• Delivers total revenue growth of 15%, including 17% recurring revenue growth

OTTAWA, Nov. 5, 2015 /CNW/ - Halogen Software Inc. ("Halogen" or the "Company") (TSX: HGN), a leading provider of cloud-based talent management solutions, today announced its financial results for the three months ended September 30, 2015. All figures are stated in United States dollars unless otherwise noted.

Third Quarter 2015 Financial and Operational Highlights

• Recurring revenue increased 17% from Q3 2014 to $14.9 million, representing 90% of total revenue in the quarter.
• Total revenue increased 15% from Q3 2014 to a record $16.6 million.
• Deferred revenue rose 17% year-over-year to $33.3 million.
• Net customer adds included a broad set of verticals and geographies, including names such as LEAP Legal Software Pty. Limited, Piller's Fine Foods, FAMA Holdings Company Ltd., Emirates Post Group, World First UK Ltd, Florida Hospital Wesley Chapel, St. Clair, Hope Hospice, and Community Services Inc.
• Dollar retention continued to be more than 100%¹.
• Total cash and investments of $39.7 million at September 30, 2015 compared to $44.2 million at December 31, 2014.
• Continued a Normal Course Issuer Bid to purchase up to a maximum of 600,000 common shares. In the third quarter the Company purchased and cancelled 50,600 shares for approximately $0.4 million resulting in a total of 120,643 shares for approximately $0.9 million as of September 30, 2015.

"Our third quarter results were in line with our expectations, and reflect continued solid demand for our differentiated talent management solutions that are ideal for mid-enterprise customers", said Les Rechan, Halogen's CEO. "There is a tremendous market opportunity for SaaS-based talent management solutions, and we will continue to adjust our go-to-market strategies and respective investments to capitalize on this largely untapped market. Looking forward, we are making incremental progress, but we still have opportunities to increase our level of execution, productivity and growth. I am confident in our future success given our best-in-class portfolio of solutions and strong track-record of delivering value to our customers."

Financial Review

Halogen's recurring revenue in the third quarter of 2015 was $14.9 million, a 17% increase over Q3 2014. Total revenue increased 15% over Q3 2014 to $16.6 million, driven by growth in the Company's customer base, as well as the sale of additional seats and modules to existing customers. In the third quarter of 2015, approximately 79% of revenue was generated from customers located in the United States (79% in Q3 2014), 10% in Canada (10% in Q3 2014) and 11% in international markets (11% in Q3 2014).

Gross margin was $12.2 million, or 74% of total revenue, in the third quarter of 2015, compared to $9.9 million, or 69% of total revenue, in Q3 2014.

Net loss was $3.8 million in the third quarter of 2015 as compared to a loss of $5.0 million in Q3 2014. Adjusted EBITDA² was $(0.6) million in Q3 2015 compared to $(2.6) million in Q3 2014; Adjusted EBITDA per share was $(0.03) per share in Q3 2015, compared to $(0.12) per share in Q3 2014.   

Total cash and investments was $39.7 million at September 30, 2015 compared to $44.2 million at December 31, 2014. Deferred revenue was $33.3 million at quarter-end, compared to $28.5 million at September 30, 2014 and $32.8 million at December 31, 2014.

Fourth Quarter and Full Year 2015 Financial Guidance

For the fourth quarter of 2015, the Company is expecting:

• Recurring revenue in the range of $15.4 to $15.6 million
• Total revenue in the range of $16.9 to $17.1 million

For the full year 2015, the Company is expecting:

• Recurring revenue in the range of $59.3 to $59.5 million
• Total revenue in the range of $65.4 to $65.6 million

Third quarter 2015 Financial Statements and Management's Discussion and Analysis
Halogen's Management's Discussion and Analysis and Condensed Consolidated Interim Financial Statements for the three and nine month periods ended September 30, 2015 will be available on SEDAR (www.sedar.com) and on the Halogen website at http://ir.halogensoftware.com.

