Not for distribution to U.S. news wire services or for dissemination in the United States
TORONTO, Aug. 26, 2020 (GLOBE NEWSWIRE) -- Avante Logixx Inc. (TSX.V: XX) (OTC: ALXXF) (“Avante” or the “Company”) is pleased to announce its results for the three-month period ended June 30, 2020 (all amounts in thousands of Canadian dollars, unless otherwise indicated).
RESULTS FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2020
Three Months Ended
$ in thousands, unless otherwise noted
Gross profit (1)
Gross profit margin (1)
Direct Operating Expenses (1)
Adjusted EBITDA (1)
Net income (loss) attributable to Avante shareholders
Comprehensive income (loss) attributed to Avante shareholders
Basic and fully diluted income per share
Basic and fully diluted Adjusted EBITDA per share
“During our first quarter ended June 30, 2020, we continued to execute on our strategy and strengthen Avante through organic growth and integration activities,” said Craig Campbell, CEO and Director of Avante. “On a sequential basis compared to Q4 of our prior fiscal year, this quarter’s revenue was higher, gross profit margin percentages were stronger, and we delivered lower direct operating expenses. These factors combined to increase Adjusted EBITDA1 from negative $458 in Q4 of last year to positive $756 during this year’s Q1 and I am proud of our teams for delivering this outcome during the challenges created by COVID-19.”
The Company also benefited from strong and growing recurring monthly revenue (“RMR”) and contractual revenue streams, representing 80.4% of Q1 revenue versus 64.8% during the comparable period last year.
“This quarter we benefited from continued efforts to leverage the infrastructure and customer base acquired with the ASAP acquisition last December, leading to sequential quarterly revenue growth of 5.7%,” said Steve Rotz, CFO. “With the completion of the sale of our Citywide ownership, expected to occur on or before September 30, 2020, we will have greater focus on our two core divisions pursuing organic opportunities to win new customers, broaden services with existing customers, simplify our operations, upgrade and consolidate technologies and further reduce costs, leading to our expectation of improving fundamentals in future quarters. We believe in our strategy, our businesses, the security industry and our team’s ability to deliver on these goals.”
FIRST QUARTER FISCAL 2021 HIGHLIGHTS
Generated record quarterly revenues of $19.4 million for the three-months ended June 30, 2020, representing sequential growth of 5.7% and 68.7% YoY growth.
Revenue2 by segment during the first quarter was as follows:
For the 3 Months Ended
June 30, 2020
% of Total
Generated gross profit of $4,594 during the three-months ended June 30, 2020, which represented 30.1% sequential growth and 38.4% YoY growth.
Direct Operating Expenses declined to 19.5% of revenue during Q1 2021 from 21.7% in Q4 2020 and 28.4% in Fiscal 2020’s first quarter.
Generated Adjusted EBITDA during Q1 2021 of $756, or 3.9% of revenues, and a sequential improvement of $1,214 and a YoY improvement of $641.
Q1 Fiscal 2021 Guidance Comparison
Actual financial results compared to the guidance the Company provided last month with respect to financial results of the Company’s first quarter ending June 30, 2020 were as follows:
Q1 Fiscal 2021 Guidance versus Actual
July 29, 2020 Guidance
Range of $19 to $20 million
$19.4; at midpoint of the range.
Gross Profit Margin %
Range of 21% to 24%
23.6%; at high end of the range.
Direct Operating Expenses
Less than Q4
Lower by 4.9%.
“While we are not in a position to provide forward guidance in respect of future quarters, management reiterates its confidence in the momentum of the business notwithstanding these challenging economic times arising from the COVID-19 pandemic,” said Craig Campbell.
On August 10, 2020, the Company announced it had entered into a binding agreement to sell the Company’s ownership interest in City Wide on or before September 30, 2020. City Wide represented 6.3% of the Company’s first quarter revenue and the sale will allow the Company to focus on its two core divisions. The sale price for the Company’s 70% interest is expected to be $2,341,500, of which $1,800,000 will be paid on closing, $450,000 represents an interest-bearing vendor take back note payable over five years from the date of closing and $91,500 has already been received.
“After completing four acquisitions during the past two years, focusing intensely on organic growth activities, and selling our 70% interest in City Wide as of September 30, 2020, we now have two excellent platforms for us to focus on. We also have the right teams in place to fully realize our identified strategy,” added Craig Campbell.
Annual General Meeting
The Company would like to remind shareholders that the Company’s Annual General Meeting (“AGM”) will be held on September 17, 2020 at 10:30AM. The AGM will only be held virtually and shareholders will be able to access the meeting via the following link http://web.lumiagm.com/200885806
Avante will be hosting a conference call to discuss the above financial results on Thursday, August 27, 2020, at 8:30 AM EDT.
