All amounts are stated in
- Revenue increased on a sequential basis to
$16.7 million - Focus on growth continues to push year-to-date New Bookings(1) to
$24.1 million versus$7.7 million during the same period last year - Gross margin at record levels of 79%
- Net income of
$3.8 million compared to a net loss of$29.2 million in Q3'20 - Adjusted EBITDA(1) of
$5.9 million or 35%, versus$6.8 million in Q3'20, representing the fifth consecutive quarter of Adjusted EBITDA margin above 25% - Balance sheet remains robust with
$32.8 million (2) in cash to support growth - Adjusted EPS(1) of
$0.35
"I am pleased with our continued success in executing our strategic objectives during Q3 with customer wins, increased bookings and strong cost management. We are in line with our fiscal year 2021 plan and, in some instances, ahead of expectations," said
"Our customers continue to be very engaged with our team in exploring the most appropriate pathway to realize their long-term business goals balanced against their nearer-term immediate needs, bridging the gap to implement a full-cloud migration plan in strategic partnership with Optiva," added Giere.
Business Highlights
- Optiva continues to invest in strengthening and building its global sales team to drive increased bookings, customer retention, contract renewals, service enhancement and delivery growth. As a result of our initiatives, New Bookings increased to
$11.3 million in Q3 '21, and$24.1 million on a year-to-date basis. - The Company continues to add to its R&D talent and is on track for our new product launch by Q1'22. A critical element of our strategy is to establish, where appropriate,
R&D Centers of Excellence . The Company has established our firstR&D Centre of Excellence inBelfast, Northern Ireland . The Centre will focus on the development and delivery of Optiva's cloud-native software solutions, accelerating the innovation investment within our roadmap. - During Q3'21, the Company completed the insourcing of its key finance department functions.
- A leading Saudi-based telecom operator selected Optiva BSS Platform for its new MVNO business line to rapidly bring to market innovative digital services to the fast-growing consumer market segment. The partnership enables the operator to deploy Optiva cloud-native BSS technology on its state-of-the-art, private cloud infrastructure. The solution will provide a differentiated, superior customer experience and digital service offerings that build upon the operator's strong enterprise customer base and accelerate the velocity of its product introduction cycle to more quickly deliver profitable growth.
- Optiva has been selected as an approved vendor for next generation charging solution by a large multinational telecommunications group, operating in countries in
Africa and theMiddle East . The Company's services include cellular network access and business solutions. - The Company announced the launch of its new MVNx Fast Track program - (https://optiva.com/mvnx/), which provides MVNOs and MVNEs an all-in-one, cloud-native BSS MVNx solution. The program allows them to deploy in 90 days, realize more than 40% of total cost of ownership and operations cost savings, leverage embedded testing and customer service automation and rollout new propositions within three hours with out-of-the-box templates and guided configuration flows.
Third Quarter 2021 Financial Results Highlights:
Q3 Fiscal 2021 Highlights | Three Months Ended | Nine Months Ended | ||||||
($ US Thousands, except per share information) | ||||||||
(Unaudited) | 2021 | 2020 | 2021 | 2020 | ||||
Revenue | 16,666 | 18,804 | 49,068 | 57,774 | ||||
Net Income (Loss) | 3,783 | (29,221) | 21,813 | (43,190) | ||||
Earnings (Loss) Per Share | ||||||||
Adjusted EBITDA | 5,901 | 6,819 | 14,975 | (2,906) | ||||
Cash provided by (used in) operating activities | 5,217 | (1,398) | 5,948 | (5,279) | ||||
Total cash, including restricted cash | 32,823 | 21,306 | 32,823 | 21,306 |
- Revenue for Q3'21 decreased by
$2.1 million to$16.7 million , driven by known attritions while showing early indication of stabilizing at current levels. The year-over-year decrease in revenue was primarily due to the discontinuation of software, support and subscription sales to customers who had previously notified Optiva of their exit. - Gross margin reached a new record level at 79% in Q3'21, increasing 4% over the 75% gross margin achieved during the corresponding period in 2020. This increase was mainly attributable to continued strict cost management and operational efficiencies.
