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Lumine Group Inc. Announces Results for the Three and Six Months Ended June 30, 2024

V.LMN

TORONTO, Aug. 7, 2024 /CNW/ - Lumine Group Inc. ("Lumine Group" or "the Company") (TSXV: LMN) announces financial results for the three and six months ended June 30, 2024. All amounts referred to in this press release are in US dollars unless otherwise stated.

The following press release should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2024, and management's discussion and analysis ("MD&A") for the three and six months ended June 30, 2024, which can be found on SEDAR+ at www.sedarplus.ca. Additional information about Lumine Group is also available on SEDAR+ and on Lumine Group's website www.luminegroup.com.

Q2 2024 Headlines:

  • Revenue grew 25% to $162.8 million compared to $129.9 million in the same quarter prior year (including -12% organic growth after adjusting for foreign exchange impacts).
  • The Company generated operating income of $36.6 million during the quarter, a 1% increase from $36.4 million in the same quarter prior year.
  • The Company generated a net loss of $2.2 million during the quarter, from net loss of $489.1 million in the same quarter prior year.
  • Cash flows from operations ("CFO") decreased $12.4 million to $10.0 million compared to $22.4 million in Q2 2023, representing a decrease of 55%.
  • Free cash flow available to shareholders ("FCFA2S") decreased $14.5 million to $2.8 million compared to $17.3 million in Q2 2023, representing a decrease of 84%.

Year-to-Date Q2 2024 Headlines:

  • Revenue grew 35% to $303.9 million compared to $225.3 million in the same six-month period prior year (including -8% organic growth after adjusting for foreign exchange impacts).
  • The Company generated operating income of $81.1 million in the six-month period ended June 30, 2024, an increase of 40% from $58.0 million in the same period prior year.
  • An expense of $317.4 million was incurred in the six-month period ended June 30, 2024 up to the Mandatory Conversion Date, $298.7 million is related to the mark to market adjustments on the fair value of the Preferred and Special Securities and $18.7 million is related to the dividend payable. Fair value of the preferred and special securities is primarily dependent on the price movement of the Company's Subordinate Voting Shares.
  • The Company generated a net loss of $306.6 million during the six-month period ended June 30, 2024, from net loss of $1,140.7 million in the same period prior year. The net loss is primarily related to the redeemable preferred and special securities expense in 2023.
  • CFO increased $7.7 million to $45.0 million compared to $37.4 million in the six-month period ended June 30, 2023, representing an increase of 21%.
  • FCFA2S increased $2.6 million to $31.5 million compared to $29.0 million in the six-month period ended June 30, 2023, representing an increase of 9%.

Total revenue for the three months ended June 30, 2024 is $162.8 million, an increase of 25%, or $32.9 million, compared to $129.9 million for the comparable period in 2023. For the six months ended June 30, 2024, total revenue was $303.9 million, an increase of 35%, or $78.7 million, compared to $225.3 million for the comparable period in 2023. The increase for the three and six months compared to the same period in the prior year is attributable to revenues from new acquisitions. The Company experienced organic growth of -12% and -7%, respectively for the three and six months ended June 30, 2024, or -12% and -8% after adjusting for the impact of changes in the valuation of the US dollar against most major currencies in which the Company transacts business. For acquired companies, organic growth is calculated as the difference between actual revenues achieved by each business in the financial period following acquisition, compared to the estimated revenues they achieved in the corresponding financial period preceding the date of acquisition by the Company. Organic growth is not a standardized financial measure and might not be comparable to measures disclosed by other issuers.

Operating income for the three months ended June 30, 2024 was $36.6 million, an increase of 1%, or $0.2 million, compared to $36.4 million for the same period in 2023. Operating income for the six months ended June 30, 2024 was $81.1 million, an increase of 40%, or $23.0 million, compared to $58.0 million for the same period in 2023. The increase for the three and six month periods is primarily attributable to growth from 2023 acquisitions partially offset by current period losses from 2024 acquisitions. Operating income is not a standardized financial measure and might not be comparable to measures disclosed by other issuers. See "Non-IFRS Measures".

Net loss for the three months ended June 30, 2024 was $2.2 million compared to net loss of $489.1 million for the same period in 2023. Net loss for the six months ended June 30, 2024 was $306.6 million compared to net loss of $1,140.7 million for the same period in 2023. The decrease in net loss for the three and six month periods is primarily attributable to the Mandatory Conversion of Preferred and Special Securities on March 25, 2024 such that no further preferred and special securities expense was booked in the current quarter.

