- Reports 21% Growth in Subscription Revenue and 29% Adjusted EBITDA Margin -
OTTAWA, Aug. 8, 2017 /CNW/ - Kinaxis ® (TSX:KXS), provider of RapidResponse®,
delivering the leading cloud-based concurrent
planning solution, reported results for its fiscal second quarter, which ended June 30, 2017.
All amounts are in U.S. dollars. All figures are prepared in accordance with International Financial Reporting Standards (IFRS),
unless otherwise indicated.
Second Quarter 2017 Highlights
(Comparisons made between fiscal Q2 2017 and fiscal Q2 2016 results, unless otherwise noted)
- Revenue totaled $32.9 million, up 14%
- Subscription revenue was $24.2 million, up 21%
- Gross profit was $22.9 million (70% of total revenue), up 14%
- Profit was $5.6 million or $0.22 per basic and $0.21 per diluted share
- Adjusted EBITDA(1) totaled $9.6 million (29% of total revenue)
- Adjusted diluted earnings per share(1) of $0.30
(1) "Adjusted EBITDA" and "Adjusted diluted earnings per share" are non-IFRS measures and are not recognized, defined or
standardized measures under IFRS. These measures as well as other non-IFRS financial measures reported by Kinaxis are defined in
the "Non-IFRS Measures" section of this news release.
"Demand from global enterprises for RapidResponse's concurrent planning capabilities continues to grow, driving our revenue
growth and strong adjusted EBITDA margin in the quarter," said John Sicard, Chief Executive
Officer of Kinaxis. "Our strategic partner relationships have played an increasingly important role in generating awareness that
the conventional approach to supply chain planning no longer fits today's business environment. These relationships provide us
access to a much broader audience of prospective clients with a shared desire for end-to-end supply chain visibility."
Mr. Sicard continued, "While these strong fundamentals underlie our long-term prospects, our 2017 forecast has been revised
for two reasons. First, a large Asia-based customer, whom we have been working with for over one
year, has breached its contractual obligations during the second quarter. As a result, we are no longer recognizing revenue from
this company and have removed future revenue from the guidance. Second, our strategic partners are increasing their role in
deploying new customer implementations, and gaining the related Professional Services revenue as a result. This positive trend
has occurred earlier than we anticipated - which in turn has reduced our outlook for professional services revenue growth for
2017. While this has a short-term revenue impact – we are excited by the acceleration of partner contributions to our business.
This also creates a stronger mix of subscription revenues in our business model."
"As a result of these developments, we have updated our 2017 revenue guidance to a range of $131
million to $133 million," said Mr. Sicard. "The outlook for the business remains strong as we continue to deliver on
combined subscription growth and strong EBITDA performance."
Fiscal Q2 2017 Financial Results
Total revenue for the three months ending June 30, 2017 (Q2 2017) was $32.9 million, an increase of 14% compared to the same period in 2016.
Subscription revenue was $24.2 million in Q2 2017, an increase of 21% from $19.9 million for the same period in 2016. The increase was driven by contracts secured with new customers in
the last twelve months, as well as expansion of existing customer subscriptions.
Professional services revenue was $8.4 million in Q2 2017, a decline of 2% compared to
$8.5 million for the same period in 2016. Professional services revenue reflects the support of our
partners in implementing new customer projects.
Gross profit was $22.9 million in Q2 2017, compared to $20.0
million for the same period in 2016. As a percentage of revenue, gross profit was 70%, consistent with the prior year
quarter. The increase in absolute dollars was due to revenue growing at a higher rate than the cost of revenue compared to the
prior year period.
Profit for Q2 2017 was $5.6 million or $0.22 per basic and
$0.21 per diluted share compared to a profit of $3.2 million or
$0.13 per basic and diluted share for the same period in 2016. The change was primarily driven by
an increase in subscription revenue and decrease in income taxes - which was partially offset by the investment in professional
services, data center capacity, research and development and an increase in share-based payments.
