Solium Capital Inc.
TSX : SUM

Solium Capital Inc.

August 09, 2012 13:00 ET

CORRECTION FROM SOURCE: Solium Capital Inc. Releases 2012 Second Quarter Results

CALGARY, ALBERTA--(Marketwire - Aug. 9, 2012) -

The following corrects and replaces the release sent on August 8th, 2012 at 8:46pm ET. An incorrect date was included in the table header for the Financial results for the quarter and six month period ended June 30, 2012.

Solium Capital Inc. (TSX:SUM) ("Solium" or the "Company") today announced its financial results for the second quarter and six month period ended June 30, 2012.

The Company's revenues from operations for the three and six month periods ended June 30, 2012 were consistent with those in the same periods of 2011. Revenue was $11.9 million for the second quarter of 2012 (2011: $11.4 million) and $24.6 million for the six month period ended June 30, 2012 (2011: $24.5 million). Earnings from operations increased to $1.7 million for the second quarter of 2012 (2011: $1.1 million) and to $4.6 million for the six month period ended June 30, 2012 (2011: $4.0 million).

Excluding the impact of the Computershare matter discussed below, adjusted EBITDA increased to $2.7 million in the second quarter of 2012 (2011: $2.2 million) and to $6.8 million in the six month period ended June 30, 2012 (2011: $6.2 million), and net earnings were $0.5 million in the second quarter of 2012 (2011: $0.5 million) and $2.5 million in the six month period ended June 30, 2012 (2011: $2.8 million).

Inclusive of all items, net earnings were $8.3 million in the second quarter of 2012 (2011: $0.5 million) and $10.3 million in the six month period ended June 30, 2012 (2011: $2.8 million).

The key factors affecting the results in the three and six month periods ended June 30, 2012 are:

  • Computershare - On April 3, 2012, the Company received notice from Computershare of its decision to retain a stock options and restricted stock administration business that it acquired on December 31, 2011 as part of a larger transaction. As a consequence of this decision, effective April 3, 2012, the U.S. $17.3 million amount due to Computershare as at December 31, 2011 was extinguished and ceased to be an obligation of Solium. The impact of this on the Company's second quarter income statement is a gain of $15.6 million partially offset by a charge to intangible assets and goodwill of $7.8 million.
  • Strategic initiatives - The Company incurred significant expenses during the first six months of 2012 in establishing its new operations in the UK, obtaining a brokerage license in Canada, and pursuing other potential business opportunities.
  • SRED ITC's - In the second quarter of 2012, the Company applied for investment tax credits under the Canadian and Alberta governments' scientific and experimental development ("SRED") programs. The application represented a claim for 2011 SRED expenditures. Based on the history of successful SRED claims made in previous years, the Company accrued $645,000 as a reduction to operating expenses in the second quarter of 2012 (2011: $Nil), and $1.3 million in the six months ended June 30, 2012 (2011: $Nil) relating to SRED claims.
  • CapMX Acquisition - On May 15, 2012, the Company closed the acquisition of the CapMX business of SVB Analytics, Inc. CapMX provides record keeping services for grant based incentive plans and awards to private companies and venture capital investors in the United States.

Financial results for the quarter and six month period ended June 30, 2012:

Three Months Ended June 30, Six Months Ended June 30,
2012 2011 % Change 2012 2011 % Change
Revenue $11,916,176 $11,400,255 5 % $24,568,848 $24,457,134 0.5 %
Expenses before income taxes
$10,210,099

$10,528,465

(3
%)
$20,261,694

$20,669,905

(2
%)
Adjusted EBITDA1 $2,683,364 $2,214,296 21 % $6,828,062 $6,176,471 11 %
Earnings from operations $1,659,704 $1,132,331 47 % $4,594,124 $4,033,469 14 %
Earnings before income taxes2
$9,539,363

$871,790

994
%
$12,140,440

$3,787,229

221
%
Net earnings3 $8,328,563 $546,688 1,423 % $10,297,785 $2,806,112 267 %
Net earnings per share4
Basic $0.199 $0.013 1,431 % $0.246 $0.067 258 %
Diluted $0.198 $0.013 1,423 % $0.246 $0.067 257 %
Issued and outstanding
Common shares 41,779,974 41,680,915 0.2 %
Diluted5 45,415,837 44,619,512 2 %

Notes:

  1. Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-IFRS financial measure which does not have any standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted EBITDA provides useful information to users as it reflects the net earnings prior to the effect of non-operating expenses such as finance costs, income tax, amortization, foreign exchange gain or loss, gain on extinguishment of amount due to Computershare, and intangibles and goodwill charges. Management uses Adjusted EBITDA in measuring the financial performance of the Company. Management monitors Adjusted EBITDA against budget and past results on a regular basis.

