– Quarter Highlighted by Sequential Improvement in
Adjusted EBITDA and Cash from Operations and Healthy Backlog at
Quarter End of $175 Million –
TORONTO, Dec. 12, 2016 /CNW/ - Redknee Solutions
Inc. (TSX: RKN) a leading provider of
real-time monetization and subscriber management software, reported
results for its fiscal fourth quarter ended September 30,
2016. (All figures are in U.S. dollars unless otherwise
stated.)
Fiscal Q4 2016 Financial Highlights
(Comparisons
made between fiscal Q4FY2016 and fiscal Q4FY2015 results, unless
otherwise noted)
- Revenue totalled $40.7 million
compared to $59.8 million;
- Gross profit was $23.1 million
(57% of total revenue) compared to $34.6
million (58% of total revenue);
- Adjusted EBITDA was $3.0 million
(7% of total revenue) compared to Adjusted EBITDA of $7.7 million (13% of total revenue);
- Recurring revenue was 63% of revenue, compared to 44%;
- Net loss was $14.7 million, or
$0.14 loss per share (including
$6.2 million in restructuring costs)
compared to a net loss of $4.4
million, or $0.04 loss per
share;
- Cash from operations was $5.4
million (adjusted cash from operations was $13.8 million); and,
- Order backlog of $175.0 million
at September 30, 2016.
Fiscal 2016 Financial Highlights
(Comparisons made
between fiscal 2016 and fiscal 2015 results, unless otherwise
noted)
- Revenue totalled $171.1 million
compared to $222.7 million;
- Gross profit was $92.6 million
(54% of total revenue) compared to $130.5
million (59% of total revenue);
- Adjusted EBITDA was $3.5 million
(2% of total revenue) compared to Adjusted EBITDA of $34.4 million (15% of total revenue);
- Recurring revenue was 60% of revenue, compared to 46%;
- Net loss was $66.9 million, or
$0.62 loss per share (including
$35.2 million in restructuring costs)
compared to a net loss of $10.0
million, or $0.09 loss per
share; and,
- Cash from operations was $7.4
million (adjusted cash from operations was $24.0 million).
Fiscal Q4 2016 Operational Highlights
- Signed a multi-million cloud contract to deliver Redknee's
real-time monetization solution to a leading retailer in
LATAM:
- Won a multi-million dollar contract with a Tier 1 CSP in EMEA
to enhance customer satisfaction;
- Recognized as a Visionary in Gartner's 2016 Magic Quadrant for
Integrated Revenue and Customer Management (IRCM) report;
- Recognized as a Top 4 Convergent Billing Vendor in Analysys
Mason's Revenue Management Systems Market Share Report for
2015;
- Redknee Unified was certified by the Hewlett Packard Enterprise
(HPE) OpenNFV Partner Program;
- Completed the successful implementation of its multi-play
monetization solution at Omantel, a leading operator in the
Middle East;
- MGI Telecom implemented Redknee Unified to support its growth
strategy; and,
- Formed a special committee of independent members of the board
of directors of the Company to consider various strategic and
financing alternatives potentially available to the Company to
enhance shareholder value.
Highlights Subsequent to Fiscal Q4 2016
- Subsequent to quarter end, on December
9, 2016 the Company entered into an agreement with
Constellation Software Inc. and one of its subsidiaries providing
for an investment of US$80 million in
Redknee, completion of which is subject to approval of Redknee
common shareholders. Redknee's largest investor, Invesco Canada
Ltd., which holds 19.9% of outstanding Redknee common shares, has
agreed to vote its shares in favour of the transaction. In
addition, all directors and certain officers of the Company holding
in aggregate 16% of the outstanding common shares have also agreed
to vote their shares in favour of the transaction.
Management Commentary
"Amidst ongoing delays in customer decisions across the BSS
industry that have impacted our software license sales throughout
Fiscal 2016, our focus on our near-term priorities delivered
sequential improvement in our financial results in the fourth
quarter, highlighted by positive adjusted EBITDA of $3.0 million," said Lucas Skoczkowski, President
and CEO, Redknee Solutions Inc. "Importantly, our focus on working
capital optimization and disciplined collection efforts contributed
to the generation of $13.9 million in
cash from operations before restructuring costs and an improvement
in working capital. We continue to win new orders, which
contributed to a healthy backlog at quarter end of $175 million."
