Record 1st half of 2019 revenue growth of 50% compared with 1st half of 2018 on the back of closing CRG acquisition to fuel growth

 

Toronto – TheNewswire -  August 28, 2019 – Quisitive Technology Solutions Inc. (Quisitive or the “Corporation “) (TSXV:QUIS), a premier Microsoft solutions provider, announced today that it is has achieved quarterly revenues of $4.2 million or 36.8% year over year growth while driving operational performance of adjusted EBITDA of $259,413 or 6.6% of revenue for the quarter ended June 30, 2019.

“The completion of the CRG acquisition in Q2 marked a major milestone in our growth and sets the foundation for our M&A strategy,” said Mike Reinhart, CEO. “The combination of the CRG acquisition which brings significant recurring revenue and the award recognition by Microsoft as their United States Partner of the Year provides us real momentum as we drive towards the back half of 2019 with marketing and sales motions focused on bringing full Microsoft cloud capability to our customers. We are now able to wrap the customer with an end-to-end cloud strategy across Microsoft Azure, Microsoft O365 and Microsoft Dynamics. This gives our customers the advantage to engage with one trusted partner across their entire cloud platform.”

The Corporation also announced the appointment of Michael J. Murphy CPA, CA, as Chief Financial Officer and Corporate Secretary, replacing Stephanie Ratza who assisted the Company with financial oversight through its going-public transaction in 2018 and for the first year of operation as a listed company on the TSX Venture Exchange (“TSXV”). Ms. Ratza has worked with Mr. Murphy and the Company to support a seamless transition, and the Company would like to thank Ms. Ratza for her services.

FY2019 1H Financial Results

- Revenue for the first half of 2019 was $8,190,616 or 50% revenue growth from first half of 2018 revenue of $5,469,972.  

- Gross margin for the first half of 2019 was $3,451,995 or 42.1% of revenue.  Gross margin for the first half of 2018 was $2,010,630 or 36.8% of revenue.

- Adjusted EBITDA for the first half of 2019 was $497,732 or 6.3% of revenue.  This is a significant increase from the first half of 2018 where the adjusted EBITDA was a loss of ($241,105) or (4.4%) of revenue.

  

FY2019 Q2 Financial Results:

- Revenue for the quarter ended June 30, 2019 was $4,181,782 representing 36.8% revenue growth over the quarter ended June 30, 2018.  

- Gross margin for the quarter ended June 30, 2019 was $1,846,981 or 44.2% of revenue.  This is a 77% increase over the gross margin of $1,043,717 or 34.1% for the quarter ended June 30, 2018.

- Adjusted EBITDA for the quarter ended June 30, 2019 was $259,431 or 6.6% of revenue.  This is a significant increase from the quarter ended June 30, 2018 where the adjusted EBITDA was a loss of ($260,205) or (8.5%) of revenue.

FY2019 Q2 Business Highlights:

- Quisitive completed the acquisition of Corporate Renaissance Group. The transaction solidified a major milestone for the Company realizing their growth vision by expanding geographic base throughout Canada, the United States and the Caribbean and complements the Company’s Microsoft Azure and Microsoft Office 365 cloud services by adding CRG’s expertise in the implementation, customization and support of Microsoft Dynamics

- Quisitive was recognized as 2019 Microsoft Country Partner of the Year for the United States. The Company was honored among a global field of top Microsoft partners for demonstrating excellence in innovation and implementation of customer solutions based on Microsoft technology.

- Quisitive formed a partnership with A-LIGN which brings forth new capability to Quisitive’s Azure migration services, a service design to help enterprises establish governance and third-party compliance in the Azure public cloud, ensuring Quisitive Azure migration and application development meet the ‘gold standard’ for data security and audits.

- Quisitive expanded its North Central United States presence with the hire of Alan Yousha as Regional Business Development Manager. This expansion extended the Quisitive brand to enterprise customers looking for strong partner expertise in Microsoft cloud innovation in the North Central area, including marketing and sales focus across Minnesota, Illinois, Iowa, North and South Dakota, Nebraska, Ohio and Wisconsin.

