Bay Street News

Lumine Group Inc. Announces Results for the Three Months Ended March 31, 2024

TORONTO, May 01, 2024 (GLOBE NEWSWIRE) — Lumine Group Inc. (“Lumine Group” or “the Company”) (TSXV: LMN) announces financial results for the three months ended March 31, 2024. All amounts referred to in this press release are in US dollars unless otherwise stated.

The following press release should be read in conjunction with the Company’s unaudited condensed consolidated interim financial statements for the three months ended March 31, 2024, management’s discussion and analysis (“MD&A”) for the three months ended March 31, 2024, which can be found on SEDAR+ at www.sedarplus.ca. Additional information about Lumine Group is also available on SEDAR+ and on Lumine Group’s website www.luminegroup.com

Q1 2024 Headlines:

Total revenue for the three months ended March 31, 2024 was $141.1 million, an increase of 48%, or $45.7 million, compared to $95.4 million for the comparable period in 2023. The increase for the three month period is primarily attributable to growth from acquisitions. The Company experienced organic growth of -2% for the three months ended March 31, 2024 or -3% after adjusting for foreign exchange impacts. For acquired companies, organic growth is calculated as the difference between actual revenues achieved by each business in the financial period following acquisition, compared to the estimated revenues they achieved in the corresponding financial period preceding the date of acquisition by the Company. Organic growth is not a standardized financial measure and might not be comparable to measures disclosed by other issuers.

Operating income for the three months ended March 31, 2024 was $44.5 million, an increase of 105%, or $22.8 million, compared to $21.7 million for the same period in 2023. The increase for the three month period is primarily attributable to growth from acquisitions. Operating income is not a standardized financial measure and might not be comparable to measures disclosed by other issuers. See “Non-IFRS Measures”.

Net loss for the three months ended March 31, 2024 was $304.3 million compared to net loss of $651.6 million for the same period in 2023. The decrease in net loss for the three month period is primarily attributable to lower expense of $337.3 million for the three months ended March 31, 2024 related to fair value adjustments and accrued dividends on the redeemable preferred and special securities compared to the same period in 2023.

For the three months ended March 31, 2024, CFO increased $20.0 million to $35.0 million compared to $15.0 million for the same period in 2023 representing an increase of 134%. The primary reason for the increase is that CFO includes the impact of changes in non-cash operating assets and liabilities exclusive of effects of business combinations partly offset by changes in non-cash operating working capital (“NCOWC”).

For the three months ended March 31, 2024, FCFA2S increased $17.1 million, or 146%, to $28.8 million compared to $11.7 million for the same period in 2023. The increase is primarily a result of higher CFO during the period. FCFA2S is not a standardized financial measure and might not be comparable to measures disclosed by other issuers. See “Non-IFRS Measures”.

Non-IFRS Measures

Operating income (loss) refers to income (loss) before income taxes, amortization of intangible assets, redeemable Preferred and Special Share expense, and finance and other expenses (income). We believe that operating income is useful supplemental information as it provides an indication of the profitability of the Company related to its core operations. Operating income (loss) is not a recognized measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Accordingly, readers are cautioned that operating income (loss) should not be construed as an alternative to net income (loss).

The following table reconciles operating income to net income:

  Three months ended March 31,
  2024 2023  
Net income (loss) (304.3 ) (651.6 )
Adjusted for:    
Amortization of intangible assets 22.8   14.8  
Redeemable preferred and special securities expense 317.4   654.6  
Finance and other expense (income) 4.3   1.9  
Income tax expense (recovery)            4.3   1.8  
Operating income (loss) 44.5   21.7  
         

Free cash flow available to shareholders ‘‘FCFA2S’’ refers to net cash flows from operating activities less interest paid on lease obligations, interest paid on bank debt, transaction costs on bank debt, repayments of lease obligations, dividends paid to redeemable preferred and special securities holders, and property and equipment purchased. The Company believes that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if Lumine Group does not make any acquisitions, or investments, and does not repay any debts. While the Company could use the FCFA2S to pay dividends or repurchase shares, the Company’s objective is to invest all of its FCFA2S in acquisitions which meet the Company’s hurdle rate.

FCFA2S is not a recognized measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Accordingly, readers are cautioned that FCFA2S should not be construed as an alternative to net cash flows from operating activities.

