Industry leading organic growth and
bookings, in all geographies
Q1-2022 Highlights
- Revenues increased 45.6% to $102.9
million, compared to $70.7
million for the same quarter last year. The consolidated
percentage increase would have been 51.3% assuming a constant US$
exchange rate.
- Gross margin increased 38.9% to $28.3
million, compared to $20.4
million for the same quarter last year.
- Gross margin as a percentage of revenues decreased to 27.5%,
from 28.9% for the same quarter last year.
- Selling, general and administrative expenses as a percentage of
revenues decreased to 22.1%, from 27.5% for the same quarter last
year.
- Adjusted EBITDA(1) increased 114.5% to $7.0 million, compared to $3.3 million for the same quarter last year, and
increased 115.0% sequentially compared to the fourth quarter of
last year.
- Q1 bookings(1) reached $708.5
million, including the $600.0
million estimated value of the two new long-term contracts
signed as part of the acquisition of R3D Consulting Inc. ("R3D" or
the "R3D Acquisition"), which translated into a book-to-bill
ratio(1) of 7.11 for the quarter, and on a trailing
twelve months basis, bookings(1) were $989.7 million, which translated into a
book-to-bill ratio(1) of 3.21.
- Net loss of $2.0 million, or
$0.02 per share, compared to a net
loss of $4.5 million, or $0.08 per share, for the same quarter last
year.
- Expansion in Morocco to
bolster expertise and talent pool of Alithya Digital Solutions
Center.
- Record sales in the US Oracle business, expanding stronghold
from healthcare to financial services and high technology.
- R3D's integration is progressing as anticipated, and contracts
are ramping up at an excellent pace.
MONTREAL, Aug. 12, 2021 /PRNewswire/ - Alithya Group inc.
(TSX: ALYA) (NASDAQ: ALYA) ("Alithya" or the "Company"), a leader
in strategy and digital transformation employing more than 3,300
highly qualified professionals and offering enterprise cloud
solutions across Canada, the U.S.
and Europe, reported today its
results for the first quarter fiscal 2022 ended June 30, 2021.
All amounts are in Canadian dollars unless otherwise stated.
Summary of the financial results for the first
quarter:
Financial
Highlights
(in thousands of
$, except for margin percentages)
|
F2022-Q1
|
F2021-Q1
|
Revenues
|
102,921
|
70,711
|
Gross
Margin
|
28,340
|
20,403
|
Gross Margin
(%)
|
27.5%
|
28.9%
|
Adjusted
EBITDA(1)
|
7,012
|
3,269
|
Adjusted EBITDA
Margin(1) (%)
|
6.8%
|
4.6%
|
Net loss
|
(2,032)
|
(4,529)
|
(1)
|
These are non-IFRS
financial measures. Please refer to the "Non-IFRS Measures" section
at the end of this press release and in the MD&A for more
information and calculated amounts.
|
Quote by Paul Raymond,
President and CEO, Alithya:
"I am very pleased with our team's record first quarter
performance. We have exceeded all expectations and are seizing new
opportunities to accelerate profitable growth in all of our
industries and geographies.
In Canada, we are posting
industry leading organic growth, and we are on track with the
integration of R3D (our latest acquisition closed on April 1, 2021), and a much larger recurring
backlog of long-term revenue is helping to transform this
operation. Also, we are rapidly scaling to effectively compete for
the largest and most complex digital transformation projects and
cloud migrations, which are increasingly in demand by our
customers.
In the U.S., our foresight to retain our people throughout the
pandemic is enabling us to accelerate a turnaround in our business.
The availability of our professionals has enabled us to ramp up and
convert new bookings rapidly. Hindsight suggests that we made the
right decision.
Our long-term vision contributes to our success in attracting
and retaining the best people. Our bookings and backlog give us
confidence for the months ahead, despite ongoing uncertainties
related to the pandemic in our geographies. Alithya is extremely
well positioned to execute our strategic plan to generate
profitable, organic growth and high-quality acquisitions to better
support our clients, and to provide our people with ever growing
career opportunities."
First Quarter Results
Revenues
Revenues amounted to $102.9
million for the three months ended June 30, 2021, a $32.2
million increase, or 45.6%, from $70.7 million for the three months ended
June 30, 2020. Assuming a constant
US$ exchange rate, the consolidated percentage increase would have
been 51.3%.
Revenues in Canada increased by
$29.9 million, or 77.8%, to
$68.2 million for the three months
ended June 30, 2021, from
$38.4 million for the three months
ended June 30, 2020. Organic growth
in all areas and additional revenues of $20.0 million from the R3D Acquisition, including
growth from the two new long-term contracts, accounted for the bulk
of the increase in revenues. On a sequential basis, revenues in
Canada increased by $22.8 million, from $45.4
million for the fourth quarter of last year.
U.S. revenues increased by $1.1
million, or 3.7%, to $31.4
million for the three months ended June 30, 2021, from $30.3
million for the three months ended June 30, 2020. General organic growth in most
areas, particularly in the Oracle business, was partially offset by
the negative impact of foreign exchange variations between the
periods. Revenues would have been $35.5
million with a constant US$ exchange rate, resulting in an
increase in constant currency of 17.1%. On a sequential basis,
revenues in the U.S. increased by $1.7
million, from $29.7 million
for the fourth quarter of last year, despite an unfavorable US$
exchange rate impact of $1.0
million.
