Sylogist Q2 Fiscal 2021 Results: Sylogist Initiates Operational and Strategic changes
CALGARY, AB, May 13, 2021 /CNW/ - Sylogist Ltd. (TSX: SYZ) ("Sylogist" or the "Company"), a provider of enterprise information management solutions, is pleased to announce its unaudited financial results for the second quarter of the 2021 fiscal year, ended March 31, 2021.
Bill Wood, President and CEO of Sylogist commented, "Despite the material headwinds from COVID-19 on the public service markets we serve and the unfavorable currency exchange rate due to a weakened US dollar, we are pleased with our performance this quarter. We focused on serving our customer communities and the successful protection of our recurring revenue base. We also began to make foundational changes and investments in strategic initiatives across the company aimed at operational excellence and accelerating future organic growth.
Revenue was impacted primarily from a weakened US dollar and from continued purchase delays due to COVID. While a weakened US dollar unfavorably affects our shorter term performance it also enhances our prospects for additional US acquisitions. Our sales and acquisition pipelines remain intact and we expect to see demand begin to recover in the back-half of calendar 2021, possibly sooner.
Throughout Q2, we began taking strategic steps to improve alignment, processes and our products. For instance, we began to strengthen and better align our development and product management teams and are continuing to build capability and capacity where needed.
In March, we closed on the acquisition of Municipal Accounting Systems, Inc. ("MAS"). This was a strong value creation accelerator as we gained valuable IP, a talented team, an expanded K-12 customer footprint and gained a dominant position in the Oklahoma K-12 market, and a significant increase in revenue and profitability. MAS is highly complementary, and we have identified opportunities to offer a broader, integrated platform offering to our customers, which expands the options related to transitioning our legacy Bellamy and SunPac customers to a modern platform, and it creates greater leverage and scale for our go-to-market strategy.
Simultaneously with the acquisition of MAS, we announced the expansion of our credit facility to $75 million CAD. This provides additional resources to pursue other strategic and transformative acquisitions.
Lastly, at the end of Q2, Sylogist's common shares began trading on the Toronto Stock Exchange (the "TSX"). Graduating to the TSX from the TSX Venture Exchange was an important milestone for the Company and provides us with greater exposure to investors and a potential source of further growth capital.
Again, I am pleased with the Company's Q2 results in these extraordinary times and excited about the outlook and our path forward," concluded Mr. Wood.
Q2 2021 Summary (Comparisons are to Q2 2020, unless otherwise noted)
The Company acquired Municipal Accounting Systems Inc. on March 17th, 2021; the deal was immediately accretive and provided Sylogist with valuable IP, a talented team, ~85% market share among Oklahoma K-12 school districts, and further growth opportunities.
The Company's common shares began trading on the Toronto Stock Exchange on March 31st, 2021.
Revenues were $8.9 million, compared to $9.4 million, a decrease of 6%.
Gross profit margins of 71%, compared to 75% in Q2 2020.
Profit before income taxes of $1.7 million, compared to $3.9 million in the second quarter last year.
Reported earnings were $1.1 million, compared to $2.8 million in Q2 2020.
Earnings per fully diluted common share of $0.05 per share, compared to $0.12 in Q2 2020.
Adjusted EBITDA(1) was $4.4 million, or $0.18 per fully diluted common share, compared to $0.24 per fully diluted common share in the second quarter of 2020.
Adjusted EBITDA Margin(1) was 50%, compared to 60%.
Cash flow from operations was $4.9M compared to $6M, a decrease of 19%.
The Company paid regular dividends to shareholders totaling $3 million during the quarter, compared to $2.4 million in the same period last year, an increase of 25%.
Adjusted Working Capital(1) was $6.9 million ($0.29 per share) compared to $45.2 million ($1.99 per share) in the same period last year.
Combined tax pools at the end of the second quarter 2021 were approximately $13.5 million (CAD).
Given the strong and growing cash generating ability of the Company, its Board of Directors has approved a quarterly dividend to $0.125 per common share for shareholders of record as at May 28, 2021 to be paid on June 9, 2021, which is treated as an eligible dividend under the Income Tax Act (Canada).
First half of fiscal 2021 (Comparisons are to the first half of fiscal 2020, unless otherwise noted)
Revenues increased to $18.4 million, compared to $18.3 million.
Recurring revenues from subscriptions and maintenance were $14 million compared to $14.1 million for the first half of 2020.
Gross profit margins were 72% of revenue, compared to 76% for the first half of fiscal 2020.
Adjusted EBITDA(1) was $9.4 million ($0.39 per share), compared to $10.9 million ($0.46 per share).
Adjusted EBITDA Margin (1) was 51%, compared to 59%.
The Company paid regular dividends to shareholders totaling $5.9 million during the first half of fiscal 2021, compared to $4.8 million in the same period in 2020.
For the six months ended March 31, 2021, the Company repurchased 118,400 common shares at an average price of $10.96 for a total cost of $1.3 million.
Sylogist is a public sector SaaS company that provides comprehensive ERP, CRM, fundraising, education administration, and payments solutions that allow its customers to carry out their missions. It serves over 1,700 customers globally, including all levels of government, nonprofit and non-governmental organizations, educational institutions, and public compliance-driven and funded companies. The Company has industry-leading profitability, an exceptionally strong balance sheet, a track record of successful acquisitions, and a portfolio of mission-critical SaaS solutions. 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 Exchange under the symbol SYZ. Information about Sylogist can be found at www.sylogist.com.
Sylogist solutions include:
Serenic Navigator: Financial Tracking and Management for Education and Nonprofits
NaviPayroll: Payroll & HR Solution for Microsoft Dynamics 365 Business Central Customers
WenGAGE: Accounting & Student Information Systems
MissionCRM: Donor Management and Fundraising
InfoStrat: Dynamics 365 for GovCon, Grants Manager Plus, and SAVIN360 Victim Notification
Sylogist Pay: Payment Processing and Fuel Payment Management
The Portal Connector: Secure Web Portals for Online Customer Experiences
pavliks.com: Network and IT Solutions
Bellamy and SunPac: Financial Management
EpicData: ERP Solution for Manufacturing & Distribution
Learn more about Sylogist.