Conference Call and Webcast
Halogen will hold a conference call to discuss its third quarter 2015 results today (Thursday, November 5, 2015) at 5:00 p.m. (ET). The call will be hosted by Les Rechan, President and CEO, and Pete Low, CFO.  To participate in the call, please dial 647-427-7450 or 1-888-231-8191 (Conference ID: 56538882) ten minutes prior to the scheduled start of the call. A replay of the conference call will be available until 12:00 midnight (ET) November 12, 2015 by calling 416-849-0833 or 1-855-859-2056. The conference call will be webcast live at http://bit.ly/1j8e4VI.

Forward-looking Statements
Certain statements in this release, including those that express management's expectations or estimates of our future performance, are "forward-looking statements" which reflect the Company's current expectations and projections about future events and financial trends that it believes might affect its financial condition, results of operations, business strategy and financial needs. In some cases, these forward-looking statements can be identified by words or phrases such as "may", "might", "will", "expect", "anticipate", "estimate", "intend", "plan", "indicate", "seek", "believe", "estimates", "predicts" or "likely", or the negative of these terms, or other similar expressions intended to identify forward-looking statements.

The Company has based these forward-looking statements on its current expectations and projections at the time the statements were originally made or at the time the information was originally provided, about future events and financial trends that it believes might affect its financial condition, results of operations, business strategy and financial needs. Forward-looking statements are based on certain assumptions and analyses made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate, and are subject to risks and uncertainties. Although the Company believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and it cannot assure that actual results will be consistent with these forward-looking statements. Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors, including without limitation, those risks and uncertainties discussed in the Company's Prospectus and other filings on SEDAR.

If any of these risks or uncertainties materialize, or if assumptions underlying the forward-looking statements prove incorrect, actual results might vary materially from those expressed or implied by the forward-looking statements contained herein. These factors should be considered carefully and prospective investors should not place undue reliance on these forward-looking statements. Although the forward-looking statements contained herein are based upon what the Company currently believes to be reasonable assumptions, the Company cannot assure prospective investors that actual results, performance or achievements will be consistent with these forward-looking statements. The Company does not intend, and the Company does not assume, any obligation to update or revise these forward-looking statements to reflect new events or circumstances.

About Halogen Software
Halogen Software (TSX: HGN) offers an organically built cloud-based talent management suite that reinforces and drives higher employee performance across all talent programs — whether that is recruiting, performance management, learning and development, succession planning or compensation. With over 2,100 customers worldwide, Halogen Software has been recognized as a market leader by major business analysts and has garnered the highest customer satisfaction ratings in the industry. Halogen Software's powerful, yet simple-to-use solutions, which also include industry-vertical editions, are used by organizations that want to build a world-class workforce that is aligned, inspired and focused on delivering exceptional results. For more information, visit: http://www.halogensoftware.com. Subscribe to Halogen Software's TalentSpace blog: http://www.halogensoftware.com/blog/ or follow Halogen Software on Twitter: http://twitter.com/HalogenSoftware.

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1} Calculated by taking the annualized recurring revenue of customers at the beginning of a 12-month period and dividing it into annualized recurring revenue for those same customers at the end of the period.

² Adjusted EBITDA is a non-IFRS measure defined by the Company as earnings before interest income or expense, other income, depreciation and amortization, share-based compensation, foreign exchange gains or losses and loss related to change in fair value of redeemable preferred shares. Adjusted EBITDA per share is calculated by dividing the Adjusted EBITDA by the weighted average number of shares outstanding in each period. Adjusted EBITDA and Adjusted EBITDA per share do not have a uniform definition. Our definition will likely differ from the definitions used by other companies, including peer companies, and therefore comparability may be limited. Thus, our non-IFRS measure of Adjusted EBITDA and Adjusted EBITDA per share should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with IFRS. There are inherent limitations with non-IFRS measures; we compensate for these limitations by reconciling Adjusted EBITDA to the most comparable IFRS financial measure. Management encourages investors and others to review our financial information in its entirety, not to rely on any single financial measure, and to view our non-IFRS financial measures in conjunction with the most comparable IFRS financial measures.

SOURCE Halogen Software