- Q4 FY2023 total revenue of $31.2 million grew by 4.3% compared to $30.0 million in Q4 FY2022
- Adjusted EBITDA(2) of $2.2 million in Q4 FY2023 compared to Adjusted EBITDA(2) loss of $0.8 million in Q4 FY2022
- Net loss of $4.0 million in Q4 FY2023 compared to $8.7 million in Q4 FY2022
MONTREAL, June 27, 2023 (GLOBE NEWSWIRE) -- mdf commerce inc. (the "Corporation") (TSX:MDF), a SaaS leader in digital commerce technologies, reported fourth quarter financial results for the three-month period ended March 31, 2023 (Q4 FY2023) and fiscal 2023 full year ended March 31, 2023 (FY2023). All dollar amounts are expressed in Canadian dollars unless otherwise indicated.
"We take pride in the advancements that we achieved this year, encompassing financial growth, improving profitability, and making significant operational strides. Our accomplishments include a strong balance sheet position following using the cash proceeds from the sale of InterTrade to repay debt, three consecutive quarters of positive Adjusted EBITDA(2), and noteworthy progress in integrating our eprocurement offerings into a unified platform, featuring a comprehensive suite of products offered in modules such as Source, Contract, Procure, Connect, and Shop. We successfully launched a highly promising Acumatica ERP e-commerce product, were recognized as an Acumatica-Certified Application with which we expect to gain significant traction. These achievements have been accompanied by substantial enhancements in efficiency and productivity across the Corporation" said Luc Filiatreault, President and Chief Executive Officer of mdf commerce. "Our FY2024 focus will be on executing on our strategic priorities while delivering strong financial results and with an objective of profitable growth and cash flows improvements across all our platforms. The full benefit of various costs saving initiatives, including the workforce reductions announced in Q1 FY2024 and further office space reductions planned in early Q3 FY2024, will have a positive impact on FY2024 cash flows."
Fourth Quarter Fiscal 2023 Financial Results
Revenues for Q4 FY2023 were $31.2 million, an increase of $1.3 million or 4.3% compared to $30.0 million for Q4 FY2022. On a Constant Currency(3) basis, revenues increased by $0.3 million or 1.0% compared to $30.9 million in Q4 FY2022. Recurring Revenue(1) represents $24.4 million or 77.9% of revenues for Q4 FY2023 compared to $26.1 million or 78.9% of revenues for Q4 FY2022.
Our two core platforms, eprocurement and ecommerce (previously Unified Commerce before the sale of InterTrade Systems Inc. ("InterTrade"), a wholly-owned subsidiary sold by the Corporation on October 4, 2022) contributed to fourth quarter revenues as follows:
- The eprocurement platform generated revenues of $20.3 million, an increase of $4.5 million or 28.6% compared to $15.8 million in Q4 FY2022. The Corporation's U.S. based revenues represented $15.5 million for Q4 FY2023 and 76.3% of total eprocurement revenue, compared to $11.1 million and 70.2% for Q4 FY2022.
Revenues for Q4 FY2023 were impacted by a fair value adjustment on deferred revenues at the closing date of the Periscope acquisition on August 31, 2021 which resulted in a reduction in revenues of $0.1 million compared to $1.9 million for Q4 FY2022.
Recurring Revenue(1) for the eprocurement platform represented $17.8 million or 87.3% as a percentage of revenue for Q4 FY2023, compared to $17.1 million and 90.4% for Q4 FY2022.
- The ecommerce platform, generated revenues of $6.0 million for Q4 FY2023, a decrease of $3.8 million or 38.7% compared to $9.8 million for Q4 FY2022. The sale of InterTrade represented a decrease in revenues of $3.4 million, offset by $0.7 million in other revenue from post-closing transition services provided in Q4 FY2023, and professional services in Orckestra decreased by $1.0 million.
