Canada NewsWire
TORONTO, Nov. 16, 2020
TORONTO, Nov. 16, 2020 /CNW/ - Optiva Inc. ("Optiva" or "the Company") (TSX: OPT), a leader in providing communications service providers (CSPs) worldwide with cloud-native revenue management software on the public cloud, released its third quarter financial results today for the three-month period ended September 30, 2020.
Q3 Fiscal 2020 Highlights | Three Months Ended | Nine Months Ended | |||
($ US Thousands, except per share information) | September 30, | September 30, | |||
(Unaudited) | 2020 | 2019 | 2020 | 2019 | |
Revenue | 18,804 | 23,124 | 57,774 | 72,736 | |
Net income (loss) | (29,221) | (963) | (43,190) | 2,584 | |
Earnings (loss) Per Share | $(5.50) | $(0.18) | $(8.12) | $ 0.49 | |
Adjusted EBITDA | $ 6,819 | $ 4,630 | $ 15,095 | $ 19,591 | |
Cash generated from (used in) operating activities | (1,398) | 1,232 | (5,279) | 2,624 | |
Total cash, including restricted cash | 21,306 | 37,677 | 21,306 | 37,677 |
"During the quarter, we endeavored to enhance our customer engagement and use the feedback as a tool to deliver greater value as a vendor. While plenty of work remains, our team has demonstrated unwavering focus to work closely with our customers to assess and address their current and future needs including a path to cloud native offerings," said Robert Stabile, Chairman of the Board of Optiva. "The reception to this approach from our customers and prospects is both positive and encouraging, which ultimately validates that our first-mover advantage, expertise and view of the future, positions Optiva as the partner of choice as customers prepare for their respective transition strategies to the cloud."
Business Highlights:
Third Quarter 2020 Financial Results Highlights
_________________________________ |
[1] EBITDA and Adjusted EBITDA are a non-IFRS measure. This measure is defined in the "Non-IFRS Financial Measures" section of this news release. |
CDN $30 Million Private Placement
Subsequent to quarter-end, on November 10, 2020, Optiva announced that OceanLink Management Ltd., for and on behalf of certain managed funds, agreed to make a CDN $30 million investment in Optiva through the purchase of subordinate voting shares by way of a private placement.
OceanLink agreed to purchase 750,000 subordinate voting shares at a purchase price of CDN $40.00 per share for gross proceeds to Optiva of CDN $30 million. Following the closing of the investment, OceanLink will exercise control or direction over approximately 12.4% of the issued and outstanding subordinate voting shares.
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, any one-time transaction costs associated with shareholder conflict and the new debenture financing and spending on Cloud innovation. The Company believes that Adjusted EBITDA is a metric that investors may find useful in understanding the Company's financial position. Additionally, the Company believes that Adjusted EBITDA isolates the Company's results of operations from spending on cloud development and serves as a useful yardstick to gauge the profitability of the Company's operations prior to spending on the development of the cloud platform which currently generates negligible revenue to the Company. The following table provides a reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA.
Three months ended, September 30 | Nine months ended, September 30 | Last twelve months ending September 30, | ||||||||
2020 | 2019 | 2020 | 2019 | 2020 | ||||||
Net income (loss) for the period | $ | (29,220,983) | $ | (962,817) | $ | (43,189,879) | $ | 2,584,377 | $ | (60,063,734) |
Add back / (substract): | ||||||||||
Depreciation of property and equipment | - | 8,271 | - | 57,237 | - | |||||
Amortization of intangible assets | 2,188,032 | 1,200,761 | 7,140,553 | 3,527,123 | 8,303,749 | |||||
Finance income | (173,251) | (119,245) | (250,074) | (391,186) | (375,644) | |||||
Finance costs | 29,660,877 | 1,795,206 | 28,282,767 | 5,197,974 | 38,435,347 | |||||
Income tax expense | 1,987,199 | 2,611,925 | 2,675,506 | 3,987,088 | 9,030,210 | |||||
Foreign exchange loss (gain) | (282,702) | 384,747 | 1,899,005 | (865,901) | 3,497,943 | |||||
Share-based compensation | 1,421,022 | 450,154 | 535,890 | 1,304,133 | 1,172,744 | |||||
EBITDA | 5,580,194 | 5,369,002 | (2,906,232) | 15,400,845 | 615 | |||||
Restructuring costs (recovery) | 59,440 | (3,709,732) | 202,162 | (2,414,738) | 305,696 | |||||
Change in other provisions | - | - | 3,072,717 | - | 3,072,717 | |||||
One-time costs related to shareholder conflict | - | |||||||||
and Debenture financing | 1,179,264 | - | 2,101,129 | - | 2,101,129 | |||||
Spend on Cloud innovation | - | 2,970,681 | 12,624,903 | 6,605,119 | 17,010,645 | |||||
Adjusted EBITDA | $ | 6,818,898 | $ | 4,629,951 | $ | 15,094,679 | $ | 19,591,226 | $ | 22,490,802 |
About Optiva Inc.
