Q4-2022 Highlights
- Revenues increased 53.9% to $120.0
million, compared to $78.0
million for the same quarter last year.
- Adjusted EBITDA(1) increased 85.5% to $6.0 million, or 5.0% of revenues (Adjusted
EBITDA Margin(1)), compared to $3.3 million, or 4.2% of revenues, for the same
quarter last year.
- Gross margin increased 32.5% to $31.1
million, compared to $23.5
million for the same quarter last year.
- Gross margin as a percentage of revenues(2) was
25.9%, compared to 30.1% for the same quarter last year, a decrease
explained in part by the acquisition of R3D Consulting Inc. ("R3D")
("R3D Acquisition").
- Selling, general and administrative expenses as a percentage of
revenues(2) decreased to 21.8%, from 27.9% for the same
quarter last year.
- Net loss of $7.3 million, or
$0.08 per share, compared to a net
loss of $2.5 million, or $0.04 per share, for the same quarter last
year.
- Q4 Bookings(2) reached $107.2
million, which translated into a Book-to-Bill
Ratio(2) of 0.89.
- Successfully completed 21 go-live implementations and signed 11
new clients during the fourth quarter, and 120 new clients during
fiscal 2022.
- Entered into a binding agreement on June
1, 2022 to acquire US-based Datum Consulting Group, LLC, a
leader in IP enabled digital transformation services for data rich
insurers and other regulated entities such as state
governments.
F2022 Highlights
- Revenues increased 52.2% to $437.9
million, compared to $287.6
million last year.
- Adjusted EBITDA increased 134.4% to $22.6 million, or 5.2% of revenues (Adjusted
EBITDA Margin), from $9.6 million, or
3.4% of revenues, last year.
- Gross margin increased 39.9% to $116.1
million, compared to $83.0
million last year.
- Gross margin as a percentage of revenues was 26.5%, compared to
28.9% last year, a decrease explained in part by the R3D
Acquisition.
- Selling, general and administrative expenses as a percentage of
revenues decreased to 22.6%, from 28.4% last year.
- Net loss of $15.5 million, or
$0.18 per share, compared to a net
loss of $17.3 million, or
$0.30 per share last year.
- Fiscal 2022 Bookings reached $1,031.8
million, which translated into a Book-to-Bill ratio of
2.36.
MONTREAL, June 17,
2022 /CNW Telbec/ - Alithya Group inc. (TSX: ALYA)
(NASDAQ: ALYA) ("Alithya" or the "Company") reported today its
results for the fourth quarter and fiscal 2022 ended March 31,
2022. All amounts are in Canadian dollars unless otherwise
stated.
Summary of the financial results for the fourth quarter and
for the twelve-month period:
Financial
Highlights
(in thousands of $,
except for margin percentages)
|
F2022-Q4
|
F2021-Q4
|
F2022
|
F2021
|
Revenues
|
119,974
|
77,971
|
437,885
|
287,643
|
Gross Margin
|
31,083
|
23,454
|
116,153
|
83,017
|
Gross Margin
(%)(2)
|
25.9 %
|
30.1 %
|
26.5 %
|
28.9 %
|
Selling, general and
administrative expenses
|
26,204
|
21,740
|
98,838
|
81,723
|
Selling, general and
administrative expenses (%)(2)
|
21.8 %
|
27.9 %
|
22.6 %
|
28.4 %
|
Adjusted
EBITDA(1)
|
6,048
|
3,262
|
22,609
|
9,645
|
Adjusted EBITDA
Margin(1) (%)
|
5.0 %
|
4.2 %
|
5.2 %
|
3.4 %
|
Net Loss
|
(7,253)
|
(2,525)
|
(15,548)
|
(17,338)
|
(1)
|
These are non-IFRS
financial measures or ratios without a standardized definition
under IFRS, which may not be comparable to similar measures or
ratios used by other issuers. Definition and quantitative
reconciliation of Adjusted EBITDA to the most directly comparable
IFRS measure is presented below under the caption ''Non-IFRS and
other financial measures''. "Adjusted EBITDA Margin" refers to the
percentage of total revenue that Adjusted EBITDA represents for a
given period. This earnings release incorporates by reference
section 5,"Non-IFRS and Other Financial Measures", of
Alithya's MD&A for the year ended March 31, 2022, filed on
SEDAR at www.sedar.com and on EDGAR at www.sec.gov, which includes
explanations of the composition and usefulness of these non-IFRS
financial measures and non-IFRS ratios.