Recurring Revenue(1) for the ecommerce platform was $2.6 million in Q4 FY2023 and represented 42.5% of platform revenues compared to $5.8 million or 59.4% in Q4 FY2022 which included both ecommerce and InterTrade's Supply Chain Collaboration. InterTrade contributed Recurring Revenue(1) of $3.1 million in Q4 FY2022.
Revenues from the emarketplaces platform were $4.9 million in Q4 FY2023, an increase of $0.6 million or 13.2% from $4.3 million in Q4 FY2022. This increase is mainly explained by a $0.6 million increase of revenues from The Broker Forum, which is an electronics parts marketplace, where volumes increased mainly due to global supply chain shortages. Recurring Revenue(1) for the emarketplaces platform represented $4.0 million or 82.1% of platform revenues for Q4 FY2023 compared to $3.2 million or 73.4% for Q4 FY2022.
Gross margin for Q4 FY2023 was $17.5 million or 56.2% compared to $16.6 million or 55.5% for Q4 FY2022.
Operating expenses totalled $22.6 million in Q4 FY2023, a decrease of $1.0 million or 4.3% compared to $23.6 million in Q4 FY2022. General and administrative expenses totalled $5.1 million in Q4 FY2023, selling and marketing expenses were $8.1 million and technology expenses were $9.3 million, compared to $7.4 million, $8.0 million, and $8.2 million respectively for Q4 FY2022.The decrease in operating costs is partly due to the sale of InterTrade on October 4, 2022 and from salary savings from a workforce reduction during Q4 FY2023, partially offset by higher restructuring costs of $0.8 million as compared to Q4 FY2022.
The Corporation recorded an operating loss of $5.0 million during Q4 FY2023, compared to $7.0 million in Q4 FY2022.
Net loss was $4.0 million or $0.09 per share (basic and diluted) for Q4 FY2023, compared to $8.7 million or $0.21 per share (basic and diluted) for Q4 FY2022. Adjusted net loss(4) was $4.2 million or $0.09 per share (basic and diluted) for Q4 FY2023, compared to $8.7 million or $0.21 per share (basic and diluted) for Q4 FY2022.
The $4.5 million decrease of Adjusted net loss(4) in Q4 FY2023 compared to Q4 FY2022 is mainly due a lower operating loss of $1.9 million, despite higher restructuring costs of $0.8 million, lower finance expenses of $0.4 million due to repayment of long-term debt following the sale of InterTrade and lower income taxes which was a recovery of $1.2 million in Q4 FY2023 compared to an income tax expense of $0.8 million for Q4 FY2022.
Adjusted EBITDA(2) was $2.2 million for Q4 FY2023, compared to Adjusted EBITDA(2) loss of $0.8 million for Q4 FY2022. The increase of Adjusted EBITDA(2) of $3.0 million compared to Q4 FY2022 is mainly due to an increase in revenues with a positive impact of $1.0 million on gross margin, partially offset by a non-cash gain on lease modification of $1.7 million recognized in Q4 FY2023.
The Periscope acquisition accounting adjustment to the fair value of deferred revenues at the acquisition date, which resulted in a reduction of revenue of $0.1 million in Q4 FY2023 and $1.9 million in Q4 FY2022, also had an unfavorable impact on gross margins, operating loss, net loss, Adjusted Net Loss(4), Adjusted EBITDA (loss)(2), net loss per share (basic and diluted) and Adjusted net loss per share(4) (basic and diluted) in the respective periods.
Full-year Fiscal 2023 Financial Results
FY2023 revenue was $128.3 million, a 18.5% increase over $108.3 million for FY2022. On a Constant Currency(3) basis, total revenue increased by $18.9 million or 17.3% compared to FY2022.
Revenues for FY2023 were impacted by a fair value adjustment on Periscope deferred revenues at the closing date of the acquisition on August 31, 2021 which resulted in a reduction in revenues of $1.8 million compared to $5.4 million for the seven-months of Periscope included in FY2022.
