Quisitive Technology Solutions Inc. Releases Third Quarter Financial Results

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Quisitive Technology Solutions Inc. Releases Third Quarter Financial Results

Canada NewsWire

Not for distribution to United States newswire services or for release publication, distribution or dissemination directly, or indirectly, in whole or in part, in or into the United States.

TORONTO, Nov. 27, 2018 /CNW/ -- Quisitive Technology Solutions Inc. (Quisitive or the "Company") (TSXV: QUIS), a premier Microsoft solutions provider, announced today that it is on target posting third-quarter revenue of $3,234,208.

Quisitive Logo (PRNewsfoto/Quisitive Technology Solutions )

Fusion Agiletech Partners Inc.  ("Fusion Canada") formed in 2017 to act as a consolidator in the Microsoft partner ecosystem and invest in emerging technology. In January 2018, the Company raised capital through private placement and in February 2018 purchased Quisitive, LLC, a premium Microsoft solutions provider. Results today reflect Fusion's operations since February 2018.  Fusion Canada completed an RTO with Nebo Capital Corporation effective August 8, 2018 and the resulting company has changed its name to Quisitive Technology Solutions Inc.

"It has been a transformational quarter whereby the company is now listed on the TSXV and has built the foundation for our consolidation platform completing our first acquisition in February 2018.  We have sourced potential acquisition targets, pending financing, to potentially close in early 2019.  I am pleased with the progress we have made this quarter," said Stephanie Ratza, CFO.

Financial Highlights:

  • Revenue for the three months ending September 30, 2018 was $3,234,208, a 5.5% increase from the three months ending June 30, 2018 of $3,056,458. We are embracing new customers' wins this quarter and have developed a strong pipeline for our fourth quarter. There is no comparable revenue for September 30, 2017.
  • Revenue was $7,586,189 for the nine months ended September 30th, 2018. There are no comparable periods for September 30, 2017.
  • Gross profit for the three months ending September 30, 2018 increased to $1,078,420 or 3.3% from $1,043,713 in the second quarter ending June 30, 2018. As a percentage, gross profit was 33.3% compared to 34.1% in the second quarter of 2018.  There is no comparable gross profit for September 30, 2017.
  • Gross profit for nine months ending September 30 30, 2018 was $2,551,804 or 33.6%. There are no comparable gross profits for nine months ending September 30, 2017.
  • Net loss for the three months ending September 30, 2018 was $3,749,609 which represents a $0.05 loss per share.  During the quarter, with the completion of the RTO, the Company expensed $2,780,736 associated with the Listing fees of the RTO. The Amalgamation with Nebo allowed the former Fusion Canada, a private company, to obtain a listing on the TSX-V without having to go through the initial public offering process.  As the acquisition was not considered a business combination, a total of $2,780,736 (non-cash), being the excess of fair value of the consideration paid to obtain the listing over the net assets (liabilities) received (assumed) is expensed for the three and nine months ended September 30, 2018.
  • Net loss for the nine months ending September 30, 2018 was $4,965,294 which represents a $0.08 loss per share.
  • Adjusted EBITDA loss for the three months ending September 30, 2018 was ($649,111) or (20.1%) of revenue.
  • Adjusted EBITDA loss for the nine months ending September 30, 2018 was ($842,182) or (11.1%) of revenue.
  • The company incurred $42,920 in acquisition related expenses in the three months ending September 30, 2018 compared with $68,691 incurred in the three months ending June 30, 2018.  Acquisition related expenses for the nine months ending September 30, 2018 was $266,611.  The company is actively pursuing its consolidations strategy.

"Over the last quarter, Quisitive has shown focused execution against our two core Go-To-Market strategies; Emerging Technologies and the Azure Accelerator Program, resulting in the acquisition of net-new customers and the build of a robust pipeline. These focused tactics are positioning us well to finish out the year strong and more importantly creating the right volume to start F2019 positively.  With the competitive options available in today's cloud computing environment and the pressure on IT to innovate and optimize, our prospects and clients are evaluating a move to the cloud very diligently, resulting in an average of a 4-month decision making window. The momentum we have driven in Q3 coupled with the trends we are seeing around time to action, gives us confidence in the quality of our Q4 and FY2019 Q1 pipeline to drive significant revenue impact," Mike Reinhart, CEO.

BUSINESS UPDATE

During the third quarter, Quisitive achieved the following milestones:

  • The Company announced the completion of the RTO on August 8, 2018 and is now trading under the symbol TSXV: QUIS.
  • The Company was selected as a 2018 Microsoft US Partner of the Year Finalist and recognized as a top Microsoft partner demonstrating excellence in innovation and implementation of customer solutions based on Microsoft technology. Finalist and award winners represent the best and most forward-thinking innovators coming out of the Microsoft partner community
  • The Company has seen dramatic growth in customers looking to evaluate the benefits of the Microsoft cloud.
    • 183% increase in customer assessment engagements via Quisitive's proprietary Azure Accelerator program.
    • The Company has developed a strong pipeline of Microsoft cloud consumption and Quisitive cloud migration services to drive revenue growth in future periods.
    • Secured follow-on projects that include Office 365, Azure DevOps and Azure Migration.
    • Actively engaged with 19 new customers across Microsoft's key market segments; Financial Services and Healthcare.
    • Expansion of Quisitive Azure Accelerator Program into Canadian market including strategic assessment win at a top 5 national bank.
  • Microsoft selected the Company to participate as a speaker at the Microsoft Oil and Gas Innovation Summit hosted at Baker Hughes. The Company spoke on key scenarios that Microsoft Azure and blockchain could be applied to within midstream oil and gas sector showcasing the Quisitive Oil and Gas Blockchain Proof of Concept.
  • The Company was featured in an article titled 'Quisitive and the Quest to Become the Perfect Microsoft Partner,' further validating the vision to create North America's premiere Microsoft solutions provider.