"While we expect the challenging macro environment to continue
to impact our revenue, our restructuring initiatives and ongoing
cost management efforts are expected to result in significantly
improved profitability next year. Supported by the stability
of the $80 million investment to be
provided pursuant to our agreement with Constellation Software, we
are reiterating our guidance of $15 million
to $20 million of Adjusted EBITDA on $170 to $180 million of revenue."
"Alongside our contract wins, the strength of our solutions,
including the adaptability of our solutions to different types of
businesses and our high level of service, continues to be
recognized by the industry. Redknee was recently named a
Visionary in Gartner's 2016 Magic Quadrant for Integrated Revenue
and Customer Management and was ranked one of the top four
convergent billing vendors globally in the Analysys Mason Revenue
Management Systems Market Share Report, highlighting our position
as a preferred provider by many CSPs around the world."
Fiscal Q4 2016 Financial Results
Revenue was $40.7 million compared to $59.8
million in the same year-ago quarter. The decrease resulted
mainly from the impact of lower license revenue due to delays in
customer purchasing decisions and overall reduced capital and
operating spending in the global communication industry, compared
to the same year-ago quarter.
Recurring revenue was 63% of total revenue, compared to 54% in
the same year-ago quarter.
Gross margin was $23.1 million, or
57% of total revenue, compared to $34.6
million, or 58% of total revenue, in the same year-ago
quarter. The decrease resulted mainly from lower
revenue from high-margin software license deals.
Adjusted EBITDA was $3.0 million
or 7% of revenue compared to Adjusted EBITDA of
$7.7 million, or 13% of
revenue, in the same year-ago quarter (see discussion
about the presentation of Adjusted EBITDA, a non-IFRS measure,
below).
Net loss was $14.7 million, or $0.14 loss per
basic and diluted share, compared to a net loss of
$4.4 million, or $0.04
loss per basic and diluted share, in the same year-ago
quarter. Net loss included $6.2
million of restructuring costs.
Cash flow from operations was $5.4
million. Adjusted cash flow from operations was
$13.8 million (see discussion about
the presentation of Adjusted cash flow from operations, a non-IFRS
measure, below).
Fiscal 2016 Financial Results
Revenue was $171.1 million compared to $222.7
million in the same year-ago quarter. The decrease resulted
mainly from the impact of lower license revenue due to delays in
customer purchasing decisions and overall reduced capital and
operating spending in the global communication industry. This
was partially offset by the contribution of revenue from customers
obtained through the acquisition of Orga Systems.
Recurring revenue was 60% of total revenue, compared to 46% in
the same year-ago quarter.
Order backlog increased 10% to $175.0 compared to $158.5
million in fiscal 2015.
Gross margin was $92.6 million, or
54% of total revenue, compared to $130.5
million, or 59% of total revenue, in the same year-ago
quarter. The decrease resulted mainly from lower
revenue from high-margin software license deals.
Adjusted EBITDA was $3.5 million,
or 2% of revenue, compared to Adjusted EBITDA of
$34.4 million, or 15% of
revenue, in the same year-ago quarter (see discussion
about the presentation of Adjusted EBITDA, a non-IFRS measure,
below).
Net loss was $66.9 million, or $0.62 loss per
basic and diluted share, compared to a net loss of
$10.0 million, or $0.09
loss per basic and diluted share, in the same year-ago
quarter. Net loss for the year included $35.2 million of restructuring costs.
Total cash at September 30, 2016
was $41.7 million. Cash flow from
operations was $7.4 million.
Adjusted cash flow from operations was $24.0
million (see discussion about the presentation of Adjusted
cash flow from operations, a non-IFRS measure, below).
Please refer to the section regarding Forward-Looking Statements
below which form an integral part of this release. These results,
along with the annual audited consolidated financial statements and
the Company's MD&A, are available on the Company's website at
www.redknee.com and on SEDAR at www.sedar.com.
Financial Guidance
The Company reiterated the financial guidance it had previously
provided for Fiscal 2017:
- Revenue of between $170 million and $180
million; and,
- Adjusted EBITDA of between $15 million
and $20 million.
This financial guidance constitutes forward-looking information
within the meaning of applicable securities laws and is based on a
number of assumptions and subject to a number of risks. Actual
results could vary materially as a result of numerous factors,
including certain risk factors, many of which are beyond Redknee's
control. Please refer to the section regarding Forward-Looking
Statements below. All numbers provided in this section are
approximate.
