Solium Releases 2014 First Quarter Financial Results Tuesday, May 06, 2014
Solium Releases 2014 First Quarter Financial Results
07:00 EDT Tuesday, May 06, 2014
- Revenue increased by 20%
- Adjusted EBITDA increased by 34%
- Cash position strong at $43.4 million
CALGARY, May 6, 2014 /CNW/ - Solium Capital Inc. ("Solium" or the "Company") today announced its financial results for the first quarter ended March 31, 2014.
Financial and operating highlights for the first quarter ended March 31, 2014:
- Revenue increased by 20% to $21.7 million in the first quarter of 2014;
- Earnings from operations increased by 42% to $6.0 million in the first quarter of 2014;
- Adjusted EBITDA1 increased by 34% to $7.3 million in the first quarter of 2014;
- Net earnings increased by 71% to $4.6 million in the first quarter of 2014;
- Cash on hand and short-term investments as at March 31, 2014 totaled $43.4 million;
- On January 10, 2014, the Company completed the acquisition of GlobalSharePlans (rebranded to Solium GSP).
Key factors affecting financial results for the first quarter ended March 31, 2014:
Organic growth and strong trading activity - The Company experienced increased license and subscription fees through organic growth since the first quarter of 2013. In addition, the Company experienced stronger participant share trading activity and corresponding transaction based revenue in the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. Certain seasonal factors typically contribute to higher transaction based revenue in the first quarter of a given year.
Foreign exchange - The strength of the U.S. dollar (USD) against the Canadian dollar (CAD) increased during the three months ended March 31, 2014 compared to the same period in 2013. This had a positive impact on the Company's overall financial results due to the translation of USD financial results into CAD for consolidated financial reporting purposes.
Acquisitions - GlobalSharePlans (rebranded to Solium GSP), a leading online provider of regulatory and tax information for companies with global equity incentive plans was acquired in exchange for cash and 176,493 common shares at the beginning of the first quarter of 2014. A small amount of revenue, expenses and a small net loss were recorded from the acquired business in the three months ended March 31, 2014 compared to no revenue or expenses in the first quarter of 2013.
Selected financial information for the first quarter ended March 31, 2014:
| | | | | |
| | Three Months Ended March 31, |
| 2014 | 2013 | % Change |
| Revenue | $21,742 | $18,151 | 20% |
| Operating Expenses | $15,714 | $13,909 | 13% |
| Earnings from operations | $6,027 | $4,242 | 42% |
| Adjusted EBITDA1 | $7,254 | $5,413 | 34% |
| Net earnings | $4,571 | $2,673 | 71% |
| | | | |
| Net earnings per share | | | |
| | Basic | $0.097 | $0.063 | 54% |
| | Diluted2 | $0.092 | $0.061 | 51% |
| | | | |
| Issued and outstanding | | | |
| | Common shares | 47,198,753 | 42,690,013 | 11% |
| | Diluted3 | 51,510,075 | 46,984,009 | 10% |
| | | | | |
Revenue was $21.7 million in the first quarter of 2014 (2013: $18.2 million).
Adjusted EBITDA1 was $7.3 million in the first quarter of 2014 (2013: $5.4 million).
Net earnings were $4.6 million in the first quarter of 2014 (2013: $2.7 million).
The effective income tax rate relative to accounting income increased from 31.6% in the first quarter of 2013 to 35.3% in the first quarter of 2014.
Net earnings per share were $0.097 in the first quarter of 2014 (2013: $0.063).
During the first quarter of 2014, the Company had a net cash outflow of $3.0 million (2013: outflow $0.07 million). Funds from operations were $6.6 million (2013: $4.9 million). The payment of employee staff bonuses for 2013 that occurred in the first quarter of 2014 as well as income tax payments and instalments contributed to the overall net cash outflow. In addition, net cash outflow from investing activities was $3.4 million during the quarter ended March 31, 2014 (2013: $0.6 million) mainly due to the acquisition of Solium GSP. Working capital as at March 31, 2014 was $45.4 million (December 31, 2013: $41.9 million).
Outlook
Solium will continue to invest significantly in Shareworks, the first and only equity administration platform with end-to-end global capabilities on a single platform, and will accelerate investment into the expansion of international operations which are gaining traction in the marketplace.
On January 10, 2014, the Company completed the acquisition of GlobalSharePlans (rebranded to Solium GSP), a leading online provider of regulatory and tax information for companies with global equity incentive plans. Based in Spain, Solium GSP has a base of established Fortune 500 clients. The Company will develop additional revenue-generating opportunities from this acquisition by integrating Solium GSP's expertise in global tax and regulatory compliance into the Shareworks platform and associated services ecosystem. The Company will also introduce the Solium GSP tax and compliance datasets and toolsets to current and future Shareworks clients in all geographies. Solium GSP is expected to be accretive to earnings over time.
Notes:
| 1. | Earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA are non-IFRS financial measures which do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. EBITDA and Adjusted EBITDA provide useful information to users as they reflect the net earnings prior to the effect of non-operating expenses such as finance costs, income tax, amortization, and foreign exchange gain or loss (on translation of working capital assets). Management uses Adjusted EBITDA in measuring the financial performance of the Company. Management monitors Adjusted EBITDA against budget and past results on a regular basis. The measure is a component in determining the annual bonus pool for staff and management. |
| | |
| | The following is a reconciliation of Adjusted EBITDA to net earnings: |
| | | | Three months ended March 31 | |
| | | | | | | |
| | | | 2014 | 2013 | |
| | | Adjusted EBITDA | 7,254 | 5,413 | |
| | | Foreign exchange gain (loss) | 898 | (234) | |
| | | EBITDA | 8,152 | 5,179 | |
| | | | | | | |
| | | Finance income (costs) | 136 | (100) | |
| | | Amortization expense | (1,227) | (1,171) | |
| | | Income tax expense | (2,490) | (1,235) | |
| | | | | | | |
| | | Net earnings | 4,571 | 2,673 | |
| | | | | | | |
| 2. | Diluted net earnings per share is calculated using the treasury stock method. |
| | |
| 3. | Diluted shares as presented equals issued and outstanding common shares plus outstanding stock options, restricted share units and shares to be issued on conversion of the convertible notes. |
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About Solium Capital Inc.
Solium Capital Inc. (TSX: SUM) provides cloud-enabled services for global equity administration, financial reporting and compliance. From operation centers in the United States, Canada, the United Kingdom, Spain and Australia, our innovative software-as-a-service (SaaS) technology powers share plan administration and equity transactions for more than 3,000 corporate clients with employee participants in more than 100 countries. Follow us @Solium and visit us at solium.com.