Adjusted EBITDA increased 32% to $9.6 million in Q2 2017, compared to $7.3 million in the same period last year. The increase in the period was driven by the growth in revenue
offset by an increase in operating expenses from investments in headcount and program spending.
Cash provided by operating activities was $7.5 million for Q2 2017 compared to $6.8 million generated in the same period in 2016. The change resulted from an increase in profit, partially
offset by an increase in investment tax credits recoverable and a decrease in trade payables and accrued liabilities.
Cash and cash equivalents were $150.4 million as at June 30, 2017
as compared to $127.9 million as at December 31, 2016.
Full Year 2017 Financial Guidance
With today's announcement, the Company is updating its 2017 full-year financial guidance:
- Annual total revenue to be in the range of $131 million to $133 million
- Annual subscription revenue to grow 21% to 23%
- Annual Adjusted EBITDA as a percentage of total revenue to be between 26% and 28% of total revenue
This guidance is provided to enhance visibility into the Company's expectations for financial targets for the year ending
December 31, 2017. Please refer to the section regarding forward-looking statements which
forms an integral part of this release.
This press release, along with the unaudited condensed consolidated interim financial statements and the Company's
corresponding MD&A, are available on the Company's website at www.kinaxis.com and on SEDAR at www.sedar.com.
Conference Call
The Company will host a conference call today, August 8, 2017 to discuss these results.
John Sicard, Chief Executive Officer, and Richard Monkman, Chief
Financial Officer, will host the call starting at 5:30 p.m. Eastern Time. A question and
answer session will follow management's presentation.
Date: Tuesday, August 8, 2017
Time: 5:30 p.m. Eastern Time
Dial-In Number: 1 (888) 231-8191
International: 1 (647) 427-7450
Conference ID#: 48048784
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and
organization.
A replay of the call will be available until 12:00 midnight Eastern Time on Tuesday, August
15, 2017.
Toll-Free Replay Number: 1 (855) 859-2056
International Replay Number: 1 (416) 849-0833
Replay PIN: 48048784
Live Webcast: http://bit.ly/2uGvUp2
Webcast will be archived for 90 days
About Kinaxis Inc.
Offering the industry's only concurrent planning solution, Kinaxis is helping organizations around the world revolutionize
their supply chain planning. With RapidResponse®, our cloud-based supply chain management software, we connect your
data, processes, and people into a single harmonious environment. With a consolidated view of the entire supply chain, you can
plan expected performance, monitor progress, and respond to disconnects when reality hits. RapidResponse lets you know sooner and
act faster, leading to reduced decision latency, and improved operational and financial performance. We can prove it. From
implementation to expansion, we're here to help our customers with every step of their supply chain journey.
Non-IFRS Measures
This news release contains non-IFRS measures, specifically, Adjusted profit, Adjusted diluted earnings per share and
Adjusted EBITDA. We use Adjusted profit and Adjusted diluted earnings per share, which remove the impact of our redeemable
preferred shares and share based compensation plans, to measure our performance as these measurements better align the reporting
of our results and improve comparability against our peers. We use Adjusted EBITDA to provide investors with a supplemental
measure of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when
relying solely on IFRS financial measures. We believe that securities analysts, investors and other interested parties frequently
use non-IFRS measures in the evaluation of issuers. Management also uses non-IFRS measures in order to facilitate operating
performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital
expenditure and working capital requirements. Adjusted profit, Adjusted diluted earnings per share and Adjusted EBITDA are not
recognized, defined or standardized measures under IFRS. Our definition of Adjusted profit, Adjusted EBITDA and Adjusted diluted
earnings per share will likely differ from that used by other companies (including our peers) and therefore comparability may be
limited. Non-IFRS measures should not be considered a substitute for or in isolation from measures prepared in accordance with
IFRS. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put
undue reliance on non-IFRS measures and view them in conjunction with the most comparable IFRS financial measures.
