- Reports 23% growth in annual subscription revenue and annual Adjusted EBITDA of 30% of revenue
-
OTTAWA, Feb. 28, 2018 /CNW/ - Kinaxis ® (TSX:KXS), provider of RapidResponse®, the
leading cloud-based supply chain management solution based on concurrent planning, today reported results for its fiscal fourth
quarter and year ended December 31, 2017. All amounts are in U.S. dollars. All figures are prepared
in accordance with International Financial Reporting Standards (IFRS), unless otherwise indicated.
"Today's results reflect both strong top line and bottom line growth. We continue to win exciting new customer contracts as a
result of our global expansion investments, including Toyota, recently announced. Customers continue to expand their
subscriptions as they look to broaden the value they receive from our products. Our success is driven by the strength of our
internal team combined with our ever-expanding partner network supported by the launch of our Partner Enablement Program this
past quarter," said John Sicard, Chief Executive Officer of Kinaxis. "We are the only company in
our industry uniquely focused on concurrent planning, and that commitment continues to deliver breakthrough business outcomes for
our growing global customer list."
Mr. Sicard added, "The strength of our financial results coupled with the long-term revenue visibility of our business model
gives us the confidence to accelerate our investments to expand our salesforce, continue our product innovation and further build
our global operations in Europe and Asia. We believe that these key investments will
enable future revenue growth while supporting our growing customer base and partnerships."
Fiscal 2017 Highlights
$ USD millions, except as otherwise indicated
|
FY 2017
|
FY 2016
|
Change
|
Revenue
|
133.3
|
116.0
|
15%
|
Subscription revenue
|
100.8
|
81.8
|
23%
|
Gross profit
|
93.5
|
(70% of revenue)
|
80.2
|
(69% of revenue)
|
17%
|
Profit
|
20.4
|
($0.77 per diluted share)
|
10.7
|
($0.41 per diluted share)
|
90%
|
Adjusted EBITDA(1)
|
40.1
|
(30% of revenue)
|
28.5
|
(25% of revenue)
|
40%
|
Cash from operating activities
|
33.6
|
31.1
|
8%
|
Q4 2017 Highlights
$ USD millions, except as otherwise indicated
|
Q4 2017
|
Q4 2016
|
Change
|
Revenue
|
34.4
|
30.3
|
14%
|
Subscription revenue
|
27.0
|
22.7
|
19%
|
Gross profit
|
24.7
|
(72% of revenue)
|
20.8
|
(69% of revenue)
|
19%
|
Profit
|
5.5
|
($0.21 per diluted share)
|
1.7
|
($0.07 per diluted share)
|
221%
|
Adjusted EBITDA(1)
|
11.2
|
(32% of revenue)
|
6.4
|
(21% of revenue)
|
73%
|
Cash from operating activities
|
12.5
|
17.1
|
-27%
|
(1)
|
"Adjusted EBITDA"is a non-IFRS measures and is not recognized, defined
or a standardized measure under IFRS. This measure as well as other non-IFRS financial measures reported by Kinaxis are
defined in the "Non-IFRS Measures" section of this news release.
|
Analysis of Fiscal Q4 2017 and Full Year 2017 Financial Highlights
Subscription revenue increases of 19% and 23% in the respective periods were driven by contracts secured with new customers
and expansion of existing customer subscriptions, while total revenue grew at slightly lower rates due to significant increases
in Kinaxis' partners assuming deployment activity and the related professional services revenue in 2017.
Growth in gross profit as a percentage of revenue to 72% and 70% in the respective periods reflected the higher growth rate of
revenue in the period. Growth in profit of 221% and 90% in the respective periods was primarily driven by an increase in overall
subscription revenue, partially offset by investments in professional service and data center capacity, research and development
and an increase in share-based payments.
Growth in adjusted EBITDA of 73% and 40% in the respective periods was a result of the higher growth of revenue compared to
operating expenses excluding share-based compensation in the current periods. The 27% decrease in cash from operating
activities for Q4 2017 resulted from an increase in trade and other receivables during the fourth quarter of 2017 compared to a
decrease in trade and other receivables during the same period in 2016, partially offset by an increase in profit. The 8%
increase in cash from operating activities in FY 2017 was due to an increase in profit, partially offset by a smaller increase in
deferred revenue during fiscal 2017 compared to the same period in 2016.
