CALGARY, Alberta, Feb. 07, 2024 (GLOBE NEWSWIRE) -- Computer Modelling Group Ltd. (CMG Group or the Company) announces its financial results for the three and nine months ended December 31, 2023.
CMG Group and its subsidiaries include the following; Computer Modelling Group Inc., CMG Middle East FZ LLC, CMGL Services Corporation Inc., CMG Europe Ltd., and CMG Collaboration Centre India Private Ltd., (together referred to as CMG), and CMG Holdings (USA) Inc., Bluware-Headwave Ventures Inc., Bluware Inc., Hue AS, and Kalkulo AS (together referred to as BHV or Bluware).
As a result of CMG Group's acquisition of BHV on September 25, 2023, the Company's operations are now organized into two reportable operating segments represented by CMG; the development and licensing of reservoir simulation software, and BHV; the development and licensing of seismic interpretation software.
THIRD QUARTER FISCAL 2024 (Q3 2024) OVERVIEW
CMG GROUP KEY FINANCIAL METRICS
| For the Three Months Ended | For the Nine Months Ended |
| December 31, 2023 and compared to the same period of the previous fiscal year, when appropriate: | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THIRD QUARTER BUSINESS HIGHLIGHTS
- Our third quarter results represent the first full quarter of operations following the acquisition of BHV, which contributed $11.2 million to total revenue and $1.7 million to net income:
- Generated total revenue of $33.0 million in the third quarter of fiscal 2024 compared to $19.4 million in the prior year's quarter, an increase of 70% with 58% contributed by BHV and 12% by CMG. Geographically, all regions saw increases in annuity/maintenance revenue due to new customers and increased licensing by existing customers. Our existing customers continue to grow their product offerings on contract renewals. Annuity license fee revenue increased due to the acquisition of BHV and was impacted by contract renewals;
- Adjusted EBITDA was 38%, compared to 49% in the same period of last fiscal year with BHV achieving 27% and CMG achieving 44% adjusted EBITDA;
- Recognition of annuity license fee from BHV had a positive impact on total revenue and adjusted EBITDA (see under Quarterly Performance heading for further description);
- Reported free cash flow of $7.7 million, representing $0.09 per share;
- Subsequent to quarter-end, declared a quarterly cash dividend of $0.05 per share to be paid on March 15, 2024 to all shareholders on record at the close of business on March 7, 2024.
The following press release should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements for the three and nine months ended December 31, 2023 and the accompanying notes, our Management's Discussion and Analysis (MD&A) for the three and nine months ended December 31, 2023 and with our annual Consolidated Financial Statements, prepared in accordance with International Financial Reporting Standards (IFRS) and with our MD&A for the year ended March 31, 2023 which can be found on SEDAR at www.sedarplus.ca and on the Company's website www.cmgl.ca. Additional information about the Company is also available on SEDAR at www.sedarplus.ca.