For the three months ended June 30, 2024, CFO decreased $12.4 million to $10.0 million compared to $22.4 million for the same period in 2023 representing a decrease of 55%. The decrease in CFO is primarily attributable to current period losses from 2024 acquisitions.

For the six months ended June 30, 2024, CFO increased $7.7 million to $45.0 million compared to $37.4 million for the same period in 2023 representing an increase of 21%. The primary reason for the increase is that CFO includes the impact of changes in non-cash operating assets and liabilities exclusive of effects of business combinations or, changes in non-cash operating working capital ("NCOWC") which improved during the six months ended June 30, 2024 compared to the same period prior year.

For the three months ended June 30, 2024, FCFA2S decreased $14.5 million, or 84%, to $2.8 million compared to $17.3 million for the same period in 2023. The decrease is primarily a result of lower CFO during the period. For the six months ended June 30, 2024, FCFA2S increased $2.6 million, or 9%, to $31.5 million compared to $29.0 million for the same period in 2023. The increase is primarily a result of higher CFO during the period. FCFA2S is not a standardized financial measure and might not be comparable to measures disclosed by other issuers. See "Non-IFRS Measures".

Non-IFRS Measures

Operating income (loss) refers to income (loss) before income taxes, amortization of intangible assets, redeemable Preferred and Special Share expense, and finance and other expenses (income). We believe that operating income is useful supplemental information as it provides an indication of the profitability of the Company related to its core operations. Operating income (loss) is not a recognized measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Accordingly, readers are cautioned that operating income (loss) should not be construed as an alternative to net income (loss).

The following table reconciles operating income to net income:


Three months ended

June 30,

Six months ended

June 30,


2024

2023

2024

2023

Net income (loss)

(2.2)

(489.1)

(306.6)

(1,140.7)

Adjusted for:





Amortization of intangible assets

29.2

21.5

52.0

36.3

Redeemable preferred and special securities expense

-

496.6

317.4

1,151.2

Finance and other expense (income)

5.7

4.3

10.0

6.3

Income tax expense (recovery)

3.9

3.1

8.3

4.9

Operating income (loss)

36.6

36.4

81.1

58.0

Free cash flow available to shareholders ''FCFA2S'' refers to net cash flows from operating activities less interest paid on lease obligations, interest paid on bank debt, transaction costs on bank debt, repayments of lease obligations, dividends paid to redeemable preferred and special securities holders, and property and equipment purchased. The Company believes that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if Lumine Group does not make any acquisitions, or investments, and does not repay any debts. While the Company could use the FCFA2S to pay dividends or repurchase shares, the Company's objective is to invest all of its FCFA2S in acquisitions which meet the Company's hurdle rate.

FCFA2S is not a recognized measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Accordingly, readers are cautioned that FCFA2S should not be construed as an alternative to net cash flows from operating activities.

The following table reconciles FCFA2S to net cash flows from operating activities:


Three months ended
June 30,

Six months ended
June 30,


2024

2023

2024

2023

Net cash flows from operating activities:

10.0

22.4

45.0

37.4

Adjusted for:





Interest paid on lease obligations

(0.1)

(0.2)

(0.3)

(0.3)

Interest paid on other facilities

(5.1)

(3.2)

(7.6)

(3.6)

Credit facility transaction costs

(0.2)

0.0

(1.8)

(1.8)

Payment of lease obligations

(1.5)

(1.5)

(3.0)

(2.4)

Property and equipment purchased

(0.4)

(0.2)

(0.7)

(0.4)

Free cash flow available to shareholders

2.8

17.3

31.5

29.0

Forward Looking Statements

Certain statements herein may be "forward looking" statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Lumine Group or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward looking statements. These forward looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Lumine Group assumes no obligation, except as required by law, to update any forward looking statements to reflect new events or circumstances.

About Lumine Group Inc.

Lumine Group acquires, strengthens, and grows, vertical market software businesses in the communications and media industry. Learn more at www.luminegroup.com.