|
(2)
|
This earnings release
incorporates by reference section 5,"Non-IFRS and Other Financial
Measures", of Alithya's MD&A for the year ended March 31, 2022,
filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov, which
includes explanations of the composition and usefulness of these
other financial measures.
|
Quote by Paul Raymond, President and CEO,
Alithya:
"We are pleased to have registered another quarter of record
revenues to end our 2022 fiscal year. Our fiscal year was marked by
notable growth in revenues and Adjusted EBITDA, both on a
sequential basis, and year-over-year. We posted a strong
performance in terms of Bookings, with a robust annual Book-to-Bill
ratio of 2.36 for the past 12 months, ending the year with strong
numbers in Q4 in the manufacturing and healthcare verticals, in
the United States. Our healthy
pipeline of signed contracts reflects the level of trust that our
customers continue to place in us in carrying out their critical,
digital transformation projects. It also validates the strategic
merits of our recent acquisitions, with customers now demanding
additional services derived from those transactions, including new
solutions and bolstered expertise.
Following an already active year on the acquisition front, on
June 1, 2022, we announced our
acquisition of US-based Datum Consulting Group and its affiliates
("Datum"), expected to close on July 1,
2022. Datum is a leader in specialized IP-enabled digital
transformation services and software, primarily targeting customers
in the insurance industry and public sector. By joining forces with
Datum, Alithya continues its steady penetration of the fast-growing
InsurTech market. In addition to welcoming an impressive client
base that includes 6 of the top 10 health insurers in the United States, synergies obtained from the
acquired company include a suite of proprietary products and
cloud-based SaaS offerings generating recurring revenue, as well as
a highly skilled workforce of 150 professionals based in
the United States, Europe, India, and Australia.
With the acquisition of Datum, Alithya will have completed 9
successful acquisitions since going public in 2018, including three
in the past two quarters alone. Given our new critical mass and
growing maturity, we started in Q4 accelerating our efforts to
drive cost efficiencies and synergies across the company.
We have the leaders and experience required to vigilantly
address the current challenges of global uncertainties, a
competitive landscape, continued labour market shortages, and some
inflationary pressure on wages. As the accelerated growth of our
revenues sometimes forces us, reluctantly, to hire more
subcontractors, which has a negative impact on our gross margins,
we remain committed and focused on our 2021-2024 strategic plan
objectives and enter fiscal 2023 with confidence and optimism."
Fourth Quarter Results
Revenues
Revenues amounted to $120.0
million for the three months ended March 31, 2022,
including revenues from the R3D Acquisition, recorded in other
Canadian entities of the Group following its administrative
integration at the end of the third quarter of this year, and
$5.0 million from the acquisition of
Vitalyst, LLC ("Vitalyst") ("Vitalyst Acquisition"), representing a
$42.0 million increase, or 53.9%,
from $78.0 million for the three
months ended March 31, 2021.
Revenues in Canada increased by
$28.8 million, or 63.3%, to
$74.2 million for the three months
ended March 31, 2022, from $45.4
million for the three months ended March 31, 2021.
The increase in revenues was due to organic growth in all areas,
the general recovery of activity levels, revenues from the R3D
Acquisition, and growth from the two long-term contracts signed as
part of the R3D Acquisition. On a sequential basis, revenues in
Canada increased by $2.1 million, from $72.1
million for the third quarter of this year.
U.S. revenues increased by $11.6
million, or 39.4%, to $41.3
million for the three months ended March 31, 2022,
from $29.7 million for the three
months ended March 31, 2021, due primarily to organic
growth in all areas, the general recovery of activity levels, and
revenues of $5.0 million from the
Vitalyst Acquisition. On a sequential basis, revenues in the U.S.
increased by $7.6 million, from
$33.7 million for the third quarter
of this year, despite an unfavorable US$ exchange rate impact of
$0.2 million.