FY2023 Recurring Revenue(1) represented $101.7 million or 78.1% of revenues for FY2023, compared to $87.9 million or 77.4% of total revenues for FY2022. The increase in Recurring Revenue(1) as compared to prior year, is mainly related to eprocurement and emarketplaces platforms offset by a decrease from the sale of InterTrade which had Recurring Revenue(1) of $12.5 million in FY2022 compared to $6.7 million in FY2023.
Our two core platforms, eprocurement and ecommerce (previously Unified Commerce before the sale of InterTrade) contributed to revenue growth for FY2023 as follows:
- The eprocurement platform generated $77.2 million, a 46.3% increase compared to $52.8 million reported for FY2022. In comparison to FY2022, the increase of $24.4 million was mainly attributable to Periscope, which contributed twelve months in FY2023 compared to seven months in FY2022, representing an increase in revenues of $22.1 million, with other eprocurement solutions contributing $2.3 million of the increase in revenue. Revenues for FY2023 were impacted by a fair value adjustment on Periscope deferred revenues at the closing date of the acquisition on August 31, 2021 which resulted in a reduction in revenues of $1.8 million compared to $5.4 million for FY2022
- The ecommerce platform generated revenues of $31.8 million for FY2023, a decrease of $7.7 million or 19.6% compared to revenues of $39.6 million for the previous fiscal year. The decrease was mainly attributable to the sale of InterTrade, explaining a decrease in revenues of $6.2 million, and lower revenues from the Orckestra solution of $3.1 million, offset by other revenue from post-closing transition services of $1.6 million related to the sale of InterTrade.
The emarketplaces platform generated revenues of $19.2 million for FY2023, an increase of $3.3 million or 21.0% compared to revenues of $15.9 million for the previous fiscal year.
Gross margin in FY2023 was $73.2 million or 57.1% compared to $61.3 million or 56.7% in FY2022. The increase of gross margin of $11.9 million is mainly attributable to the increase of revenues, mainly from the eprocurement platform, where Periscope contributed twelve months in FY2023 compared to seven months in FY2022, offset by the impact of the sale of InterTrade.
Operating expenses in FY2023 were $95.0 million, an increase of $8.1 million or 9.3% compared to $86.9 million in FY2022. General and administrative expenses totalled $25.3 million in FY2023, selling and marketing expenses were $33.7 million and technology expenses were $36.0 million, compared to $29.0 million, $29.1 million, and $28.8 million respectively for FY2022.
The operating loss was $21.7 million for FY2023, compared to operating loss of $25.5 million for FY2022.
For FY2023, net loss was $85.0 million or $1.93 per share (basic and diluted), compared to $23.9 million or $0.64 (basic and diluted) in FY2022. Adjusted net loss(4) was $23.1 million or $0.52 per share (basic and diluted) in FY2023, compared to $23.9 million or $0.64 per share (basic and diluted) in FY2022.
Total Adjusted EBITDA(2) for FY2023 was $3.4 million, compared to Adjusted EBITDA(2) loss of $2.0 million for FY2022. The increase is mainly due to Periscope, which contributed twelve months of operations in FY2023 compared to seven months in the prior year, partially offset by a decrease due to the sale of InterTrade which contributed approximately six months in FY2023 compared to twelve months in FY2022.
The Periscope acquisition accounting adjustment to the fair value of deferred revenues at the acquisition date, which resulted in a reduction of revenue of $1.8 million in FY2023 and $5.4 million in FY2022, also had an unfavorable impact on gross margins, operating loss, net loss, Adjusted Net Loss(4), Adjusted EBITDA (loss)(2), net loss per share (basic and diluted) and Adjusted net loss per share(4) (basic and diluted) in the respective periods.