- Quisitive’s Q2 customer wins and project momentum included:

- The Corporation secured a large-scale migration of virtual machines, database environments and on-premise monitoring to a modernized Azure ecosystem.

- The Corporation migrated a large healthcare customer’s traditional infrastructure to the Azure cloud, modernizing their common data model approach while creating a foundation for DevOps.  Quisitive was selected as the Corporation’s Cloud Solution Provider and Managed Services provider for Azure.

- The Corporation completed the final migration of over 15,000 seats of Lotus Notes to Office 365 for a major retailer.  The Corporation partnered with the Microsoft Retail Stores to help train and provide support for over 7,500 store associates.  The Corporation enabled the deployment and adoption of Microsoft Teams to drive communication and collaboration throughout corporate and store personnel.

- The Corporation secured the Azure migration for a customer to move all virtual machines and database environments to retire a major data center.

- The Corporation secured a project to deploy advanced O365 workloads for device and endpoint management for a major financial services customer.

- The Corporation continues to have success with the Quisitive Azure Assessment program. This program was designed to help guide customers to Microsoft cloud adoption. During the quarter ending in June 30, 2019, Quisitive ran 31 assessments, completing 22. The program converted 4 assessments, transitioning customers from assessment into Azure migration projects.  

Appointment of Chief Financial Officer and Corporate Secretary

Mike Reinhart, Chief Executive Officer of Quisitive commented: “We are very pleased to welcome Michael as our new CFO and believe that his skill set will be a strong addition to our management team. His wide-ranging experience with public companies, in finance, and strong leadership skills will be a great asset to our team.”

Mr. Reinhart continued, “On behalf of the Board of Directors we would like to thank Stephanie for her contributions to the company and assisting us in the transition to a public company and first year of operation. We wish her well in her future endeavors”.  

Mr. Murphy brings over 20 years of financial management experience to Quisitive, having been in leadership roles with established and high-growth stage organizations in the public markets across various industries including mining, renewable energy and consumer products. Mr. Murphy recently served as Chief Financial Officer of Acasta Enterprises Inc. where he successfully took on a lead role on the sell side due diligence team responsible for all aspects of the marketing, pricing and sale of the issuer’s remaining consumer products business. Prior to that Mr. Murphy served as Chief Financial Officer of Transeastern Power Trust (2015-2018), a Toronto based TSXV-listed renewable energy trust with hydro, solar and wind assets located in Romania, and VP and Controller of Allied Nevada Gold Corp. (2013 to 2015) where he served as part of the senior leadership team responsible for transforming the finance function to support the development of the Hycroft gold mine from a small producer into a world class mining asset. Prior to joining Allied Nevada, Mr. Murphy was Senior Manager at PricewaterhouseCoopers’ Toronto office from September 1998 to December 2012. Throughout his career, Mr. Murphy excelled in strategic corporate initiatives, shareholder value creation, and risk management. Mr. Murphy is a Chartered Professional Accountant (CPA), and holds a B.A. in Economics from the University of Western Ontario and a diploma in accounting from Wilfred Laurier University.

In connection with Mr. Murphy’s appointment, the Company granted Mr. Murphy 300,000 options (the “Options”) to purchase up to 300,000 common shares in the capital of the Company, pursuant to the Company's omnibus stock and incentive plan. The Options are exercisable at a price of C$0.15 per share for a period of five years. The Options vest as to one-third (1/3) on August 29, 2019, one-third (1/3) on August 29, 2020 and one-third (1/3) on August 29, 2021.

Members of Quisitive’s executive management team will host a conference call to discuss the Corporation’s financial results at 5:30pm Eastern Daylight Time on Thursday, August 29, 2019.

Conference Call Access

To access the conference call by phone, please dial the following numbers.

Canada/United States: 1-800-319-4610

Toronto Toll: 1-416-915-3239

The Company’s unaudited financial statements for the quarter ended March 31, 2019 and related management’s discussion and analysis can be found on the Company’s website and at www.sedar.ca.  All figures are expressed in United States dollars unless otherwise stated.