International revenues increased by 54.7%, to $4.5 million, from $2.9
million for the same quarter last year, due primarily to a
general recovery of activity levels, partially offset by the
negative impact of foreign exchange variations between the two
periods. In local currency, this represents a record quarter for
revenues. On a sequential basis, international revenues increased
by $0.7 million, from $3.8 million for the third quarter of this
year.
Gross Margin
Gross margin increased by $7.6
million, or 32.5%, to $31.1
million for the three months ended March 31, 2022,
from $23.5 million for the three
months ended March 31, 2021. Gross margin as a percentage
of revenues decreased to 25.9% for the three months ended
March 31, 2022, from 30.1% for the three months ended
March 31, 2021.
The percentage decrease was driven in part by decreased gross
margin in Canada from the R3D
Acquisition, whose operations are now recorded in other Canadian
entities of the Group following its administrative integration at
the end of the third quarter of this year, and whose revenues
historically show a higher proportion from billable subcontractors,
resulting in lower margins. Gross margin percentage also decreased
in other areas of the business due to an increase in subcontractor
revenues relative to revenues from permanent employees. The high
demand for Alithya's services, as evidenced by its strong revenue
growth, coupled with a tightening labour market, have resulted in
this increased reliance on subcontractors. Finally, increased costs
in certain customer projects in Canada and the U.S., partly due to market
pressures on salary costs, and decreased governmental wage
subsidies in Canada were partially
offset by increased gross margins internationally and a positive
margin impact from the Vitalyst Acquisition.
Selling, General and Administrative Expenses
Selling, general and administrative expenses totaled $26.2
million for the three months ended March 31, 2022, an
increase of $4.5 million, or 20.5%,
from $21.7 million for the three months ended
March 31, 2021. As a percentage of consolidated revenues,
total selling, general and administrative expenses amounted to
21.8% for the three months ended March 31, 2022, compared
to 27.9% for the same period last year.
Adjusted EBITDA
Adjusted EBITDA amounted to $6.0
million for the three months ended March 31, 2022,
representing an increase of $2.7
million, from $3.3 million for
the three months ended March 31, 2021. As explained
above, the contribution from the Vitalyst Acquisition and increased
gross margin were partially offset by increased selling, general
and administrative expenses. Adjusted EBITDA Margin was 5.0% for
the three months ended March 31, 2022, compared to 4.2%
for the three months ended March 31, 2021.
Net Loss
Net loss for the three months ended March 31, 2022 was
$7.3 million, an increase
of $4.8 million, from $2.5 million for the three months ended
March 31, 2021. The increased loss was driven by
increased selling, general and administrative expenses, increased
business acquisition, integration and reorganization costs,
increased depreciation and amortization, increased net financial
expenses, and decreased income tax recovery, partially offset by
increased gross margin in the three months ended
March 31, 2022, compared to the three months ended
March 31, 2021. On a per share basis, this translated
into a basic and diluted net loss per share of $0.08 for the three months ended
March 31, 2022, compared to a net loss of $0.04 per share for the three months ended
March 31, 2021.
Liquidity and Capital Resources
For the three months ended March 31, 2022, net cash
used in operating activities was $4.8 million, representing an
increase of $2.8 million,
from $2.0 million of cash used for the three months ended
March 31, 2021. The cash flows for the three months ended
March 31, 2022 resulted primarily from the net loss
of $7.3 million, plus $5.0 million of non-cash adjustments to the
net loss, consisting primarily of depreciation and amortization and
share-based compensation, partially offset by deferred taxes, and
$2.6 million in unfavorable
changes in non-cash working capital items. In comparison, the cash
flows for the three months ended March 31, 2021 resulted
primarily from the net loss of $2.5 million, plus $3.5 million of non-cash adjustments to the
net loss, consisting primarily of depreciation and amortization,
unrealized foreign exchange loss, and share-based compensation,
partially offset by the forgiveness of PPP loans and deferred
taxes, and $3.0 million in
unfavorable changes in non-cash working capital items.
