TORONTO, March 3, 2021 /CNW/ - Optiva Inc. ("Optiva" or "the Company") (TSX: OPT), a leading provider of mission-critical, cloud-native revenue management software for the telecommunications industry, today released its fourth quarter financial results for the three-month and full-year period ended December 31, 2020.
"My priority in the first ninety days with Optiva is to listen to our customers and employees. I have been reaching out by video directly to both our current customers as well as employees to understand their priorities, concerns and challenges with respect to how we work together going forward. I have communicated to customers that we are in a period of dynamic change taking place in the telecom market, and we will work in partnership to solve for their present and future business requirements as we collaborate on their unique journey to the 5G cloud future," said John Giere, President and Chief Executive Officer of Optiva. "My goal is to build Optiva as a customer and employee focused organization that allows us to consistently deliver high-quality innovative cloud-native products that will ensure long-term growth and profitability. We have work ahead of us to get there, and we have initiated actions already to drive forward our operational excellence and financial performance.
I believe the telecom industry will continue to shift its business model to the cloud and demand cloud-native products. Our three-year product roadmap goal is to invest in delivering a robust cloud-native product portfolio and offset legacy revenues with new revenues generated by a cloud-agnostic product offering. Due to individual issues that our customers face, including commercial, technology, regulatory and security issues, the transition will take place over a period of years. Optiva is well-positioned to deliver innovative cloud-based BSS solutions that enable our customers to expand their menu and velocity in terms of delivering new revenue-generating services that are supported by their choice of privately-hosted, subscription or SaaS operational models."
Business Highlights
Fourth Quarter 2020 Financial Results Highlights
Q4 Fiscal 2020 Highlights | Three Months | Twelve | Fifteen | ||
($ US Thousands, except per share information) | December 31, | December 31, | |||
(Unaudited) | 2020 | 2019 | 2020 | 2019 | |
Revenue | 18,142 | 20,530 | 75,916 | 120,883 | |
Net income (loss) | 1,670 | (16,874) | (41,520) | (13,751) | |
Earnings (loss) Per Share | $ 0.31 | $(3.17) | $(7.81) | $(2.60) | |
Adjusted EBITDA | $ 5,661 | $ 7,395 | $ 20,756 | $ 33,544 | |
Cash used in operating activities | (2,621) | (2,966) | (7,900) | (2,259) | |
Total cash, including restricted cash | 18,290 | 32,699 | 18,290 | 32,699 |
[1] EBITDA and Adjusted EBITDA are a non-IFRS measure. This measure is defined in the "Non-IFRS Financial Measures" section of this news release. |
Non-IFRS Measures
EBITDA" and "Adjusted EBITDA", are not financial measures calculated and presented in accordance with International Financial Reporting Standards (IFRS), and should not be considered in isolation or as a substitute to net income (loss), operating income or any other financial measures of performance calculated and presented in accordance with IFRS, or as an alternative to cash flow from operating activities as a measure of liquidity. The Company defines EBITDA as net income (loss) excluding amounts for depreciation and amortization, other income, finance costs, finance income, income tax expense (recovery), foreign exchange gain (loss) and share-based compensation. The Company defines "Adjusted EBITDA" as EBITDA (as defined above), excluding restructuring costs, one-time provision amounts, any one-time transaction costs associated with shareholder conflict and the July 2020 debenture financing and spending on cloud innovation. The Company believes that Adjusted EBITDA is a metric that investors may find useful in understanding the Company's financial position. Additionally, the Company believes that Adjusted EBITDA isolates the Company's results of operations from spending on cloud development and serves as a useful yardstick to gauge the profitability of the Company's operations prior to spending on the development of the cloud platform which currently generates negligible revenue to the Company. The following table provides a reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA.