Summary of consolidated results
| Financial Highlights In thousands of Canadian dollars, except number of shares and per share data | Q4 FY2023 | Q3 FY2023 | Q4 FY2022 | FY2023 | FY2022 | |||||
| Revenues | 31,231 | 31,652 | 29,954 | 128,295 | 108,259 | |||||
| Recurring Revenue(1) | 24,444 | 24,728 | 26,117 | 101,675 | 87,949 | |||||
| Gross margin | 17,546 | 17,832 | 16,638 | 73,239 | 61,348 | |||||
| Operating loss | (5,034 | ) | (5,787 | ) | (6,964 | ) | (21,742 | ) | (25,540 | ) |
| Net earnings (loss) | (3,995 | ) | 15,082 | (8,672 | ) | (85,005 | ) | (23,938 | ) | |
| Adjusted Net Loss(4) | (4,175 | ) | (7,804 | ) | (8,672 | ) | (23,071 | ) | (23,938 | ) |
| Adjusted EBITDA(2) (loss) | 2,191 | 898 | (805 | ) | 3,359 | (1,977 | ) | |||
| Net earnings (loss) per share(4) (basic and diluted) (in $) | (0.09 | ) | 0.34 | (0.21 | ) | (1.93 | ) | (0.64 | ) | |
| Adjusted Net Loss per share(4) (basic and diluted) (in $) | (0.09 | ) | (0.18 | ) | (0.21 | ) | (0.52 | ) | (0.64 | ) |
| Basic and diluted weighted average number of shares outstanding (in thousands) | 43,971 | 43,971 | 43,971 | 43,971 | 37,368 | |||||
| Reconciliation of net earnings (loss), EBITDA(2) (loss) and Adjusted EBITDA(2) (loss) | ||||||||||
| In thousands of Canadian dollars, unless otherwise noted | Q4 | Q3 | Q4 | |||||||
| FY2023 | FY2023 | FY2022 | FY2023 | FY2022 | ||||||
| Net earnings (loss) | (3,995 | ) | 15,082 | (8,672 | ) | (85,005 | ) | (23,938 | ) | |
| Income tax expense (recovery) | (1,237 | ) | 1,194 | 777 | (419 | ) | (2,916 | ) | ||
| Depreciation of property and equipment and amortization of intangible assets | 950 | 1,018 | 1,038 | 4,054 | 4,040 | |||||
| Amortization of acquired intangible assets | 3,116 | 3,128 | 2,963 | 12,235 | 8,102 | |||||
| Amortization of right-of-use assets | 817 | 566 | 598 | 2,533 | 2,195 | |||||
| Finance expenses | 298 | 228 | 659 | 2,209 | 1,305 | |||||
| EBITDA(2) (loss) | (51 | ) | 21,216 | (2,637 | ) | (64,393 | ) | (11,212 | ) | |
| Gain on disposal of a subsidiary | (180 | ) | (22,886 | ) | - | (23,066 | ) | - | ||
| Goodwill impairment loss | - | - | - | 85,000 | - | |||||
| Foreign exchange loss (gain) | 169 | 594 | 284 | (1,624 | ) | (285 | ) | |||
| Share-based compensation | (1 | ) | 47 | 247 | 469 | 1,072 | ||||
| Restructuring costs | 1,621 | 1,418 | 800 | 4,119 | 3,191 | |||||
| Transaction-related costs | 633 | 509 | 501 | 2,854 | 5,257 | |||||
| Adjusted EBITDA(2) (loss) | 2,191 | 898 | (805 | ) | 3,359 | (1,977 | ) | |||
| Reconciliation of net earnings (loss) and Adjusted net loss(4) | ||||||||||
| In thousands of Canadian dollars, unless otherwise noted | Q4 | Q3 | Q4 | |||||||
| FY2023 | FY2023 | FY2022 | FY2023 | FY2022 | ||||||
| Net earnings (loss) | (3,995 | ) | 15,082 | (8,672 | ) | (85,005 | ) | (23,938 | ) | |
| Gain on disposal of a subsidiary | (180 | ) | (22,886 | ) | - | (23,066 | ) | - | ||
| Goodwill impairment loss | - | - | - | 85,000 | - | |||||
| Adjusted net loss(4) | (4,175 | ) | (7,804 | ) | (8,672 | ) | (23,071 | ) | (23,938 | ) |
| Weighted average number of shares outstanding: | ||||||||||