QUARTERLY PERFORMANCE
| Fiscal 2022(2) | Fiscal 2023(3) | Fiscal 2024(4) | ||||||
| ($ thousands, unless otherwise stated) | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 |
| Annuity/maintenance license | 14,306 | 13,529 | 14,825 | 15,533 | 15,803 | 15,607 | 17,610 | 18,814 |
| Annuity license fee | - | - | - | - | - | - | - | 3,846 |
| Perpetual license | 2,351 | 386 | 780 | 518 | 1,556 | 1,849 | 1,176 | 584 |
| Total software license revenue | 16,657 | 13,915 | 15,605 | 16,051 | 17,359 | 17,456 | 18,786 | 23,244 |
| Professional services revenue | 2,137 | 2,192 | 2,477 | 3,341 | 2,906 | 3,292 | 3,847 | 9,763 |
| Total revenue | 18,794 | 16,107 | 18,082 | 19,392 | 20,265 | 20,748 | 22,633 | 33,007 |
| Operating expenses | 11,482 | 9,382 | 10,870 | 9,262 | 13,356 | 9,079 | 12,414 | 18,434 |
| Adjusted operating expenses(1) | 12,398 | 7,780 | 8,529 | 9,262 | 13,356 | 9,079 | 11,841 | 17,738 |
| Operating profit | 7,312 | 4,961 | 5,555 | 8,435 | 6,909 | 9,764 | 7,726 | 8,217 |
| Operating profit (%) | 39 | 31 | 31 | 43 | 34 | 47 | 34 | 25 |
| Adjusted operating profit(1) | 6,396 | 6,563 | 7,896 | 8,435 | 6,909 | 9,764 | 8,299 | 8,913 |
| Adjusted operating profit (%) | 34 | 41 | 44 | 43 | 34 | 47 | 37 | 27 |
| Profit before income and other taxes | 6,563 | 5,182 | 5,989 | 8,350 | 7,127 | 9,148 | 8,793 | 8,117 |
| Income and other taxes | 1,611 | 1,369 | 1,579 | 2,002 | 1,901 | 2,244 | 2,277 | 2,507 |
| Net income for the period | 4,952 | 3,813 | 4,410 | 6,348 | 5,226 | 6,904 | 6,516 | 5,610 |
| Adjusted EBITDA(1) | 7,879 | 6,775 | 8,435 | 9,498 | 8,520 | 9,948 | 10,718 | 12,634 |
| Cash dividends declared and paid | 4,016 | 4,017 | 4,025 | 4,025 | 4,032 | 4,039 | 4,043 | 4,059 |
| Funds flow from operations | 7,105 | 4,558 | 4,974 | 8,169 | 7,656 | 7,920 | 11,491 | 8,477 |
| Free cash flow(1) | 6,584 | 4,255 | 4,505 | 7,545 | 5,396 | 7,463 | 11,028 | 7,654 |
| Per share amounts “ ($/share) | ||||||||
| Earnings per share (EPS) “ basic | 0.06 | 0.05 | 0.05 | 0.08 | 0.07 | 0.09 | 0.08 | 0.07 |
| Earnings per share (EPS) “ diluted | 0.06 | 0.05 | 0.05 | 0.08 | 0.06 | 0.08 | 0.08 | 0.07 |
| Cash dividends declared and paid | 0.05 | 0.05 | 0.05 | 0.05 | 0.05 | 0.05 | 0.05 | 0.05 |
| Funds flow from operations per share “ basic | 0.09 | 0.06 | 0.06 | 0.10 | 0.09 | 0.10 | 0.14 | 0.10 |
| Free cash flow per share “ basic(1) | 0.08 | 0.05 | 0.06 | 0.09 | 0.07 | 0.09 | 0.14 | 0.09 |
| (1) | This is a non-IFRS financial measure. See the Non-IFRS Financial Measures section. |
| (2) | Q4 of fiscal 2022 includes $0.8 million of annuity/maintenance revenue that pertains to usage of CMG's products in prior quarters. |
| (3) | Q1, Q2, Q3, and Q4 of fiscal 2023 include $0.2 million, $0.3 million, $0.3 million, and $0.4 million, respectively, of annuity/maintenance revenue that pertains to usage of CMG's products in prior quarters. |
| (4) | Q1, Q2, and Q3 of fiscal 2024 include $0.1 million, $0.4 million, and $0.2 million, respectively, of annuity/maintenance revenue that pertains to usage of CMG's products in prior quarters. |
Total software license revenue for the three months ended December 31, 2023 increased by 45%, compared to the same period of the previous fiscal year, of which 31% is due to BHV acquisition and 14% due to increases in annuity/maintenance and perpetual license revenue of CMG. Total software license revenue for the nine months ended December 31, 2023 increased by 31%, compared to the same period of the previous fiscal year, of which 11% is due to BHV acquisition and 19% due to increases in annuity/maintenance and perpetual license revenue of CMG.
