- SaaS revenue grows 24% to $34.0 million
- Total revenue grows 15% to $52.8 million
- Adjusted EBITDA(1) margin of 29%
OTTAWA, May 6, 2020 /CNW/ - Kinaxis® (TSX: KXS), the leader in empowering people to make confident supply chain decisions, today reported results for its first quarter ended March 31, 2020. All amounts are in U.S. dollars. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.
"We are pleased to report a very strong Q1. Our results were driven by our expanding base of multi-year subscription contracts with their corresponding long-term backlog. We were encouraged that, even in these challenging times, our sales pipeline grew overall, we continued to expand relationships with customers, and we won several new customers, including one of the world's largest consumer product companies," said John Sicard, President and CEO of Kinaxis. "I am very pleased that our team has responded so well to the restrictions imposed by COVID-19. Our level of engagement with customers and prospects remains high and the use of RapidResponse has grown dramatically as customers cope with unprecedented supply chain disruptions. While we've seen the pandemic slow the progress of some opportunities as prospects adjust to new ways of working, and it is challenging to predict its full impact ahead, we remain positive given the strength of our backlog, a growing pipeline, and current sales activity. We are very pleased to be able to reiterate our confidence in achieving our initial guidance for the year. Long-term, the integral value of our unique concurrent planning approach has never been more relevant."
|
Q1 2020 Highlights |
|||
|
$ USD thousands, except as otherwise indicated |
Q1 2020 |
Q1 2019 |
Change |
|
Total Revenue |
52,755 |
45,754 |
15% |
|
SaaS |
33,995 |
27,342 |
24% |
|
Subscription term license |
4,904 |
8,406 |
-42% |
|
Professional services |
10,673 |
6,912 |
54% |
|
Maintenance and support |
3,183 |
3,094 |
3% |
|
Gross profit |
36,919 |
33,563 |
10% |
|
|
(70%) |
(73%) |
|
|
Profit |
5,581 |
6,966 |
-20% |
|
|
($0.20/diluted share) |
($0.26/diluted share) |
|
|
Adjusted EBITDA(1) |
15,052 |
15,938 |
-6% |
|
|
(29%) |
(35%) |
|
|
Cash from operating activities |
20,960 |
18,759 |
12% |
|
(1) |
"Adjusted EBITDA" is a non-IFRS measure and is not a 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. |
|||
Financial Guidance and Outlook
The nature of the company's long-term contracts provides visibility into future, contracted revenue. The following table presents revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at March 31, 2020.
|
|
2020 |
2021 |
2022 and |
Q1 2020 |
|
SaaS |
102.4 |
98.2 |
110.1 |
310.8 |
|
Subscription term license |
7.0 |
- |
- |
7.0 |
|
Maintenance and support |
9.2 |
9.9 |
8.1 |
27.1 |
|
Total |
118.6 |
108.1 |
118.2 |
344.9 |
Based on this backlog, Kinaxis is reiterating fiscal 2020 financial guidance, as follows:
|
|
FY 2020 Guidance |
|
Total revenue |
$211-215 million |
|
SaaS |
23-25% growth |
|
Subscription term license |
$12-14 million |
|
Adjusted EBITDA margin |
20-23% of revenue |
Guidance in this press release is provided to enhance visibility into Kinaxis' expectations for financial targets for the periods indicated. Please refer to the section regarding forward-looking statements that forms an integral part of this release. This press release along with the financial statements and MD&A for the three months ended March 31, 2020 are available on Kinaxis' website and on SEDAR at www.sedar.com.
Conference Call
Kinaxis will host a conference call tomorrow, May 7, 2020, 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, May 7, 2020 |
|
Time: |
8:30 a.m. Eastern Time |
|
Webcast: |
|
|
Dial-in number: |
(647) 427-7450 or (888) 231-8191 |
|
Replay: |
(416) 849-0833 or (855) 859-2056 |
|
|
Available until 11:59 p.m. EDT, Thursday, May 14, 2020 |
|
Reference number: |
1285437 |
Please call the conference telephone number five to ten minutes prior to the start time. An operator will register your name and organization.
About Kinaxis Inc.