The Company has reconciled Adjusted profit and Adjusted EBITDA to the most comparable IFRS financial measure as follows:
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(In thousands of U.S. dollars, except percentages)
|
Statement of Operations
|
|
|
|
|
|
|
|
|
Profit
|
|
$
|
5,640
|
|
$
|
3,240
|
|
$
|
8,866
|
|
$
|
6,609
|
Share-based compensation
|
|
2,397
|
|
1,850
|
|
5,113
|
|
4,130
|
Adjusted profit
|
|
$
|
8,037
|
|
$
|
5,090
|
|
$
|
13,979
|
|
$
|
10,739
|
Income tax expense
|
|
1,043
|
|
1,510
|
|
2,974
|
|
3,687
|
Depreciation
|
|
818
|
|
543
|
|
1,606
|
|
1,063
|
Foreign exchange loss (gain)
|
|
12
|
|
188
|
|
23
|
|
(78)
|
Net finance income
|
|
(310)
|
|
(59)
|
|
(477)
|
|
(133)
|
|
|
1,563
|
|
2,182
|
|
4,126
|
|
4,539
|
Adjusted EBITDA
|
|
$
|
9,600
|
|
$
|
7,272
|
|
$
|
18,105
|
|
$
|
15,278
|
Adjusted EBITDA as a percentage of revenue
|
|
29%
|
|
25%
|
|
28%
|
|
27%
|
Forward-Looking Statements
Certain statements in this release constitute forward-looking statements within the meaning of applicable
securities laws. Forward-looking statements include statements as to our expectations for growth of annual total revenue,
annual subscription revenue, and our expectations for Adjusted EBITDA achievement, in each case looking forward for the balance
of our fiscal year ending December 31, 2017, as well as statements as to Kinaxis' growth
opportunities, the potential benefits of our strategic partnerships and the potential benefits of, and markets and demand for,
Kinaxis' products and services. These statements are subject to certain assumptions, risks and uncertainties, including our view
of the relative position of Kinaxis' products and services compared to competitive offerings in the industry.
In particular, our guidance for 2017 annual revenue total revenue, annual subscription revenue and annual Adjusted EBITDA,
is subject to certain assumptions, including:
- our ability to win business from new customers and expand business from existing customers;
- the timing of new customer wins and expansion decisions by our existing customers;
- maintaining our current customer retention levels; and
- with respect to Adjusted EBITDA, our ability to contain expense levels while expanding our business.
These and other assumptions, risks and uncertainties may cause Kinaxis' actual results, performance, achievements and
developments to differ materially from the results, performance, achievements or developments expressed or implied by
forward-looking statements. Material risks and uncertainties relating to our business are described under the headings "Forward
Looking Statements" and "Risks and Uncertainties" in our annual MD&A dated February 28, 2017,
under the heading "Risk Factors" in our Annual Information Form dated March 27, 2017, and in our
other public documents filed with Canadian securities regulatory authorities, which are available at www.sedar.com. Forward-looking statements are provided to help readers understand
management's expectations as at the date of this release and may not be suitable for other purposes. Readers are cautioned not to
place undue reliance on forward-looking statements. Kinaxis assumes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise, except as expressly required by law.
Kinaxis Inc.