Annuity/maintenance license revenue increased by 21% during the three months ended December 31, 2023, compared to the same period of the previous fiscal year, of which 8% is due to BHV acquisition and 13% due to annuity/ maintenance license revenue increase of CMG. Annuity/maintenance license revenue increased by 18% during the nine months ended December 31, 2023, compared to the same period in the previous fiscal year, of which 3% is due to BHV acquisition and 15% due to increases in annuity/ maintenance license revenue of CMG. CMG's annuity/maintenance license revenue increases during both three and nine months ended December 31, 2023 were a result of increases in all regions, supported by license fee increases, increased the license usage by existing customers and addition of new customers. We continue to see a strong contribution to revenue from CMG energy transition customers and estimate during the three and nine months ended December 31, 2023, 22% of total software license revenue is related to energy transition.
Annuity license fee revenue relates to BHV and this revenue stream is expected to fluctuate quarterly depending on the timing of contract renewals as the annuity license fees are recognized in revenue when the software license is delivered. Historically, a majority of contracts renew during the third and fourth quarters.
Perpetual license revenue increased by 13% during the three months ended December 31, 2023, compared to the same period of the previous fiscal year, due to perpetual license sales generated in Canada during the quarter. During the nine months ended December 31, 2023, compared to the same period of the previous fiscal year, perpetual license revenue increased by 114% due to increases in all regions.
Professional services revenue for the three and nine months ended December 31, 2023 was $9.8 million and $16.9 million which represents increases of 192% and 111%, respectively, compared to the same periods of the previous fiscal year. The acquisition of BHV contributed 185% and 82% of the increase, respectively, for the three and nine months ended December 31, 2023.The remaining increases are due to increased CMG professional services revenue from consulting projects as a result of expanded services to address customer demand.
Total operating expenses for the three and nine months ended December 31, 2023, increased by 99% and 35%, respectively, compared to the same periods of the previous fiscal year. Adjusted total operating expenses increased by 92% and 51% for the three and nine months ended December 31, 2023, respectively, compared to the same periods of the previous fiscal year. The acquisition of BHV contributed to 46% and 17% of the increase in total adjusted operating costs for the three and nine months ended December 31, 2023, respectively, compared to the same periods of the previous fiscal year. CMG's total adjusted operating expenses increased by 46% and 34% for the three and nine months ended December 31, 2023, respectively, compared to the same periods of the previous fiscal year, due to an increase in both direct employee costs and other corporate costs.
Operating profit as a percentage of total revenue for the three months ended December 31, 2023 was 25%, down from 43% in the comparative quarter. Adjusted operating profit was 27%, down from 43% in the comparative quarter. Current quarter includes BHV's adjusted operating profit as a percentage of revenue at 26% and CMG's adjusted operating profit as a percentage of revenue at 28%. CMG's adjusted operating profit as a percentage of revenue decreased from 43% recorded in the same quarter of the previous fiscal year, due to an increase in direct employee costs driven by the increase in stock-based compensation, other corporate costs inclusive of the increase in amortization expense as a result of BHV acquisition, partially offset by an increase in revenue. Operating profit as a percentage of total revenue for the nine months ended December 31, 2023 was 34%, slightly down from 35% in the comparative quarter. Adjusted operating profit was 35%, down from 43% in the comparative quarter. Current year-to-date quarter includes BHV's adjusted operating profit as a percentage of revenue at 26% and CMG's adjusted operating profit as a percentage of revenue at 37%. CMG's adjusted operating profit as a percentage of revenue decreased from 43% recorded in the same period of the previous fiscal year, due to the same reasons that affected the quarterly comparison as explained above.
NON-IFRS FINANCIAL MEASURES AND RECONCILIATION OF NON-IFRS MEASURES
Funds flow from operations is an additional IFRS measure that the Company presents in its consolidated statements of cash flows. Funds flow from operations is calculated as cash flows provided by operating activities adjusted for changes in non-cash working capital. Management believes that this measure provides useful supplemental information about operating performance and liquidity, as it represents cash generated during the period, regardless of the timing of collection of receivables and payment of payables, which may reduce comparability between periods.