In Europe, revenues increased
by 59.5%, to $3.3 million, from
$2.0 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. On a sequential basis, revenues
in Europe increased by
$0.4 million, from $2.9 million for the fourth quarter of last
year.
Gross margin
Gross margin increased by $7.9
million, or 38.9%, to $28.3
million for the three months ended June 30, 2021, from $20.4
million for the three months ended June 30, 2020. Gross margin as a percentage of
revenues decreased to 27.5% for the three months ended June 30, 2021, from 28.9% for the three months
ended June 30, 2020.
The percentage decrease was driven primarily by decreased gross
margin in Canada from the R3D
Acquisition, whose revenues historically show a higher proportion
from billable subcontractors, as well as a $2.5 million impact from increased costs on one
large customer project also involving the development of some
highly complex, bespoke digital transformation software, which may
have further commercial applications. The project is nearing
completion and no further cost increases or losses are expected
going forward. This decrease was partially offset by increased
gross margin in the U.S. and Europe, due to some U.S. governmental wage
subsidies, namely the forgiveness of $4.6
million in Paycheck Protection Program loans, as well as
increased utilization rates. Of note, before the impact of the
above large customer project, the wage subsidies, and the R3D
Acquisition, the gross margin percentage increased in all
geographies. On a sequential basis, the overall gross margin
increased by $4.8 million, or 20.8%,
from $23.5 million for the fourth
quarter of last year.
As with previous acquisitions, the Company's objective is to
gradually transform R3D's revenue mix by increasing revenues from
permanent employees relative to subcontractor revenues, which would
result in higher gross margins.
Selling, General and Administrative Expenses
Selling, general and administrative expenses totaled $22.7
million for the three months ended June 30,
2021, an increase of $3.3
million, or 17.1%, from $19.4 million for the three
months ended June 30, 2020. As a
percentage of consolidated revenues, total selling, general and
administrative expenses were 22.1% for the three months ended
June 30, 2021, compared to 27.5%, for
the same period last year.
Adjusted EBITDA(1)
Adjusted EBITDA(1) amounted to $7.0 million for the three months ended
June 30, 2021, representing an
increase of $3.7 million, from
$3.3 million for the three months
ended June 30, 2020. As explained
above, the contribution from the R3D Acquisition and increased
gross margin were partially offset by increased selling, general
and administrative expenses. Adjusted EBITDA Margin was 6.8% for
the three months ended June 30, 2021,
compared to 4.6% for the three months ended June 30, 2020.
Net loss
Net loss for the three months ended June
30, 2021 was $2.0 million, an
improvement of $2.5 million, from
$4.5 million for the three months
ended June 30, 2020. The decreased
loss was driven by increased Adjusted EBITDA, increased selling,
general and administrative expenses, decreased share-based
compensation, increased depreciation, increased business
acquisition and integration costs, and increased income tax
recovery in the three months ended June 30,
2021, compared to the three months ended June 30, 2020.
Liquidity and Capital Resources
Net cash from operating activities was $0.5 million in the
three months ended June 30, 2021,
including favorable changes in non-cash working capital items of
$4.5 million, representing a decrease
from $7.4 million of cash from
operating activities for the same period last year.
Net bank borrowing(1) reached $30.6 million, an increase from $21.1 million as at March 31, 2021. Total
long-term debt as at June 30, 2021 increased by $7.4 million, to $62.4
million, from $55.0 million as
at March 31, 2021, due primarily to an increase of
$13.3 million in drawings under the
Credit Facility, related to the R3D Acquisition.
Outlook
As the context surrounding the COVID-19 pandemic continues to
evolve, and although Alithya was fortunate enough to provide
essential services since the commencement of the crisis, management
remains very cautious with its outlook. The Company's priority
still is the protection of its people, its clients and the Company.
However, notwithstanding the ongoing pandemic, the Company has
shown its ability to navigate the crisis and maintain focus on its
three-to-five-year strategic plan, which sets as a goal to
consolidate its position as to become a 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-to-five-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 June 30, 2021 and for the year ended March 31, 2021, 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 Measures
This press release includes certain measures which have not been
prepared in accordance with IFRS. EBITDA, adjusted EBITDA, adjusted
EBITDA margin, net bank borrowing, bookings and book-to-bill ratio
are non-IFRS measures. 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. Please refer to the Management's Discussion
and Analysis for the year ended March 31, 2021 for a
description of such measures, a reconciliation to the most directly
comparable IFRS financial measure and calculated amounts.
Conference Call
Alithya will hold a conference call to discuss these results on
August 12, 2021 at 9:00 AM Eastern Time. Interested parties can join
the call by dialing 1.800.263.0877, conference ID: 6816633, or via
webcast at https://www.icastpro.ca/h3zkfp. Persons unable to call
in at this time may access a recording by dialing 1-888-203-1112
and entering the passcode 6816633. This recording will be available
until September 11, 2021.
About Alithya
Alithya is a North American leader in strategy and digital
transformation. The Company employs more than 3,300 professionals
in Canada, the United States, and Europe. Alithya'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 to develop
tools designed to meet the unique needs of customers in a variety
of sectors, including financial services, manufacturing, renewable
energy, telecommunications, transport and logistics, professional
services, healthcare and government. To learn more about Alithya,
visit www.alithya.com.
Note to readers: Management's Discussion and
Analysis and the interim condensed consolidated financial
statements and notes for the three months ended June 30, 2021 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