Eliminating volatility in your supply chain is impossible, but managing it is not. Trusted by top brands, Kinaxis® gives people the confidence to know they are making the best supply chain planning decisions to maximize business performance. We solve complex business problems in easy-to-understand ways by combining human and machine intelligence to plan for any future, monitor risks and opportunities and respond at the pace of change. With the support of our community of supply chain experts and using our unique concurrent planning technique and single integrated planning platform, customers can realize higher revenue, lower costs and fewer risks. For more Kinaxis news, follow us on LinkedIn, Twitter or Facebook.
Non-IFRS Measures
This news release contains non-IFRS measures, specifically Adjusted EBITDA and Adjusted EBITDA margin. 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 EBITDA and Adjusted EBITDA margins are not recognized, defined or standardized measures under IFRS. Our definition of Adjusted EBITDA and Adjusted EBITDA margin 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. Kinaxis has reconciled Adjusted EBITDA to the most comparable IFRS financial measure as follows:
|
|
Three months ended March 31, |
||||
|
|
2020 |
|
2019 |
||
|
|
|
(In thousands of USD) |
|||
|
Profit |
$ |
5,581 |
|
$ |
6,966 |
|
Share-based compensation |
|
3,776 |
|
|
3,072 |
|
Adjusted profit |
$ |
9,357 |
|
$ |
10,038 |
|
Income tax expense |
|
3,476 |
|
|
3,818 |
|
Depreciation and amortization |
|
2,941 |
|
|
2,677 |
|
Foreign exchange loss (gain) |
|
(49) |
|
|
170 |
|
Net finance income |
|
(673) |
|
|
(765) |
|
|
|
5,695 |
|
|
5,900 |
|
Adjusted EBITDA |
$ |
15,052 |
|
$ |
15,938 |
|
Adjusted EBITDA as a percentage of revenue |
|
29% |
|
|
35% |
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 SaaS and Subscription term licenses revenue, and our expectations for Adjusted EBITDA margin achievement, in each case looking forward for our fiscal year ending December 31, 2020; and
- contracted revenue in future periods, including 2020, 2021 and 2022.
This release also includes forward-looking 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 2020 annual total revenue, annual SaaS and Subscription term license revenue and annual Adjusted EBITDA margin, is subject to certain assumptions and associated risks 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.
Our guidance and commentary for achievement of contracted revenue in future periods, including in 2020, 2021 and 2022, is based on assumptions and associated risks including:
- our ability to satisfy material unperformed obligations under our long-term contracts; and
- the continued financial capacity and creditworthiness of our customers under long-term contracts.
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 25, 2020, under the heading "Risk Factors" in our Annual Information Form dated February 28, 2019 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 March 31, 2020 and December 31, 2019 |
||||
|
(Expressed in thousands of USD) (Unaudited) |
||||
|
|
|
|
||
|
|
March 31, |
December 31, |
||
|
|
|
|
||
|
Assets |
|
|
||
|
|
|
|
||
|
Current assets: |
|
|
||
|
Cash and cash equivalents |
$ |
158,148 |