Optiva Inc. is a leader in providing communication service providers ("CSPs") worldwide with cloud-native revenue management software on the private and public cloud in various models, including software-as-a-service ("SaaS"). Operators worldwide from different tiers and business lines can select the best-of-breed, converged Optiva Charging Engine and integrate it into their existing Business Support System ("BSS") ecosystem or choose an end-to-end, best-of-suite billing and charging product. Optiva solutions offer unmatched speed, scale, security, and savings and help operators unlock business opportunities such as 5G and IoT. Established in 1999, Optiva Inc. is listed on the Toronto Stock Exchange (TSX: OPT). For more information, visit www.optiva.com.
Caution Concerning Forward-Looking Statement
Certain statements in this document may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which 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 November 11, 2020, about our business and the markets we operate in, and on various estimates and assumptions. Our actual results could materially differ from our expectations if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. As a result, there is no assurance that any forward-looking statements will materialize. Risks that could cause our results to differ materially from our current expectations are discussed in the Company's most recent Annual Information Form, which is available on SEDAR at www.sedar.com and on Optiva's website at www.optiva.com/investors/. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Optiva does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.
OPTIVA Inc. | ||||
Condensed Consolidated Interim Statements of Financial Position | ||||
(Expressed in U.S. dollars) | ||||
(Unaudited) | ||||
September 30, | December 31, | |||
2020 | 2019 | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 20,615,460 | $ | 31,747,993 |
Trade accounts and other receivables | 9,743,583 | 7,808,293 | ||
Unbilled revenue | 4,547,853 | 4,468,014 | ||
Prepaid expenses | 1,955,205 | 1,983,391 | ||
Income taxes receivable | 4,162,609 | 4,105,144 | ||
Other assets | 207,273 | 243,199 | ||
Inventories | - | 473,201 | ||
Total current assets | 41,231,983 | 50,829,235 | ||
Restricted cash | 690,126 | 951,291 | ||
Long-term unbilled revenue | 3,816,671 | 4,676,597 | ||
Deferred income taxes | 222,481 | 217,423 | ||
Other assets | 570,370 | - | ||
Investment tax credits | 350,452 | 358,309 | ||
Intangible assets | 5,088,742 | 12,215,598 | ||
Goodwill | 32,271,078 | 32,271,078 | ||
Total assets | $ | 84,241,903 | $ | 101,519,531 |
Liabilities and Shareholders' Deficit | ||||
Current liabilities: | ||||
Trade payables | $ | 13,508,017 | $ | 7,350,942 |
Accrued liabilities | 9,080,924 | 10,518,015 | ||
Provisions | 5,765,333 | 3,630,550 | ||
Income taxes payable | 3,379,804 | 3,644,752 | ||
Deferred revenue | 6,231,762 | 6,363,724 | ||
Total current liabilities | 37,965,840 | 31,507,983 | ||
Deferred revenue | 634,137 | 702,143 | ||
Other liabilities | 3,145,629 | 2,628,408 | ||
Pension and other long-term employment benefit plans | 16,092,993 | 12,486,732 | ||
Debentures | 86,812,355 | - | ||
Provisions | - | 36,611 | ||
Preferred shares | - | 66,345,563 | ||
Series A Warrant | 21,291,366 | 22,679,934 | ||
Deferred income taxes | 670,691 | 753,036 | ||
Total liabilities | 166,613,011 | 137,140,410 | ||
Shareholders' equity deficit: | ||||
Share capital | 250,904,013 | 250,893,223 | ||
Standby Warrant | 997,500 | 997,500 | ||
Contributed surplus | 11,280,842 | 11,291,632 | ||
Deficit | (337,511,917) | (294,322,038) | ||
Accumulated other comprehensive loss | (8,041,546) | (4,481,196) | ||
Total shareholders' deficit | (82,371,108) | (35,620,879) | ||
Total liabilities and shareholders' equity (deficit) | $ | 84,241,903 | $ | 101,519,531 |
OPTIVA Inc. | ||||||||
Condensed Consolidated Interim Statements of Comprehensive Income (Loss) | ||||||||
(Expressed in U.S. dollars, except per share and share amounts) | ||||||||
(Unaudited) | ||||||||
Three months ended, | Nine months ended, | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Revenue: | ||||||||
Support and subscription | $ | 14,077,343 | $ | 16,595,067 | $ | 44,030,708 | $ | 51,602,980 |
Software licenses, services and other | 4,726,877 | 6,528,991 | 13,742,981 | 21,133,345 | ||||
18,804,220 | 23,124,058 | 57,773,689 | 72,736,325 | |||||