Fiscal 2022 Results
Revenues
Revenues amounted to $437.9
million for the twelve months ended
March 31, 2022, including $51.0
million from the R3D Acquisition and $5.0 million from the Vitalyst Acquisition,
representing a $150.3 million
increase, or 52.2%, from $287.6
million for the twelve months ended
March 31, 2021.
Gross Margin
Gross margin increased by $33.1
million, or 39.9%, to $116.1
million for the twelve months ended
March 31, 2022, from $83.0
million for the twelve months ended
March 31, 2021. Gross margin as a percentage of revenues
decreased to 26.5% for the twelve months ended
March 31, 2022, from 28.9% for the twelve months ended
March 31, 2021. However, excluding the impact of the R3D
Acquisition prior to its administrative integration at the end of
the third quarter of this year, gross margin as a percentage of
revenues would have been 1.7% higher for the twelve months ended
March 31, 2022.
Selling, General and Administrative Expenses
Selling, general and administrative expenses totaled $98.8
million for the twelve months ended March 31, 2022, an
increase of $17.1 million, or 20.9%,
from $81.7 million for the twelve months ended
March 31, 2021. As a percentage of consolidated revenues,
total selling, general and administrative expenses amounted to
22.6% for the twelve months ended March 31, 2022,
compared to 28.4% for the twelve months ended
March 31, 2021.
Adjusted EBITDA and Net loss
Adjusted EBITDA amounted to $22.6
million for the twelve months ended
March 31, 2022, representing an increase of $13.0 million, from $9.6
million for the twelve months ended
March 31, 2021. Net loss for the twelve months ended
March 31, 2022 was $15.5
million, an improvement of $1.8 million, from
$17.3 million for the twelve months
ended March 31, 2021.
Subsequent Event
On June 1, 2022, the Company
entered into a binding agreement to acquire all of the outstanding
shares of the US-based Datum Consulting Group, LLC and its
affiliates ("Datum)"("Datum Acquisition"). The closing of the
transaction is expected to take place on July 1, 2022 and is subject to customary
conditions for a transaction of this nature, including approval
from the Toronto Stock Exchange.
The Datum Acquisition will be completed for total consideration
of up to US$45.5 million
($57.5 million), including the
assumption of estimated IFRS 16 lease liabilities of US$0.5 million ($0.6
million), subject to working capital and other adjustments.
The consideration will consist of: (i) approximately US$13.7 million ($17.3
million) in cash; (ii) US$4.0
million ($5.1 million) payable
by the issuance of 1,867,262 Subordinate Voting Shares, (iii)
deferred cash consideration of approximately US$10.3 million ($13.0
million) and deferred share consideration of US$4.0 million ($5.1
million), both payable over three years and (iv) potential
earn-out consideration of up to US$13.0
million ($16.4 million),
payable in cash (75%) and shares (25%), based on annual gross
profit increases, available over three years.
Outlook
As a result of measures enacted during fiscal 2022 and 2021 to
combat the COVID-19 pandemic, increased uncertainty surrounding
global economic conditions and business impacts have resulted. In
this context, the Company's priority remains the protection of its
people, its clients and the Company. However, notwithstanding the
ongoing, global uncertainties, the Company has demonstrated its
ability to navigate the crisis and maintain focus on its long-term
strategic plan, which sets as a goal to consolidate its position to
become a trusted North American digital transformation leader.
According to this plan, Alithya's consolidated scale and scope
should allow it to leverage its geographies, expertise, integrated
offerings, and position on the value chain to target the fastest
growing IT services segments. Alithya's specialization in digital
technologies and the flexibility to deploy enterprise solutions,
and deliver solutions tailored to specific business objectives,
responds directly to client expectations. More specifically,
Alithya has established a three-pronged plan focusing on:
- Increasing scale through organic growth and strategic
acquisitions
- Achieving best-in-class employee engagement
- Providing its investors, partners and stakeholders with
long-term growing return on investment.