$ |
182,284 |
|
Short-term investments |
75,450 |
30,319 |
||
|
Trade and other receivables |
66,257 |
80,623 |
||
|
Prepaid expenses |
8,791 |
6,534 |
||
|
|
308,646 |
299,760 |
||
|
|
|
|
||
|
Non-current assets: |
|
|
||
|
Property and equipment |
25,108 |
25,704 |
||
|
Right-of-use assets |
8,009 |
8,671 |
||
|
Contract acquisition costs |
16,121 |
15,497 |
||
|
Unbilled receivables |
510 |
249 |
||
|
Other receivables |
713 |
713 |
||
|
Deferred tax assets |
398 |
149 |
||
|
Intangible assets |
708 |
- |
||
|
Goodwill |
3,659 |
- |
||
|
|
|
|
||
|
|
$ |
363,872 |
$ |
350,743 |
|
|
|
|
||
|
Liabilities and Shareholders' Equity |
|
|
||
|
|
|
|
||
|
Current liabilities: |
|
|
||
|
Trade payables and accrued liabilities |
$ |
21,235 |
$ |
20,770 |
|
Deferred revenue |
82,611 |
83,673 |
||
|
Lease obligations |
2,133 |
2,288 |
||
|
|
105,979 |
106,731 |
||
|
Non-current liabilities: |
|
|
||
|
Lease obligations |
6,107 |
6,818 |
||
|
Deferred tax liabilities |
7,441 |
7,092 |
||
|
|
13,548 |
13,910 |
||
|
|
|
|
||
|
Shareholders' equity: |
|
|
||
|
Share capital |
147,685 |
140,961 |
||
|
Contributed surplus |
32,454 |
30,392 |
||
|
Accumulated other comprehensive loss |
(472) |
(348) |
||
|
Retained earnings |
64,678 |
59,097 |
||
|
|
244,345 |
230,102 |
||
|
|
|
|
||
|
|
$ |
363,872 |
$ |
350,743 |
|
Kinaxis Inc. |
||||
|
Condensed Consolidated Interim Statements of Comprehensive Income |
||||
|
|
|
|
||
|
For the three months ended March 31, 2020 and 2019 |
||||
|
(Expressed in thousands of USD, except share and per share data) (Unaudited) |
||||
|
|
|
|
||
|
|
2020 |
2019 |
||
|
|
|
|
||
|
Revenue |
$ |
52,755 |
$ |
45,754 |
|
|
|
|
||
|
Cost of revenue |
15,836 |
12,191 |
||
|
|
|
|
||
|
Gross profit |
36,919 |
33,563 |
||
|
|
|
|
||
|
Operating expenses: |
|
|
||
|
Selling and marketing |
11,975 |
9,315 |
||
|
Research and development |
9,677 |
7,994 |
||
|
General and administrative |
6,932 |
6,065 |
||
|
|
28,584 |
23,374 |
||
|
|
|
|
||
|
|
8,335 |
10,189 |
||
|
Other income (expense): |
|
|
||
|
Foreign exchange gain (loss) |
49 |
(170) |
||
|
Net finance income |
673 |
765 |
||
|
|
722 |
595 |
||
|
|
|
|
||
|
Profit before income taxes |
9,057 |
10,784 |
||
|
|
|
|
||
|
Income tax expense |
3,476 |
3,818 |
||
|
|
|
|
||
|
Profit |
5,581 |
6,966 |
||
|
|
|
|
||
|
Other comprehensive loss: |
|
|
||
|
Items that are or may be reclassified subsequently to profit or loss: |
|
|
||
|
Foreign currency translation differences - foreign operations |
(124) |
(56) |
||
|
|
|
|
||
|
Total comprehensive income |
$ |
5,457 |
$ |
6,910 |
|
|
|
|
||
|
Basic earnings per share |
$ |
0.21 |
$ |
0.27 |
|
|
|
|
||
|
Weighted average number of basic Common Shares |
26,432,585 |
26,091,542 |
||
|
|
|
|
||
|
Diluted earnings per share |
$ |
0.20 |
$ |
0.26 |
|
|
|
|
||
|
Weighted average number of diluted Common Shares |
27,534,441 |
26,805,963 |
||
|
|
|
|
||
|
Kinaxis Inc. |
||||||||||
|
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity |
||||||||||
|
|
|
|
|
|
|
|||||
|
For the three months ended March 31, 2020 and 2019 |
||||||||||
|
(Expressed in thousands of USD) (Unaudited) |
||||||||||
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
|
|
|
Accumulated |
|
|
|||||
|
|
|