Cash and cash equivalents were $158.4 million as at December 31,
2017 as compared to $127.9 million as at December 31,
2016.
Full Year 2018 Financial Guidance
Kinaxis has set the following 2018 full year financial targets:
- Annual total revenue to be in the range of $158 million to $163
million
- Annual subscription revenue to grow 23% to 26%
- Annual Adjusted EBITDA as a percentage of total revenue to be between 23% and 26% of total revenue, reflecting enhanced
investments in the direct salesforce and marketing programs to support both direct sales and our partners together with
continued investment in R&D as well as new data centre investments.
This guidance is provided to enhance visibility into the Company's expectations for financial targets for the year ending
December 31, 2018 under IFRS standards as applicable at December 31,
2017. The Company will provide revised guidance following the implementation of IFRS 15 & 16 accounting standards as
part of the Q1 2018 earnings announcement. Please refer to the section regarding forward-looking statements which forms an
integral part of this release.
This press release, along with the audited consolidated annual financial statements and the Company's annual 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 tomorrow, March 1 st, 2018 to discuss these
results. John Sicard, Chief Executive Officer, and Richard Monkman,
Chief Financial Officer, will host the call starting at 8:30 a.m. Eastern time. A question and answer session will
follow management's presentation.
Date:
|
Thursday, March 1st, 2018
|
Time:
|
8:30 a.m. (ET)
|
Dial In Number:
|
(647) 427-7450 or (888) 231-8191
|
Live Webcast:
|
http://bit.ly/2sahXU3
|
|
Webcast will be archived for 90 days
|
Taped Replay:
|
(416) 849-0833 or (855) 859-2056
|
|
Available until 12:00 midnight (ET) Thursday, March 8, 2018
|
Reference Number:
|
8783059
|
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and
organization.
About Kinaxis Inc.
Offering the industry's only concurrent planning solution, Kinaxis is helping organizations around the world revolutionize their supply chain planning. Kinaxis
RapidResponse, our cloud-based supply chain management software, connects 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 work 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 diluted
earnings per share and Adjusted EBITDA 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
December 31,
|
|
|
Years ended
December 31,
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
(In thousands of U.S. dollars, except percentages)
|
Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
|
Profit
|
$
|
5,485
|
|
$
|
1,711
|
|
$
|
20,383
|
|
$
|
10,745
|
Share-based compensation
|
|
2,334
|
|
|
1,950
|
|
|
9,746
|
|
|
8,140
|
Adjusted profit
|
$
|
7,819
|
|
$
|
3,661
|
|
$
|
30,129
|
|
$
|
18,885
|
Income tax expense
|
|
2,584
|
|
|
1,884
|
|
|
7,375
|
|
|
7,258
|
Depreciation
|
|
1,101
|
|
|
748
|
|
|
3,618
|
|
|
2,494
|
Foreign exchange loss
|
|
31
|
|
|
223
|
|
|
84
|
|
|
198
|
Net finance income
|
|
(378)
|
|
|
(78)
|
|
|
(1,131)
|
|
|
(307)
|
|
|
3,338
|
|
|
2,777
|
|
|
9,946
|
|
|
9,643
|
Adjusted EBITDA
|
$
|
11,157
|
|
$
|
6,438
|
|
$
|
40,075
|
|
$
|
28,528
|
Adjusted EBITDA as a percentage of revenue
|
|
32%
|
|
|
21%
|
|
|
30%
|
|
|
25%
|
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, 2018, as well as statements as to Kinaxis' growth opportunities 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 2018 annual 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,
2018, 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.