| Basic and diluted (in thousands) | 43,971 | 43,971 | 43,971 | 43,971 | 37,368 | |||||
| Net earnings (loss) per share - basic and diluted (4) (in $) | (0.09 | ) | 0.34 | (0.21 | ) | (1.93 | ) | (0.64 | ) | |
| Adjusted net loss per share - basic and diluted (4) (in $) | (0.09 | ) | (0.18 | ) | (0.21 | ) | (0.52 | ) | (0.64 | ) |
| Reconciliation of revenues on a Constant Currency basis(3) | |||||||||||||||||
| In thousands of Canadian dollars | Q4 FY2023 | Q4 FY2022 | Var. $ | Var. % | Q4 FY2023 | Q3 FY2023 | Var. $ | Var. % | FY2023 | FY2022 | Var. $ | Var. % | |||||
| Revenues | 31,231 | 29,954 | 1,277 | 4.3 | 31,231 | 31,652 | (421 | ) | (1.3 | ) | 128,295 | 108,259 | 20,036 | 18.5 | |||
| Constant Currency impact | - | 956 | (956 | ) | - | - | (59 | ) | 59 | - | - | 1,120 | (1,120 | ) | - | ||
| Revenues in Constant Currency(3) | 31,231 | 30,910 | 321 | 1.0 | 31,231 | 31,593 | (362 | ) | (1.1 | ) | 128,295 | 109,379 | 18,916 | 17.3 | |||
(1) Recurring Revenue and Monthly Recurring Revenue ("MRR") are key performance indicators. Refer to section "12 - Non-IFRS Financial Measures and Key Performance Indicators" of the Management's Discussion and Analysis (MD&A) for the fourth quarter and the year-ended March 31, 2023.
(2) EBITDA, Adjusted EBITDA (loss) and Adjusted EBITDA margin are non-IFRS financial measures. Refer to section "12 - Non-IFRS Financial Measures and Key Performance Indicators" of the MD&A for the fourth quarter and the year-ended March 31, 2023.
(3) Certain revenue figures and changes from prior period are analyzed and presented on a Constant Currency basis and are obtained by translating revenues from the comparable period of the prior year denominated in foreign currencies at the foreign exchange rates of the current period. Refer to section "12 - Non-IFRS Financial Measures and Key Performance Indicators" of the MD&A for the fourth quarter and the year-ended March 31, 2023.
(4) Adjusted net earnings (loss) and Adjusted net earnings (loss) per share (basic and diluted) are non-IFRS financial measures. Refer to section "12 - Non-IFRS Financial Measures and Key Performance Indicators" of the MD&A for the fourth quarter and the year-ended March 31, 2023.
About mdf commerce inc.
mdf commerce inc. (TSX:MDF) enables the flow of commerce by providing a broad set of software as a service (SaaS) solutions that optimize and accelerate commercial interactions between buyers and sellers. Our platforms and services empower businesses around the world, allowing them to generate billions of dollars in transactions on an annual basis. Our eprocurement, ecommerce and emarketplaces solutions are supported by a strong and dedicated team of approximately 650 employees based in Canada, the United States, Denmark and China. For more information, please visit us at mdfcommerce.com, follow us on LinkedIn or call at 1-877-677-9088.
Forward-Looking Statements
In this press release, "mdf commerce", the "Corporation" or the words "we", "our" and "us" refer, depending on the context, either to mdf commerce inc. or to mdf commerce inc. together with its subsidiaries and entities in which it has an economic interest.