The following is a reconciliation of Adjusted EBITDA to net earnings:

Three months ended
June 30
Six months ended
June 30
2012 2011 2012 2011
Adjusted EBITDA 2,683,364 2,214,296 6,828,062 6,176,472
Foreign exchange gain 137,087 82,415 123,267 456,500
Finance costs (90,714 ) (342,956 ) (410,237 ) (702,740 )
Amortization expense (1,023,660 ) (1,081,965 ) (2,233,938 ) (2,143,003 )
Gain on extinguishment of amount due to Computershare

15,630,180


-


15,630,180


-
Intangibles and goodwill charge
(7,796,894
)
(7,796,894
)
-
Income tax expense (1,210,800 ) (325,102 ) (1,842,655 ) (981,117 )
Net earnings 8,328,563 546,688 10,297,785 2,806,112
  1. Earnings before income taxes excluding the impact of the Computershare matter was $1,706,077 in the second quarter of 2012 and $4,307,154 in the six months ended June 30, 2012.
  1. Net earnings excluding the impact of the Computershare matter was $495,277 in the second quarter of 2012 and $2,464,499 in the six months ended June 30, 2012.
  1. Diluted net earnings per share is calculated using the treasury stock method.

    Basic earnings per share excluding the impact of the Computershare matter was $0.012 for the three months ended June 30, 2012 and $0.059 for the six months ended June 30, 2012.
  1. Diluted shares as presented equals issued and outstanding common shares plus outstanding stock options and restricted share units.

HIGHLIGHTS OF FINANCIAL PERFORMANCE

  • Revenue from Canadian operations was $5.9 million in the second quarter of 2012 (2011: $5.5 million) and $12.6 million in the six month period ended June 30, 2012 (2011: $12.1 million), while revenue from U.S. operations was $6.0 million in the second quarter of 2012 (2011: $5.9 million) and $12.0 million in the six month period ended June 30, 2012 (2011: $12.4 million).
  • Adjusted EBITDA in Canada was $1.3 million in the second quarter of 2012 (2011: $1.5 million) and $3.8 million in the six month period ended June 30, 2012 (2011: $3.9 million), while adjusted EBITDA in the U.S. was $1.4 million in the second quarter of 2012 (2011: $0.8 million) and $3.1 million in the six months ended June 30, 2012 (2011: $2.2 million).
  • Excluding the impact of the Computershare matter, net earnings from Canadian operations were $0.6 million in the second quarter of 2012 (2011: $1.0 million) and $2.2 million in the six month period ended June 30, 2012 (2011: $3.1 million), while net losses from U.S. operations were $0.1 million in the second quarter of 2012 (2011: loss $0.5 million) and net earnings were $0.2 million in the six month period ended June 30, 2012 (2011: loss $0.3 million). The amortization of intangible assets is predominantly attributable to the U.S. operations.
  • Excluding the impact of the Computershare matter, net earnings per share was $0.012 in the second quarter of 2012 (2011: $0.013) and $0.059 in the six month period ended June 30, 2012 (2011: $0.067).
  • During the six month period ended June, 30, 2012, the Company had a net cash outflow of $0.7 million (2011: outflow $0.5 million). Cash generated from operations was $3.2 million (2011: $3.1 million), and net cash outflow from investing activities was $3.7 million during the six month period ended June 30, 2012 (2011: $3.1 million).
  • Working capital as at June 30, 2012 was $14.6 million (December 31, 2011: $9.6 million).

About Solium Capital Inc.

Solium Capital Inc. (TSX:SUM), a software-as-a-service company, is a leading global provider of web-based stock plan administration technology and services. Solium's software helps companies automate and manage their stock option and purchase plans, by providing unrivalled comprehensive regulatory and financial reporting capabilities. Founded in 1999, Solium has offices in Canada, the United States and the United Kingdom.

Certain statements included or incorporated by reference in this press release constitute forward-looking statements or forward-looking information under applicable securities legislation. Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", or similar words suggesting future outcomes or statements regarding an outlook. Such forward-looking statements or information are based on a number of assumptions which may prove to be incorrect. Although Solium believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements or information because Solium can give no assurance that such expectations will prove to be correct. The forward-looking statements and information are based on Solium's current expectations, estimates and projections, and are subject to a number of significant risks and uncertainties that could cause actual results to differ materially from those anticipated. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

The Management's Discussion and Analysis and the condensed consolidated interim financial statements for the three and six month periods ended June 30, 2012 referred to herein will be available on SEDAR at www.sedar.com under Solium Capital Inc., or at www.solium.com.

Contact Information

  • Solium Capital Inc.
    Mike Broadfoot
    CEO and Managing Director
    (403) 450-6026
    (877) 380-7793

    Solium Capital Inc.
    Lynn Leong
    EVP, Finance & Admin
    (403) 450-6015
    (877) 380-7793
    investorrelations@solium.com