TORONTO, April 03, 2023 (GLOBE NEWSWIRE) -- Quisitive Technology Solutions Inc. ("Quisitive" or the "Company") (TSXV: QUIS, OTCQX: QUISF), a premier Microsoft solutions provider and payments solutions provider, today reported financial results for the fourth quarter and full year ended December 31, 2022.
Management Commentary
"In 2022, we made significant progress with PayiQ, completed major acquisition integration activities which streamlined processes and enhanced synergies, achieved strong financial results, and remained resilient throughout turbulent economic times," said Quisitive CEO Mike Reinhart. "We've experienced momentum in our Cloud Solutions segment with advancements made on the MazikCare platform and Spyglass security managed services offerings utilizing the capabilities of Microsoft Azure and Dynamics to alleviate pain points for customers across industries. Driving recurring revenues remains a core focus we intend to augment as we scale our first-party IP and managed services to drive value for long-term customer partnerships."
"On the Payment Solutions front, our Bankcard Merchant Services business continues to realize high charge volumes as we focus on expanding our existing network while further mobilizing our PayiQ platform's commercialization strategy. With advancements in American Express and Discover certifications, we will ramp up our go-to-market strategy for our cloud-enabled payments architecture in 2023. We expect this year to be one of continued growth across our verticals despite some macroeconomic uncertainty, as we are more mature internally than ever before and poised to execute our strategic vision."
Fourth Quarter 2022 Financial Results
The Company's condensed consolidated interim financial statements for the three months ended December 31, 2022, and related management's discussion and analysis can be found on the Company's website and the Company's issuer profile on SEDAR at www.sedar.com. All figures are expressed in United States dollars unless otherwise stated.
- Revenue increased 38% to $45.9 million compared to $33.3 million for the quarter ended December 31, 2021.
- Gross profit increased 45% to $19.0 million compared to $13.1 million for the quarter ended December 31, 2021.
- Adjusted EBITDA increased to $8.1 million compared to $4.5 million for the quarter ended December 31, 2021.
- Global Cloud Solutions revenue increased to $32.3 million compared to $23.0 million for the quarter ended December 31, 2021.
- Global Payment Solutions revenue increased to $13.6 million compared to $10.3 million for the quarter ended December 31, 2021.
- The Company's total senior debt to Adjusted EBITDA ratio was 2.54 at December 31, 2022.
Full Year 2022 Financial Results
The Company's condensed consolidated interim financial statements for the full year ended December 31, 2022 and related management's discussion and analysis can be found on the Company's website and on the Company's issuer profile on SEDAR at www.sedar.com. All figures are expressed in United States dollars unless otherwise stated.
- Revenue increased 94% to $187.3 million compared to $96.7 million for the full year ended December 31, 2021.
- Gross profit increased 110% to $76.6 million compared to $36.5 million for the full year ended December 31, 2021.
- Adjusted EBITDA increased to $28.9 million compared to $14.5 million for the full year ended December 31, 2021.
- Global Cloud Solutions revenue increased to $137.3 million compared to $70.0 million for the full year ended December 31, 2021.
- Global Payment Solutions revenue increased to $50.0 million compared to $26.7 million for the full year ended December 31, 2021.
Fourth Quarter and Full Year 2022 and Recent Operational Highlights
- Secured several major new contracts for the Spyglass security solution with customers spanning municipalities and enterprise retailers.
- Included on The Globe and Mail's 2023 Report on Business magazine's Women Lead Here list; an editorial benchmark that identifies top-notch Canadian businesses with the highest executive gender diversity.
- Recognized as one of the top performers on the TSX Venture Exchange over the last year; a list of 50 companies from 5 different sectors, recognizing the strongest performance on the exchange.
- Achieved all six out of six available Microsoft Cloud Partner Program solution designations, earning the recognition of Microsoft Cloud Solutions Partner.
- Partnered with Cybersource, a Visa Solution, to directly access VisaNet and expand the payment acceptance model for PayiQ.
- Rebranded the cloud-enabled payments solutions platform, formerly known as LedgerPay, to PayiQ.
Amendment to Credit Facility
- On March 31, the Company amended its existing credit facility, with a syndicate led by Bank of Montreal and including Desjardins Capital Markets, to reduce its minimum fixed charge coverage ratio to 1.10:1.00 for fiscal year 2023. The minimum fixed charge coverage ratio will return to 1.25:1.00 for the quarter ended March 31, 2024.
Conference Call
Quisitive management will hold a conference call tomorrow (April 4, 2023) at 8:30 a.m. Eastern time (5:30 a.m. Pacific time) to discuss these results.
Company CEO Mike Reinhart and CFO Scott Meriwether will host the call, followed by a question-and-answer period.
Toll Free dial-in: 1-877-704-4453
International dial-in: 1-201-389-0920
Webcast Link: Here
Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.
A telephonic replay of the conference call will be available after 11:30 a.m. Eastern time on the same day and will expire after April 18, 2023.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13736735
For additional information, please visit the Investor Relations section of Quisitive's website at: https://quisitive.com/investor-relations/.