- General and administrative expenses decreased to
$3.0 million when compared to$8.3 million during the same period in 2020. The decrease is mainly due to lower legal and advisory costs related to activities of the special committee of the board of directors incurred last year, lower amortization costs, lower stock-based compensation, and bad debt recovery, slightly offset by higher compensation costs. - Earnings before interest, taxes, depreciation and amortization ("EBITDA")(1) for Q3'21 of 2021 was
$5.9 million compared to$5.6 million during the same period in 2020. Adjusted EBITDA(1) ("Adjusted EBITDA") for Q3'21 amounted to$5.9 million as compared to$6.8 million during the same period in 2020. The Adjusted EBITDA for Q3'21 includes a reversal of bad-debt provision of$0.8 million . - Net income for Q3'21 was
$3.8 million compared to a loss of$29.2 million during the corresponding period in 2020. The increase in net income is mainly attributable to the Company's ongoing focus on cost management and overall operating expenses and higher finance costs last year related to accretion of preferred shares on redemption.
(1) | EBITDA,Adjusted EBITDA, new bookings and adjusted EPS are non-IFRS measures. These measures are defined in the "Non-IFRS Financial Measures" section of this news release |
(2) | Includes restricted cash |
Conference Call
Date:
Time: 8:00 a.m. Eastern Time
Toll-free (
International: 1-720-452-9102
Reference number: 7088116
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.
Non-IFRS Measures
"EBITDA" and "Adjusted EBITDA" are not financial measures calculated and presented in accordance with International Financial Reporting Standards (IFRS) and should not be considered in isolation or as a substitute to net income (loss), operating income or any other financial measures of performance calculated and presented in accordance with IFRS, or as an alternative to cash flow from operating activities as a measure of liquidity. The Company defines EBITDA as net income (loss) excluding amounts for depreciation and amortization, other income, finance costs, finance income, income tax expense (recovery), foreign exchange gain (loss) and share-based compensation. The Company defines "Adjusted EBITDA" as EBITDA (as defined above), excluding restructuring costs, one-time provision amounts, and any one-time transaction costs associated with shareholder conflict. The Company believes that Adjusted EBITDA is a metric that investors may find useful in understanding the Company's financial position. The following table provides a reconciliation of Net Income to EBITDA and Adjusted EBITDA.
New Bookings are total bookings minus SLA renewals. New Bookings Indicates the contractually committed revenue, excluding renewal of maintenance/support contracts from existing customers, that we expect to recognize over the forthcoming quarters. New Bookings is thus a subset of our Total Bookings in a particular period. New Booking indicates our success in contracting new business whereas Total Bookings reflects our success in both, contracting new business as well as renewing existing maintenance and support SLAs.
Adjusted EPS is reported diluted EPS excluding the impact of change in the fair value of warrants.
Three months ended, | Nine months ended, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Net income (loss) for the period | $ | 3,783,002 | $ | (29,220,983) | $ | 21,812,912 | $ | (43,189,879) |
Add back / (substract): | ||||||||
Depreciation of property and equipment | 65,161 | - | 83,601 | - | ||||
Amortization of intangible assets | 362,763 | 2,188,032 | 1,088,289 | 7,140,553 | ||||
Finance (income) | (328,765) | (173,251) | (471,360) | (250,074) | ||||
Finance costs (recovery) | 804,557 | 29,660,877 | (9,500,031) | 28,282,767 | ||||
Income tax expense | 833,422 | 1,987,199 | 2,438,396 | 2,675,506 | ||||
Foreign exchange loss (gain) | (109,584) | (282,702) | (635,219) | 1,899,005 | ||||
Share-based compensation | 490,144 | 1,421,022 | 1,905,976 | 535,890 | ||||
EBITDA | 5,900,700 | 5,580,194 | 16,722,564 | (2,906,232) | ||||