Certain financial measures “ namely, Adjusted EBITDA, free cash flow, adjusted total operating expenses, direct employee costs, adjusted direct employee costs, other corporate costs, adjusted other corporate costs, adjusted operating profit, and adjusted net income “ do not have a standard meaning prescribed by IFRS and, accordingly, may not be comparable to measures used by other companies. Management believes that these indicators nevertheless provide useful measures in evaluating the Company's performance. Reconciliations of the non-IFRS financial measures to the most directly comparable IFRS financial measure are presented below:
Free Cash Flow Reconciliation to Funds Flow from Operations
| Fiscal 2022 | Fiscal 2023 | Fiscal 2024 | ||||||||||||||
| ($ thousands, unless otherwise stated) | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||||||||
| Funds flow from operations | 7,105 | 4,558 | 4,974 | 8,169 | 7,656 | 7,920 | 11,491 | 8,477 | ||||||||
| Capital expenditures | (62 | ) | - | (130 | ) | (211 | ) | (1,707 | ) | (45 | ) | (51 | ) | (459 | ) | |
| Repayment of lease liabilities | (459 | ) | (303 | ) | (339 | ) | (413 | ) | (553 | ) | (412 | ) | (412 | ) | (364 | ) |
| Free cash flow | 6,584 | 4,255 | 4,505 | 7,545 | 5,396 | 7,463 | 11,028 | 7,654 | ||||||||
| Weighted average shares “ basic (thousands) | 80,335 | 80,335 | 80,412 | 80,511 | 80,603 | 80,685 | 80,834 | 81,067 | ||||||||
| Free cash flow per share “ basic | 0.08 | 0.05 | 0.06 | 0.09 | 0.07 | 0.09 | 0.14 | 0.09 | ||||||||
Adjusted EBITDA and Adjusted EBITDA as a % of Total Revenue
| Three months ended December 31 | Nine months ended December 31 | |||||||||||||||
| 2023 | 2022 | $ change | % change | 2023 | 2022 | $ change | % change | |||||||||
| ($ thousands, except per share data) | ||||||||||||||||
| Net income | 5,610 | 6,348 | (738 | ) | (12 | %) | 19,030 | 14,571 | 4,459 | 31 | % | |||||
| Add (deduct): | ||||||||||||||||
| Depreciation and amortization | 1,555 | 864 | 691 | 80 | % | 3,537 | 2,732 | 805 | 29 | % | ||||||
| Stock-based compensation | 2,974 | 1,094 | 1,880 | 172 | % | 5,370 | 1,596 | 3,774 | 236 | % | ||||||
| Acquisition related expenses | 696 | - | 696 | 100 | % | 1,269 | - | 1,269 | 100 | % | ||||||
| Restructuring charges | - | - | - | 0 | % | - | 3,943 | (3,943 | ) | (100 | %) | |||||
| Income and other tax expense | 2,507 | 2,002 | 505 | 25 | % | 7,028 | 4,950 | 2,078 | 42 | % | ||||||
| Interest income | (986 | ) | (548 | ) | (438 | ) | 80 | % | (2,438 | ) | (1,105 | ) | (1,333 | ) | 121 | % |
| Foreign exchange loss (gain) | 642 | 151 | 491 | 325 | % | 693 | (923 | ) | 1,616 | (175 | %) | |||||
| Repayment of lease liabilities | (364 | ) | (413 | ) | 49 | (12 | %) | (1,188 | ) | (1,055 | ) | (133 | ) | 13 | % | |
| Adjusted EBITDA | 12,634 | 9,498 | 3,136 | 33 | % | 33,301 | 24,709 | 8,592 | 35 | % | ||||||
| Adjusted EBITDA as a % of total revenue | 38 | % | 49 | % | 44 | % | 46 | % | ||||||||
OPERATIONS BY REPORTABLE SEGMENT AND ANALYSIS
| CMG | Three months ended December 31 | Nine months ended December 31 | |||||||||||||||
| 2023 | 2022 | $ change | % change | 2023 | 2022 | $ change | % change | ||||||||||
| ($ thousands) | |||||||||||||||||