|
|
|
Consolidated Statements of Financial Position
|
|
|
|
|
|
As at December 31
|
|
(Expressed in thousands of U.S. dollars)
|
|
|
|
|
|
2017
|
2016
|
|
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
Cash and cash equivalents
|
$
|
158,398
|
$
|
127,910
|
|
Trade and other receivables
|
31,783
|
23,820
|
|
Investment tax credits receivable
|
-
|
1,583
|
|
Investment tax credits recoverable
|
911
|
755
|
|
Prepaid expenses
|
4,196
|
3,333
|
|
195,288
|
157,401
|
|
|
|
Non-current assets:
|
|
|
|
Property and equipment
|
17,350
|
10,652
|
|
Deferred tax assets
|
55
|
239
|
|
|
|
|
$
|
212,693
|
$
|
168,292
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
Trades payable and accrued liabilities
|
$
|
11,176
|
$
|
10,495
|
|
Deferred revenue
|
67,040
|
55,458
|
|
78,216
|
65,953
|
Non-current liabilities:
|
|
|
|
Lease inducement
|
-
|
18
|
|
Deferred revenue
|
7,745
|
13,198
|
|
Deferred tax liability
|
1,944
|
1,412
|
|
9,689
|
14,628
|
|
|
|
Shareholders' equity:
|
|
|
|
Share capital
|
108,253
|
97,164
|
|
Contributed surplus
|
19,294
|
13,924
|
|
Accumulated other comprehensive loss
|
(284)
|
(519)
|
|
Deficit
|
(2,475)
|
(22,858)
|
|
124,788
|
87,711
|
|
|
|
|
$
|
212,693
|
$
|
168,292
|
Kinaxis Inc.
|
|
|
|
|
|
Consolidated Statements of Comprehensive Income
|
|
|
|
|
|
|
|
|
|
For the three months and years ended December 31
|
|
|
|
(Expressed in thousands of U.S. dollars, except share and per share
data)
|
|
|
|
|
|
|
|
|
|
For the three months
ended December 31,
|
|
For the year
ended December 31,
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
Revenue
|
$
|
34,423
|
$
|
30,264
|
|
$
|
133,317
|
$
|
115,951
|
|
|
|
|
|
|
Cost of revenue
|
9,737
|
9,493
|
|
39,780
|
35,777
|
|
|
|
|
|
|
Gross profit
|
24,686
|
20,771
|
|
93,537
|
80,174
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
Selling and marketing
|
7,882
|
8,503
|
|
29,280
|
30,350
|
|
Research and development
|
5,608
|
5,495
|
|
23,691
|
20,652
|
|
General and administrative
|
3,474
|
3,033
|
|
13,855
|
11,278
|
|
16,964
|
17,031
|
|
66,826
|
62,280
|
|
|
|
|
|
|
|
7,722
|
3,740
|
|
26,711
|
17,894
|
Other income (expense):
|
|
|
|
|
|
|
Foreign exchange loss
|
(31)
|
(223)
|
|
(84)
|
(198)
|
|
Net finance income
|
378
|
78
|
|
1,131
|
307
|
|
347
|
(145)
|
|
1,047
|
109
|
|
|
|
|
|
|
Profit before income taxes
|
8,069
|
3,595
|
|
27,758
|
18,003
|
|
|
|
|
|
|
Income tax expense
|
2,584
|
1,884
|
|
7,375
|
7,258
|
|
|
|
|
|
|
Profit
|
5,485
|
1,711
|
|
20,383
|
10,745
|
|
|
|
|
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
Items that are or may be reclassified subsequently to profit or
loss:
|
|
|
|
|
|
|
Foreign currency translation differences - foreign operations
|
104
|
(199)
|
|
235
|
(45)
|
|
|
|
|
|
|
Total comprehensive income
|
$
|
5,589
|
$
|
1,512
|
|
$
|
20,618
|
$
|
10,700
|
|
|
|
|
|
|
Basic earnings per share
|
$
|
0.22
|
$
|
0.07
|
|
$
|
0.81
|
$
|
0.44
|
|
|
|
|
|
|
Weighted average number of basic Common Shares
|
25,457,874
|
24,898,361
|
|
25,314,091
|
24,654,369
|
|
|
|
|
|
|
Diluted earnings per share
|
$
|
0.21
|
$
|
0.07
|
|
$
|
0.77
|
$
|
0.41
|
|
|
|
|
|
|
Weighted average number of diluted Common Shares
|
26,502,885
|
26,234,783
|
|
26,479,621
|
25,977,615
|
|
|
|
|
|
|
Kinaxis Inc.
