First Quarter Summary
$3.8M of revenue for the second quarter as compared to$4.3M in the second quarter of the previous year$130K in Adjusted EBITDA profit for the second quarter as compared to$582K in the second quarter of the previous year$179K of net loss for the second quarter as compared to$1.2M of net loss in the second quarter of the previous year- Generated new subscription license revenue from our relationship with a leading US brokerage firm by delivering new technology that seamlessly supports multiple deployment options including public, private and hybrid clouds
- Delivered our new reporting and dashboarding platform to a multi-national European headquartered wealth management firm
- Entered the rapidly expanding RIA market through our eco-system partnership, driving more new customers onto our cloud service adding to our subscription license revenue in the past three months
- Building on our partnership with IBM, our products were released on IBM Cloud for Financial Services, designed to help address financial services institutions regulatory compliance, security and resiliency requirements
"New client acquisition and the shifting revenue mix to new subscription-based product revenue within our client base and our partner ecosystem is contributing towards higher recurring revenue," said
Second Quarter Financial Results | ||||||||
(Expressed in thousands of Canadian dollars) | ||||||||
(Unaudited) | ||||||||
Quarter ended | Six months ended | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Revenue | $ | $ | $ | $ | ||||
License and subscription fees | 395 | 26 | 438 | 50 | ||||
Professional services | 1,258 | 1,972 | 3,058 | 3,643 | ||||
Maintenance and support | 2,113 | 2,289 | 4,206 | 4,575 | ||||
3,766 | 4,287 | 7,702 | 8,268 | |||||
Cost of revenue | 894 | 872 | 1,957 | 2,203 | ||||
Gross profit | 2,872 | 3,415 | 5,745 | 6,065 | ||||
Operating Expenses | ||||||||
Research and development | 1,486 | 1,341 | 2,881 | 3,343 | ||||
Sales and marketing | 517 | 566 | 1,082 | 1,353 | ||||
General and administrative | 739 | 926 | 1,556 | 2,120 | ||||
2,742 | 2,833 | 5,519 | 6,816 | |||||
Adjusted EBITDA | 130 | 582 | 226 | (751) | ||||
Share-based payment expense | 17 | 58 | 54 | 129 | ||||
Depreciation and amortization | 224 | 222 | 442 | 433 | ||||
Deferred share unit expense | - | 275 | - | 275 | ||||
Restructuring costs | - | 960 | - | 960 | ||||
Loss from operations | (111) | (933) | (270) | (2,548) | ||||
Foreign exchange loss (gain) | 50 | 239 | 150 | (134) | ||||
Finance income | (6) | (19) | (9) | (43) | ||||
Finance expense | 24 | 34 | 51 | 70 | ||||
Net loss for the period | (179) | (1,187) | (462) | (2,441) |
Non-IFRS Measures
This news release includes certain measures that have not been prepared in accordance with International Financial Reporting Standards ("IFRS") such as Adjusted EBITDA and Adjusted EBITDA margin which are used to evaluate the Company's operating performance as a complement to results provided in accordance with IFRS. The Company believes that Adjusted EBITDA and Adjusted EBITDA margin are useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset depreciation and the other items listed below.
The term "Adjusted EBITDA" refers to net income (loss) before adjusting for share-based payment expense, depreciation and amortization, deferred share unit expense, restructuring costs, foreign exchange gain (loss), finance income, finance costs, and income taxes. "Adjusted EBITDA margin" refers to the percentage that Adjusted EBITDA for any period represents as a portion of total revenue for that period.
The term Adjusted EBITDA and Adjusted EBITDA margin are not measures recognized by IFRS and do not have standardized meanings prescribed by IFRS. Therefore, Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to similar measures presented by other issuers. Investors are cautioned that Adjusted EBITDA and Adjusted
EBITDA margin should not be construed as an alternative to net income (loss) as determined in accordance with IFRS.