Forward-Looking
Statements
This press release contains statements that may constitute
"forward-looking information" within the meaning of applicable
Canadian securities laws and "forward-looking statements" within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995 and other applicable U.S. safe harbours (collectively
"forward-looking statements"). Statements that do not exclusively
relate to historical facts, as well as statements relating to
management's expectations regarding the future growth, results of
operations, performance and business prospects of Alithya, and
other information related to Alithya's business strategy and future
plans or which refer to the characterizations of future events or
circumstances represent forward-looking statements. Such statements
often contain the words "anticipates," "expects," "intends,"
"plans," "predicts," "believes," "seeks," "estimates," "could,"
"would," "will," "may," "can," "continue," "potential," "should,"
"project," "target," and similar expressions and variations
thereof, although not all forward-looking statements contain these
identifying words.
Forward-looking statements in this press release include, among
other things, information or statements about: (i) our ability to
generate sufficient earnings to support our operations; (ii) our
ability to take advantage of business opportunities and meet our
goals set in our three-year strategic plan; (iii) our ability to
develop new business, broaden the scope of our service offerings
and enter into new contracts; (iv) our strategy, future operations,
and prospects; (v) our need for additional financing and our
estimates regarding our future financing and capital requirements;
(vi) our expectations regarding our financial performance,
including our revenues, profitability, research and development,
costs and expenses, gross margins, liquidity, capital resources,
and capital expenditures; (vii) our ability to realize the expected
synergies or cost savings relating to the integration of our
business acquisitions, and (viii) the impact of the COVID-19
pandemic and related response measures on our business operations,
financial results and financial position and those of our clients
and on the economy in general.
Forward-looking statements are presented for the sole purpose of
assisting investors and others in understanding Alithya's
objectives, strategies and business outlook as well as its
anticipated operating environment and may not be appropriate for
other purposes. Although management believes the expectations
reflected in Alithya's forward-looking statements were reasonable
as at the date they were made, forward-looking statements are based
on the opinions, assumptions and estimates of management and, as
such, are subject to a variety of risks and uncertainties and other
factors, many of which are beyond Alithya's control, and which
could cause actual events or results to differ materially from
those expressed or implied in such statements. Such risks and
uncertainties include but are not limited to those discussed in the
section titled "Risks and Uncertainties" of Alithya's Management's
Discussion and Analysis for the quarter ended
March 31, 2022 and Management's Discussion and Analysis
for the year ended March 31, 2022, as well as in Alithya's
other materials made public, including documents filed with
Canadian and U.S. securities regulatory authorities from time to
time and which are available on SEDAR
at www.sedar.com and EDGAR at www.sec.gov.
Additional risks and uncertainties not currently known to Alithya
or that Alithya currently deems to be immaterial could also have a
material adverse effect on its financial position, financial
performance, cash flows, business or reputation.
Forward-looking statements contained in this press release are
qualified by these cautionary statements and are made only as of
the date of this press release. Alithya expressly disclaims any
obligation to update or alter any forward-looking statements, or
the factors or assumptions underlying them, whether as a result of
new information, future events or otherwise, except as required by
applicable law. Investors are cautioned not to place undue reliance
on forward-looking statements since actual results may vary
materially from them.
Non-IFRS and other financial
Measures
This press release includes certain measures which have not been
prepared in accordance with IFRS and other financial measures.
EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin,
are non-IFRS measures and Bookings, Book-to-Bill Ratio, Gross
Margin as a Percentage of Revenues and Selling, General and
Administrative as a Percentage of Revenues are other financial
measures used in this press release. These measures do not have any
standardized meaning prescribed by IFRS and are therefore unlikely
to be comparable to similar measures presented by other companies.
These measures should be considered as supplemental in nature and
not as a substitute for the related financial information prepared
in accordance with IFRS. Additional details for these non-IFRS and
other financial measures can be found in section 5,"Non-IFRS
and Other Financial Measures", of Alithya's MD&A for the year
ended March 31, 2022, filed on SEDAR
at www.sedar.com and on EDGAR at www.sec.gov, and are incorporated
by reference in this press release, which includes explanations of
the composition and usefulness of these non IFRS financial measures
and non IFRS ratios.
