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BSM Technologies Inc. Reports Fiscal 2018 Third Quarter Results

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BSM Technologies Inc. Reports Fiscal 2018 Third Quarter Results

Canada NewsWire

TORONTO, Aug. 14, 2018 /CNW/ - BSM Technologies Inc. ("BSM" or the "Company") (TSX:GPS), a leading provider of real-time GPS fleet and asset management solutions, today announced its unaudited consolidated financial and operating results for the three months ended June 30, 2018 (the "Third  Quarter" or "Q3 FY2018"). All amounts are in Canadian dollars unless otherwise stated.

"Entering the last quarter of the fiscal year, we continue to execute on our key strategic objectives," said Aly Rahemtulla, BSM's President and CEO. "We remain focused on increasing sales in our key sales verticals and are encouraged by our efforts in developing and identifying customer opportunities. During the third quarter, progress continued towards consolidating our various software platforms, an important first step in helping us achieve our goal of developing an industry leading IOT software company that is differentiated by its business analytics and asset optimization capabilities.  We believe that evolving our product focus to analyzing and optimizing the data we collect for clients will provide enhanced value to our clients and help differentiate BSM in an increasingly competitive market," added Mr. Rahemtulla.

Third Quarter of Fiscal 2018 Results:

  • Total revenue of $15.8 million, a decrease of 5% compared to $16.7 million in the third quarter of fiscal 2017 ("Q3 FY2017"), primarily as a result of lower hardware sales.

  • Total gross profit margin of 56%, a decrease of 5% compared to 59% in Q3 FY2017.

  • Recurring Revenue (i) of $11.1 million, a decrease of 3% compared to $11.4 million in Q3 FY2017 and a decrease of 1% compared to $11.2 million in the second quarter of fiscal 2018 ("Q2 FY2018").

  • Gross Subscriber additions(ii) of 3,100 and Subscriber churn(ii) of 4,600, resulting in a June 30, 2018 Subscriber(ii) base of 165,200 as compared to 166,700 as at March 31, 2018.

  • Average Revenue Per Subscriber(ii) calculated on a constant currency basis(iii) was $22.32 compared to $22.94 in Q3 FY2017 and $22.76 in Q2 FY2018.

  • Adjusted EBITDA(i) of $1.6 million, a decrease of 27% compared to $2.2 million in Q3 FY2017 and unchanged as compared to $1.6 million in Q2 FY2018.

Financial Highlights for the Third Quarter of Fiscal 2018:

($ thousands except gross margin % and per share data)

(unaudited)

Three months ended June 30

Nine months ended June 30

2018

2017

2018

2017

Total revenue

$ 15,764

$ 16,660

$ 45,476

$ 51,027






Recurring Revenue(i)

11,115

11,356

33,587

34,684






Hardware Revenue(i) and

Professional Services Revenue(i)

4,649

5,304

11,889

16,343






Gross profit

8,846

9,819

26,279

30,189






Gross margin %

56%

59%

58%

59%






Net income/(loss)

(692)

(1,336)

(1,229)

(2,982)






EPS – basic

(0.009)

(0.017)

(0.015)

(0.037)






EPS – diluted

(0.009)

(0.017)

(0.015)

(0.037)






EBITDA(i)

1,402

1,051

5,635

4,952






Adjusted EBITDA(i)

1,632

2,150

4,634

7,138






Notes:




(i)     

Recurring Revenue, Hardware Revenue, Professional Services Revenue, EBITDA and Adjusted EBITDA are non-GAAP financial measures and do not have standardized meanings; therefore, they are unlikely to be comparable to similar measures presented by other companies. See "Non-GAAP Financial Measures and KPIs" below for more details.



(ii)   

Subscriber, Subscriber Gross Additions, Subscriber Churn and Average Revenue Per Subscriber are key performance indicators of the Company and are therefore unlikely to be comparable to similar measures presented by other companies. Refer to the "Non-GAAP Financial Measures and KPIs" section below for more details.



(iii)  

In the calculation of ARPU on a constant currency basis, United States dollar ("USD") denominated revenues have been translated to Canadian dollars ("CAD") using the average effective USD to CAD exchange rate for Q3 FY2018 for all periods presented.  ARPU on a constant currency basis is identified by the Company as a non-gaap key performance indicator which removes the impact of foreign currency fluctuations from the calculation of ARPU on a CAD consolidated basis.  Refer to the "Non-GAAP Financial Measures and KPIs" section below for more details.