The following table reconciles FCFA2S to net cash flows from operating activities:

  Three months ended March 31,
  2024   2023  
Net cash flows from operating activities: 35.0   15.0  
Adjusted for:    
Interest paid on lease obligations (0.2 ) (0.1 )
Interest paid on other facilities (2.5 ) (0.3 )
Credit facility transaction costs (1.7 ) (1.8 )
Payment of lease obligations (1.6 ) (0.8 )
Property and equipment purchased (0.4 ) (0.2 )
Free cash flow available to shareholders 28.8   11.7  
         

Forward Looking Statements

Certain statements herein may be “forward looking” statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Lumine Group or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Lumine Group assumes no obligation, except as required by law, to update any forward looking statements to reflect new events or circumstances.

About Lumine Group Inc.

Lumine Group acquires, strengthens, and grows, vertical market software businesses in the communications and media industry. Learn more at www.luminegroup.com.  

For further information:

David Nyland
Chief Executive Officer
Lumine Group
david.nyland@luminegroup.com
+1-437-353-4910

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Lumine Group Inc.
Condensed Consolidated Interim Statements of Financial Position

(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited

  March 31, 2024 December 31, 2023
     
Assets    
     
Current assets:    
Cash $ 259,789   $ 146,509  
Accounts receivable   100,817     104,955  
Unbilled revenue   42,786     39,858  
Inventories   572     521  
Other assets   44,104     46,377  
    448,068     338,220  
     
Non-current assets:    
Property and equipment   3,848     4,164  
Right of use assets   10,648     11,973  
Deferred income taxes   6,009     6,197  
Other assets   11,794     13,063  
Intangible assets and goodwill   737,489     763,081  
    769,788     798,478  
     
Total assets $ 1,217,856   $ 1,136,698  
     
Liabilities and Equity    
     
Current liabilities:    
Accounts payable and accrued liabilities $ 91,206   $ 97,533  
Due to related parties, net   1,117     2,380  
Current portion of bank debt   2,228     3,071  
Deferred revenue   94,382     91,726  
Acquisition holdback payables   318     319  
Lease obligations   6,434     6,358  
Income taxes payable   9,310     12,436  
Preferred and Special Securities       4,469,996  
    204,995     4,683,819  
     
Non-current liabilities:    
Deferred income taxes   120,803     125,294  
Bank debt   238,497     149,636  
Lease obligations   5,436     6,921  
Other liabilities   10,672     12,995  
    375,408     294,846  
     
Total liabilities   580,403     4,978,665  
     
Equity:    
Capital stock   490,669      
Contributed surplus   185,142     (1,015,661 )
Accumulated other comprehensive income (loss)   (9,921 )   (6,296 )
Retained earnings (deficit)   (28,437 )   (2,820,010 )
    637,453     (3,841,967 )
     
Subsequent events    
     
Total liabilities and equity $ 1,217,856   $ 1,136,698  
             

Lumine Group Inc.
Condensed Consolidated Interim Statements of Income (Loss)
(In thousands of USD, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited

  Three months ended March 31,
    2024 2023  
     
Revenue    
License $ 11,720   $ 10,649  
Professional services   24,933     16,827  
Hardware and other   2,417     4,608  
Maintenance and other recurring   102,029     63,297  
    141,099     95,381  
Expenses    
Staff   73,028     48,619  
Hardware   1,520     3,319  
Third party license, maintenance and professional services   8,539     4,735  
Occupancy   896     777  
Travel, telecommunications, supplies, software and equipment   6,757     4,672  
Professional fees   2,832     7,313  
Other, net   946     2,782  
Depreciation   2,115     1,510  
Amortization of intangible assets   22,821     14,836  
    119,454     88,563  
     
Redeemable Preferred and Special Securities expense   317,362     654,615  
Finance and other expenses (income)   4,272     1,925  
    321,634     656,540  
     
Income (loss) before income taxes   (299,989 )   (649,722 )
     
Current income tax expense (recovery)   8,346     7,513  
Deferred income tax expense (recovery)   (3,998 )   (5,670 )
Income tax expense (recovery)   4,348     1,843  
     
Net income (loss) $ (304,337 ) $ (651,565 )
     
Weighted average shares outstanding:    
Basic   86,111,920     67,787,851  
Diluted   253,336,755     236,683,131  
     
Earnings per share:    
Basic and diluted $ (3.53 ) $ (9.61 )
     

Lumine Group Inc.
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited

  Three months ended March 31,
    2024     2023  
     
Net income (loss) $ (304,337 ) $ (651,565 )
     
Items that are or may be reclassified subsequently to net income (loss):    
     
Foreign currency translation differences from foreign operations and other   (3,625 )   589  
                 