| Software license revenue | 18,209 | 16,051 | 2,158 | 13 | % | 54,282 | 45,571 | 8,711 | 19 | % | |||||||
| Professional service revenue | 3,594 | 3,341 | 253 | 7 | % | 10,338 | 8,010 | 2,238 | 29 | % | |||||||
| Total revenue | 21,803 | 19,392 | 2,411 | 12 | % | 64,620 | 53,581 | 11,039 | 21 | % | |||||||
| Cost of revenues | 2,288 | 1,695 | 593 | 35 | % | 6,464 | 5,116 | 1,348 | 26 | % | |||||||
| Operating expenses | 13,606 | 9,262 | 4,344 | 47 | % | 34,912 | 29,514 | 5,398 | 18 | % | |||||||
| Operating profit | 5,909 | 8,435 | (2,526 | ) | (30 | %) | 23,244 | 18,951 | 4,293 | 23 | % | ||||||
| Adjusted EBITDA: | |||||||||||||||||
| Net Income | 3,918 | 6,348 | (2,430 | ) | (38 | %) | 17,245 | 14,571 | 2,674 | 18 | % | ||||||
| Add (deduct): | |||||||||||||||||
| Depreciation and amortization | 1,449 | 865 | 584 | 68 | % | 3,424 | 2,732 | 692 | 25 | % | |||||||
| Stock-based compensation | 2,974 | 1,093 | 1,881 | 172 | % | 5,370 | 1,596 | 3,774 | 236 | % | |||||||
| Acquisition related expenses | 146 | - | 146 | 100 | % | 719 | - | 719 | 100 | % | |||||||
| Restructuring charges | - | - | - | - | - | 3,943 | (3,943 | ) | (100 | %) | |||||||
| Income and other tax expense | 1,805 | 2,002 | (197 | ) | (10 | %) | 6,288 | 4,950 | 1,338 | 27 | % | ||||||
| Interest income | (982 | ) | (548 | ) | (434 | ) | 79 | % | (2,434 | ) | (1,105 | ) | (1,329 | ) | 120 | % | |
| Foreign exchange loss (gain) | 701 | 151 | 550 | 364 | % | 752 | (923 | ) | 1,675 | (181 | %) | ||||||
| Repayment of lease liabilities | (428 | ) | (413 | ) | (15 | ) | 4 | % | (1,248 | ) | (1,055 | ) | (193 | ) | 18 | % | |
| Adjusted EBITDA | 9,583 | 9,498 | 85 | 1 | % | 30,116 | 24,709 | 5,407 | 22 | % | |||||||
| Adjusted EBITDA as a % CMG total revenue | 44 | % | 49 | % | 47 | % | 46 | % | |||||||||
CMG experienced increases in revenue for the three and nine months ended December 31, 2023, with increases of $2.4 million or 12% and $11.0 million or 21%, respectively. This consistent growth demonstrates CMG's ability to capture new customers and grow existing customers' revenue through increased license contracts and pricing.
Cost of revenues has increased for the three and nine months ended December 31, 2023, by 35% and 26%, respectively, primarily as a result of increased headcount and headcount related costs to support increased professional services revenue growth.
Operating expenses have increased for the three and nine months ended December 31, 2023, by 47% and 18%, respectively, primarily as a result of acquisition-related expenses, and increases in stock-based compensation, headcount and headcount related costs, agent commissions, depreciation and amortization expenses, and other corporate costs.
CMG adjusted EBITDA as a percentage of CMG total revenue is 44% for the three months ended December 31, 2023, compared to 49% in the prior year comparative quarter, primarily due to an increase in operating expenses as a result of an increase in headcount and headcount related costs and other corporate costs. Adjusted EBITDA as a percentage of total revenue for the nine months ended December 31, 2023, for CMG was 47% which is relatively consistent with the prior year.