 

The Company's interim unaudited consolidated financial statements for the three and nine months ended June 30, 2018 and 2017, together with its corresponding management's discussion and analysis can be found under the Company's profile on SEDAR at www.sedar.com and on the Company's website at http://www.bsmtechnologies.com.

Conference Call Details:

DATE:

Wednesday, August 15, 2018

TIME:

8:30 a.m. ET

DIAL-IN NUMBER:

647-427-7450 or 1-888-231-8191

CONFERENCE ID:

7885097

TAPED REPLAY:

416-849-0833 or 1-855-859-2056

Reference number 7885097

Available until Wednesday, August 22, 2018 at midnight

LIVE WEBCAST:

https://bit.ly/2msDuld  
Webcast will be archived for 90 days

 

About BSM Technologies:

BSM, through its subsidiaries, is a provider of GPS telematics and Internet of Things (IoT) asset management solutions. The Company offers a variety of product solutions to its customers including both hardware and software technologies. BSM's product solutions provide, among other things, near real-time tracking and management of customer assets through BSM's web-based platform. The Company's product solutions extend beyond basic location tracking and encompass a host of solutions including: driver compliance, asset utilization metrics, real-time dynamic scheduling and routing, and enhanced data reporting capabilities. Customers use our product solutions to, among other things, enhance asset utilization, improve the security of their drivers and vehicles, improve customer service and lower business costs, thereby improving the overall efficiency of their operations. BSM's common shares are publicly traded on the Toronto Stock Exchange (TSX:GPS).

For more information, please visit http://www.bsmtechnologies.com.

Non-GAAP Financial Measures and KPI's:

This news release includes the measures "Recurring Revenue", "Hardware Revenue", "Professional Services Revenue", "EBITDA" and "Adjusted EBITDA", which are "non-GAAP financial measures" under applicable laws. Non-GAAP financial measures do not have any standardized meaning under the Company's GAAP and therefore may not be comparable to similar measures presented by other companies. Readers are cautioned that the disclosure of these items are meant to add to, and not replace, the discussion of financial results or cash flows from operations as determined by the Company's GAAP under International Financial Reporting Standards. BSM believes that investors use these non-GAAP financial measures as indicators to assess telematics companies.

Non-GAAP Measure:

Why We Use It

How We Calculate or Define It

Most Comparable
IFRS Financial
Measure

Recurring Revenue

 

Hardware Revenue

 

Professional Services Revenue

  • We believe that separately disclosing these revenue categories helps us to explain period-over-period variation in our financial performance.  Furthermore, gross profit margin generated by each revenue categories varies and we believe disclosure of these different categories helps our investors to better understand the composition of our total revenue and the impact of relative changes in revenue categories on total gross profit margin.
  • We believe that Recurring Revenue provides useful information to our investors because it shows the long-term nature of revenue earned from our customer relationships.
  • Recurring Revenue is defined by us as: revenue from our monthly services fees, monthly monitoring fees, and the cost of cellular and satellite data. Recurring Revenue is recognized monthly as services are delivered.
  • Hardware Revenue is defined by us as: revenue from the sale of our proprietary and third-party telematics devices.
  • Professional Services Revenue is defined by us as: revenue from installation fees, project management fees, custom development fees, cancellation fees and other one-time fees for services provided to our customers.

Revenue

EBITDA

 

Adjusted EBITDA

  • We believe that EBITDA and Adjusted EBITDA provide useful information to our investors because they exclude transactions not related to the core cash operating business activities, allowing meaningful analysis of the performance of BSM's core cash operations.
  • We believe Adjusted EBITDA provides more meaningful continuity with respect to the comparison of BSM's operating results over time.
  • We believe that using these metrics enhances an overall understanding of the Company's results and we present them for that purpose.
  • EBITDA is defined by us as:
    Net income/(loss) adjusted by: cost of debt financing activities; depreciation of property and equipment; amortization of intangible assets; and taxes with respect to various jurisdictions.
  • Adjusted EBITDA is defined by us as:
    EBITDA adjusted by: acquisition, integration and restructuring related costs; share-based compensation expenses; write-off of goodwill or other impairments to any financial and non-financial assets; fair value adjustments on contingent consideration; costs related to certain legal actions; and gains and losses resulting from the translation of non-Canadian dollar working capital balances.