|
|
|
|
|
|
Consolidated Statements of Changes in Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
For the years ended December 31
|
|
|
|
|
|
(Expressed in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
-
|
-
|
-
|
10,745
|
10,745
|
Other comprehensive income
|
-
|
-
|
(45)
|
-
|
(45)
|
Total comprehensive income
|
-
|
-
|
(45)
|
10,745
|
10,700
|
|
|
|
|
|
|
Share options exercised
|
4,845
|
(1,578)
|
-
|
-
|
3,267
|
Restricted share units vested
|
1,360
|
(1,360)
|
-
|
-
|
-
|
Deferred share units vested
|
151
|
(151)
|
-
|
-
|
-
|
Share based
payments
|
-
|
8,140
|
-
|
-
|
8,140
|
Total shareholder transactions
|
6,356
|
5,051
|
-
|
-
|
11,407
|
|
|
|
|
|
|
Balance, December 31, 2016
|
$
|
97,164
|
$
|
13,924
|
$
|
(519)
|
$
|
(22,858)
|
$
|
87,711
|
|
|
|
|
|
|
Profit
|
-
|
-
|
-
|
20,383
|
20,383
|
Other comprehensive income
|
-
|
-
|
235
|
-
|
235
|
Total comprehensive income
|
-
|
-
|
235
|
20,383
|
20,618
|
|
|
|
|
|
|
Share options exercised
|
9,437
|
(2,724)
|
-
|
-
|
6,713
|
Restricted share units vested
|
1,652
|
(1,652)
|
-
|
-
|
-
|
Share based
payments
|
-
|
9,746
|
-
|
-
|
9,746
|
Total shareholder transactions
|
11,089
|
5,370
|
-
|
-
|
16,459
|
|
|
|
|
|
|
Balance, December 31, 2017
|
$
|
108,253
|
$
|
19,294
|
$
|
(284)
|
$
|
(2,475)
|
$
|
124,788
|
Kinaxis Inc.
|
|
|
|
|
|
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
For the three months and years ended December 31
|
|
|
|
|
|
(Expressed in thousands of U.S. dollars, except share and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended December 31,
|
|
For the year
ended December 31,
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
|
$
|
5,485
|
$
|
1,711
|
|
$
|
20,383
|
$
|
10,745
|
|
Items not affecting cash:
|
|
|
|
|
|
|
|
Depreciation of property and equipment
|
1,101
|
748
|
|
3,618
|
2,494
|
|
|
Share-based payments
|
2,334
|
1,950
|
|
9,746
|
8,140
|
|
|
Amortization of lease inducement
|
-
|
(12)
|
|
(18)
|
(44)
|
|
|
Investment tax credits recoverable
|
376
|
387
|
|
(156)
|
1,328
|
|
|
Income tax expense
|
2,584
|
1,884
|
|
7,375
|
7,258
|
|
|
Change in operating assets and liabilities
|
1,509
|
11,376
|
|
(2,761)
|
3,408
|
|
Income taxes paid
|
(875)
|
(955)
|
|
(4,624)
|
(2,203)
|
|
12,514
|
17,089
|
|
33,563
|
31,126
|
|
|
|
|
|
|
Cash flows used investing activities:
|
|
|
|
|
|
|
Purchase of property and equipment
|
(5,845)
|
(669)
|
|
(10,149)
|
(5,794)
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Common shares issued on exercise of stock options
|
281
|
300
|
|
6,713
|
3,267
|
|
|
|
|
|
|
Increase in cash and cash equivalents
|
6,950
|
16,720
|
|
30,127
|
28,599
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
151,435
|
111,661
|
|
127,910
|
99,390
|
|
|
|
|
|
|
Effects of exchange rates on cash and cash equivalents
|
13
|
(471)
|
|
361
|
(79)
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
$
|
158,398
|
$
|
127,910
|
|
$
|
158,398
|
$
|
127,910
|
SOURCE Kinaxis Inc.
View original content: http://www.newswire.ca/en/releases/archive/February2018/28/c4871.html