Not for distribution to U.S. news wire services or for dissemination in the United States
TORONTO, Nov. 22, 2018 (GLOBE NEWSWIRE) — Avante Logixx Inc. (TSX.V: XX) (OTC: ALXXF) (“Avante” or the “Company”) is pleased to announce its results for the quarter period ended September 30, 2018 (all amounts in Canadian dollars, unless otherwise indicated).
“I am pleased with the results for the quarter as our efforts to grow organically and through strategic M&A have resulted in meaningful top-line growth and accretive transactions that will top-grade our earnings profile over the coming quarters. Our focus remains steadfast on the continued streamlining of our technical operations and the expansion into adjacent markets,” said Craig Campbell, CEO and director of Avante. “Consistent with our long-term vision, we have made significant investments in building a platform to support organic growth that is capable of handling acquisitions of varying sizes in the next three years. This quarter, we executed against our strategic priorities through the completion of three separate acquisitions in conjunction with continued organic growth through our different marketing initiatives, which will all result in increased earnings visibility moving forward. Further, our capital markets activities resulted in the announcement of a $10M acquisition facility made available to the Company, where Avante is well positioned to achieve meaningful scale in the coming years. Our acquisition pipeline remains robust and the excitement to engage in forward-looking opportunities that provide outsized synergistical advantages to our portfolio of companies has never been higher.”
Q2 2019 Highlights
- Generated revenues of $5,855,951 for the quarter period ended September 30, 2018 which represented 5.3% YoY growth
- Recurring revenue and non-recurring revenue grew 11.0% and 2.9% respectively YoY
- Increase in operating expenditure of $295K, due to investment in infrastructure to support future growth initiatives
- Generated adjusted EBITDA of $106,864 which reflects platform investments for future growth
- Strong balance sheet; cash on hand $7.7 M and shareholders’ equity $21.3 M
- Secured a $10 M acquisition facility with RBC
- Closed the acquisition of Watermark which bolsters Avante’s geographic reach in protective services
- Acquired the remaining 49% interest in Architronics as part of Avante’s restructuring effort and to align business units across the enterprise
- Completed the acquisition of Veridin, a platform for accelerating national growth within commercial security integration; Veridin generated approximately $5.0 million of revenue in the past twelve months for the period ended Sept 3, 2018
- Announced a strategic partnership and investment in 3|Sixty Secure Corp that provides greater access to the burgeoning cannabis industry
Highlights Subsequent to the Quarter
- Announced the acquisition of Intelligarde, a commercial security provider operating in Ontario, Winnipeg, and Manitoba delivering national accounts; Intelligarde generated approximately $15.4 M of revenue in the past twelve months for the period ended September 30, 2018 and realized an adjusted EBITDA margin of 5%
- Consolidated shares outstanding on the basis of one (1) post-consolidation Common Share for every five (5) pre-consolidation Common Shares
RESULTS FOR THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2018
| Quarter ended | Six-month period ended | |||||
| Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2018 | Sep 30, 2017 | |||
| Total revenues | 5,855,951 | 5,562,285 | 11,430,935 | 10,947,291 | ||
| Revenues – Recurring Monitoring and Response 1 | 1,787,410 | 1,609,716 | 3,527,981 | 3,186,579 | ||
| Revenues – Other Security Services | 4,068,541 | 3,952,569 | 7,902,954 | 7,760,712 | ||
| Total gross profit | 1,741,420 | 1,951,568 | 3,603,344 | 3,900,647 | ||
| Adjusted EBITDA2 | 106,864 | 565,695 | 476,545 | 1,213,995 | ||
| Net income before tax | (398,992 | ) | 161,733 | (445,723 | ) | 468,074 |
| Net income for the year | (485,071 | ) | 86,733 | (555,301 | ) | 288,074 |
| Basic income per share | (0.005 | ) | 0.001 | (0.005 | ) | 0.004 |
| Diluted income per share | (0.005 | ) | 0.001 | (0.005 | ) | 0.004 |
Avante Logixx generated revenues of $5,855,951 for the three-month period ended September 30, 2018 which represents a 5.3% growth over $5,562,285 of revenues registered for the three-month period ended September 30, 2017. Gross profit for the period ended September 30, 2018 was $1,741,420 as compared to $1,951,568 for the period ended September 30, 2017.
Recurring revenues grew by 11.0%, due primarily to a 9.9% increase in rapid response and patrol revenues and 6.3% growth in revenues from monitoring and electronic building management. The number of rapid response and patrol packages grew by 8.6%, while the number of video analytics packages sold grew by 14.5% year over year. Other non-recurring revenues including locks and hardware revenues increased by 6.4% while security-related services (including secure transport, international security travel advisory, and consulting) grew 2.9% year over year.
Gross margin amounted to 29.7% as compared to 35.1% for the same period last year. The decrease in margins can be partly attributed to the monitoring business as new customer service employees were added. Installation margins also fell but will likely rebound in the coming quarters as the Company continues to work on streamlining the delivery model. Gross margins from locks and fine hardware saw an improvement over the three-month period ended September 30, 2017.
Adjusted EBITDA for the three-month period amounted to $106,864 as compared to $565,695 for the three-month period ended September 30, 2017. This was largely due to an increase in operating expenses of $295,292, related to platform investments to support future growth including newly created departments such as marketing, corporate development and human resources. Promotion and advertising expenditure also increased in our efforts to spur organic growth through the Oakville expansion as well as other marketing initiatives. With significant M&A activity completed subsequent to September 30, 2018, and more expected to follow for the remainder of the year, the Company is better positioned to accommodate additional acquisitions without incremental back-office costs.
Net loss before taxes amounted to ($398,992), as compared to a profit of $161,733 for the same period last year.
The Company’s Balance Sheet is healthy, where total debt to capitalization was 3.8% as of September 30, 2018. Cash and cash equivalents on hand as of September 30, 2018 was in excess of $7 million which is expected to continue to support organic growth initiatives and strategic acquisition opportunities.
CONFERENCE CALL
Avante will be hosting a conference call to discuss the aforementioned results on Thursday, November 22, 2018, at 5:00 PM EST.
Dial in details are as follows:
Local: (+1) 416-764-8658 Toll Free: (+1) 888-886-7786 Conference ID: 98460012
Playback details below, available until December 7, 2018:
Local: (+1) 416-764-8692 Toll Free: (+1) 877-674-7070 Playback Pin: 460012 #
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.
Craig Campbell
CEO
(416) 923-6984
craig@avantelogixx.com
Forward-Looking Information
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.
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 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.
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.
1Revenues – Recurring Monitoring and Response includes Alarm Response and Monitoring services
2Adjusted EBITDA – Net income before taxes + Depreciation + Amortization of intangibles + Share Based Payments + Acquisition and integration costs + Expensing of CWL fair value adjustment per IFRS (-) Non-controlling interest’s share