 

The Corporation will simultaneously conduct an audio webcast on the Quisitive website at https://www.quisitive.com/investor-relations/reporting/ .  Phone conference dial-in or webcast login is required approximately 10 minutes beforehand and ask to join the Quisitive Technology Solutions earnings call.

Replays of the conference call will be available following the call.

 We encourage you to access the presentation material in the Investors section of Quisitive’s website at https://quisitive.com/investor-relations/.

 

About Quisitive:

Quisitive is a premier Microsoft solutions provider that helps enterprise organizations move, operate and innovate in the Microsoft cloud: Microsoft Azure, Microsoft Dynamics and Microsoft O365. With a legacy of deep technical expertise, Quisitive is empowering the enterprise to navigate the ever-changing technology climate their business relies upon. Quisitive helps customers harness the power of the Microsoft cloud and innovative technologies such as blockchain, artificial intelligence, machine learning, and the Internet of Things (IoT) through customized solutions and first-party cloud-based products.

Quisitive is the 2019 Microsoft United States Partner of the Year. Quisitive earned this top honor among a global field of top Microsoft partners for demonstrating excellence in innovation and implementation of customer solutions based on Microsoft technology.

Quisitive is uniquely comprised of former Microsoft leaders and technologists who share a deep understanding of market needs and the appropriate application of Microsoft cloud technology. The company's expertise and focus are on helping industries such as financial services, manufacturing, oil and gas, and retail, drive innovation using Microsoft cloud-based technologies.

Quisitive serves clients globally with offices in Dallas, TX; Denver, CO; Minneapolis, MN; Ottawa, ON; and Toronto, ON. For more information, visit http://www.Quisitive.com and follow @BeQuisitive. TSXV: QUIS.

 

For further information, please contact:

Mike Reinhart – Chief Executive Officer

mike@reinhart@quisitive.com

Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenue

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 our company use non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues, in making investment decisions about our 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, foreign exchange, stock-based compensation (for which we include related fees and taxes), acquisition-related expenses and listing expense. 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.

Reconciliation of Adjusted EBITDA loss		Quarter ended June 30, 2019				Quarter ended June 30,2018
Net loss for the period	$		(1,734,502)		$		(439,382)
Adjustments to reconcile to Adjusted EBITDA
Income tax expense			71,225				-
Interest expense			251,142				85,682
Foreign exchange			517,141				(180,742)
Amortization			479,433				3,830
Depreciation			159,376				33,452
Share-based compensation			49,687				168,264
Acquisition related expenses			465,929				68,691
Adjusted EBITDA (loss)			259,431				(260,205)
Adjusted EBITDA (loss) as a percentage of revenue			6.6%				(1.0%)

 

Reconciliation of Adjusted EBITDA loss		First half June 30, 2019				First half June 30,2018
Net loss for the period	$		(2,391,046)		$		(1,222,359)
Adjustments to reconcile to Adjusted EBITDA
Income tax expense			71,225				7,800
Deferred tax expense							439,100
Interest expense			478,288				203,977
Foreign exchange			532,693				(137,967)
Amortization			883,014				17,921
Depreciation			308,095				58,467
Share-based compensation			95,432				168,264
Acquisition related expenses			520,029				223,691
Adjusted EBITDA (loss)			497,732				(241,105)
Adjusted EBITDA (loss) as a percentage of revenue			6.3%				(4.4%)

Neither 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.

Forward-Looking Statements: Some statements in this news release contain forward-looking information. These statements include, but are not limited to, statements with respect to proposed activities, consolidation strategy and future expenditures. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements.  Such factors include, among others the limited history of operations, lack of profitability, availability of financing, the need for additional financing and the timing and amount of expenditures, ability to successfully execute on consolidation strategies, the failure to find economically viable acquisition targets, funding for internally developed technology solutions, client retention and attrition, client demands, reliance on key personnel, economic spending in the IT industry and technological changes in the IT industry.  Quisitive Technology Solutions Inc. does not assume the obligation to update any forward-looking statements.

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