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

Lumine Group Inc.
Condensed Consolidated Interim Statements of Financial Position
(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited


June 30, 2024

December 31, 2023




Assets






Current assets:



Cash

$ 167,773

$ 146,509

Accounts receivable, net

127,329

104,955

Unbilled revenue, net

49,828

39,858

Inventories

561

521

Other assets

46,780

46,377


392,271

338,220




Non-current assets:



Property and equipment

7,138

4,164

Right of use assets

9,060

11,973

Deferred income taxes

6,371

6,197

Other assets

11,518

13,063

Intangible assets and goodwill

845,525

762,665


879,612

798,062




Total assets

$ 1,271,883

$ 1,136,282




Liabilities and Equity






Current liabilities:



Accounts payable and accrued liabilities

$ 100,821

$ 97,533

Due to related parties, net

1,529

2,380

Current portion of bank debt

2,166

3,071

Deferred revenue

97,110

91,726

Acquisition holdback payables

318

319

Lease obligations

6,073

6,358

Income taxes payable

11,702

12,436

Preferred and Special Securities

-

4,469,996


219,720

4,683,819




Non-current liabilities:



Deferred income taxes

115,341

124,878

Bank debt

288,818

149,636

Lease obligations

4,079

6,921

Other liabilities

9,684

12,995


417,922

294,430




Total liabilities

637,641

4,978,249




Equity:



Capital stock

490,669

-

Contributed surplus

185,142

(1,015,661)

Accumulated other comprehensive income (loss)

(10,896)

(6,296)

Retained earnings (deficit)

(30,673)

(2,820,010)


634,242

(3,841,967)




Subsequent events






Total liabilities and equity

$ 1,271,883

$ 1,136,282

Lumine Groupe Inc.
Condensed Consolidated Interim Statements of Income (Loss)
(In thousands of USD, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited


Three months ended June 30,

Six months ended June 30,


2024

2023

2024

2023






Revenue





License

$ 11,687

$ 11,094

$ 23,407

$ 21,743

Professional services

28,909

23,440

53,842

40,267

Hardware and other

2,326

4,728

4,743

9,336

Maintenance and other recurring

119,903

90,623

221,932

153,920


162,825

129,885

303,924

225,266

Expenses





Staff

87,704

71,285

160,733

119,904

Hardware

1,418

3,132

2,938

6,451

Third party license, maintenance and professional services

11,867

8,050

20,406

12,785

Occupancy

975

789

1,871

1,566

Travel, telecommunications, supplies, software and equipment

12,751

5,214

19,508

9,886

Professional fees

5,655

2,919

8,487

10,232

Other, net

3,509

(94)

4,455

2,688

Depreciation

2,337

2,195

4,452

3,705

Amortization of intangible assets

29,211

21,481

52,032

36,317


155,427

114,971

274,882

203,535






Redeemable Preferred and Special Securities expense

-

496,588

317,362

1,151,203

Finance and other expenses (income)

5,698

4,332

9,970

6,257


5,698

500,920

327,332

1,157,460






Income (loss) before income taxes

1,700

(486,006)

(298,290)

(1,135,729)






Current income tax expense (recovery)

9,209

10,649

17,555

18,162

Deferred income tax expense (recovery)

(5,274)

(7,557)

(9,272)

(13,227)

Income tax expense (recovery)

3,935

3,092

8,283

4,935






Net income (loss)

$ (2,235)

$ (489,098)

$ (306,573)

$ (1,140,664)






Weighted average shares outstanding:





Basic

256,620,388

74,008,247

171,366,154

70,914,357

Diluted

256,620,388

253,106,712

254,978,572

236,914,312






Earnings per share:





Basic and diluted

$ (0.01)

$ (6.61)

$ (1.79)

$ (16.09)














Lumine Group Inc.
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited


Three months ended June 30,

Six months ended June 30,


2024

2023

2024

2023






Net income (loss)

$ (2,235)

$ (489,098)

$ (306,573)

$ (1,140,664)






Items that are or may be reclassified subsequently to net income (loss):










Foreign currency translation differences from foreign operations and other

5,321

(900)

(4,600)

(311)






Other comprehensive (loss) income for the year, net of income tax

5,321

(900)

(4,600)

(311)






Total comprehensive income (loss) for the year

$ 3,086

$ (489,998)

$ (311,173)

$ (1,140,975)

Lumine Group Inc.
Condensed Consolidated Interim Statement of Changes in Equity
(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited

Six months ended June 30, 2024







Capital stock

Contributed
surplus

Accumulated other
comprehensive
(loss) income

Retained
earnings
(deficit)

Total equity







Balance at January 1, 2024

$ -

$ (1,015,661)

$ (6,296)

$ (2,820,010)

$ (3,841,967)







Total comprehensive income (loss) for the period:






Net income (loss)

-

-

-

(306,573)

(306,573)







Other comprehensive income (loss):






Foreign currency translation differences from foreign operations and other

-

-

(4,600)

-

(4,600)

Total other comprehensive income (loss) for the period

-

-

(4,600)