Conference Call
The Company will host a conference call tomorrow (December 13, 2016) to discuss these results.
CEO Lucas Skoczkowski and CFO David
Charron will host the presentation starting at 8:30 a.m.
Eastern time. A question and answer session will follow
management's presentation.
Date: Tuesday, December 13, 2016
Time: 8:30 a.m. Eastern time (5:30
a.m. Pacific time)
Dial-In Number: 1 (888) 231-8192
International: 1 (647) 427-7451
Conference ID#: 4579855
The presentation will be webcast live and available for replay
via either the Investors section of Redknee's website
(www.redknee.com) or http://bit.ly/2frMiTE.
Please call the conference telephone number 5-10 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 NATIONAL | Equicom at 1 (416) 586-1955.
A replay of the call will be available until 12:00 midnight
(EST) Tuesday, December 20, 2016.
Toll-Free Replay Number: 1 (855) 859-2056
International Replay Number: 1 (416) 849-0833
Replay PIN: 4579855
About Redknee Solutions
Inc.
Redknee monetizes today's digital world. We provide a complete
portfolio of mission-critical monetization and subscriber
management solutions and services that allow communications service
providers, utility companies, auto makers and enterprise businesses
of all types to charge for things in new and innovative ways.
Redknee's real-time billing, charging, policy and customer care
offerings provide the agility and scalability to drive a unique
user experience, increase profitability and support any new product
or business model. Available on premise, cloud-based, or as a
Software-as-a-Service, Redknee's low-risk, flexible solutions power
more than 250 businesses across the globe. Established in
1999, Redknee Solutions Inc. (TSX: RKN) is the parent of the
wholly-owned operating subsidiary Redknee Inc. and its various
subsidiaries. References to Redknee refer to the combined
operations of those entities. For more information about Redknee
and its solutions, please go to www.redknee.com.
Non-IFRS Measures
The Company reports "Adjusted EBITDA", which is not a financial
measure 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 Adjusted 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), share-based compensation, restructuring costs
and acquisition and related costs.
"Recurring revenue," which is not a financial measure
calculated and presented in accordance with IFRS, and should not be
considered in isolation or as asubstitute to revenue.
Recurring revenue includes revenue fromsupport and maintenance
agreements, long term service agreements, and term-based product
licenses and software subscription.
"Adjusted cash flow from operations", which is a non-IFRS
measure, is defined as cash flow from operations excluding amounts
for restructuring payments made in the period.
"Order backlog" relates to contractual commitments as at
period end, pending to be delivered and will be recognized as
revenue in future periods. Order backlogis not a financial
measure calculated and presented in accordance with IFRS and should
not be considered in isolation or as a substitute to
revenue.
The "constant currency" presentation, which is a non-IFRS
measure, excludes the impact of fluctuations in foreign currency
exchange rates. The Company calculates constant currency by
converting the current period local currency financial results
using the comparative period exchange rates.
Other companies (including competitors) may define Adjusted
EBITDA, Adjusted cash flow from operations, recurring revenue, and
order backlog differently. The Company presents Adjusted EBITDA,
Adjusted cash flow from operations, recurring revenue, and order
backlog because management believes these to be important
supplemental measures of performance that are commonly used by
securities analysts, investors and other interested parties in the
evaluation of companies in Redknee's industry. Management uses this
information internally for forecasting and budgeting. It may not be
indicative of the historical operating results of Redknee nor is it
intended to be predictive of potential future results.
See "Reconciliation of Net Income (Loss) to Adjusted
EBITDA" below for further information on this
non-IFRS measure.
Forward-Looking Statements
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.
Forward-looking statements are provided for the purpose of
providing information about management's current expectations and
plans relating to the future. Persons reading this news release are
cautioned that such information may not be appropriate for other
purposes. Such forward-looking statements include statements
respecting order backlog contributing to increased revenue
visibility for the Fiscal 2017; the impact of the challenging macro
environment on the Company's revenue; our restructuring initiatives
and ongoing cost management efforts are expected to result in
significantly improved profitability next year; and financial
guidance for Fiscal 2017; as well as statements regarding Redknee's
future plans, objectives or performance for the current period and
subsequent periods and regarding the markets for our products.