About
Based in
NexJ Forward-looking Statement
Certain statements in this press release, including statements about the financial conditions, and results of operations and earnings, may contain words such as "may", "will", "expect", "anticipate", "aim", "estimate", "intend", "plan", "seek", "believe", "potential", "continue", "is/are likely to", "could", "should", "target", "envision", and other similar language and are considered forward-looking statements or information under applicable securities laws. These statements are based on the Company's current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which the Company operates. These statements are subject to important assumptions, risks and uncertainties that are difficult to predict, and the actual outcome may be materially different. The Company's assumptions, although considered reasonable by the Company at the date of this press release, may provide to be inaccurate and consequently the Company's actual results could differ materially from the expectations set out herein.
Actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following: (i) the future performance, financial and otherwise, of
The risks and uncertainties that may affect forward-looking statements include, but are not limited to: (i) our dependence on a limited number of customers and large project size; (ii) fluctuation in our quarterly operating results; (iii) our dependence on key personnel and our compensation structure; (iv) risks associated with managing large and complex software implementation projects; (v) uncertainties and assumptions in our sales forecasts, including the extent to which sales proposals are converted into sales; (vi) risks associated with our ability to design, develop, test, market, license and support our software products on a timely basis; (vii) market acceptance of our products and services; (viii) commercial success of products resulting from our investment in research and development; (ix) our success in expanding sales into new international markets; * competition in our industry; (xi) failure to protect our intellectual property or infringement of intellectual property rights of third parties; (xii) reliance upon a limited number of third-party software products to develop our products; (xiii) defects or disruptions in our products and services; (xiv) currency exchange rate fluctuations; (xv) lengthy sales cycles for our software; (xvi) general economic conditions; (xvii) failure to manage our growth successfully; (xviii) failure to successfully manage and integrate acquisitions; (xix) breach of our security measures and unauthorized access to data; (xx) employee retention and (xxi) litigation, including commercial, product liability, employment, class action and other litigation and claims.
For additional information with respect to risks and other factors which could occur, see the Company's most recently filed Annual Information Form for the year ended
| |||
Condensed Interim Statements of Financial Position | |||
(Expressed in thousands of Canadian dollars) | |||
(Unaudited) | |||
Assets | |||
$ | $ | ||
Current assets: | |||
Cash and cash equivalents | 6,378 | 5,426 | |
Accounts receivable | 898 | 3,546 | |
Prepaid expenses and other assets | 1,034 | 1,320 | |
Total current assets | 8,310 | 10,292 | |
Non-current assets: | |||
Property and equipment | 692 | 768 | |
Right-of-use assets | 1,170 | 1,280 | |
Goodwill | 1,753 | 1,753 | |
Investments | 248 | 255 | |
Contract costs | 70 | 51 | |
Other assets | 333 | 403 | |
Total non-current assets | 4,266 | 4,510 | |
Total assets | 12,576 | 14,802 | |
Liabilities and Shareholders' Equity | |||
Current liabilities: | |||
Accounts payable and accrued liabilities | 1,860 | 1,874 | |
Deferred revenue | 4,231 | 5,374 | |
Lease liabilities | 1,095 | 967 | |
Total current liabilities | 7,186 | 8,215 | |