| BHV | Three months ended December 31 | Nine months ended December 31 | |||||||||||||
| 2023 | 2022 | $ change | % change | 2023 | 2022 | $ change | % change | ||||||||
| ($ thousands) | |||||||||||||||
| Software license revenues | 5,035 | - | 5,035 | 100 | % | 5,200 | - | 5,200 | 100 | % | |||||
| Professional service revenue | 6,169 | - | 6,169 | 100 | % | 6,568 | - | 6.568 | 100 | % | |||||
| Total revenue | 11,204 | - | 11,204 | 100 | % | 11,768 | - | 11,768 | 100 | % | |||||
| Cost of revenues | 4,068 | - | 4,068 | 100 | % | 4,290 | - | 4,290 | 100 | % | |||||
| Operating expenses | 4,828 | - | 4,828 | 100 | % | 5,015 | - | 5,015 | 100 | % | |||||
| Operating profit | 2,308 | - | 2,308 | 100 | % | 2,463 | - | 2,463 | 100 | % | |||||
| Adjusted EBITDA: | |||||||||||||||
| Net Income | 1,692 | - | 1,692 | 100 | % | 1,785 | - | 1,785 | 100 | % | |||||
| Depreciation and amortization | 106 | - | 106 | 100 | % | 113 | - | 113 | 100 | % | |||||
| Acquisition related expenses | 550 | - | 550 | 100 | % | 550 | - | 550 | 100 | % | |||||
| Income and other tax expense | 702 | - | 702 | 100 | % | 740 | - | 740 | 100 | % | |||||
| Interest income | (4 | ) | - | (4 | ) | 100 | % | (4 | ) | - | (4 | ) | 100 | % | |
| Foreign exchange loss (gain) | (59 | ) | - | (59 | ) | 100 | % | (59 | ) | - | (59 | ) | 100 | % | |
| Repayment of lease liabilities | 64 | - | 64 | 100 | % | 60 | - | 60 | 100 | % | |||||
| Adjusted EBITDA | 3,051 | - | 3,404 | 100 | % | 3,184 | |||||||||
| Adjusted EBITDA as a % of BHV total revenue | 27 | % | - | 27 | % | - | |||||||||
BHVs revenue for the three and nine months ended December 31, 2023, is comprised of 55% professional services revenue, which is primarily driven by a contract with one customer. BHVs software license revenue for the three and nine months ended December 31, 2023, was supported by contract renewals.
BHVs cost of revenues consist mainly of headcount and headcount related costs incurred to support professional services revenue.
Operating expenses for BHV are primarily comprised of headcount and headcount related costs, office related costs and professional services costs.
BHV adjusted EBITDA as a percentage of BHV revenue is 27% for both the three and nine months ended December 31, 2023, respectively. The recognition of the annual license fee revenue in connection to third quarter contract renewals had a positive effect on adjusted EBITDA. We expect that adjusted EBITDA will fluctuate on a quarterly basis as a result of annual license fee revenue recognition which is skewed towards the last two quarters of the fiscal year.
CORPORATE PROFILE
CMG Group (TSX:CMG) is a global software and consulting company that combines science and technology with deep industry expertise to solve complex subsurface and surface challenges for the new energy industry around the world. The Company is headquartered in Calgary, AB, with offices in Houston, Oxford, Dubai, Bogota, Rio de Janeiro, Bengaluru, Oslo, and Kuala Lumpur. For more information, please visit www.cmgl.ca.
QUARTERLY FILINGS AND RELATED QUARTERLY FINANCIAL INFORMATION
Management's Discussion and Analysis (MD&A) and condensed consolidated interim financial statements and the notes thereto for the three and nine-months ended December 31, 2023 can be obtained from our website www.cmgl.ca. The documents will also be available under CMG Group's SEDAR profile www.sedarplus.ca.