|
|
|
Condensed Consolidated Interim Statements of Financial Position
|
|
|
|
|
|
|
As at June 30, 2017 and December 31, 2016
|
|
|
(Expressed in thousands of U.S. dollars)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
June 30,
2017
|
December 31,
2016
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
Cash and cash equivalents
|
$
|
150,425
|
$
|
127,910
|
|
Trade and other receivables
|
21,928
|
23,820
|
|
Investment tax credits receivable
|
–
|
1,583
|
|
Investment tax credits recoverable
|
1,597
|
755
|
|
Prepaid expenses
|
3,105
|
3,333
|
|
|
177,055
|
157,401
|
|
|
|
|
Non-current assets:
|
|
|
|
Property and equipment
|
10,769
|
10,652
|
|
Deferred tax assets
|
189
|
239
|
|
|
|
|
|
|
$
|
188,013
|
$
|
168,292
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
Trades payable and accrued liabilities
|
$9,679
|
$10,495
|
|
Deferred revenue
|
57,828
|
55,458
|
|
|
67,507
|
65,953
|
Non-current liabilities:
|
|
|
|
Lease inducement
|
–
|
18
|
|
Deferred revenue
|
11,668
|
13,198
|
|
Deferred tax liability
|
1,097
|
1,412
|
|
|
12,765
|
14,628
|
|
|
|
|
Shareholders' Equity
|
|
|
|
Share capital
|
105,524
|
97,164
|
|
Contributed surplus
|
16,599
|
13,924
|
|
Accumulated other comprehensive loss
|
(390)
|
(519)
|
|
Deficit
|
(13,992)
|
(22,858)
|
|
|
107,741
|
87,711
|
|
|
|
|
|
|
$
|
188,013
|
$
|
168,292
|
Kinaxis Inc.
|
|
|
|
Condensed Consolidated Interim Statements of Comprehensive
Income
|
|
|
|
|
|
|
|
For the three and six months ended June 30, 2017 and 2016
|
|
|
|
(Expressed in thousands of U.S. dollars, except share and per share
data)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
For the three months
ended June 30,
|
For the six months
ended June 30,
|
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
Revenue
|
$
|
32,866
|
$
|
28,734
|
$
|
65,408
|
$
|
55,766
|
|
|
|
|
|
Cost of revenue
|
9,985
|
8,713
|
20,362
|
16,818
|
|
|
|
|
|
Gross profit
|
22,881
|
20,021
|
45,046
|
38,948
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
Selling and marketing
|
7,367
|
7,783
|
14,298
|
13,762
|
|
Research and development
|
5,874
|
4,736
|
12,097
|
9,473
|
|
General and administrative
|
3,255
|
2,623
|
7,265
|
5,628
|
|
16,496
|
15,142
|
33,660
|
28,863
|
|
|
|
|
|
|
6,385
|
4,879
|
11,386
|
10,085
|
Other income (expense):
|
|
|
|
|
|
Foreign exchange (loss) gain
|
(12)
|
(188)
|
(23)
|
78
|
|
Net finance income
|
310
|
59
|
477
|
133
|
|
|
298
|
(129)
|
454
|
211
|
|
|
|
|
|
Profit before income taxes
|
6,683
|
4,750
|
11,840
|
10,296
|
|
|
|
|
|
Income tax expense
|
1,043
|
1,510
|
2,974
|
3,687
|
|
|
|
|
|
Profit
|
5,640
|
3,240
|
8,866
|
6,609
|
|
|
|
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
Items that are or may be reclassified subsequently to profit or
loss:
|
|
|
|
|
|
Foreign currency translation differences - foreign operations
|
(17)
|
73
|
129
|
134
|
|
|
|
|
|
|
Total comprehensive income
|
$
|
5,623
|
$
|
3,313
|
$
|
8,995
|
$
|
6,743
|
|
|
|
|
|
Basic earnings per share
|
$
|
0.22
|
$
|
0.13
|
$
|
0.35
|
$
|
0.27
|
|
|
|
|
|
Weighted average number of basic Common Shares
|
25,331,522
|
24,570,593
|
25,188,312
|
24,508,111
|
|
|
|
|
|
Diluted earnings per share
|
$
|
0.21
|
$
|
0.13
|
$
|
0.34
|
$
|
0.26
|
|
|
|
|
|
Weighted average number of diluted Common Shares
|
26,523,749
|
25,900,028
|
26,427,595
|
25,825,290
|
|
|
|
|
|
Kinaxis Inc.
