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Avante Logixx Inc. Announces Results for the Nine Month Period Ended December 31, 2014
TORONTO, ONTARIO--(Marketwired - Feb. 19, 2015) - Avante Logixx Inc. (TSX VENTURE:XX)(ALXXF) ("Avante", the "Company" or the "Group") through its wholly owned subsidiaries, Avante Security Inc. ("ASI") and INTO Electronics Inc. ("INTO"), provides best in class residential and commercial security and automation services including system design and installation, rapid alarm response, alarm monitoring, video analytics, commercial and high-rise security integration, secure transport and electronic building management through the use of advanced technology and a focus on client service.
Results for the Nine Month Period Ended December 31, 2014 | ||||||||||||
Quarter ended | Nine month period ended | |||||||||||
Dec 31, | Dec 31, | Variance | Dec 31, | Dec 31, | Variance | |||||||
Total revenues | $ | 2,946,266 | $ | 2,259,091 | 30.4 | % | $ | 7,186,308 | $ | 6,737,945 | 6.7 | % |
Revenues - Recurring Monitoring and Response(1) | 1,123,396 | 801,197 | 40.2 | % | 2,951,984 | 2,339,145 | 26.2 | % | ||||
Revenues from other security services and transport | 1,822,869 | 1,457,894 | 25.0 | % | 4,234,324 | 4,398,800 | -3.7 | % | ||||
Total gross profit | 1,159,724 | 858,464 | 35.1 | % | 2,793,584 | 2,606,692 | 7.2 | % | ||||
Net income before income tax | 255,722 | 279,149 | -8.4 | % | 621,518 | 1,017,851 | -38.9 | % | ||||
Adjusted EBITDA(2) | 359,249 | 336,941 | 6.6 | % | 834,231 | 1,095,531 |
| % | ||||
Basic income per share | 0.003 | 0.005 | 0.006 | 0.018 | ||||||||
Diluted income per share | 0.003 | 0.005 | 0.006 | 0.018 | ||||||||
Total common shares outstanding | 74,846,739 | 55,983,843 | 74,846,739 | 55,983,843 | ||||||||
Total common shares outstanding - diluted | 77,036,706 | 59,509,577 | 77,036,706 | 59,509,577 | ||||||||
Total assets | $ | 12,243,141 | $ | 3,542,140 | $ | 12,243,141 | $ | 3,542,140 | ||||
Total liabilities | 2,975,087 | 2,286,370 | 2,975,087 | 2,286,370 | ||||||||
Total liabilities (excluding deferred revenue) | 1,208,348 | 796,566 | 1,208,348 | 796,566 | ||||||||
Deferred revenue | 1,766,740 | 1,489,804 | 1,766,740 | 1,489,804 | ||||||||
Bank and other debt | 119,335 | -nil- | 119,335 | -nil- | ||||||||
Shareholders' equity | $ | 9,268,055 | $ | 1,255,768 | $ | 9,268,055 | $ | 1,255,768 | ||||
(1) Revenues - Recurring Monitoring and Response includes Alarm Response along with Digital, Wireless and Video Monitoring services |
(2) Adjusted EBITDA = Net income + Income tax + Depreciation / amortization + Shared based payments expense + Acquisition costs |
Co-CEOs George Rossolatos and Emmanuel Mounouchos announced Avante Logixx Inc.'s results for the quarter ended December 31, 2014 ("Q3-15"). During the quarter, the Group generated revenues of $2,946,266, an increase of 30.4% over the quarter ended December 31, 2013. This increase was attributable to growth in recurring revenues, and to the consolidation of revenues of INTO, a company which was acquired and became a wholly-owned subsidiary in August 2014. Overall gross profit of $1,159,724 or 39.4% was slightly better than the $858,464 or 38.0% in Q3-14. The Group registered an Adjusted EBITDA of $359,249, or 12.2%.
