are not used by management to measure operations. Accordingly,
these expenses are excluded from Adjusted EBITDA, which we
reference to both measure our operations and as a basis of
comparison of our operations from period-to-period.
Management believes that investors and financial analysts
measure our business on the same basis, and we are providing the
Adjusted EBITDA financial metric to assist in this evaluation and
to provide a higher level of transparency into how we measure our
own business. However, Adjusted EBITDA and Adjusted EBITDA as a
percentage of revenues are non-GAAP financial measures and may not
be comparable to similarly titled measures reported by other
companies. Adjusted EBITDA and Adjusted EBITDA as a percentage of
revenues should not be construed as a substitute for net income
determined in accordance with IFRS or other non-GAAP measures that
may be used by other companies, such as EBITDA. The use of Adjusted
EBITDA and Adjusted EBITDA as a percentage of revenues does have
limitations. As these acquisition-related expenses charges may
continue as we pursue our consolidation strategy, some investors
may consider these charges and expenses as a recurring part of
operations rather than expenses that are not part of
operations.
Cautionary Note Regarding Forward Looking Information
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.
Forward-Looking Statements: Some statements in this news
release contain forward-looking information. These statements
include, but are not limited to, statements with respect to
proposed activities, consolidation strategy and future
expenditures. These statements address future events and conditions
and, as such, involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
statements. Such factors include, among others the limited
history of operations, lack of profitability, availability of
financing, the need for additional financing and the timing and
amount of expenditures, information pertaining to strategy,
plans, or future financial performance, such as statements with
respect to future revenues, EBITDA, cash flows and other statements
that express management's expectations or estimates of future
performance, the anticipated timing of future cash flow and
positive EBITDA, ability to successfully execute on corporate
strategies, the failure to find economically viable acquisition
targets, funding for internally developed technology solutions,
client retention and attrition, client demands, reliance on key
personnel, economic spending in the IT industry and technological
changes in the IT industry.
These forward-looking statements are based on reasonable
assumptions and estimates of management of the Company at the time
such statements were made. Actual future results may differ
materially as forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the company to materially
differ from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such
factors, among other things, include: changes in technology,
customer markets and demand for the Company's services; the
efficacy of the Company's software and product offering; sales and
margin risk; acquisition and integration risks; dependence on
economic and market conditions including, but not limited to,
access to equity or debt capital on favourable terms if required;
changes in market dynamics including business relationships and
competition; information system risks; risks associated with the
introduction of new products; product design risk; risks related to
the Company being a holding company; environmental risks; customer
and vendor risks; credit risks; tax and insurance related risks;
risks of legislative changes; risks relating to remote operations;
key executive risk; risk of litigation risks; risks related to
contracts with third party service providers; risks related to the
enforceability of contracts; risks related to general economic,
market and business conditions, including, but not limited to, the
ongoing impact of the COVID-19 pandemic; the limited operating
history of the Company; reliance on the expertise and judgment of
senior management of the Company; risks related to proprietary
intellectual property and potential infringement by third parties;
risks relating to financing activities including leverage; risks
relating to the management of growth; increased costs associated
with the Company becoming a publicly traded company; increasing
competition in the industry; risks relating to energy costs;
reliance on key inputs, suppliers and skilled labour;
cyber-security risks; risks related to quantifying the Company's
target market; risks related to industry growth and consolidation;
fraudulent activity by employees, contractors and consultants;
conflicts of interest; risks related to the cost structures of
certain projects; risks relating to certain remedies being limited
and the difficulty of enforcement of judgments and effect service
outside of Canada; risks related
to future dispositions; sales by existing shareholders; the limited
market for securities of the Company; price volatility of the
common shares of the Company; no guarantee regarding use of
available funds; currency fluctuations; and those factors described
under the heading "Risks Factors" in the company's annual
information form dated May 15, 2020
available on SEDAR. Although the forward-looking statements
contained in this news release are based upon what management of
the company believes, or believed at the time, to be reasonable
assumptions, the company cannot assure shareholders that actual
results will be consistent with such forward-looking statements, as
there may be other factors that cause results not to be as
anticipated, estimated or intended. Accordingly, readers should not
place undue reliance on forward-looking statements and information.
There can be no assurance that forward-looking information, or the
material factors or assumptions used to develop such
forward-looking information, will prove to be accurate. The Company
does not undertake any obligations to release publicly any
revisions for updating any voluntary forward-looking statements,
except as required by applicable securities law.
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SOURCE Quisitive Technology Solutions Inc.