Sylogist Ltd.

Sylogist Ltd.

January 10, 2017 08:00 ET

Sylogist Announces Fiscal 2016 Results: Revenue grows 31%, Adjusted EBITDA up 53%

CALGARY, ALBERTA--(Marketwired - Jan. 10, 2017) -


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 audited financial results for the fiscal year ended September 30, 2016.

Fiscal 2016 Highlights (Comparisons are to fiscal 2015, unless otherwise noted)

  • Revenues were $35.8 million, up 31% (26% organic, 5% currency related).
  • Adjusted EBITDA(1) was $13.6 million, an increase of 53%, or $0.58 per fully diluted share, up 63%.
  • Cash from operating activities (before non-cash changes in working capital) was $12.7 million, up 45%.
  • Adjusted Earnings(1) were $12.4 million ($0.53 per share), a 44% increase and a per share increase of 53%.
  • Cash as at September 30, 2016 totalled $28.4 million. Sylogist has no debt.
  • There are currently 22.7 million Sylogist shares outstanding, a reduction of 8% from September 30, 2015.

Jim Wilson, Chief Executive Officer of the Company, commented that: "Sylogist experienced another very good year of performance in fiscal 2016, with strong organic revenue and earnings growth. The benefits that our solutions deliver to our customers led to substantial year-over-year increases in revenue and Adjusted EBITDA, both in gross and per share terms.

We attribute much of our success in 2016 to the strength of our performance in the Public Sector non-profit and non-governmental organization markets. This success was driven by Sylogist being awarded several significant contracts with some of the world's most notable charitable organizations during 2016. These larger, multi-phased contracts translate into more recurring revenues for the Company.

Consistent with our Public Sector focus and to improve financial returns, we signed an agreement with Microsoft on August 2, 2016 which significantly lowers our Microsoft royalty rates going forward into fiscal 2017 and beyond. With this agreement, we are also able to expand the reach of our Public Sector products, providing a broad, mid-market Public Sector SaaS offering, with the brand value of Microsoft at the core. We are now investing in, and expanding our offerings in the K-12 education and local government markets internationally, with particular emphasis on the US market.

During 2016, we also made significant, foundational capital investments focused on additional infrastructure capacity to facilitate our rapid growth, including the centralization our internally hosted systems and the implementation of a new ERP/CRM system."

Other 2016 Highlights

  • Adjusted Working Capital(1) (net of deferred revenue) was $31 million or $1.36 per share as at September 30, 2016.
  • Combined tax pools at the end of the fiscal year were approximately $26 million (CDN).
  • The Company paid regular and special dividends to shareholders totaling $8.6 million or $0.365 per share in fiscal 2016.
  • For the fiscal year ended September 30, 2016 the Company repurchased a total of 1,880,600 of its common shares at an average price of $7.93 for a total cost of $14.9 million.

5 Year Performance Summary

We have made steady progress over the past 5 fiscal periods. The Company's revenue, Adjusted EBITDA and Adjusted EBITDA per share have increased at compound annual growth rates ("CAGR") of 40%, 36% and 30% respectively from September 30, 2012 to September 30, 2016. During that 5-year period, Sylogist raised $40 million through equity financings; paid $19.2 million to acquire businesses while paying a total of $26.2 million in dividends; and repurchased 3.2 million shares for $17 million (average repurchase price per common share - $5.23), leaving a current strong balance sheet with no debt and cash of $28.4 million.

In addition, during the same period, our revenue growth and Adjusted EBITDA margins have remained well ahead of our peers, while our trailing enterprise value to Adjusted EBITDA trading multiple is at the low end of multiples enjoyed by our peer group. We believe that the hallmarks of a good franchise are its long term revenue growth and sustainable, high Adjusted EBITDA margins. Our revenue growth demonstrates our business can be scaled through increasing demand for our products and services, while high Adjusted EBITDA margins confirm the Company is a value setter over our competition.

The following table displays our performance over the last five annual fiscal periods ended September 30, 2016.

2012 2013 2014 2015 2016
(000's of Canadian Dollars, except percentages)
Revenue 9,267 11,645 17,523 27,350 35,848
YoY Revenue Growth -6% 26% 50% 56% 31%
Adjusted EBITDA 3,960 4,732 5,348 8,879 13,574
Adjusted EBITDA Margin 43% 41% 31% 32% 38%
Adjusted EBITDA per Share 0.20 0.24 0.25 0.36 0.58

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. We are an industry-leading publisher of mission-critical software products that satisfy the unique and sophisticated functionality requirements of public sector entities, nonprofit organizations, educational institutions, and government agencies. Our Company delivers highly scalable, multi-language, multi-currency software solutions, which serve the needs of an international clientele.

(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, foreign exchange gains or losses, interest expense, bargain purchase price on acquisition, income taxes, acquisition-related costs, depreciation and amortization. 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 as well as foreign exchange gains or losses and certain other expenses (income). Adjusted Working Capital is defined as current assets less current liabilities adjusted for deferred revenue.

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

The Company's stock is traded on the TSX Venture Exchange under the symbol SYZ. Information about Sylogist can be found at

Forward-looking Statements

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. 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. Forward-looking information in this news release includes statements with respect to Sylogist's key organizational changes and investments, its key relationships and its products potentially reaching broader markets. Material assumptions and factors that could cause actual results to differ materially from such forward-looking information include Sylogist's ability to attract and retain customers and to 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.

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.

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

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

    Xavier Shorter
    Vice President, Finance and CFO
    (403) 266-4808