Overall revenues for the nine month period ended December 31, 2014 was $7,186,308, which was 6.7% higher than the $6,737,945 for nine month period ended December 31, 2013. This increase was due to organic growth in recurring revenues and the inclusion of revenues from INTO, partially offset by a 3.7% decrease in non-recurring revenues. The Company registered a 14% growth in the sale of alarm response packages and 7% in the sale of monitoring accounts. However, the year over year decrease in International Security Travel Advisory Services ("ISTAS"), contributed to the decrease in non-recurring revenues over the nine month period. It is to be noted that "Other Security" services like ISTAS are not recurring in nature and depend on the activities of our clients during the period. ISTAS revenue for the previous nine month period ended December 31, 2013 was high due to two global product launches by one of our clients that required significant travel for its mid and senior level management. The Company added several clients this quarter and expects to generate more ISTAS revenues from these clients.
"The cross-selling opportunities between Avante and INTO as envisaged at the time of acquisition of the latter, are crystallizing gradually. The INTO acquisition will likely be accretive in the first year of ownership, with synergies expected to materialize over the next 3 to 15 months. The Group continues to build on an order backlog for security systems installations, both in high-end residential and condo / commercial real estate sectors. Recurring revenues and installation revenues is expected to grow in Q4-15, and into the next fiscal year," said Co-CEO George Rossolatos.
Net income before tax for the quarter amounted to $255,722, slightly under the $279,149 for Q3-14. Adjusted EBITDA for the quarter was $359,249, which was 6.6% higher than the Adjusted EBITDA of $336,941 for Q3-14.
After a) expensing acquisition costs of $90,905 relating to the INTO acquisition; b) year over year decrease in ISTAS due to two major product launches last year; and c) planned incremental spend of more than $150,000 on sales promotion and advertising activities, net income before tax for the nine month period ended December 31, 2015 was $621,518 as compared to $1,017,851 for the nine month period ended December 31, 2013. Advertising and marketing initiatives will continue in the coming quarters as Avante looks to optimize this spend.
"Management has already integrated certain functions and processes of Avante and INTO. Front-end staff in both companies are working together and helping each other in cross-selling as well as in executing sales. Further, synergies have been identified in the sourcing of materials and parts, the impact of which will likely be realized in subsequent fiscal periods," said Co-CEO Emmanuel Mounouchos.
Q3-15 witnessed significant organic growth in the customer base for recurring revenue offerings. Management is confident that this trend will continue into the foreseeable future.
The Company's balance sheet is very strong with over $4,800,000 of cash on hand which will facilitate the Company's pursuit of other acquisition opportunities. The Company is currently assessing several attractive acquisition opportunities, which it believes would be strategic and accretive.
As announced on February 17, 2015, Avante will be hosting a conference call tomorrow morning (Friday, February 20, 2015) to discuss the aforementioned quarterly results at 8:30am EST.
Dial in details are as follows:
Local 416-764-8658
Toll Free 888-886-7786
Conference ID: 06420924
Playback details below, available until February 27, 2015:
Local 416-764-8692
Toll Free 877-674-7070
Playback Pin: 420924#
About Avante Logixx (www.avantelogixx.com)
Avante Logixx Inc. (TSX VENTURE:XX) is a Toronto based security and technology company. Its subsidiaries, Avante Security Inc. (www.avantesecurity.com) and INTO Electronics Inc., (www.into-electronics.com) together provide best in class security response and other security services for residential and commercial clients, and high-rise condominium applications, and are industry leaders in designing and installing complex security systems, access control, intelligent video analytics and smart home automation. Its International Travel Security offering helps corporations protect traveling employees working abroad in medium/high risk jurisdictions and has executed travel details in over 60 countries. The company continuously develops innovative products and applications within its core competencies. Please visit our newly updated websites at www.avantelogixx.com and www.avantesecurity.com and consider joining our investor email list. Avante recently conducted a test comparing its rapid alarm response service with that of other alarm companies. For the result of this test please see www.6minuteresponse.com.
FORWARD LOOKING STATEMENTS
Certain of the statements and information in this press release constitute "forward-looking statements" or "forward-looking information" These statements include, but are not limited to, statements with respect to the entering into of agreements, the closing of transactions and the use of proceeds. 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 timing of transactions, the ability to fulfill certain conditions and obtain regulatory approvals, and the ability to raise funds and use the proceeds as anticipated.
Neither the 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.