The following table reconciles net loss to EBITDA and Adjusted
EBITDA:
|
|
For the three months
ended March 31,
|
|
For the year ended
March 31,
|
(in $
thousands)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
$
|
|
$
|
|
$
|
|
$
|
Revenues
|
|
119,974
|
|
77,971
|
|
437,885
|
|
287,643
|
Net
loss
|
|
(7,253)
|
|
(2,525)
|
|
(15,548)
|
|
(17,338)
|
Net financial
expenses
|
|
1,352
|
|
849
|
|
4,579
|
|
3,274
|
Income tax
recovery
|
|
(575)
|
|
(950)
|
|
(3,027)
|
|
(2,282)
|
Depreciation
|
|
1,235
|
|
1,058
|
|
5,435
|
|
3,767
|
Amortization of
intangibles
|
|
4,017
|
|
2,490
|
|
14,285
|
|
11,739
|
EBITDA
(1)
|
|
(1,224)
|
|
922
|
|
5,724
|
|
(840)
|
EBITDA Margin
(1)
|
|
(1.0) %
|
|
1.2 %
|
|
1.3 %
|
|
(0.3) %
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
Foreign exchange loss
(gain)
|
|
(25)
|
|
74
|
|
(26)
|
|
473
|
Share-based
compensation
|
|
937
|
|
1,183
|
|
4,454
|
|
6,241
|
Business acquisition,
integration and reorganization costs
|
|
6,128
|
|
718
|
|
11,617
|
|
2,321
|
Gain on recovery of
note receivable
|
|
—
|
|
—
|
|
—
|
|
(660)
|
Premise relocation
expenses
|
|
—
|
|
155
|
|
—
|
|
933
|
Severance
|
|
—
|
|
3
|
|
—
|
|
154
|
Internal ERP systems
implementation
|
|
232
|
|
207
|
|
840
|
|
1,023
|
Adjusted EBITDA
(1)
|
|
6,048
|
|
3,262
|
|
22,609
|
|
9,645
|
Adjusted EBITDA Margin
(1)
|
|
5.0 %
|
|
4.2 %
|
|
5.2 %
|
|
3.4 %
|
(1)
|
Non-IFRS measure. See
section 5 titled "Non-IFRS and Other Financial Measures" of
Alithya's MD&A for the year ended March 31, 2022, filed on
SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
|
Conference Call
Alithya will hold a conference call to discuss these results on
June 17, 2022, at 9:00 AM Eastern Time. Interested parties can join
the call by dialing 888 396 8049, conference ID 43750636, or via
webcast at https://www.icastpro.ca/muu7r8. The conference call
recording can be accessed via the same URL link until July 17, 2022.
About Alithya
Alithya is a North American leader in strategy and digital
transformation, employing a dedicated and highly skilled workforce
of 3,700 professionals in Canada,
the United States
and internationally. Since its founding in 1992, Alithya's
capacity, size, and capabilities have continuously evolved, guided
by a long-term strategic vision to become the trusted advisor of
its clients. Alithya's strategy is based on a plan of accelerated
organic growth and complementary acquisitions to create a global
leader. The company's integrated offer is based on four pillars of
expertise: business strategies, enterprise cloud solutions,
application services, and data and analytics. Alithya deploys
leading-edge solutions, services, and skills as one of the most
prominent consulting firms, driving successful digital change as a
trusted advisor to customers in a variety of sectors, including
financial services, manufacturing, renewable
energy, telecommunications, transport and logistics, professional
services, healthcare, government, and beyond. Alithya strives to be
a model of corporate responsibility, professional equity,
diversity, and inclusion, with a vibrant business culture that
embraces social consciousness at its core. To learn more about
Alithya, visit www.alithya.com.
Note to readers: Management's Discussion and Analysis and
the annual consolidated financial statements and notes thereto, and
the Annual Report on Form 40-F, for the year ended March 31, 2022 are available on SEDAR at
www.sedar.com, on EDGAR at www.sec.gov and on the Company's website
at www.alithya.com. Shareholders may, upon request, receive a hard
copy of these documents free of charge.
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SOURCE Alithya