Dial in details are as follows:
Local: (+1) 416-764-8658
Toll Free: (+1) 888-886-7786
Conference ID: 46643620
Playback details below, available until September 27, 2020:
Local: (+1) 416-764-8692
Toll Free: (+1) 877-674-7070
Playback Pin: 643620 #
This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities described herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This news release does not constitute an offer of securities for sale in the United States. The securities described herein have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent registration under U.S. federal and state securities laws or an applicable exemption from such U.S. registration requirements.
About Avante Logixx Inc.
Avante Logixx Inc. (TSXV: XX) is a Toronto based provider of high-end security services. We acquire, manage and build industry leading businesses which provide specialized, mission-critical solutions that address the needs of our customers. Our businesses continuously develop innovative solutions that enable our customers to achieve their objectives. With an experienced team and a proven track record of solid growth, we are taking steps to establish a broad portfolio of security businesses to provide our customers and shareholders with exceptional returns. Please visit our website at www.avantelogixx.com and consider joining our investor email list.
Avante Logixx Inc.
All statements in this press release, other than statements of historical fact, may constitute “forward looking information” with respect to Avante within the meaning of applicable securities laws. Forward-looking information is often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “planned”, “expect”, “project”, “predict”, “potential”, “targeting”, “intends”, “believe”, “potential”, and similar expressions, or describes a “goal”, or a variation of such words and phrases or state that certain actions, events or results “may”, “should”, “could”, “would”, “might” or “will” be taken, occur or be achieved. This forward-looking information includes statements with respect to, among other things, the intention to create a platform capable of supporting a business with significantly greater scale, Avante’s strategic plan, Avante’s intentions to engage in mergers and acquisitions in the near term, Avante’s intentions to identify, acquire and integrate suitable targets for mergers and acquisitions, the ability to achieve operational efficiencies and provide a better overall customer experience, Avante’s run- rate, opportunities to grow Avante’s revenue and Adjusted EBITDA profile, investments in corporate infrastructure, Avante’s ability to execute and integrate larger acquisitions, and the expected trajectory of corporate costs as a percentage of revenue. Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied by the forward looking information, including, without limitation, the ability to identify, acquire and integrate suitable targets for mergers and acquisitions, the ability to control corporate costs, and the list of risk factors identified in Avante’s Management Discussion & Analysis (MD&A), Annual Information Form (AIF) and other continuous disclosure, which list is not exhaustive of the factors that may affect any of Avante’s forward-looking information. In connection with the forward-looking statements contained in this and subsequent press releases, Avante has made certain assumptions about its business and the industry in which it operates and has also assumed that no significant events occur outside of Avante’s normal course of business. Although management believes that the assumptions inherent in the forward-looking statements are reasonable as of the date the statements are made, forward-looking statements are not guarantees of future performance and, accordingly, undue reliance should not be put on such statements due to the inherent uncertainty therein. Avante’s forward-looking information is based on the beliefs, expectations and opinions of management on the date the statements are made, and Avante does not assume any obligation to update forward-looking information, whether as a result of new information, future events or otherwise, other than as required by applicable law. For the reasons set forth above, readers should not place undue reliance on forward-looking information.
Non-IFRS Financial Measures
This press release includes certain measures which have not been prepared in accordance with IFRS such as EBITDA, Adjusted EBITDA, Gross Profit and Direct Operating Expenses. These non-IFRS measures are not recognized under IFRS and, accordingly, users are cautioned that these measures should not be construed as alternatives to net income determined in accordance with IFRS. The non-IFRS measures presented are unlikely to be comparable to similar measures presented by other issuers.
References to EBITDA are to net income before interest, taxes, depreciation and amortization. References to Adjusted EBITDA are to net income before interest, taxes, depreciation, amortization of intangibles & capitalized commissions, share-based payments, acquisition, integration and / or reorganization costs, deferred financing costs, loss (gain) in fair value of derivative liability, expensing of CWL fair value adjustment per IFRS less non-controlling interest’s share. References to Direct Operating Expenses are net of interest expense, accretion interest expense, depreciation, amortization and share based payments. EBITDA, Adjusted EBITDA, Gross Profit and Direct Operating Expenses are not earnings measures recognized by International Financial Reporting Standards (“IFRS”) and do not have a standardized meaning prescribed by IFRS. Management believes that Adjusted EBITDA is an appropriate measure in evaluating Avante’s performance. Readers are cautioned that neither EBITDA nor Adjusted EBITDA should be construed as an alternative to net income (as determined under IFRS), as an indicator of financial performance or to cash flow from operating activities (as determined under IFRS) or as a measure of liquidity and cash flow. Avante’s method of calculating Adjusted EBITDA may differ from methods used by other issuers and, accordingly, Avante’s Adjusted EBITDA may not be comparable to similar measures used by other issuers.
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.
1Adjusted EBITDA, EBITDA, Gross Profit, Gross Profit Margin and Direct Operating Expenses are non-IFRS measures. See Description of Non-IFRS Measures later in this new release.
2 Net of intercompany eliminations