These statements reflect current assumptions and expectations
regarding future events and operating performance and speak only as
of the date of this document. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors
and assumptions that may cause the actual results, performance or
achievements to differ materially. Such factors include, but are
not limited to, assumptions respecting : (i) the conversion of
sales pipeline into orders and orders into revenue based on the
extent and timing of historical conversion; (ii) the
anticipated mix of the sale of products and services of the Company
and associated margin being consistent with that realized in the
past; (iii) the ability of Redknee to bring new products and
services to market and to increase sales; (iv) the strength of the
Company's product development pipeline; (v) the estimated size and
growth prospects of the markets Redknee seeks to address; (vi) the
Company's competitive position in those markets and its ability to
take advantage of future opportunities in those markets; (vii) the
benefits of the Company's products and services to be realized by
its customers; (viii) the demand for the Company's products and
services and the extent of deployment of the Company's products and
services; (ix) the Company's financial condition and capital
requirements; * the stability of general economic and market
conditions; (xi) currency exchange rates and interest rates; (xii)
capital markets continuing to provide the Company with access to
capital; (xiii) risks associated with the non-completion or delay
of the investment by Constellation Software Inc.; and (xiv) the
risk of default by the Company under the requirements of its senior
secured credit agreement and the enforcement by the lenders of
their security. The risks and uncertainties that may affect
forward-looking statements include, but are not limited to: the
failure of demand for Redknee's products to develop as anticipated,
the failure to obtain customer orders or meet customer
requirements, the inability of Redknee's products to perform as
expected, the inability of Redknee to achieve anticipated cost
savings in the time frames and to the extent anticipated,
unanticipated negative impacts on customer service or product
development as a result of costs savings implemented, a material
adverse change in the affairs of Redknee, and the factors discussed
under the "Risk Factors" section of Redknee's most recently filed
AIF which is available on SEDAR at www.sedar.com and on
Redknee's web-site at www.redknee.com. 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. Redknee
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.
Redknee Solutions
Inc.
|
|
|
Consolidated
Statements of Financial Position
|
|
|
(Expressed in U.S.
dollars)
|
|
|
|
|
|
September 30, 2016
and 2015
|
|
|
|
|
|
|
2016
|
2015
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
37,080,510
|
$
|
55,047,577
|
|
Trade accounts and
other receivables
|
43,209,046
|
67,439,885
|
|
Unbilled
revenue
|
27,290,500
|
38,282,163
|
|
Prepaid
expenses
|
2,999,539
|
2,535,936
|
|
Income taxes
receivable
|
2,662,163
|
1,399,564
|
|
Other
assets
|
268,929
|
392,195
|
|
Inventories
|
710,591
|
812,987
|
|
Total current
assets
|
114,221,278
|
165,910,307
|
|
|
|
Restricted
cash
|
4,582,293
|
5,972,087
|
Property and
equipment
|
6,262,965
|
8,435,008
|
Deferred income
taxes
|
1,984,479
|
2,086,025
|
Investment tax
credits
|
355,914
|
351,385
|
Other
assets
|
1,656,971
|
1,816,640
|
Intangible
assets
|
35,721,065
|
46,362,262
|
Goodwill
|
32,271,078
|
32,271,078
|
|
|
|
Total
assets
|
$
|
197,056,043
|
$
|
263,204,792
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Trade
payables
|
$
|
14,212,869
|
$
|
9,128,710
|
|
Accrued
liabilities
|
23,405,832
|
32,305,136
|
|
Provisions
|
21,981,367
|
8,772,519
|
|
Income taxes
payable
|
724,412
|
2,364,983
|
|
Settlement accrual
and contingent consideration
|
–
|
10,244,224
|
|
Deferred
revenue
|
18,915,596
|
13,363,696
|
|
Loans and
borrowings
|
50,445,790
|
1,800,000
|
|
Total current
liabilities
|
129,685,866
|
77,979,268
|
|
|
|
|
Deferred
revenue
|
639,688
|
870,937
|
Other
liabilities
|
2,264,482
|
2,615,163
|
Pension and other
long-term employment benefit
plans
|
20,387,584
|
11,417,481
|
Loans and
borrowings
|
–
|
54,961,066
|
Provisions
|
6,683,256
|
4,006,354
|
Deferred income
taxes
|
687,947
|
–
|
Total
liabilities
|
160,348,823
|
151,850,269
|
|
|
|
Shareholders'
equity:
|
|
|
|
Share
capital
|
172,436,385
|
174,082,815
|
|
Treasury
stock
|
(141,917)
|
(141,917)
|
|
Contributed
surplus
|
9,812,545
|
7,899,360
|
|
Deficit
|
(133,954,043)
|
(67,086,722)
|
|
Accumulated other
comprehensive loss
|
(11,445,750)
|
(3,399,013)
|
|
Total shareholders'
equity
|
36,707,220
|
111,354,523
|
|
|
|
|
Total liabilities and
shareholders'
equity
|
$
|
197,056,043
|
$
|
263,204,792
|
Redknee Solutions
Inc.