Restructuring costs | - | 59,440 | - | 202,162 | ||||
Change in other provisions | - | - | (1,313,725) | 3,072,717 | ||||
One-time costs (recovery) related to shareholder conflict | ||||||||
and debenture financing | - | 1,179,264 | (433,610) | 2,101,129 | ||||
Adjusted EBITDA | $ | 5,900,700 | $ | 6,818,898 | $ | 14,975,229 | $ | 2,469,776 |
About Optiva
Caution Concerning Forward-Looking Statement
Certain statements in this document may constitute "forward-looking" statements that involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this document, such statements use such words as "may," "will," "expect," "continue," "believe," "plan," "intend," "would," "could," "should," "anticipate" and other similar terminology. These statements are forward-looking as they are based on our current expectations, as at
Condensed Consolidated Interim Statements of Financial Position | ||||
(Expressed in | ||||
(Unaudited) | ||||
2021 | 2020 | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 32,031,896 | $ | 17,663,998 |
Trade accounts and other receivables | 9,241,414 | 7,868,501 | ||
Unbilled revenue | 6,310,487 | 4,086,395 | ||
Prepaid expenses | 3,053,180 | 2,752,304 | ||
Income taxes receivable | 4,316,147 | 4,281,673 | ||
Other assets | 747,621 | 222,101 | ||
Total current assets | 55,700,745 | 36,874,972 | ||
Restricted cash | 791,372 | 625,692 | ||
Property and equipment | 847,517 | - | ||
Long-term unbilled revenue | 2,940,041 | 3,520,177 | ||
Deferred income taxes | 351,336 | 208,237 | ||
Other assets | 107,353 | 624,134 | ||
Intangible assets | 2,539,464 | 3,255,482 | ||
Goodwill | 32,271,078 | 32,271,078 | ||
Total assets | $ | 95,548,906 | $ | 77,379,772 |
Liabilities and Shareholders' Deficit | ||||
Current liabilities: | ||||
Trade payables | $ | 4,296,734 | $ | 8,811,407 |
Accrued liabilities | 9,719,033 | 9,677,245 | ||
Provisions | 4,200,000 | 5,555,373 | ||
Income taxes payable | 5,661,702 | 4,932,157 | ||
Deferred revenue | 4,301,164 | 4,894,195 | ||
Total current liabilities | 28,178,633 | 33,870,377 | ||
Deferred revenue | 487,312 | 661,837 | ||
Other liabilities | 1,822,907 | 2,797,836 | ||
Pension and other long-term employment benefit plans | 10,918,925 | 15,582,459 | ||
Debentures | 86,818,996 | 86,338,367 | ||
Series A Warrant | 768,340 | 16,662,808 | ||
Standby Warrant | 92,550 | - | ||
Deferred income taxes | 769,379 | 898,146 | ||
Total liabilities | 129,857,042 | 156,811,830 | ||
Shareholders' deficit: | ||||
Share capital | 269,992,761 | 250,904,013 | ||
Standby Warrant | - | 997,500 | ||
Contributed surplus | 13,389,540 | 11,406,814 | ||
Deficit | (314,029,337) | (335,842,249) | ||
Accumulated other comprehensive loss | (3,661,100) | (6,898,136) | ||
Total shareholders' deficit | (34,308,136) | (79,432,058) | ||
Total liabilities and shareholders' deficit | $ | 95,548,906 | $ | 77,379,772 |
Condensed Consolidated Interim Statements of Comprehensive Income (Loss) | ||||||||
(Expressed in | ||||||||
(Unaudited) | ||||||||
Three months ended, | Nine months ended, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Revenue: | ||||||||
Support and subscription | $ | 11,411,812 | $ | 14,077,343 | $ | 35,681,432 | $ | 44,030,708 |
Software licenses, services and other | 5,253,879 | 4,726,877 | 13,386,078 | 13,742,981 | ||||
16,665,691 | 18,804,220 | 49,067,510 | 57,773,689 | |||||
Cost of revenue | 3,491,639 | 4,649,294 | 10,765,379 | 15,124,936 | ||||
Gross profit | 13,174,052 | 14,154,926 | 38,302,131 | 42,648,753 | ||||
Operating expenses: | ||||||||
Sales and marketing | 1,788,771 | 1,581,100 | 5,502,413 | 6,272,788 | ||||
General and administrative | 2,990,055 | 8,288,092 | 11,983,848 | 23,893,409 | ||||
Research and development | 3,412,594 | 2,255,154 | 7,171,172 | 22,863,069 | ||||
Restructuring costs | - | 59,440 | - | 202,162 | ||||
8,191,420 | 12,183,786 | 24,657,433 | 52,231,428 | |||||
Income (loss) from operations | 4,982,632 | 1,971,140 | 13,644,698 | (10,582,675) | ||||
Foreign exchange gain / (loss) | 109,584 | 282,702 | 635,219 | (1,899,005) | ||||
Finance income | 328,765 | 173,251 | 471,360 | 250,074 | ||||