Other comprehensive (loss) income for the year, net of income tax   (3,625 )   589  
     
Total comprehensive income (loss) for the year $ (307,962 ) $ (650,976 )
             

Lumine Group Inc.
Condensed Consolidated Interim Statement of Changes in Equity
(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited

Three months ended March 31, 2024          
  Capital
stock
Contributed
surplus
Accumulated
other comprehensive
(loss) income
Retained
earnings (deficit)
Total
equity
           
Balance at January 1, 2024 $ $ (1,015,661 ) $ (6,296 ) $ 2,820,010 ) $ (3,841,967 )
           
Total comprehensive income (loss) for the year:          
Net income (loss)             (304,337 )   (304,337 )
           
Other comprehensive income (loss):          
Foreign currency translation differences from foreign operations and other         (3,625 )       (3,625 )
           
Total other comprehensive income (loss) for the year         (3,625 )       (3,625 )
           
Total comprehensive income (loss) for the year         (3,625 )   (304,337 )   (307,962 )
           
Mandatory Conversion of Special and Preferred Shares   403,301   1,200,803         3,095,910     4,700,014  
Settlement of Preferred and Special Share Dividends   87,368               87,368  
           
Balance at March 31, 2024 $ 490,669 $ 185,142   $ (9,921 ) $ (28,437 ) $ 637,453  
                             

Lumine Group Inc.
Condensed Consolidated Interim Statement of Changes in Equity
(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited                            
Three months ended March 31, 2023                            
  Capital
stock
Contributed
surplus
Accumulated other comprehensive (loss) income Retained
earnings (deficit)
Total
equity
           
Balance at January 1, 2023 $ $ 162,692   $ (8,912 ) $   $ 153,780  
           
Total comprehensive income (loss) for the year:          
Net income (loss)             (651,565 )   (651,565 )
           
Other comprehensive income (loss):          
Foreign currency translation differences from foreign operations and other         589         589  
           
Total other comprehensive income (loss) for the year         589         589  
           
Total comprehensive income (loss) for the year         589     (651,565 )   (650,976 )
           
Transactions with Parent, recorded directly in equity          
Capital contributions by Parent     22,451             22,451  
Amalgamation with Lumine Group (Holdings) Inc.     (1,200,804 )           (1,200,804 )
Special Share conversion (note 14)             1,067     1,067  
           
Balance at March 31, 2023 $ $ (1,015,661 ) $ (8,323 ) $ (650,498 ) $ (1,674,482 )
                             

Lumine Group Inc.
Condensed Consolidated Interim Statements of Cash Flows
(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited  
  Three months ended March 31,
    2024 2023  
     
Cash flows from (used in) operating activities:    
Net income (loss) $ (304,337 ) $ (651,565 )
Adjustments for:    
Depreciation   2,115     1,510  
Amortization of intangible assets   22,821     14,836  
Contingent consideration adjustments   43     670  
Preferred and Special Securities expense (income)   317,362     654,615  
Finance and other expenses (income)   4,272     1,925  
Income tax expense (recovery)   4,348     1,843  
Change in non-cash operating assets and liabilities exclusive of effects of business combinations   (7,991 )   (4,031 )
Income taxes (paid) received   (3,637 )   (4,834 )
Net cash flows from (used in) operating activities   34,996     14,969  
     
Cash flows from (used in) financing activities:    
Interest paid on lease obligations   (154 )   (93 )
Interest paid on bank debt   (2,472 )   (342 )
Cash transferred from (to) Parent   (2,107 )   (4,670 )
Proceeds from issuance of bank debt   90,000     175,000  
Repayments of bank debt   (244 )   (244 )
Transaction costs on bank debt   (1,655 )   (1,771 )
Payments of lease obligations   (1,566 )   (840 )
Issuance of Preferred Shares to Parent       181,484  
Net cash flows from (used in) in financing activities   81,802     348,524  
     
Cash flows from (used in) investing activities:    
Acquisition of businesses       (314,760 )
Cash obtained with acquired businesses       33,965  
Post-acquisition settlement payments, net of receipts   (685 )   (362 )
Property and equipment purchased   (361 )   (241 )
Other investing activities   6      
Net cash flows from (used in) investing activities   (1,039 )   (281,399 )
         
         
Effect of foreign currency on cash and cash equivalents   (2,479 )   302  
Increase (decrease) in cash   113,280     82,396  
         
Cash, beginning of period   146,509     67,085  
Cash, end of period $ 259,789   $ 149,481  

 


Bay Street News