OPTIVA Inc. | ||||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA | ||||||||
(Expressed in U.S. dollars) | ||||||||
(Unaudited) | ||||||||
Three months ended, December 31, | Twelve months ending | Fifteen months ending | ||||||
2020 | 2019 | 2020 | 2019 | |||||
Net income (loss) for the period | $ | 1,669,668 | $ | (16,873,855) | $ | (41,520,211) | $ | (13,751,105) |
Add back / (substract): | ||||||||
Depreciation of property and equipment | - | - | - | 166,698 | ||||
Amortization of intangible assets | 1,819,563 | 1,163,196 | 8,960,116 | 5,828,932 | ||||
Finance income | (155,736) | (125,570) | (405,810) | (604,885) | ||||
Finance costs (recovery) | (2,029,188) | 10,152,580 | 26,253,579 | 14,190,135 | ||||
Income tax expense | 3,598,360 | 6,354,704 | 6,273,866 | 11,641,649 | ||||
Foreign exchange loss | 100,211 | 1,598,079 | 1,999,216 | 1,475,908 | ||||
Share-based compensation | (383,911) | 636,854 | 151,979 | 2,175,412 | ||||
EBITDA | 4,618,967 | 2,905,988 | 1,712,735 | 21,122,744 | ||||
Restructuring costs (recovery) | (39,449) | 103,534 | 162,713 | (1,715,241) | ||||
Change in other provisions | - | - | 3,072,717 | - | ||||
One-time costs related to shareholder conflict | ||||||||
and Debenture financing | 651,787 | - | 2,752,916 | - | ||||
Spend on Cloud innovation | 430,143 | 4,385,742 | 13,055,046 | 14,136,575 | ||||
Adjusted EBITDA | $ | 5,661,448 | $ | 7,395,264 | $ | 20,756,127 | $ | 33,544,078 |
About Optiva
Optiva Inc. is a leading provider of mission-critical, cloud-native revenue management software for the telecommunications industry. Its products are delivered globally on the private and public cloud. The Company's solutions help service providers maximize digital, 5G, IoT and emerging market opportunities to achieve business success. Established in 1999, Optiva Inc. is on the Toronto Stock Exchange (TSX: OPT). For more information, visit www.optiva.com.
Caution Concerning Forward-Looking Statement
Certain statements in this document may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this document, such statements use such words as "may," "will," "expect," "continue," "believe," "plan," "intend," "would," "could," "should," "anticipate" and other similar terminology. These statements are forward-looking as they are based on our current expectations, as at March 3, 2021, about our business and the markets we operate in, and on various estimates and assumptions. Our actual results could materially differ from our expectations if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. As a result, there is no assurance that any forward-looking statements will materialize. Risks that could cause our results to differ materially from our current expectations are discussed in the Company's most recent Annual Information Form, which is available on SEDAR at www.sedar.com and on Optiva's website at www.optiva.com/investors/. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Optiva does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.
OPTIVA Inc. | ||||
Consolidated Statements of Financial Position | ||||
(Expressed in U.S. dollars) | ||||
December 31, | December 31, | |||
2020 | 2019 | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 17,663,998 | $ | 31,747,993 |
Trade accounts and other receivables | 7,868,501 | 7,808,293 | ||
Unbilled revenue | 4,086,395 | 4,468,014 | ||
Prepaid expenses | 2,752,304 | 1,983,391 | ||
Income taxes receivable | 4,281,673 | 4,105,144 | ||
Other assets | 222,101 | 243,199 | ||
Inventories | - | 473,201 | ||
Total current assets | 36,874,972 | 50,829,235 | ||
Restricted cash | 625,692 | 951,291 | ||
Deferred income taxes | 208,237 | 217,423 | ||
Other assets | 624,134 | - | ||
Investment tax credits | - | 358,309 | ||
Long-term unbilled revenue | 3,520,177 | 4,676,597 | ||
Intangible assets | 3,255,482 | 12,215,598 | ||
Goodwill | 32,271,078 | 32,271,078 | ||
Total assets | $ | 77,379,772 | $ | 101,519,531 |
Liabilities and Shareholders' Equity (Deficit) | ||||
Current liabilities: | ||||
Trade payables | $ | 8,811,407 | $ | 7,350,942 |
Accrued liabilities | 9,677,245 | 10,518,015 | ||
Provisions | 5,555,373 | 3,630,550 | ||
Income taxes payable | 4,932,157 | 3,644,752 | ||
Deferred revenue | 4,894,195 | 6,363,724 | ||
Total current liabilities | 33,870,377 | 31,507,983 | ||
Deferred revenue | 661,837 | 702,143 | ||
Other liabilities | 2,797,836 | 2,628,408 | ||
Pension and other long-term employment benefit plans | 15,582,459 | 12,486,732 | ||