This press release is dated June 27, 2023, and unless specifically stated otherwise, all information disclosed herein is provided as at March 31, 2023 and for the fourth quarter and the year-ended March 31, 2023.
Certain statements in this press release and in the documents incorporated by reference herein constitute forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause mdf commerce's, or the Corporation's industry's actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any of the Corporation's statements. Such factors may include, but are not limited to, risks and uncertainties that are discussed in greater detail in the "Risk Factors and Uncertainties" section of the Corporation's Annual Information Form as at March 31, 2023, as well as in the "12 - Risk Factors and Uncertainties" section of the MD&A for the fourth quarter and the year-ended March 31, 2023 and elsewhere in the Corporation's filings with the Canadian securities regulators, as applicable.
Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "should", "could", "expects", "plans", "anticipates", "intends", "believes", "estimates", "predicts", "potential" or "continue" or the negatives of these terms or other comparable terminology. These statements are only predictions. Forward-looking statements are based on management's current estimates, expectations and assumptions, which management believes are reasonable as of the date hereof, and are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and are accordingly subject to changes after such date. Undue importance should not be placed on forward looking statements, and the information contained in such forward-looking statements should not be relied upon as of any other date. Actual events or results may differ materially. We cannot guarantee future results, levels of activity, performance or achievement. We disclaim any intention, and assume no obligation, to update these forward-looking statements, except as required by applicable securities laws.
Additional information about mdf commerce, including the Corporation's audited consolidated financial statements as at March 31, 2023 and 2022, MD&A for the fourth quarter and the year-ended March 31, 2023 and its latest Annual Information Form as at March 31, 2023 are available on the Corporation's website www.mdfcommerce.com and have been filed with SEDAR at www.sedar.com.
Non-IFRS Financial Measures and Key Performance Indicators
The Corporation's audited consolidated financial statements for the years ended March 31, 2023 and 2022 have been prepared in accordance with International Financial Reporting Standards (IFRS).
The Corporation presents Non-IFRS financial measures and key performance indicators to assess operating performance. The Corporation presents Adjusted net earnings (loss)(4), Adjusted net earnings (loss) (4) per share, net earnings (loss) before interest, taxes, depreciation and amortization ("EBITDA(2)") Adjusted EBITDA (loss) (2), Adjusted EBITDA margin(2), and certain Revenues presented on a Constant Currency basis(3) as a Non-IFRS financial measures and Recurring Revenue(1) and Monthly Recurring Revenues(1) as key performance indicators.
These Non-IFRS financial measures and key performance indicators do not have standardized meanings under IFRS and may not be comparable to similarly designed measures reported by other corporations. The reader is cautioned that these measures are being reported in order to complement, and not replace, the analysis of financial results in accordance with IFRS. Management uses both measures that comply with IFRS and Non-IFRS measures, in planning, overseeing and assessing the Corporation's performance. Certain additional disclosures including the definitions associated with Non-IFRS financial measures as well as a reconciliation to the most comparable IFRS measures, and key performance indicators have been incorporated by reference and can be found in MD&A for the fourth quarter and the year-ended March 31, 2023, as presented in the section "12 - Non-IFRS Financial Measures and Key Performance Indicators". The MD&A for the fourth quarter and the year-ended March 31, 2023, is available on SEDAR at www.sedar.com and on the Corporation's website mdfcommerce.com under the Investors section.
Conference call for fourth quarter fiscal 2023 financial results
Date: Wednesday, June 28, 2023
Time: 9 a.m. Eastern Daylight Time
To dial-in: 1 833 630-1956 or 412 317-1837 (for international)
Live webcast: Click here to register
For further information:
mdf commerce inc.
Luc Filiatreault, President & CEO
Toll free: 1-877-677-9088, ext. 2004
Email: luc.filiatreault@mdfcommerce.com
Deborah Dumoulin, Chief Financial Officer
Toll free: 1-877-677-9088, ext. 2134
Email: deborah.dumoulin@mdfcommerce.com