Finance (cost) recovery | (804,557) | (29,660,877) | 9,500,031 | (28,282,767) | ||||
Income (loss) before income taxes | 4,616,424 | (27,233,784) | 24,251,308 | (40,514,373) | ||||
Income taxes (recovery): | ||||||||
Current | 922,153 | 2,100,108 | 2,691,270 | 2,795,866 | ||||
Deferred | (88,730) | (112,909) | (252,874) | (120,360) | ||||
833,422 | 1,987,199 | 2,438,396 | 2,675,506 | |||||
Net income (loss) | $ | 3,783,002 | $ | (29,220,983) | $ | 21,812,912 | $ | (43,189,879) |
Other comprehensive income: | ||||||||
Items that will not be reclassified | ||||||||
to net income: | ||||||||
Actuarial gain (loss) on pension and non-pension | ||||||||
post-employment benefit plans, net of income | ||||||||
tax expense of nil: | $ | 3,237,036 | $ | (3,560,350) | $ | 3,237,036 | $ | (3,560,350) |
Total comprehensive income (loss) | $ | 7,020,038 | $ | (32,781,333) | $ | 25,049,948 | $ | (46,750,229) |
Income (loss) per common share: | ||||||||
Basic | $ | 0.62 | $ | (5.50) | $ | 3.73 | $ | (8.12) |
Diluted | 0.61 | (5.50) | 3.68 | (8.12) | ||||
Weighted average number of common shares: | ||||||||
Basic | 6,150,557 | 5,315,757 | 5,850,993 | 5,315,903 | ||||
Diluted | 6,159,307 | 5,315,757 | 5,926,567 | 5,315,903 | ||||
Condensed Consolidated Interim Statements of Cash Flows | ||||||||
(Expressed in | ||||||||
(Unaudited) | ||||||||
Three months ended, | Nine months ended, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Cash provided by (used in): | ||||||||
Operating activities: | ||||||||
Income (loss) for the period | $ | 3,783,002 | $ | (29,220,983) | $ | 21,812,912 | $ | (43,189,879) |
Adjustments for: | ||||||||
Depreciation of property and equipment | 65,161 | - | 83,601 | - | ||||
Amortization of intangible assets | 362,763 | 2,188,032 | 1,088,289 | 7,140,553 | ||||
Finance (income) | (328,765) | (173,251) | (471,360) | (250,074) | ||||
Finance costs (recovery) | 804,557 | 29,660,877 | (9,500,031) | 28,282,767 | ||||
Pension | 9,015 | 100,932 | (709,033) | 109,323 | ||||
Income tax expense | 833,422 | 1,987,199 | 2,438,396 | 2,675,506 | ||||
Unrealized foreign exchange loss (gain) | 40,961 | (11,484) | (409,081) | (1,055,526) | ||||
Share-based compensation | 490,144 | 1,421,022 | 1,905,976 | 535,890 | ||||
Change in provisions | - | (258,968) | (1,355,373) | 2,098,172 | ||||
Change in non-cash operating working capital | (1,018,447) | (5,505,549) | (7,004,459) | 1,561,903 | ||||
5,041,813 | 187,827 | 7,879,837 | (2,091,365) | |||||
Interest paid | (40,297) | (7,656) | (93,054) | (34,070) | ||||
Interest received | 8,656 | 6,020 | 18,625 | 75,934 | ||||
Income taxes received (paid) | 206,465 | (1,584,095) | (1,857,734) | (3,229,262) | ||||
5,216,637 | (1,397,904) | 5,947,674 | (5,278,763) | |||||
Financing activities: | ||||||||
Payment of dividends | - | (11,378,719) | - | (13,588,145) | ||||
Issue of share capital | - | - | 19,088,748 | - | ||||
Payment of interest on loans and borrowings | (4,351,439) | - | (8,764,162) | - | ||||
Redemption of preferred shares | - | (80,000,000) | - | (80,000,000) | ||||
Transaction costs on debentures | - | (3,315,583) | - | (3,315,583) | ||||
Issuance of debentures | - | 90,000,000 | - | 90,000,000 | ||||
(4,351,439) | (4,694,302) | 10,324,586 | (6,903,728) | |||||
Investing activities: | ||||||||
Purchase of property and equipment | (665,636) | - | (931,118) | - | ||||
Purchase of software | (372,271) | - | (372,271) | - | ||||
(Increase) / Decrease in restricted cash | (253,885) | 57,647 | (165,680) | 261,165 | ||||
(1,291,792) | 57,647 | (1,469,069) | 261,165 | |||||
Effect of foreign exchange rate changes | ||||||||
on cash and cash equivalents | (476,654) | 223,160 | (435,293) | 788,793 | ||||
Increase (decrease) in cash and cash equivalents | (903,248) | (5,811,399) | 14,367,898 | (11,132,533) | ||||
Cash and cash equivalents, beginning of period | 32,935,144 | 26,426,859 | 17,663,998 | 31,747,993 | ||||
Cash and cash equivalents, end of period | $ | 32,031,896 | $ | 20,615,460 | $ | 32,031,896 | $ | 20,615,460 |
SOURCE
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