|
|
|
Consolidated
Statements of Comprehensive Loss
|
|
|
(Expressed in U.S.
dollars, except per share and share amounts)
|
|
|
|
|
|
Years ended September
30, 2016 and 2015
|
|
|
|
|
|
|
2016
|
2015
|
Revenue:
|
|
|
|
Software, services
and other
|
$
|
76,116,137
|
$
|
130,179,681
|
|
Support and
subscription
|
94,973,763
|
92,560,729
|
|
171,089,900
|
222,740,410
|
Cost of
revenue
|
78,494,715
|
92,192,264
|
|
|
|
Gross
profit
|
92,595,185
|
130,548,146
|
|
|
|
Operating
expenditures:
|
|
|
|
Sales and
marketing
|
29,513,033
|
34,128,382
|
|
General and
administrative
|
30,861,909
|
28,364,951
|
|
Research and
development
|
45,495,754
|
48,030,270
|
|
Acquisition and
related costs
|
4,838,371
|
6,212,222
|
|
Restructuring
costs
|
35,184,661
|
1,095,454
|
|
145,893,728
|
117,831,279
|
|
|
|
Income (loss) from
operations
|
(53,298,543)
|
12,716,867
|
|
|
|
Foreign exchange
loss
|
(4,216,967)
|
(9,948,211)
|
Other
income
|
6,362,935
|
–
|
Finance
income
|
83,058
|
31,633
|
Finance
costs
|
(6,260,366)
|
(5,172,039)
|
|
|
|
Loss before income
taxes
|
(57,329,883)
|
(2,371,750)
|
|
|
|
Income tax expense
(recovery):
|
|
|
|
Current
|
8,631,902
|
7,754,139
|
|
Deferred
|
905,536
|
(119,314)
|
|
9,537,438
|
7,634,825
|
|
|
|
Loss for the
year
|
(66,867,321)
|
(10,006,575)
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
Items that will not
be reclassified to net income:
|
|
|
|
|
Actuarial gain (loss)
on pension and non-pension
post-employment benefit plans, (net of income
tax (recovery) expense of nil (2015 - (nil))
|
(8,046,737)
|
775,936
|
|
|
|
Total comprehensive
loss
|
$
|
(74,914,058)
|
$
|
(9,230,639)
|
|
|
|
Loss per common
share:
|
|
|
|
Basic
|
$
|
(0.62)
|
$
|
(0.09)
|
|
Diluted
|
(0.62)
|
(0.09)
|
|
|
|
|
|
|
Weighted average
number of common shares (note 16(b)):
|
|
|
|
Basic
|
108,481,143
|
109,111,052
|
|
Diluted
|
108,481,143
|
109,111,052
|
|
|
|
Redknee Solutions
Inc.
|
|
|
Consolidated
Statements of Cash Flows
|
|
|
(Expressed in U.S.