Condensed Consolidated Statements of Financial Position
| UNAUDITED (thousands of Canadian $) | December 31, 2023 | March 31, 2023 | ||
| Assets | ||||
| Current assets: | ||||
| Cash | 45,183 | 66,850 | ||
| Restricted cash | 158 | - | ||
| Trade and other receivables | 32,090 | 23,910 | ||
| Prepaid expenses | 1,652 | 1,060 | ||
| Prepaid income taxes | 2,858 | 444 | ||
| 81,941 | 92,264 | |||
| Intangible assets | 24,347 | 1,321 | ||
| Right-of-use assets | 30,008 | 30,733 | ||
| Property and equipment | 10,072 | 10,366 | ||
| Goodwill | 3,787 | - | ||
| Deferred tax asset | - | 2,444 | ||
| Total assets | 150,155 | 137,128 | ||
| Liabilities and shareholders' equity | ||||
| Current liabilities: | ||||
| Trade payables and accrued liabilities | 13,329 | 9,883 | ||
| Income taxes payable | 1,027 | 33 | ||
| Acquisition holdback payable | 2,283 | - | ||
| Deferred revenue | 27,089 | 34,797 | ||
| Lease liabilities | 2,738 | 1,829 | ||
| 46,466 | 46,542 | |||
| Lease liabilities | 35,017 | 36,151 | ||
| Stock-based compensation liabilities | 2,706 | 1,985 | ||
| Acquisition earnout | 1,470 | - | ||
| Other long-term liabilities | 261 | - | ||
| Deferred tax liabilities | 1,113 | - | ||
| Total liabilities | 87,033 | 84,678 | ||
| Shareholders' equity: | ||||
| Share capital | 85,925 | 81,820 | ||
| Contributed surplus | 15,596 | 15,471 | ||
| Cumulative translation adjustment | (448 | ) | - | |
| Deficit | (37,951 | ) | (44,841 | ) |
| Total shareholders' equity | 63,122 | 52,450 | ||
| Total liabilities and shareholders' equity | 150,155 | 137,128 |
Condensed Consolidated Statements of Operations and Comprehensive Income
| Three months endedDecember 31 | Nine months endedDecember 31 | |||||||
| UNAUDITED (thousands of Canadian $ except per share amounts) | 2023 | 2022 | 2023 | 2022 | ||||
| RevenueCost of revenue | 33,0076,356 | 19,3921,695 | 76,38810,754 | 53,5815,116 | ||||
| Gross profit | 26,651 | 17,697 | 65,634 | 48,465 | ||||
| Operating expenses | ||||||||
| Sales and marketing | 4,857 | 2,480 | 10,596 | 6,674 | ||||
| Research and development | 7,253 | 4,096 | 16,072 | 13,268 | ||||
| General and administrative | 6,324 | 2,686 | 13,259 | 9,572 | ||||
| 18,434 | 9,262 | 39,927 | 29,514 | |||||
| Operating profit | 8,217 | 8,435 | 25,707 | 18,951 | ||||
| Finance income | 986 | 548 | 2,644 | 2,028 | ||||
| Finance costs | (1,086 | ) | (633 | ) | (2,293 | ) | (1,458 | ) |
| Profit before income and other taxes | 8,117 | 8,350 | 26,058 | 19,521 | ||||
| Income and other taxes | 2,507 | 2,002 | 7,028 | 4,950 | ||||
| Net income for the period | 5,610 | 6,348 | 19,030 | 14,571 | ||||
| Other comprehensive income: | ||||||||
| Foreign currency translation adjustment | (453 | ) | - | (449 | ) | - | ||
| Other comprehensive income | (453 | ) | - | (449 | ) | - | ||
| Total comprehensive income | 4,157 | 6,348 | 18,581 | 14,571 | ||||
| Net income per share “ basic | 0.07 | 0.08 | 0.24 | 0.18 | ||||
| Net income per share “ diluted | 0.07 | 0.08 | 0.23 | 0.18 | ||||
| Dividend per share | 0.05 | 0.05 | 0.15 | 0.15 | ||||
Condensed Consolidated Statements of Cash Flows
| Three months endedDecember 31 | Nine months endedDecember 31 | |||||||
| UNAUDITED (thousands of Canadian $) | 2023 | 2022 | 2023 | 2022 | ||||
| Operating activities | ||||||||
| Net income | 5,610 | 6,348 | 19,030 | 14,571 | ||||
| Adjustments for: | ||||||||
| Depreciation and amortization of property, equipment, right-of use assets | 890 | 864 | 2,686 | 2,732 | ||||