The following table summarizes results for the fourth quarter ended December 31, 2022 and 2021:
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||
| Revenue | $ | 45,901 | $ | 33,295 | $ | 187,262 | $ | 96,678 | |||||||
| Cost of Revenue | 26,903 | 20,221 | 110,706 | 60,161 | |||||||||||
| Gross Margin | 18,998 | 13,074 | 76,556 | 36,517 | |||||||||||
| Operating Expenses | |||||||||||||||
| Sales and marketing expense | 3,497 | 2,209 | 14,300 | 6,362 | |||||||||||
| General and administrative | 9,302 | 6,344 | 35,218 | 15,683 | |||||||||||
| Development | 117 | 96 | 434 | 614 | |||||||||||
| Share-based compensation | 750 | 596 | 3,325 | 1,247 | |||||||||||
| Interest expense | 1,541 | 142 | 4,709 | 3,437 | |||||||||||
| Amortization | 4,319 | 3,750 | 17,212 | 10,881 | |||||||||||
| Earn-out settlement loss | 3,750 | 6,180 | 5,228 | 7,261 | |||||||||||
| Acquisition related compensation | 619 | 1,069 | 2,772 | 1,575 | |||||||||||
| Depreciation | 488 | 522 | 2,029 | 1,563 | |||||||||||
| Foreign exchange loss (gain) | 36 | 754 | (219 | ) | 1,041 | ||||||||||
| Acquisition-related, transaction and other expenses | 212 | 1,085 | 935 | 6,178 | |||||||||||
| US Payroll Protection Plan Forgiveness | - | - | - | (1,683 | ) | ||||||||||
| Loss on debt extinguishment | - | 1,369 | - | 1,369 | |||||||||||
| Other Income | (227 | ) | - | (241 | ) | - | |||||||||
| Loss Before Income Taxes | (5,406 | ) | (11,042 | ) | (9,146 | ) | (19,011 | ) | |||||||
| Income tax expense - current | 812 | 118 | 4,495 | 1,548 | |||||||||||
| Deferred income tax expense (recovery) | (1,111 | ) | (2,271 | ) | (4,363 | ) | (3,756 | ) | |||||||
| Net Loss for the Period | $ | (5,107 | ) | $ | (8,889 | ) | $ | (9,278 | ) | $ | (16,803 | ) | |||
About Quisitive:
Quisitive (TSXV: QUIS, OTCQX: QUISF) is a premier, global Microsoft partner that harnesses the Microsoft cloud platform and complementary technologies, including custom solutions and first-party offerings, to generate transformational impact for enterprise customers. Our Cloud Solutions business focuses on helping enterprises move, operate, and innovate in the three Microsoft clouds. Our Payments Solutions division leverages the PayiQ platform powered by Microsoft Azure to transform the payment processing industry into an entirely new source of customer engagement and consumer value. Quisitive serves clients globally from seventeen employee hubs across the world. For more information, visit www.Quisitive.com and follow @BeQuisitive.
Quisitive Investor Contact
Matt Glover and John Yi
Gateway Investor Relations
QUIS@gatewayir.com
949-574-3860
Tami Anders
Chief of Staff
tami.anders@quisitive.com
972.573.0995
Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenue
Financial Measures and Adjusted EBITDA
There are measures included in this news release that do not have a standardized meaning under generally accepted accounting principles (GAAP) and therefore may not be comparable to similarly titled measures and metrics presented by other publicly traded companies. The Company includes these measures because it believes certain investors use these measures and metrics as a means of assessing financial performance. EBITDA (earnings before interest, taxes, depreciation and amortization is calculated as net earnings before finance costs (net of finance income), income tax expense, and depreciation and amortization of intangibles) is a non-GAAP financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.
We prepare and release quarterly unaudited and annual audited financial statements prepared in accordance with IFRS. We also disclose and discuss certain non-GAAP financial information, used to evaluate our performance, in this and other earnings releases and investor conference calls as a complement to results provided in accordance with IFRS. We believe that current shareholders and potential investors in the Company use non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues, in making investment decisions about the Company and measuring our operational results.
The term "Adjusted EBITDA" refers to a financial measure that we define as earnings before certain charges that management considers to be non-operating expenses and which consist of interest, taxes, depreciation, amortization, stock-based compensation (for which we include related fees and taxes), changes in fair value of derivatives, transaction and acquisition-related expenses, US payroll protection plan loan forgiveness, earn-out settlement losses and non-recurring development costs associated with obtaining bank sponsorship and operational certifications required to complete PayiQ. Adjusted EBITDA as a percentage of revenues divides Adjusted EBITDA for a period by the revenues for the corresponding period and expresses the quotient as a percentage.
Management considers these non-operating expenses to be outside the scope of Quisitive' ongoing operations and the related expenses are not used by management to measure operations. Accordingly, these expenses are excluded from Adjusted EBITDA, which we reference to both measure our operations and as a basis of comparison of our operations from period-to-period.
Management believes that investors and financial analysts measure our business on the same basis, and we are providing the Adjusted EBITDA financial metric to assist in this evaluation and to provide a higher level of transparency into how we measure our own business. However, Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues are non-GAAP financial measures and may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues should not be construed as a substitute for net income determined in accordance with IFRS or other non-GAAP measures that may be used by other companies, such as EBITDA. The use of Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues does have limitations. As these acquisition-related expenses charges may continue as we pursue our consolidation strategy, some investors may consider these charges and expenses as a recurring part of operations rather than expenses that are not part of operations.
Cautionary Note Regarding Forward Looking Information
This news release contains certain "forward-looking information" and "forward-looking statements" (collectively, "forward- looking statements") within the meaning of applicable Canadian securities legislation regarding Quisitive and its business. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could, "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward- looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements include, but are not limited to, statements relating to: internal business integrations, full commercialization and success of the PayiQ platform, expectations regarding go-to-market strategy and growing partnerships in the payments business, growth prospects, projected milestones and timelines.
The risks and uncertainties that may affect forward-looking statements, or the material factors or assumptions used to develop such forward-looking information, are described under the heading "Risks Factors" in the Company's annual information form dated June 23, 2022, which are available under the Company's issuer profile on SEDAR at www.sedar.com. There can be no assurance that forward-looking information, or the material factors or assumptions used to develop such forward-looking information, will prove to be accurate. The Company does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.
Neither the TSX Venture Exchange nor its Regulation Services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
