Sylogist Ltd.
TSX VENTURE : SYZ

Sylogist Ltd.

February 11, 2016 08:00 ET

Sylogist Announces First Quarter Fiscal 2016 Results: Revenue Grows 37% and Adjusted EBITDA Increases 35%; Dividend Declared

CALGARY, ALBERTA--(Marketwired - Feb. 11, 2016) -

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Sylogist Ltd. (TSX VENTURE:SYZ) ("Sylogist" or the "Company"), a provider of enterprise information management solutions to public and private sector customers, is pleased to announce its unaudited financial results for the first quarter of the 2016 fiscal year, ended December 31, 2015.

In Q1 of fiscal 2016:

  • Revenues increased 37% (26% organic, 11% currency related) to $8.4 million from $6.1 million in fiscal 2015. Strong revenue growth was driven by software license sales (up 131%), recurring subscription/maintenance (up 14%), professional services (up 61%), and product revenue (up 129%).
  • Adjusted EBITDA(1) increased 35% year over year to $3.2 million from $2.4 million, or $0.13 per fully diluted share versus $0.09 in the previous year, a 41% increase
  • Cash from operating activities (before non-cash changes in working capital) was $2.9 million compared to $2.1 million in the first quarter of fiscal 2015.
  • Adjusted Earnings(1) was $2.6 million ($0.11 per share) compared with $2.2 million ($0.09 per share) in the first quarter of fiscal 2015, an increase of 18%. Reported earnings for the first quarter of fiscal 2016 was $1.5 million ($0.06 per share) compared to a loss of $0.2 million (loss per share of $0.01).
  • Cash as at December 31, 2015 totalled $32.5 million. Sylogist has no debt.
  • Adjusted Working Capital(1) (net of deferred revenue) was $33.2 million or $1.40 per share as at December 31, 2015
  • Combined tax pools at the end of the first quarter of fiscal 2016 stood at approximately $34.1 million (CDN).
  • The Company paid special and regular dividends to shareholders totaling $2.4 million and $1.6 million, respectively, during the first quarter of fiscal 2016.
  • During Q1 2016, the Company repurchased 972,800 of its common shares at an average price of $6.90 for a total cost of $6.7 million.
  • The Company's Trailing Twelve Months Revenue and Adjusted EBITDA for the period ended December 31, 2015 were $29.6 million and $10.3 million, respectively.
  • The Company's Board of Directors has approved an eligible dividend of $0.065 per common share for shareholders of record as at February 26, 2016 to be paid on March 15, 2016.

"The results of the first quarter of 2016 reflect a continuation of the growth Sylogist has had over the past several years. During the first quarter of 2016, all our business units experienced strong growth in revenues and Adjusted EBITDA. The majority of these increases was due to organic growth. The overall increases were also aided by the weakening Canadian dollar. We had a very strong quarter in terms of licenses sales, with several new agreements being signed in our public sector business, as well as our NGO business expanding with larger customers. License sales are a good indicator of future recurring revenue growth. In Q1 2016, the Company's healthy margins were maintained despite a change in fiscal 2016 to record bonuses on a quarterly basis as opposed to recording them in their entirety in the fourth quarter, as was previously done.

With a strong balance sheet and increased cash flow from operations, we continue to seek out appropriate acquisitions and strategic relationships that will grow our revenue and cash flow. We plan to explore more opportunities in the public sector space in the large US market.

Sylogist continued its share repurchase program as the Company's shares continued to trade at a fraction of our market peers. There is good value in buying our own stock. Since launching our normal course issuer bid in July 2015, we have repurchased 1,407,500 shares at an average price of $6.94. Reducing the number of shares outstanding through our issuer bid purchases to date will result in increasing our per share growth by 6%. We intend to continue to purchase our shares for as long as they remain an attractive value compared with other opportunities" stated Jim Wilson, Chairman, President and CEO.

About Sylogist

Sylogist is a technology innovation company which, through strategic acquisitions, investments and operations management, provides intellectual property solutions to a wide range of public and private sector customers.

(1) Adjusted EBITDA, Adjusted Earnings and Adjusted Working Capital are non-GAAP financial measures: Adjusted EBITDA is defined as: profit for the period before stock based compensation, interest expense, bargain purchase price on acquisition, income taxes, acquisition-related costs, depreciation and amortization. Adjusted Working Capital is defined as current assets less current liabilities adjusted for deferred revenue. Adjusted Earnings is defined as Profit for the period adjusted for certain non-cash expenses (income), such as amortization of intangible assets, stock based compensation, deferred income taxes and certain other expenses (income).

Full financial statements together with Management's Discussion and Analysis are available on SEDAR at www.sedar.com.

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.

Forward-looking Statements

This news release contains forward-looking information which is not comprised of historical facts. These statements typically use words such as prospects, believe, estimate, forecast, project, expect, anticipate, plan, may, should, could and would, or the negative of these terms, variations thereof or similar terminology. 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 forecasts, projections and other forward-looking statements 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. Forward-looking information in this news release includes statements with respect to Sylogist's key investments, its products potentially reaching broader markets, and acquisitions giving the Company greater market presence and opportunities. Material assumptions and factors that could cause actual results to differ materially from such forward-looking information includes Sylogist's ability to integrate acquisitions and realize operating efficiencies, and its ability to attract customers and 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.

Neither the 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.

Contact Information

  • Sylogist Ltd.
    Jim Wilson
    President and CEO
    (403) 266-4808

    Sylogist Ltd.
    Brian Grassby
    Vice President, Finance and CFO
    (403) 266-4808
    www.sylogist.com