Sylogist Announces Fourth Quarter and Fiscal 2017 Results: EPS increases 14%, Reported Earnings up 9%, Margins increase, Audit Committee Appointment

CALGARY, Alberta, Jan. 16, 2018 (GLOBE NEWSWIRE) -- Sylogist Ltd. (TSX-V:SYZ) (“Sylogist” or the “Company”), a provider of enterprise information management solutions, is pleased to announce its audited financial results for the fiscal year ended September 30, 2017.

Q4 2017 Summary (Comparisons are to Q4 2016, unless otherwise noted)

• Earnings per share increased 13% to $0.09 per share, up from $0.08 per share in Q4 2016.
• Gross profit margins improved to 76% of revenue compared to 66% in Q4 2016.
• Adjusted EBITDA⁽¹⁾ was $3.2 million, an increase of 21%, or $0.14 per fully diluted share, up 27%.
• Adjusted EBITDA⁽¹⁾ margin was 40%, compared to 33% in Q4 2016.
• Revenues were $8.0 million, compared to $8.1 million in the fourth quarter last year.
• Cash generated from operations totalled $1.6 million, up from $343 thousand in Q4 2016.
• The Company paid regular dividends to shareholders totalling $1.6 million during the quarter.

Fiscal 2017 Highlights (Comparisons are to fiscal 2016, unless otherwise noted)

• Reported earnings for the fiscal year ended September 30, 2017 was $7.2 million, an increase of 9%.
• Earnings per share increased 14% to $0.32 per share, up from $0.28.
• Gross profit margins improved to 71% of revenue, compared to 67%.
• Adjusted EBITDA⁽¹⁾ was $13.4 million ($0.59 per share), compared to $13.6 million ($0.58 per share), up 2% on a per share basis.
• Adjusted EBITDA⁽¹⁾ margin was 41%, compared to 38% in fiscal 2016.
• Adjusted Earnings⁽¹⁾ were $12.4 million ($0.55 per share), compared to $12.4 million ($0.53 per share), a per share increase of 4%.
• Revenues were $32.9 million, compared to $35.8 million.
• Cash generated from operations totalled $12 million, up 12%.
• Cash as at September 30, 2017 totalled $28.8 million.  Sylogist has no debt. 
• There are currently 22.4 million Sylogist shares outstanding.

Jim Wilson, President and CEO of the Company stated: “Fiscal 2017 represented a transformational year for Sylogist. We were successful in establishing a strong foundation for growth, while at the same time improving our profitability and return to our shareholders.  Our Gross Profit Margin increased to 71%, up from 67% last year. Our Adjusted EBITDA Margin increased to 41%, compared to 38% in 2016. Reported earnings increased on a gross and per share basis, up 9% and 14% respectively. Considering the various initiatives in the current year, the overall results were both strong and consistent with our strategic plan.

In keeping with our continued focus on growing our customer base and enhancing our existing technology portfolio, subsequent to year end, we completed the acquisition of the assets of K12 Enterprise and Sunpac Systems. These entities are providers of Enterprise Resource Planning solutions to kindergarten to grade 12 education authorities in the United States. The United States’ education market is a large addressable market, saddled with older technology requiring modernization. Armed with the K12 Enterprise software, which is a modern SaaS solution based on our Navigator ERP with Microsoft Dynamics at its core, we continue to earnestly seek growth opportunities in that market. We are encouraged and excited in what lies ahead.”

Other 2017 Highlights

• Adjusted Working Capital⁽¹⁾ (net of deferred revenue) was $31.8 million an increase of 3%, or $1.42 per share, up 4%.
• Combined tax pools at the end of the fiscal year were approximately $14.4 million (CDN).
• The Company paid regular and special dividends to shareholders totaling $7.5 million or $0.33 per share in fiscal 2017. 
• For the fiscal year ended September 30, 2017, the Company repurchased a total of 452,200 of its common shares at an average price of $9.17 for a total cost of $4.1 million.

5 Year Performance Summary

The Company has demonstrated strong performance over the past 5 fiscal years.  The Company’s revenue, Adjusted EBITDA and Adjusted EBITDA per share have increased at compound annual growth rates (“CAGR”) of 29%, 28% and 24% respectively from September 30, 2013 to September 30, 2017.  During that 5-year period, Sylogist raised $40 million through equity financings; paid $19.2 million to acquire businesses while paying a total of $29.8 million in dividends; and repurchased 3.7 million shares for $21.1 million (average repurchase price per common share - $5.71), all while maintaining a strong balance sheet with no debt and cash of $28.8 million.

