TORONTO, Aug. 26, 2020 /CNW/ -- Quisitive
Technology Solutions Inc. ("Quisitive" or the
"Corporation") (TSXV: QUIS), a premier Microsoft solutions
provider, has achieved quarterly revenue of $13.1 million or 222% year-over-year growth while
driving adjusted EBITDA of $2.8
million or 21% of revenue for the second quarter ended
June 30, 2020.
"We experienced tremendous growth in Q2, which was fueled by the
momentum behind our Q1 acquisition of Menlo Technologies, organic
growth in our cloud solutions business, and the launch of our
payments intelligence solution, LedgerPay," said Mike Reinhart, Chief Executive Officer of
Quisitive. "In Q2, we also achieved advanced specialization with
Microsoft for the modernization of web applications in Azure. This
recognition has led to increased visibility within Microsoft's
ecosystem and grown our enterprise customer engagements, helping
them further leverage the cloud and compete with innovative digital
solutions in these unprecedented times."
FY2020 Q2 Financial Results:
The Corporation's unaudited financial statements for the
quarter ended June 30, 2020 and
related management's discussion and analysis can be found on the
Corporation's website and on the Corporation'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 June 30,
2020 was $13.1 million versus
$4.1 million for the quarter ended
June 30, 2019.
- Gross profit for the quarter ended June
30, 2020 was $5.6 million as
compared to $1.7 million for the
quarter ended June 30, 2019.
- Adjusted EBITDA for the quarter ended June 30, 2020 was $2.8
million or 21% of revenue as compared to an Adjusted EBITDA
of $0.3 million or 6% of revenue for
the three months ended June 30,
2019.
- Net loss for the quarter ended June 30,
2020 was $5.8 million or a
loss of $0.05 per share. Included in
the net loss was:
-
- Fair value of derivative liability loss of $5.3 million related to the revaluation of
convertible debt issued in connection with the acquisition of
Menlo.
- Amortization expense of $1.0
million.
- Stock-based compensation of $180,000.
- Depreciation expense of $190,000.
FY2020 Q2 Business Highlights:
"I deeply appreciate the dedication shown to our customers by
the Quisitive leadership team and employees," added Reinhart. "They
have continued to remain focused on helping our clients
successfully navigate this challenging time. The commitment across
the entire organization has enabled us to make a tremendous impact
for our customers in Q2 and produce exceptional financial results
as we all manage the impact of the pandemic. With a strong cash
position, a robust pipeline, and a solid start to Q3, we are well
positioned to continue executing against our multi-pronged growth
strategy that involves supplementing our core cloud-based business
with strategic M&A and partnership opportunities."
- Completed a bought deal financing raising gross proceeds of
C$16 million to enable growth through
future acquisitions, investments in sales initiatives, marketing of
intellectual property offerings, and other general corporate
purposes.
- The Company continues the market advancement of the LedgerPay
solution platform and excited to recognize LedgerPay's revenue
contribution in the quarter.
- Recognized by Microsoft for achieving the Advanced
Specialization certification in Modernizing Web Applications. Only
19 Microsoft partners worldwide have achieved this certification by
passing a rigorous audit process.
- Won and delivered a project with Inform Diagnostics, a
subspecialty anatomic pathology provider, to build a mobile
application to track case status for COVID-19 testing and
anatomical pathology specimens.
- Won and delivered an Azure Data and Analytics project for
Massanutten Resorts, resulting in a published case study
highlighting the success of the project.
- The Corporation won their first large Microsoft Azure migration
in the State and Local Government sector.
- As a result of a proof-of-concept executed in 2019, won the
follow-on project of the development of a consumer application that
analyzes a golfer's putting stroke for a major golf equipment
manufacturer.
- Chosen to implement an integrated Dynamics CE and Dynamics
Business Central Platform for a large Crown corporation.
Conference Call
Quisitive's executive management team will host a conference
call to discuss the Corporation's financial results at 8:30 a.m. Eastern time on Thursday, August 27,
2020.
To access the conference call by phone, please dial the
following numbers:
Canada/United States: 1-800-319-4610
Toronto Toll: 1-416-915-3239
Please call the conference dial-in approximately 10 minutes
beforehand and ask to join the Quisitive Technology Solutions
earnings call. A replay of the conference call will be available
following the call
at https://quisitive.com/investor-relations/.
Corporate Matters
The Corporation has issued 12,071,428 common shares pursuant to
the exercise of common share purchase warrants at a price of
C$0.35 per share, which were
originally issued as partial consideration for the acquisition of
Corporate Renaissance Group Inc. ("CRG"), and paid $1.8 million to retire the purchase price note
due to a related party of $4.8
million. In addition, and as part of the settlement, the
remaining 7,428,572 common share warrants that were issued in
connection with the acquisition of CRG were forfeited by the former
vendors of CRG. The Corporation also paid US$0.6 million to retire the working capital note
from a related party.
"We believe that forfeiture of 7.4 million in potential warrant
dilution along with retirement of over $5
million in debt using this combination of common shares and
cash minimizes dilution while improving our balance sheet and
overall liquidity position," said Michael
Murphy, Chief Financial Officer of Quisitive.
"We are excited to exercise our warrants as we continue to have
strong belief in the Quisitive strategy and compelling future
growth opportunity," said Vijay Jog, President of Quisitive's
Business Applications team, former owner of CRG.
The TSX Venture Exchange and the Corporation's board of
directors have approved an increase to the number of awards
available for issuance or grant under the Corporation's Stock and
Incentive Plan that exercisable into common shares from 8,483,101
to 18,063,338, representing, at the date hereof, 10% of current
issued and the outstanding common shares of the Corporation.
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 our Corporation use non-GAAP financial
measures, such as Adjusted EBITDA and Adjusted EBITDA as a
percentage of revenues, in making investment decisions about our
Corporation 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, acquisition-related expenses and listing expense.
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 consolidation
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 Corporation 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 Corporation's services; the
efficacy of the Corporation'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 Corporation 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 Corporation; reliance on the
expertise and judgment of senior management of the Corporation;
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 Corporation 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 Corporation'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 Corporation; price volatility of the common shares of the
Corporation; 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 Corporation does not
undertake any obligations to release publicly any revisions for
updating any voluntary forward-looking statements, except as
required by applicable securities law.
SOURCE Quisitive Technology Solutions Inc.