Debentures | 86,338,367 | - | ||
Provisions | - | 36,611 | ||
Preferred shares | - | 66,345,563 | ||
Series A Warrant | 16,662,808 | 22,679,934 | ||
Deferred income taxes | 898,146 | 753,036 | ||
Total liabilities | 156,811,830 | 137,140,410 | ||
Shareholders' equity (deficit): | ||||
Share capital | 250,904,013 | 250,893,223 | ||
Standby Warrant | 997,500 | 997,500 | ||
Contributed surplus | 11,406,814 | 11,291,632 | ||
Deficit | (335,842,249) | (294,322,038) | ||
Accumulated other comprehensive loss | (6,898,136) | (4,481,196) | ||
Total shareholders' equity (deficit) | (79,432,058) | (35,620,879) | ||
Total liabilities and shareholders' equity (deficit) | $ | 77,379,772 | $ | 101,519,531 |
OPTIVA Inc. | ||||
Consolidated Statements of Comprehensive Loss | ||||
(Expressed in U.S. dollars, except per share and share amounts) | ||||
Twelve months ended December 31, 2020 and Fifteen months ended December 31, 2019 | ||||
2020 | 2019 | |||
Revenue: | ||||
Support and subscription | $ | 58,288,775 | $ | 86,859,693 |
Software licenses, services and other | 17,626,729 | 34,022,831 | ||
75,915,504 | 120,882,524 | |||
Cost of revenue | 19,603,845 | 39,351,285 | ||
Gross profit | 56,311,659 | 81,531,239 | ||
Operating expenses: | ||||
Sales and marketing | 7,952,320 | 12,552,570 | ||
General and administrative | 30,058,707 | 22,585,631 | ||
Research and development | 25,537,279 | 35,156,577 | ||
Restructuring costs (recovery) | 162,713 | (1,715,241) | ||
63,711,019 | 68,579,537 | |||
Income (loss) from operations | (7,399,360) | 12,951,702 | ||
Foreign exchange loss | (1,999,216) | (1,475,908) | ||
Finance income | 405,810 | 604,885 | ||
Finance costs | (26,253,579) | (14,190,135) | ||
Loss before income taxes | (35,246,345) | (2,109,456) | ||
Income tax expense: | ||||
Current | 5,801,865 | 9,162,706 | ||
Deferred | 472,001 | 2,478,943 | ||
6,273,866 | 11,641,649 | |||
Loss for the year | $ | (41,520,211) | $ | (13,751,105) |
Other comprehensive income (loss): | ||||
Items that will not be reclassified to net income: | ||||
Actuarial (loss) gain on pension and non-pension | ||||
post-employment benefit plans, net of income | ||||
tax expense of nil (2019 - nil) | $ | (2,416,940) | $ | 3,590,172 |
Total comprehensive loss | $ | (43,937,151) | $ | (10,160,933) |
Loss per subordinate share: | ||||
Basic | $ | (7.81) | $ | (2.60) |
Diluted | (7.81) | (2.60) | ||
Weighted average number of common shares: | ||||
Basic | 5,315,940 | 5,280,662 | ||
Diluted | 5,315,940 | 5,280,662 | ||
OPTIVA Inc. | ||||
Consolidated Statements of Cash Flows | ||||
(Expressed in U.S. dollars) | ||||
Twelve months ended December 31, 2020 and Fifteen months ended December 31, 2019 | ||||
2020 | 2019 | |||
Cash provided by (used in): | ||||
Operating activities: | ||||
Loss for the year | $ | (41,520,211) | $ | (13,751,105) |
Adjustments for: | ||||
Depreciation of property and equipment | - | 166,698 | ||
Amortization of intangible assets | 8,960,116 | 5,828,932 | ||
Finance income | (405,810) | (604,885) | ||
Finance costs | 26,253,579 | 14,190,135 | ||
Income tax expense | 6,273,866 | 11,641,649 | ||
Unrealized foreign exchange (gain) / loss | (1,683,892) | 39,847 | ||
Share-based compensation | 151,979 | 2,175,412 | ||
Pensions | 1,236,746 | (684,984) | ||
Provisions | 1,888,212 | (9,650,047) | ||
Loss on disposal of property and equipment | - | 307,707 | ||
Change in non-cash operating working capital | (4,153,635) | (7,094,600) | ||
(2,999,050) | 2,564,759 | |||
Interest paid | (38,897) | (77,487) | ||
Interest received | 78,201 | 281,776 | ||
Income taxes paid | (4,940,550) | (5,028,410) | ||
(7,900,296) | (2,259,362) | |||
Financing activities: | ||||
Issuance of debentures | 90,000,000 | - | ||
Transaction costs on debentures | (3,933,723) | - | ||
Redemption of preferred shares | (80,000,000) | - | ||
Dividends paid | (13,588,145) | (4,264,969) | ||
(7,521,868) | (4,264,969) | |||
Investing activities: | ||||
Sale of property and equipment | - | 67,456 | ||
Increase in restricted cash | 325,599 | 2,556,468 | ||
325,599 | 2,623,924 | |||
Effect of foreign exchange rate changes | ||||
on cash and cash equivalents | 1,012,570 | (526,463) | ||
(Decrease) in cash and cash equivalents | (14,083,995) | (4,426,870) | ||
Cash and cash equivalents, beginning of year | 31,747,993 | 36,174,863 | ||
Cash and cash equivalents, end of year | $ | 17,663,998 | $ | 31,747,993 |
SOURCE Optiva Inc.
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