ALMONTE, Ontario, May 13, 2019 (GLOBE NEWSWIRE) -- 3 Sixty Risk Solutions Ltd. (“3 Sixty” or the “Company”) (CSE:SAFE) (SAYFF) (62P2.F) a leader in the risk management and security services sector of the burgeoning cannabis industry, today reported its unaudited financial results for the three month period ended March 31, 2019. The consolidated financial statements and management’s discussion and analysis for the period will be filed contemporaneously on SEDAR and available on the Company's website at www.3sixtysecure.com. Unless otherwise indicated, all references herein to dollars or "$" are to Canadian dollars.
Key Q1 2019 Financial Highlights
- Revenue of $3.4 million, an 877% increase (March 31, 2018 - $352 thousand) over Q1 2018 and a 47% increase (December 31, 2018 – $2.3 million) over Q4 2018;1
- Expenses over the same period increased by 1,798% ($8.3 million and $0.4 million, respectively);
- Increased the number of clients serviced across Canada and developed brand recognition for the Company's services;
- Net and comprehensive loss increased by $4.9 million (March 31, 2018 - $83 thousand) as the business scaled and the Company added human capital resources and incurred expenses in connection with the RTO;
- Adjusted EBITDA2 decreased by $1.7 million as compared to March 31, 2018. The decrease in EBITDA was primarily due to the Company’s investment in human capital and its domestic and international initiatives. In addition, increased operating and overhead expenses such as marketing, advertising, travel and professional fees were incurred in connection with the RTO; and
- Successfully closed on a private placement completed concurrently with the RTO for gross proceeds of $17.5 million.
Company CEO and Founder Thomas Gerstenecker noted: "We are pleased with the strong start to 2019 in our consolidated business. The impact of cannabis inventory shortages have continued to impact our business in the first part of Q1 2019. In the last part of the quarter and into Q2, we have observed a significant ramp up in cannabis inventory levels which is having a positive impact on our business and has been reflected in the results from our customers. We continue to focus on converting legacy David Hyde and Associates consulting customers to 3 Sixty customers and look to incorporate the new clients that we have taken on as part of the INKAS acquisition which closed on April 2, 2019. Our strong balance sheet provides us with a solid foundation for continued growth."
1 In each case after giving effect to the reverse takeover transaction ("RTO") with Petro Vista Energy Corp. announced in January 2019, subsequent to which the majority of the Company's revenue was earned.
2 See Non-IFRS measures later in this press release.
First Quarter Financial Results Summary
|(expressed in Canadian dollars)||March 31, 2019||March 31, 2018|
|Wages and benefits||3,008,602||187,267|
|Office and administrative||500,943||81,566|
|Bad debt expense||89,561||-|
|Freight and Storage||307,885||-|
|Net loss and comprehensive loss||(4,825,206||)||(83,072||)|
Adjusted EBITDA is not a recognized performance measure under IFRS, does not have a standardized meaning and therefore may not be comparable to similar measures presented by other issuers. Adjusted EBITDA is included as a supplemental disclosure because management believes that such measurement provides a better assessment of the Company’s operations on a continuing basis by eliminating certain non-cash charges and charges or gains that are nonrecurring. Adjusted EBITDA is defined as net loss excluding interest, taxes, depreciation and amortization, and share-based compensation and listing expense. Adjusted EBITDA has limitations as an analytical tool as it does not include depreciation and amortization expense, interest income and expense, taxes, share-based compensation and transaction fees. Because of these limitations, Adjusted EBITDA should not be considered as the sole measure of the Company’s performance and should not be considered in isolation from, or as a substitute for, analysis of the Company’s results as reported under IFRS. The most directly comparable measure to Adjusted EBITDA calculated in accordance with IFRS is operating income (loss). The above is a reconciliation of the Company’s operating loss to Adjusted EBITDA.
The Company will host a conference call on Wednesday, May 15, 2019 at 1:00 p.m. CST (2:00 p.m. EST) to discuss and answer investor questions regarding first quarter results and outlook. Management invites you to listen to the conference call by using the dial-in number 1-800-954-0601.
About 3 Sixty Risk Solutions Ltd.
3 Sixty Risk Solutions Ltd., operating through its wholly-owned subsidiary, 3 Sixty Secure Corp., is Canada's leading security service provider to the cannabis sector, transporting millions of dollars of product every month. 3 Sixty now provides enhanced cash management, cannabis security consulting, guarding and secure transport security services to more than 600 customers and more than 100 cannabis licensed producers, including some of the world's largest, such as License Holders owned by Canopy Growth Corporation. 3 Sixty employs over 600 staff, operates a fleet of over 150 vehicles and is one of the 3rd largest cash management service providers in Canada. Find out more at www.3sixtysecure.com and follow us on Twitter, Instagram or Facebook.
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3 Sixty Secure Corp.
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, expected annualized revenue numbers for certain key operating agreements, operational and strategic benefits related to acquisitions; expectations for brand recognition and similar statements related to the business and operations of 3 Sixty. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors and assumptions include, but are not limited to general business, economic, competitive, political and social uncertainties. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release.
Forward-looking statements are not a guarantee of future performance and are subject to and involve a number of known and unknown risks and uncertainties, many of which are beyond the control of 3 Sixty, which may cause 3 Sixty's actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in 3 Sixty's Management's Discussion and Analysis for the three month period ended March 31, 2019 and the Company's CSE Listing Statement, each of which is available on www.sedar.com. Any forward-looking statements are made as of the date hereof and, except as required by law, 3 Sixty assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.
This news release also contains future-oriented financial information and financial outlook information (collectively, "FOFI") about 3 Sixty's prospective results of operations including, without limitation, cash flow and various components thereof, annualized revenue and other metrics, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth above and in addition are grounded on the assumption of the continued performance of the Company's long-term customers contracts and no early termination of same. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on FOFI. 3 Sixty's actual results, performance or achievement could differ materially from those expressed in, or implied by, these FOFI, or if any of them do so, what benefits 3 Sixty will derive therefrom. The FOFI do not purport to present the Company's financial condition in accordance with IFRS, and there can be no assurance that the assumptions made in preparing the FOFI will prove accurate. 3 Sixty has included the FOFI in order to provide readers with a more complete perspective on 3 Sixty's future operations and such information may not be appropriate for other purposes. 3 Sixty disclaims any intention or obligation to update or revise any FOFI statements, whether as a result of new information, future events or otherwise, except as required by law. The inclusion of the FOFI in the earnings disclosure should not be regarded as an indication that 3 Sixty considers the FOFI to be a reliable prediction of future events, and the FOFI should not be relied upon as such.
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.