Subsequent to Third Quarter of Fiscal 2018:

  • The Company announced the approval and completion of a $2,500,000 credit facility.
  • The Company announced the build of Children's Hospital Colorado Telehealth Photo System and the release of the whitepaper. This mission-critical application showcases the robust functionality of the Microsoft cloud fabric and how it is modernizing patient care through the ability to share photos and videos between consulting physicians.  
  • The Company was a featured speaker in the following events, showcasing the power of the Microsoft cloud, blockchain, artificial intelligence and the Internet of Things:
    • Coach and speaker at the University of Arkansas Blockchain Hackathon
    • Speaker at Northwest Arkansas Women in Technology Summit
  • The Company was featured in media coverage, comparing Quisitive's emerging technology capabilities to Accenture and Deloitte.

The Company's unaudited condensed consolidated interim financial statements as at and for the three and nine months ended September 30th, 2018 and related management's discussion and analysis can be found on the Company's website and at www.sedar.ca.  All figures are expressed in United States dollars unless otherwise stated.

Conference Call Access
To access the conference call by phone, please dial the following numbers.

Canada/United States: 1-800-319-4610
Toronto Toll: 1-416-915-3239
We will start the call promptly at 8:30am EST November 27, 2018.  Please dial in 10 minutes prior to the scheduled start time and ask to join the Quisitive Technology Solutions call.

We encourage you to access the presentation material in the Investors section of Quisitive's website at https://quisitive.com/investor-relations/.

About Quisitive:

Quisitive is a premier Microsoft solutions provider that helps customers navigate the ever-changing technology climate that their business relies upon. With a legacy of innovation and deep technical expertise, Quisitive is empowering the enterprise to harness the Microsoft cloud and emerging technologies such as blockchain, artificial intelligence (AI), machine learning, and the Internet of Things (IoT) through customized solutions and first-party cloud-based products.

Quisitive is uniquely comprised of former Microsoft leaders and technologists who share a deep understanding of market needs and the appropriate application of Microsoft cloud technology. Quisitive serves clients globally with offices in Dallas, TX, Denver, CO and Toronto, Ontario. For more information, visit http://www.Quisitive.com or follow @BeQuisitive.

Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenue

Adjusted EBITDA

We prepare and release quarterly unaudited and annual audited financial statements prepared in accordance with IFRS. We also disclose and discuss certain non-GAAP financial information, used to evaluate our performance, in this and other earnings releases and investor conference calls as a complement to results provided in accordance with IFRS. We believe that current shareholders and potential investors in our company use non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues, in making investment decisions about our company and measuring our operational results.

The term "Adjusted EBITDA" refers to a financial measure that we define as earnings before certain charges that management considers to be non-operating expenses and which consist of interest, taxes, depreciation, amortization, stock-based compensation (for which we include related fees and taxes), acquisition-related expenses and listing expense. Adjusted EBITDA as a percentage of revenues divides Adjusted EBITDA for a period by the revenues for the corresponding period and expresses the quotient as a percentage.

Management considers these non-operating expenses to be outside the scope of Quisitive' ongoing operations and the related expenses are not used by management to measure operations. Accordingly, these expenses are excluded from Adjusted EBITDA, which we reference to both measure our operations and as a basis of comparison of our operations from period-to-period.

Management believes that investors and financial analysts measure our business on the same basis, and we are providing the Adjusted EBITDA financial metric to assist in this evaluation and to provide a higher level of transparency into how we measure our own business. However, Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues are non-GAAP financial measures and may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues should not be construed as a substitute for net income determined in accordance with IFRS or other non-GAAP measures that may be used by other companies, such as EBITDA. The use of Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues does have limitations. As these acquisition-related expenses charges may continue as we pursue our consolidation strategy, some investors may consider these charges and expenses as a recurring part of operations rather than expenses that are not part of operations.

Reconciliation of Adjusted EBITDA loss


3 months

September 30,
2018


9 months

September 30,

2018

Net loss for the period

$

(3,749,609)

$

(4,965,294)

Adjustments to reconcile to Adjusted EBITDA





Income tax expense


-


446,900

Interest expense


175,101


316,290

Amortization


9,219


33,967

Depreciation


33,996


78,577

Share-based compensation


58,526


200,031

Listing expense


2,780,736


2,780,736

Acquisition related expenses


42,920


266,611

Adjusted EBITDA loss


(649,111)


(842,182)

Adjusted EBITDA loss as a percentage of revenue


(20.1%)


(11.1%)

Adjusted EBITDA for the quarter ending September 30, 2018 was a loss of $649,111 or (20.1%). Adjusted EBITDA for the nine-months ending September 30, 2018 was a loss of $842,182.  The Company is investing in consulting practice of emerging technologies, investing in investor relations functions and continues to investigate acquisitions potentials.

Neither 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.

Forward-Looking Statements: Some statements in this news release contain forward-looking information. These statements include, but are not limited to, statements with respect to proposed activities, consolidation strategy and future expenditures. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements.  Such factors include, among others the limited history of operations, lack of profitability, availability of financing, the need for additional financing and the timing and amount of expenditures, ability to successfully execute on consolidation strategies, the failure to find economically viable acquisition targets, funding for internally developed technology solutions, client retention and attrition, client demands, reliance on key personnel, economic spending in the IT industry and technological changes in the IT industry.  Quisitive Technology Solutions Inc. does not assume the obligation to update any forward-looking statements.

 

SOURCE Quisitive Technology Solutions Inc.

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/November2018/27/c8471.html

Copyright CNW Group 2018

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