Cost of revenue | 4,649,294 | 8,065,009 | 15,124,936 | 25,063,327 | ||||
Gross profit | 14,154,926 | 15,059,049 | 42,648,753 | 47,672,998 | ||||
Operating expenses: | ||||||||
Sales and marketing | 1,581,100 | 2,256,818 | 6,272,788 | 8,119,128 | ||||
General and administrative | 8,288,092 | 4,646,796 | 23,893,409 | 13,185,706 | ||||
Research and development | 2,255,154 | 8,155,351 | 22,863,069 | 18,270,550 | ||||
Restructuring costs (recovery) | 59,440 | (3,709,732) | 202,162 | (2,414,738) | ||||
12,183,786 | 11,349,233 | 53,231,428 | 37,160,646 | |||||
Income (loss) from operations | 1,971,140 | 3,709,816 | (10,582,675) | 10,512,352 | ||||
Foreign exchange gain (loss) | 282,702 | (384,747) | (1,899,005) | 865,901 | ||||
Finance income | 173,251 | 119,245 | 250,074 | 391,186 | ||||
Finance costs | (29,660,877) | (1,795,206) | (28,282,767) | (5,197,974) | ||||
Income (loss) before income taxes | (27,233,784) | 1,649,108 | (40,514,373) | 6,571,465 | ||||
Income tax expense: | ||||||||
Current | 2,100,108 | 2,565,101 | 2,795,866 | 3,958,983 | ||||
Deferred | (112,909) | 46,824 | (120,360) | 28,105 | ||||
1,987,199 | 2,611,925 | 2,675,506 | 3,987,088 | |||||
Net income (loss) | $ | (29,220,983) | $ | (962,817) | $ | (43,189,879) | $ | 2,584,377 |
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: | $ | (3,560,350) | $ | 1,033,305 | $ | (3,560,350) | $ | 1,033,305 |
Total comprehensive income (loss) | $ | (32,781,333) | $ | 70,488 | $ | (46,750,229) | $ | 3,617,682 |
Income (loss) per subordinate voting share: | ||||||||
Basic | $ | (5.50) | $ | (0.18) | $ | (8.12) | $ | 0.49 |
Diluted | (5.50) | (0.18) | (8.12) | 0.46 | ||||
Weighted average subordinate voting shares: | ||||||||
Basic | 5,315,757 | 5,315,757 | 5,315,903 | 5,257,908 | ||||
Diluted | 5,315,757 | 5,315,757 | 5,315,903 | 5,612,205 | ||||
OPTIVA Inc. | ||||||||
Condensed Consolidated Interim Statements of Cash Flows | ||||||||
(Expressed in U.S. dollars) | ||||||||
(Unaudited) | ||||||||
Three months ended, | Nine months ended, | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Cash provided by (used in): | ||||||||
Operating activities: | ||||||||
Income (loss) for the period | $ | (29,220,983) | $ | (962,817) |
$ | (43,189,879) | $ | 2,584,377 |
Adjustments for: | ||||||||
Depreciation of property and equipment | - | 8,271 | - | 57,237 | ||||
Amortization of intangible assets | 2,188,032 | 1,200,761 | 7,140,553 | 3,527,123 | ||||
Finance (income) | (173,251) | (119,245) | (250,074) | (391,186) | ||||
Finance costs | 29,660,877 | 1,795,206 | 28,282,767 | 5,197,974 | ||||
Pension | 100,932 | (211,122) | 109,323 | (181,114) | ||||
Income tax expense | 1,987,199 | 2,611,925 | 2,675,506 | 3,987,088 | ||||
Unrealized foreign exchange loss (gain) | (11,484) | 227,392 | (1,055,526) | (645,352) | ||||
Share-based compensation | 1,421,022 | 450,154 | 535,890 | 1,304,133 | ||||
Change in provisions | (258,968) | (4,614,128) | 2,098,172 | (6,271,053) | ||||
Loss on disposal of property and equipment | – | 15,391 | – | 266,699 | ||||
Change in non-cash operating working capital | (5,505,549) | 624,852 | 1,561,903 | (4,692,920) | ||||
187,827 | 1,026,640 | (2,091,365) | 4,743,006 | |||||
Interest paid | (7,656) | (17,281) | (34,070) | (56,126) | ||||
Interest received | 6,020 | 55,813 | 75,934 | 160,858 | ||||
Income taxes paid | (1,584,095) | 166,375 | (3,229,262) | (2,223,571) | ||||
(1,397,904) | 1,231,547 | (5,278,763) | 2,624,167 | |||||
Financing activities: | ||||||||
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 | - | ||||
Payment of dividends | (11,378,719) | - | (13,588,145) | - | ||||
(4,694,302) | - | (6,903,728) | - | |||||
Investing activities: | ||||||||
Increase in restricted cash | 57,647 | 298,412 | 261,165 | 1,941,913 | ||||
Sale of property and equipment | - | 67,456 | - | 67,456 | ||||
57,647 | 365,868 | 261,165 | 2,009,369 | |||||
Effect of foreign exchange rate changes | ||||||||
on cash and cash equivalents | 223,160 | (497,829) | 788,793 | (399,876) | ||||
Increase (decrease) in cash and cash equivalents | (5,811,399) | 1,099,586 | (11,132,533) | 4,233,660 | ||||
Cash and cash equivalents, beginning of period | 26,426,859 | 35,493,340 | 31,747,993 | 32,359,266 | ||||
Cash and cash equivalents, end of period | $ | 20,615,460 | $ | 36,592,926 | $ | 20,615,460 | $ | 36,592,926 |
SOURCE Optiva Inc.
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