Net Income/(Loss)

 

Reconciliation of Recurring Revenue, Hardware Revenue and Professional Services Revenue to Total Revenue:

Each of these revenue categories are components of total revenue as disclosed in the statement of operations in the Company's financial statements and presented within the financial highlights table of this press release.




($ thousands)

Three months ended

June 30

Nine months ended

June 30


2018

2017

2018

2017

Hardware Revenue

3,380

4,586

8,677

13,518

Recurring Revenue

11,115

11,356

33,587

34,684

Professional Services Revenue

1,269

718

3,212

2,825

Total Revenue

15,764

16,660

45,476

51,027

 

Reconciliation of EBITDA and Adjusted EBIDTA to Net Income/(Loss):




($ thousands)

Three months ended
June 30

Nine months ended
June 30


2018

2017

2018

2017

Net loss as reported

(692)

(1,336)

(1,229)

(2,982)

Add (deduct):






Interest expense, net of interest received

80

328

348

1,173


Tax (recovery)/expense

(88)

(65)

(80)

383


Amortization

2,102

2,124

6,596

6,378

EBITDA

1,402

1,051

5,635

4,952

Add (deduct):






Share-based compensation

412

472

1,229

1,457


Foreign exchange (gain) loss

(182)

627

(419)

394


Acquisition, integration and restructuring expenses

-

-

696

335


Fair value adjustment on contingent consideration

-

-

(2,507)

-

Adjusted EBITDA

1,632

2,150

4,634

7,138

 

Key Performance Indicators:

In addition to the non-GAAP financial measures previously described, the Company uses a number of key performance indicators (KPIs). BSM believes these KPIs allow the Company to appropriately measure its performance against its operating strategy. The following KPIs are not measurements in accordance with GAAP and should not be considered as an alternative to any other measure of performance under GAAP.

A "Subscriber" is defined as a BSM customer's individual asset monitored by a telematics device. The Company believes that a Subscriber is an important metric for the Company investors because it provides an indication of the Company's ability to generate Recurring Revenue from providing recurring service to its customers. Subscriber additions occur when the Company invoices for monthly services to a new telematics device not previously in the Company's Subscriber base, and Subscriber churn occurs when the Company no longer invoices a Subscriber for monthly services due to cancellation or expiry of the monthly services.

"Average Revenue Per User or Subscriber" or "ARPU" is calculated monthly as Recurring Revenue divided by the average number of Subscribers during the month. The Company believes that ARPU helps to identify trends and to indicate whether it is successful in attracting and retaining higher value Subscribers. ARPU calculated on a constant currency basis is presented in Canadian dollars (the Company's presentation currency) using the effective average foreign exchange rate from the current period for all prior periods presented. Calculating ARPU on a constant currency basis removes the impact of foreign currency fluctuations on foreign denominated revenue when ARPU is presented in the Company's consolidated currency.

Cautionary Note Regarding Forward-Looking Statements:

This news release includes certain forward-looking statements or information under applicable Canadian, U.S. and other securities laws. Such forward-looking information and statements are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect" and "intend" and statements that an event or result "may", "will", "should", "could", or "might" occur or be achieved and any other similar expressions. Such forward-looking information includes but is not limited to, statements with respect to BSM's being able to complete a software platform consolidation plan, software migration to the Mobi software platform, and the Company's product focus evolution to analyzing and optimizing data for clients . These forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business and include, but are not limited to, successfully completing a hardware and software platform consolidation and developing an enhanced enterprise solution, successfully evolving into a leader of analyzing and optimizing data for clients and current and future customers reacting positively to the enhanced enterprise solution, including the increased focus on analyzing and optiziming client data, leading to increased commercial growth. Management believes that these assumptions are reasonable; however, some risks include, but are not limited to, failing to efficiently or successfully complete hardware and software consolidation and migrate to the Mobi software platform on time, failing to develop an enhanced enterprise solution, failing to identify or implement effectively key business analytics and optizimination metrics for clients and failing to engage customers or position products effectively with customers. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking information. Some of these risks, uncertainties and other factors are described under the heading "Risk Factors" in BSM's most recent annual information form available atwww.sedar.com. Forward-looking statements or information are based on estimates and opinions of management at the date the statements are made. Except as required by applicable law, BSM does not undertake any obligation to update forward-looking information. Readers should not place undue reliance on forward-looking information.

SOURCE BSM Technologies Inc.

View original content: http://www.newswire.ca/en/releases/archive/August2018/14/c2475.html

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