Sylogist Ltd T.SYZ

This doesn't add up!!!

[Robertson]

I’m new to this board but this is what I see coming in Q2 and the full year.  Sylogist seems like an interesting prospect but when you dig into the numbers I can’t make sense of what’s going on with the stock price.  Is this another pump and dump by management?
 
This is what I see coming:
 
Revenue flat (no growth) compared to last year, even with the past two acquisitions. (Foreign exchange working against the revenue number, renewal rates are down 20%+ in Q1, no new large contracts announced that replace the contract that accounted for 10%+ of revenue in Q2 last year and the past several years).
Earnings about half of last year – perhaps 6 cents per share in Q2.
Margins shrinking as high margin recurring revenue falls.  
Expenses on the rise with new overhead from US executive team (high salaries and bonus incentives based on stock price), new board costs, TSX costs, interest expense, heavy legal and advisory fees, new employee hirings.
An unsupportable dividend of $0.125 per quarter (likely 200% of reported profit) – 50 cents per year ($12M total) which will require cutting.
No net cash left on the balance sheet (cash fully committed with the new debt).
Insiders selling large blocks (over $4.3M in the past couple of weeks) during a blackout period (Poor results on the way?).
 
 What am I missing here?

[retiredcf]

What you're missing is that you're not only new to this BB, you're new to SH having  only joined two weeks ago so you can bash SYZ.  How's that working out for you? I won't be around to hear your answer as you're heading for the bin. GLTA

[Robertson]

Not bashing, just stating the facts.  BTW I am a shareholder, one who's concerned about fair representation of the results.  You know what happens when promotion gets well ahead of performance - things end badly.

[4frankly]

expectations from announcements/deals since then... look over the press releases

[beancounter11]

  you better cover your short pretty soon, too much good news and when they release earnings that will be another catalyst.  This company is growing up moving to the TSX and now having conference calls is not promotion it is adding value to shareholders.  

[pacer217]

One very small shareholder's opinion;   I think, IF "Robertson" is a share holder as he suggests, then this looks like he has a small position, and missed his chance to add /  average up. SYZ got away from him. To suggest that the promotion has gone too far. WHAT // promotion?.  All they did was expand company, increase dividend twice, move to TSX.  Promotion

[Robertson]

Let's continue this discussion after the second quarter results are released.  That should happen this week if things are on the same schedule as last year.  I'd be happy to apologize for my doubts if the results show profit improvement compared to last year.  

[retiredcf]

Just took advantage of today's decline to add a few more. GLTA

[pacer217]

You may be the smartest person in the room! I was thinking of adding around 1 PM , but went to lunch instead. You are up .50 cents in 80 minutes. I missed another opportunity.  Story of my life.!

[Robertson]

WOW - It turns out I was an optimist in forecasting results despite other views.  These results show a business on a rapid decline. Revenue down even including last year's acquisition and a small piece of the new one. Forward revenue likely down as deferred revenue is lower than last year INCLUDING two acquisitions! Profit down by more than half. No wonder insiders were

[u8fish]

During the three-month period ended March 31, 2021, Sylogist delivered Adjusted EBITDA of $4.4 million, or 50% of total revenues of approximately $8.9 million. Revenue decreased 6% compared to the same period in the last fiscal year. This decrease was due mainly to unfavorable movements in the USD/CAD exchange rate and to an unfavorable comparison to the same period of last fiscal year due to a

[Robertson]

Yes, that's the press release wording but the reality is different.  Sylogist pays taxes, incurs interest expenses, capitalizes R&D and now pays stock compensation - all ultimately cash payments.  EBITDA no longer reflects cash generated by the company.  The cash generated by the company no longer covers the dividend payment.   The decline in the US dollar directly

[profitprophet1]

I trust then that we can say goodbye to you then? No use hanging around if the company is in such dire straits. If you haven't sold out and are gone I'm not sure what's holding you back. Toodles.

[Robertson]

I hate to see people get burned by not being informed.  At least now you know some of the facts. You can hold on and hope that some fool will buy your stock at higher price, and they may in this market. Most often ignorance and greed go hand-in-hand but logic finds success in the longer run. I wish you well.

[u8fish]

Their earnings can be lumpy depending on implementation schedules on projects etc. so comparing Q to Q can be difficult. I suggest you get on the conference call and ask that question straight up. If they can't answer directly then you have reason for concern. I believe they will continue to grow the business but we will see. 

[4frankly]

exec comp seemed extremely excessive and certainly feeds doubts as to whether their interests are at all aligned with shareholders....

[Robertson]

So true!  Management holds almost no equity interest in the company so they can use your investor money to do as they please. This includes paying themselves too much or taking risks with the hopes of a big win on their options or bonus plans.  Unlike investors, there's no downside for management.