Sylogist Announces Strong Fiscal 2016 Results Sylogist Announces Fiscal 2016 Results: Revenue grows 31%, Adjusted EBITDA up 53%
08:00 EST Tuesday, January 10, 2017
CALGARY, ALBERTA--(Marketwired - Jan. 10, 2017) -
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Sylogist Ltd. (TSX VENTURE:SYZ) ("Sylogist" or the "Company"), a provider of enterprise information management solutions to Public and Private Sector customers, is pleased to announce its audited financial results for the fiscal year ended September 30, 2016.
Fiscal 2016 Highlights (Comparisons are to fiscal 2015, unless otherwise noted)
- Revenues were $35.8 million, up 31% (26% organic, 5% currency related).
- Adjusted EBITDA(1) was $13.6 million, an increase of 53%, or $0.58 per fully diluted share, up 63%.
- Cash from operating activities (before non-cash changes in working capital) was $12.7 million, up 45%.
- Adjusted Earnings(1) were $12.4 million ($0.53 per share), a 44% increase and a per share increase of 53%.
- Cash as at September 30, 2016 totalled $28.4 million. Sylogist has no debt.
- There are currently 22.7 million Sylogist shares outstanding, a reduction of 8% from September 30, 2015.
Jim Wilson, Chief Executive Officer of the Company, commented that: "Sylogist experienced another very good year of performance in fiscal 2016, with strong organic revenue and earnings growth. The benefits that our solutions deliver to our customers led to substantial year-over-year increases in revenue and Adjusted EBITDA, both in gross and per share terms.
We attribute much of our success in 2016 to the strength of our performance in the Public Sector non-profit and non-governmental organization markets. This success was driven by Sylogist being awarded several significant contracts with some of the world's most notable charitable organizations during 2016. These larger, multi-phased contracts translate into more recurring revenues for the Company.
Consistent with our Public Sector focus and to improve financial returns, we signed an agreement with Microsoft on August 2, 2016 which significantly lowers our Microsoft royalty rates going forward into fiscal 2017 and beyond. With this agreement, we are also able to expand the reach of our Public Sector products, providing a broad, mid-market Public Sector SaaS offering, with the brand value of Microsoft at the core. We are now investing in, and expanding our offerings in the K-12 education and local government markets internationally, with particular emphasis on the US market.
During 2016, we also made significant, foundational capital investments focused on additional infrastructure capacity to facilitate our rapid growth, including the centralization our internally hosted systems and the implementation of a new ERP/CRM system."
Other 2016 Highlights
- Adjusted Working Capital(1) (net of deferred revenue) was $31 million or $1.36 per share as at September 30, 2016.
- Combined tax pools at the end of the fiscal year were approximately $26 million (CDN).
- The Company paid regular and special dividends to shareholders totaling $8.6 million or $0.365 per share in fiscal 2016.
- For the fiscal year ended September 30, 2016 the Company repurchased a total of 1,880,600 of its common shares at an average price of $7.93 for a total cost of $14.9 million.
5 Year Performance Summary
We have made steady progress over the past 5 fiscal periods. The Company's revenue, Adjusted EBITDA and Adjusted EBITDA per share have increased at compound annual growth rates ("CAGR") of 40%, 36% and 30% respectively from September 30, 2012 to September 30, 2016. During that 5-year period, Sylogist raised $40 million through equity financings; paid $19.2 million to acquire businesses while paying a total of $26.2 million in dividends; and repurchased 3.2 million shares for $17 million (average repurchase price per common share - $5.23), leaving a current strong balance sheet with no debt and cash of $28.4 million.
In addition, during the same period, our revenue growth and Adjusted EBITDA margins have remained well ahead of our peers, while our trailing enterprise value to Adjusted EBITDA trading multiple is at the low end of multiples enjoyed by our peer group. We believe that the hallmarks of a good franchise are its long term revenue growth and sustainable, high Adjusted EBITDA margins. Our revenue growth demonstrates our business can be scaled through increasing demand for our products and services, while high Adjusted EBITDA margins confirm the Company is a value setter over our competition.