Non-current liabilities: | |||
Accrued liabilities | 77 | 101 | |
Deferred revenue | - | 346 | |
Lease liabilities | 666 | 1,078 | |
Total non-current liabilities | 743 | 1,525 | |
Total liabilities | 7,929 | 9,740 | |
Shareholders' equity: | |||
Share capital | 83,471 | 83,471 | |
Share purchase loans | (3,598) | (3,598) | |
Contributed surplus | 8,718 | 8,664 | |
Accumulated other comprehensive loss | (21) | (14) | |
Deficit | (83,923) | (83,461) | |
Total shareholders' equity | 4,647 | 5,062 | |
Total liabilities and shareholders' equity | 12,576 | 14,802 |
Condensed Interim Statements of Comprehensive Loss | |||||||
(Expressed in thousands of Canadian dollars, except per share amounts | |||||||
(Unaudited) | |||||||
Three months ended | Six months ended | ||||||
2021 | 2020 | 2021 | 2020 | ||||
Revenue | $ | $ | $ | $ | |||
License and subscription fees | 395 | 26 | 438 | 50 | |||
Professional services | 1,258 | 1,972 | 3,058 | 3,643 | |||
Maintenance and support | 2,113 | 2,289 | 4,206 | 4,575 | |||
3,766 | 4,287 | 7,702 | 8,268 | ||||
Cost of revenue | 887 | 877 | 1,955 | 2,224 | |||
Gross profit | 2,879 | 3,410 | 5,747 | 6,044 | |||
Expenses: | |||||||
Research and development | 1,492 | 1,353 | 2,895 | 3,371 | |||
Sales and marketing | 518 | 568 | 1,084 | 1,358 | |||
General and administrative | 980 | 1,462 | 2,038 | 2,903 | |||
Restructuring costs | - | 960 | - | 960 | |||
2,990 | 4,343 | 6,017 | 8,592 | ||||
Loss from operations | (111) | (933) | (270) | (2,548) | |||
Foreign exchange gain (loss) | (50) | (239) | (150) | 134 | |||
Finance income | 6 | 19 | 9 | 43 | |||
Finance expense | (24) | (34) | (51) | (70) | |||
(68) | (254) | (192) | 107 | ||||
Net loss for the period | (179) | (1,187) | (462) | (2,441) | |||
Other comprehensive income (loss): | |||||||
Items that will not be reclassified to profit or loss: | |||||||
Unrealized gain (loss) on equity securities | (4) | (12) | (7) | 12 | |||
Loss for the period and comprehensive loss | (183) | (1,199) | (469) | (2,429) | |||
Loss per share | |||||||
Basic and diluted | (0.01) | (0.06) | (0.02) | (0.12) | |||
Weighted average number of common shares | |||||||
outstanding, in thousands | |||||||
Basic and diluted | 21,055 | 20,664 | 21,055 | 20,670 |
Condensed Interim Statements of Cash Flows | |||
(Expressed in thousands of Canadian dollars) | |||
(Unaudited) | |||
Six months ended | Six months ended | ||
Cash flows from (used in) operating activities: | $ | $ | |
Loss for the period | (462) | (2,441) | |
Adjustments for: | |||
Depreciation and amortization of property and equipment | 108 | 148 | |
Depreciation of right-of-use assets | 334 | 285 | |
Changes in contract costs | (19) | 61 | |
Share-based payment expense | 54 | 129 | |
Deferred share unit expense | - | 218 | |
Finance income | (9) | (43) | |
Finance expense | 51 | 70 | |
Foreign exchange loss | 81 | 31 | |
Change in non-cash operating working capital: | |||
Accounts receivable | 2,648 | 4,448 | |
Prepaid expenses and other assets | 362 | 21 | |
Accounts payable and accrued liabilities | (38) | 1,107 | |
Deferred revenue | (1,494) | (1,146) | |
Net cash flows from operating activities | 1,616 | 2,888 | |
Cash flows used in financing activities: | |||
Payment of lease liabilities | (557) | (323) | |
Interest paid | (3) | - | |
Net cash flows used in financing activities | (560) | (323) | |
Cash flows from (used in) investing activities: | |||
Purchase of property and equipment | (32) | (84) | |
Interest received | 9 | 43 | |
Net cash flows used in investing activities | (23) | (41) | |
Effects of exchange rates on cash and cash equivalents | (81) | (31) | |
Increase in cash and cash equivalents | 952 | 2,493 | |
Cash and cash equivalents, beginning of period | 5,426 | 5,123 | |
Cash and cash equivalents, end of period | 6,378 | 7,616 |
SOURCE
© Canada Newswire, source