-

(4,600)







Total comprehensive income (loss) for the period

-

-

(4,600)

(306,573)

(311,173)







Mandatory Conversion of Special and Preferred Shares

87,368

-

-

-

87,368

Settlement of Preferred and Special Share Dividends in Subordinate Voting Shares

403,301

1,200,803

-

3,095,910

4,700,014

Balance at June 30, 2024

$ 490,669

$ 185,142

$ (10,896)

$ (30,673)

$ 634,242

Lumine Group Inc.
Condensed Consolidated Interim Statement of Changes in Equity
(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited







Six months ended June 30, 2023








Capital stock

Contributed
surplus

Accumulated other
comprehensive
(loss) income

Retained
earnings
(deficit)

Total equity







Balance at January 1, 2023

$ -

$ 162,692

$ (8,912)

$ -

$ 153,780







Total comprehensive income (loss) for the period:






Net income (loss)

-

-

-

(1,140,664)

(1,140,664)







Other comprehensive income (loss):






Foreign currency translation differences from foreign operations and other

-

-

(311)

-

(311)







Total other comprehensive income (loss) for the period

-

-

(311)

-

(311)







Total comprehensive income (loss) for the period

-

-

(311)

(1,140,664)

(1,140,975)







Transactions with Parent, recorded directly in equity






Capital contributions by Parent

-

22,451

-

-

22,451

Amalgamation with Lumine Group (Holdings) Inc.

-

(1,200,803)

-

-

(1,200,803)

Special Share conversion

-

-

-

4,040

4,040







Balance at June 30, 2023

$ -

$ (1,015,660)

$ (9,223)

$ (1,136,624)

$ (2,161,507)










Lumine Group Inc.
Condensed Consolidated Interim Statements of Cash Flows
(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited





Three months ended June 30,

Six months ended June 30,


2024

2023

2024

2023






Cash flows from (used in) operating activities:





Net income (loss)

$ (2,235)

$ (489,098)

$ (306,573)

$ (1,140,664)

Adjustments for:





Depreciation

2,337

2,195

4,452

3,705

Amortization of intangible assets

29,211

21,481

52,032

36,317

Contingent consideration adjustments

915

(3,149)

958

(2,478)

Preferred and Special Securities expense (income)

-

496,588

317,362

1,151,203

Finance and other expenses (income)

5,698

4,332

9,970

6,257

Income tax expense (recovery)

3,935

3,092

8,283

4,935

Change in non-cash operating assets and liabilities exclusive of effects of business combinations

(26,134)

(6,355)

(34,127)

(10,388)

Income taxes (paid) received

(3,680)

(6,679)

(7,317)

(11,512)

Net cash flows from (used in) operating activities

10,047

22,407

45,040

37,375






Cash flows from (used in) financing activities:





Interest paid on lease obligations

(130)

(167)

(284)

(259)

Interest paid on bank debt

(5,130)

(3,249)

(7,602)

(3,591)

Cash transferred from (to) Parent

118

(7,165)

(1,990)

(11,835)

Proceeds from issuance of bank debt

50,500

-

140,500

175,000

Repayments of bank debt

(244)

(410)

(488)

(654)

Transaction costs on bank debt

(194)

-

(1,849)

(1,771)

Payments of lease obligations

(1,468)

(1,525)

(3,034)

(2,365)

Issuance of Preferred Shares to Parent

-

-

-

181,484

Dividends paid

-

(12)

-

(12)

Net cash flows from (used in) in financing activities

43,452

(12,528)

125,253

335,997






Cash flows from (used in) investing activities:





Acquisition of businesses

(144,325)

-

(144,325)

(314,760)

Cash obtained with acquired businesses

-

-

-

33,965

Post-acquisition settlement payments, net of receipts

-

(2,307)

(685)

(2,669)

Property and equipment purchased

(363)

(180)

(724)

(421)

Other investing activities

(271)

(657)

(265)

(657)

Net cash flows from (used in) investing activities

(144,959)

(3,143)

(145,999)

(284,542)











Effect of foreign currency on cash and cash equivalents

(554)

(314)

(3,030)

(12)






Increase (decrease) in cash

(92,014)

6,422

21,264

88,818






Cash, beginning of period

259,787

149,481

146,509

67,085






Cash, end of period

$ 167,773

$ 155,903

$ 167,773

$ 155,903

SOURCE Lumine Group Inc

Cision View original content: http://www.newswire.ca/en/releases/archive/August2024/07/c1182.html



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