|
|
|
|
|
|
Condensed Consolidated Interim Statements of Changes in Shareholders'
Equity
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, 2017 and 2016
|
|
|
|
|
(Expressed in thousands of U.S. dollars)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
other
|
|
|
|
Share
|
Contributed
|
comprehensive
|
|
|
|
capital
|
surplus
|
loss
|
Deficit
|
Total equity
|
|
|
|
|
|
|
Balance, December 31, 2015
|
90,808
|
8,873
|
(474)
|
(33,603)
|
65,604
|
|
|
|
|
|
|
Profit
|
-
|
-
|
-
|
6,609
|
6,609
|
Other comprehensive income
|
-
|
-
|
134
|
-
|
134
|
Total comprehensive income
|
-
|
-
|
134
|
6,609
|
6,743
|
|
|
|
|
|
|
Share options exercised
|
2,614
|
(846)
|
-
|
-
|
1,768
|
Share based
payments
|
-
|
4,130
|
-
|
-
|
4,130
|
Total shareholder transactions
|
2,614
|
3,284
|
-
|
-
|
5,898
|
|
|
|
|
|
|
Balance, June 30, 2016
|
93,422
|
12,157
|
(340)
|
(26,994)
|
78,245
|
|
|
|
|
|
|
Balance, December 31, 2016
|
97,164
|
13,924
|
(519)
|
(22,858)
|
87,711
|
|
|
|
|
|
|
Profit
|
-
|
-
|
-
|
8,866
|
8,866
|
Other comprehensive income
|
-
|
-
|
129
|
-
|
129
|
Total comprehensive income
|
-
|
-
|
129
|
8,866
|
8,995
|
|
|
|
|
|
|
Share options exercised
|
8,360
|
(2,438)
|
-
|
-
|
5,922
|
Share based
payments
|
-
|
5,113
|
-
|
-
|
5,113
|
Total shareholder transactions
|
8,360
|
2,675
|
-
|
-
|
11,035
|
|
|
|
|
|
|
Balance, June 30, 2017
|
105,524
|
16,599
|
(390)
|
(13,992)
|
107,741
|
Kinaxis Inc.
|
|
|
|
Condensed Consolidated Interim Statements of Cash Flows
|
|
|
|
|
|
|
|
For the three and six months ended June 30, 2017 and 2016
|
|
|
|
(Expressed in thousands of U.S. dollars)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended June 30,
|
For the six months
ended June 30,
|
|
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
Profit
|
$
|
5,640
|
$
|
3,240
|
$
|
8,866
|
$
|
6,609
|
|
|
|
|
|
Items not affecting cash:
|
|
|
|
|
|
Depreciation of property and equipment
|
818
|
543
|
1,606
|
1,063
|
|
Share-based payments
|
2,397
|
1,850
|
5,113
|
4,130
|
|
Amortization of lease inducement
|
(4)
|
(11)
|
(18)
|
(22)
|
|
Investment tax credits recoverable
|
(1,051)
|
122
|
(842)
|
544
|
|
Income tax expense
|
1,043
|
1,510
|
2,974
|
3,687
|
|
Change in operating assets and liabilities
|
(168)
|
(218)
|
3,166
|
525
|
Income taxes paid
|
(1,156)
|
(276)
|
(3,087)
|
(989)
|
|
|
7,519
|
6,760
|
17,778
|
15,547
|
|
|
|
|
|
|
Cash flows used investing activities:
|
|
|
|
|
|
Purchase of property and equipment
|
(1,327)
|
(2,055)
|
(1,644)
|
(2,413)
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Common shares issued on exercise of stock options
|
1,952
|
1,395
|
5,922
|
1,768
|
|
|
|
|
|
|
Increase in cash and cash equivalents
|
8,144
|
6,100
|
22,056
|
14,902
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
141,989
|
108,348
|
127,910
|
99,390
|
|
|
|
|
|
|
Effects of exchange rates on cash and cash equivalents
|
292
|
388
|
459
|
544
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
$
|
150,425
|
$
|
114,836
|
$
|
150,425
|
$
|
114,836
|
SOURCE Kinaxis Inc.
View original content: http://www.newswire.ca/en/releases/archive/August2017/08/c6768.html