| Amortization of intangible assets | 665 | - | 851 | - | ||||
| Deferred income tax expense (recovery) | 1,104 | (145 | ) | 3,082 | (64 | ) | ||
| Stock-based compensation | 513 | 1,102 | 2,222 | 462 | ||||
| Foreign exchange and other non-cash items | (305 | ) | - | 17 | - | |||
| Funds flow from operations | 8,477 | 8,169 | 27,888 | 17,701 | ||||
| Movement in non-cash working capital: | ||||||||
| Trade and other receivables | (5,413 | ) | (4,872 | ) | (2,112 | ) | (1,048 | ) |
| Trade payables and accrued liabilities | 2,413 | 649 | 24 | 27 | ||||
| Prepaid expenses and other assets | (639 | ) | 1 | (349 | ) | (421 | ) | |
| Income taxes receivable (payable) | (181 | ) | 1,157 | (1,432 | ) | 733 | ||
| Deferred revenue | (4,214 | ) | 2,553 | (9,351 | ) | (3,737 | ) | |
| Change in non-cash working capital | (8,034 | ) | (512 | ) | (13,220 | ) | (4,446 | ) |
| Net cash provided by operating activities | 443 | 7,657 | 14,668 | 13,255 | ||||
| Financing activities | ||||||||
| Repayment of acquired line of credit | - | - | (2,012 | ) | - | |||
| Proceeds from issuance of common shares | 1,783 | 19 | 2,996 | 434 | ||||
| Repayment of lease liabilities | (364 | ) | (413 | ) | (1,188 | ) | (1,055 | ) |
| Dividends paid | (4,059 | ) | (4,025 | ) | (12,140 | ) | (12,067 | ) |
| Net cash used in financing activities | (2,640 | ) | (4,419 | ) | (12,344 | ) | (12,688 | ) |
| Investing activities | ||||||||
| Corporate acquisition, net of cash acquired | 157 | - | (22,893 | ) | - | |||
| Change in non-cash working capital | (517 | ) | - | (517 | ) | - | ||
| Property and equipment additions | (459 | ) | (211 | ) | (555 | ) | (341 | ) |
| Net cash used in investing activities | (819 | ) | (211 | ) | (23,695 | ) | (341 | ) |
| Increase (decrease) in cash | (3,016 | ) | 3,027 | (21,641 | ) | 226 | ||
| Effect of foreign exchange on cash | (26 | ) | - | (26 | ) | - | ||
| Cash, beginning of period | 48,225 | 56,859 | 66,850 | 59,660 | ||||
| Cash, end of period | 45,183 | 59,886 | 45,183 | 59,886 | ||||
| Supplementary cash flow information | ||||||||
| Interest received | 986 | 548 | 2,438 | 1,105 | ||||
| Interest paid | 444 | 482 | 1,394 | 1,458 | ||||
| Income taxes paid | 1,071 | 1,732 | 5,429 | 4,615 | ||||
For further information, please contact:
| Pramod Jain | or | Sandra Balic |
| Chief Executive Officer | Vice President, Finance & CFO | |
| (403) 531-1300 | (403) 531-1300 | |
| pramod.jain@cmgl.ca | sandra.balic@cmgl.ca | |
| For investor inquiries, please contact: | ||
| Kim MacEachern | ||
| Manager, Investor Relations | ||
| cmg-investors@cmgl.ca | ||
| For media inquiries, please contact: | ||
| marketing@cmgl.ca | ||
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements". Forward-looking statements can be identified by words such as: "anticipate", "intend", "plan", "goal", "seek", "believe", "project", "estimate", "expect", "strategy", "future", "likely", "may", "should", "will", and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding the benefits of the acquired technology, the ongoing development thereof; and the ability of data analytics to improve efficiency, cut costs and reduce risks.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are detailed in the companies' public filings.
Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by applicable securities laws, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.