|
other |
|
|
|||||
|
|
Share |
Contributed |
comprehensive |
Retained |
|
|||||
|
|
capital |
surplus |
loss |
earnings |
Total equity |
|||||
|
|
|
|
|
|
|
|||||
|
Balance, December 31, 2018 |
$ |
124,951 |
$ |
24,284 |
$ |
(319) |
$ |
35,766 |
$ |
184,682 |
|
|
|
|
|
|
|
|||||
|
Profit |
- |
- |
- |
6,966 |
6,966 |
|||||
|
Other comprehensive loss |
- |
- |
(56) |
- |
(56) |
|||||
|
Total comprehensive income (loss) |
- |
- |
(56) |
6,966 |
6,910 |
|||||
|
|
|
|
|
|
|
|||||
|
Share options exercised |
1,388 |
(443) |
- |
- |
945 |
|||||
|
Share based payments |
- |
3,072 |
- |
- |
3,072 |
|||||
|
Total shareholder transactions |
1,388 |
2,629 |
- |
- |
4,017 |
|||||
|
|
|
|
|
|
|
|||||
|
Balance, March 31, 2019 |
$ |
126,339 |
$ |
26,913 |
$ |
(375) |
$ |
42,732 |
$ |
195,609 |
|
|
|
|
|
|
|
|||||
|
Balance, December 31, 2019 |
$ |
140,961 |
$ |
30,392 |
$ |
(348) |
$ |
59,097 |
$ |
230,102 |
|
|
|
|
|
|
|
|||||
|
Profit |
- |
- |
- |
5,581 |
5,581 |
|||||
|
Other comprehensive loss |
- |
- |
(124) |
- |
(124) |
|||||
|
Total comprehensive income (loss) |
- |
- |
(124) |
5,581 |
5,457 |
|||||
|
|
|
|
|
|
|
|||||
|
Share options exercised |
6,724 |
(1,714) |
- |
- |
5,010 |
|||||
|
Share based payments |
- |
3,776 |
- |
- |
3,776 |
|||||
|
Total shareholder transactions |
6,724 |
2,062 |
- |
- |
8,786 |
|||||
|
|
|
|
|
|
|
|||||
|
Balance, March 31, 2020 |
$ |
147,685 |
$ |
32,454 |
$ |
(472) |
$ |
64,678 |
$ |
244,345 |
|
Kinaxis Inc. |
||||
|
Condensed Consolidated Interim Statements of Cash Flows |
||||
|
|
|
|
||
|
For the three months ended March 31, 2020 and 2019 |
||||
|
(Expressed in thousands of USD) (Unaudited) |
||||
|
|
|
|
||
|
|
2020 |
2019 |
||
|
|
|
|
||
|
Cash flows from operating activities: |
|
|
||
|
|
|
|
||
|
Profit |
$ |
5,581 |
$ |
6,966 |
|
Items not affecting cash: |
|
|
||
|
Depreciation of property and equipment and right-of-use assets |
2,899 |
2,677 |
||
|
Amortization of intangible assets |
42 |
- |
||
|
Share-based payments |
3,776 |
3,072 |
||
|
Net finance income |
(673) |
(765) |
||
|
Income tax expense |
3,476 |
3,818 |
||
|
Change in operating assets and liabilities |
6,856 |
13,019 |
||
|
Interest received |
862 |
873 |
||
|
Interest paid |
(120) |
(112) |
||
|
Income taxes paid |
(1,739) |
(10,789) |
||
|
|
20,960 |
18,759 |
||
|
|
|
|
||
|
Cash flows used investing activities: |
|
|
||
|
|
|
|
||
|
Acquisition of business, net of cash acquired |
(2,410) |
- |
||
|
Purchase of property and equipment |
(1,709) |
(893) |
||
|
Purchase of short-term investments |
(65,302) |
(15,005) |
||
|
Redemption of short-term investments |
20,102 |
27,506 |
||
|
|
(49,319) |
11,608 |
||
|
|
|
|
||
|
Cash flows from financing activities: |
|
|
||
|
|
|
|
||
|
Payment of lease obligations |
(591) |
(600) |
||
|
Common shares issued on exercise of stock options |
5,010 |
945 |
||
|
|
4,419 |
345 |
||
|
|
|
|
||
|
Increase (decrease) in cash and cash equivalents |
(23,940) |
30,712 |
||
|
|
|
|
||
|
Cash and cash equivalents, beginning of period |
182,284 |
126,144 |
||
|
|
|
|
||
|
Effects of exchange rates on cash and cash equivalents |
(196) |
128 |
||
|
|
|
|
||
|
Cash and cash equivalents, end of period |
$ |
158,148 |
$ |
156,984 |
SOURCE Kinaxis Inc.