dollars)
|
|
|
|
|
|
Years ended September
30, 2016 and 2015
|
|
|
|
|
|
|
2016
|
2015
|
|
|
|
Cash provided by
(used in):
|
|
|
|
|
|
Operating
activities:
|
|
|
|
Loss for the
year
|
$
|
(66,867,321)
|
$
|
(10,006,575)
|
|
Adjustments
for:
|
|
|
|
|
Depreciation of
property and equipment
|
4,175,854
|
3,694,373
|
|
|
Amortization of
intangible assets
|
9,442,492
|
7,189,337
|
|
|
Finance
income
|
(83,058)
|
(31,633)
|
|
|
Finance
costs
|
6,260,366
|
5,172,039
|
|
|
Income tax
expense
|
9,537,438
|
7,634,825
|
|
|
Unrealized foreign
exchange loss
|
2,378,887
|
6,284,482
|
|
|
Share-based
compensation
|
3,150,239
|
3,539,364
|
|
|
Pensions
|
923,366
|
1,768,978
|
|
|
Provisions
|
15,885,750
|
(16,272,604)
|
|
|
Settlement of
acquisition related liabilities
|
–
|
1,962,921
|
|
Change in non-cash
operating working capital
|
34,795,821
|
(3,925,130)
|
|
19,599,834
|
7,010,377
|
|
Interest
paid
|
(502,201)
|
(412,465)
|
|
Interest
received
|
86,335
|
31,727
|
|
Income taxes
paid
|
(11,805,732)
|
(7,392,374)
|
|
7,378,236
|
(762,735)
|
Financing
activities:
|
|
|
|
Purchase of treasury
stock
|
–
|
(536,507)
|
|
Purchase of shares
under NCIB
|
(2,556,966)
|
–
|
|
Proceeds from
exercise of stock options
|
249,768
|
231,106
|
|
Interest paid on
loans and borrowings
|
(4,109,186)
|
(2,572,761)
|
|
Proceeds (repayment)
of loans and borrowings
|
(6,800,000)
|
10,888,507
|
|
Transaction costs on
loans and borrowings
|
(90,496)
|
(1,280,254)
|
|
(13,306,880)
|
6,730,091
|
|
|
|
Investing
activities:
|
|
|
|
Purchase of property
and equipment
|
(2,552,199)
|
(2,774,266)
|
|
Purchase of
intangible assets
|
(41,318)
|
(941,171)
|
|
Decrease (increase)
in restricted cash
|
1,389,794
|
(5,090,147)
|
|
Payment of settlement
accrual and contingent consideration
|
(10,244,224)
|
(5,376,736)
|
|
Acquisition of
businesses, net of cash acquired
|
–
|
(40,312,896)
|
|
(11,447,947)
|
(54,495,216)
|
|
|
|
Effect of foreign
exchange rate changes
on cash and cash
equivalents
|
(590,476)
|
(5,061,360)
|
Increase (decrease)
in cash and cash
equivalents
|
(17,967,067)
|
(53,589,220)
|
|
|
|
Cash and cash
equivalents, beginning of
year
|
55,047,577
|
108,636,797
|
|
|
|
Cash and cash
equivalents, end of
year
|
$
|
37,080,510
|
$
|
55,047,577
|
Redknee Solutions
Inc.
|
Reconciliation of Net
Income (Loss) to Adjusted EBITDA
|
(Expressed in U.S.
dollars)
|
(Unaudited)
|
|
|
|
|
Three months
ended
|
Twelve months
ended
|
|
September
30,
|
September
30,
|
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
Net loss for the
period
|
(14,683,255)
|
(4,432,334)
|
(66,867,321)
|
(10,006,575)
|
|
|
|
|
|
Add back /
(subtract):
|
|
|
|
|
|
Depreciation of
property and equipment
|
1,042,093
|
426,185
|
4,175,854
|
3,694,373
|
|
Amortization of
intangible assets
|
2,228,364
|
2,221,280
|
9,442,492
|
7,189,337
|
|
Other
income
|
(6,362,935)
|
–
|
(6,362,935)
|
–
|
|
Finance
income
|
(18,904)
|
(16,147)
|
(83,058)
|
(31,633)
|
|
Finance
costs
|
1,563,415
|
2,213,001
|
6,260,366
|
5,172,039
|
|
Income tax
expense
|
4,567,748
|
2,867,610
|
9,537,438
|
7,634,825
|
|
Share-based
compensation
|
1,078,515
|
403,240
|
3,150,239
|
3,539,364
|
|
Foreign exchange loss
(gain)
|
3,597,168
|
3,062,814
|
4,216,967
|
9,948,211
|
|
Restructuring
costs
|
6,248,485
|
(63,098)
|
35,184,661
|
1,095,454
|
|
Acquisition and
related costs
|
3,715,000
|
1,000,539
|
4,838,371
|
6,212,222
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
2,975,694
|
$
|
7,683,090
|
$
|
3,493,074
|
$
|
34,447,617
|
SOURCE Redknee Solutions Inc.