The following table displays our performance over the last five annual fiscal periods ended September 30, 2017.

Please also refer to Sylogist’s Nov. 21, 2017, news release where the Company addressed its fiscal 2018 guidance.

Audit Committee

At its meeting January 15, 2018, the Board approved the appointment of Taylor Gray, CA, CPA to the Audit Committee, as an independent director.  The Committee is comprised of Fraser Elliott, Ron Cherkas and Mr. Gray, all independent directors, and Jim Wilson, CEO of the Company.

About Sylogist

Sylogist is a technology innovation company that, through strategic acquisitions, investments and operations management, provides intellectual property solutions to a wide range of Public Sector customers.  We are an industry-leading publisher of mission-critical software products that satisfy the unique and sophisticated functionality requirements of Public Sector entities, nonprofit organizations, educational institutions, government agencies as well as public compliance driven and funded businesses. Our Company delivers highly scalable, multi-language, multi-currency software solutions, which serve the needs of an international clientele.

Full financial statements together with Management’s Discussion and Analysis are available on SEDAR at www.sedar.com.

The Company's stock is traded on the TSX Venture Exchange under the symbol SYZ. Information about Sylogist can be found at http://www.sylogist.com.

This press release is not for distribution to United States Newswire Services or for dissemination in the United States.

Forward-looking Statements

Certain statements in this news release may be forward-looking statements within the meaning of applicable securities laws and regulations.  These statements typically use words such as expect, believe, estimate, project, anticipate, plan, may, should, could and would, or the negative of these terms, variations thereof or similar terminology. Forward-looking information in this news release includes statements with respect to the Company’s focus on growing its customer base and enhancing its existing technology portfolio and seeking growth opportunities in the United States’ education market.  By their very nature, forward-looking statements are based on assumptions and involve inherent risks and uncertainties, both general and specific in nature.  It is therefore possible that the beliefs and plans and other forward-looking expectations expressed herein will not be achieved or will prove inaccurate.  Although Sylogist believes that the expectations reflected in these forward-looking statements are reasonable, it provides no assurance that these expectations will prove to have been correct. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Additional information regarding some of these risks, uncertainties and other factors may be found under in the management’s discussion and analysis for the year ended September 30, 2017 and other documents available on the Company’s profile at www.sedar.com.  Material assumptions and factors that could cause actual results to differ materially from such forward-looking information include Sylogist’s ability to attract and retain customers and to realize on its investments. Although Sylogist believes that the material assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur. Sylogist disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

Certain information set out herein may be considered as “financial outlook” within the meaning of applicable securities laws. The purpose of this financial outlook is to provide readers with disclosure regarding Sylogist’s reasonable expectations as to the anticipated results of its proposed business activities for the periods indicated. Readers are cautioned that the financial outlook may not be appropriate for other purposes.

Non-GAAP Financial Measures

(1) Adjusted EBITDA, Adjusted Earnings and Adjusted Working Capital are non-GAAP financial measures: Adjusted EBITDA is defined as: profit for the period before stock based compensation, foreign exchange gains or losses, interest expense, bargain purchase price on acquisition, income taxes, acquisition-related costs, depreciation and amortization. Adjusted Earnings is defined as profit for the period adjusted for certain non-cash expenses (income), such as amortization of intangible assets, stock based compensation, deferred income taxes as well as foreign exchange gains or losses and certain other expenses (income). Adjusted Working Capital is defined as current assets less current liabilities adjusted for deferred revenue. 

This news release makes reference to certain non-GAAP measures.  These measures are not recognized measures under Canadian GAAP, do not have a standardized meaning prescribed by Canadian GAAP and are therefore may not be comparable to similar measures presented by other issuers. These measures are provided as additional information to complement measures under GAAP by providing further understanding of the Company’s expected results of operations from management’s perspective. Accordingly, such measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under Canadian GAAP.

Adjusted EBITDA, Adjusted Earnings and Adjusted Working Capital are provided to investors as alternative methods for assessing the Company’s operating results in a manner that is focused on the Company’s ongoing operations and to provide a more consistent basis for comparison between periods. These measures should not be construed as alternatives to net profit (loss) or cash flow from operating activities determined in accordance with GAAP as an indicator of the Company’s performance.

For further information contact:

Jim Wilson, President and CEO
or
Xavier Shorter, Vice President, Finance and CFO
or
Andre Drouillard, Vice President, Business Development and Investor Relations

Sylogist Ltd.
(403) 266-4808

- Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release -