Avante Announces Results for the Period Ended September 30, 2017
TORONTO, Nov. 22, 2017 (GLOBE NEWSWIRE) — Avante Logixx Inc., (TSX:XX.V) (OTC:ALXXF) (“Avante” the “Company” or the “Group”) through its subsidiaries, Avante Security Inc. (“ASI”), INTO-Electronics Inc. (“INTO”), City Wide Locksmiths Ltd. (“CWL”) and Architronics Limited (“Architronics”), provides best in class security systems and services for residential and commercial clients, and high-rise condominium applications, with industry leadership in designing and installing complex security systems, access control, intelligent video analytics, high-end lock services and smart home automation, through the use of advanced technology and a focus on client service. The Company is pleased to announce its results for the quarter and six month period ended September 30, 2017:
RESULTS FOR THE QUARTER AND SIX MONTH PERIOD ENDED SEPTEMBER 30, 2017
|Quarter ended||Six month period ended|
|Sep 30, 2017||Sep 30, 2016||Variance||Sep 30, 2017||Sep 30, 2016||Variance|
|Revenue – Recurring Monitoring and Response||1,609,716||1,502,693||7.10%||3,186,579||2,964,447||7.50%|
|Revenue – Other security services and transport||3,952,569||3,481,169||13.50%||7,760,712||6,742,799||15.10%|
|Total gross profit||1,951,568||1,674,467||16.40%||3,900,647||3,460,704||12.70%|
|Net income before income tax||161,732||195,271||468,074||566,939|
|Net income for the period||86,732||157,749||288,074||420,947|
|Basic and diluted income per share||$0.00||0.002||0.002||0.005|
|Total common shares outstanding||81,532,052||81,532,052||81,532,052||81,532,052|
|Total common shares outstanding – diluted||81,765,791||81,571,590||81,765,791||81,579,067|
|Liabilities (excl. deferred revenue)||4,300,516||3,466,225||4,067,283||3,347,222|
|Equity of the parent||11,545,057||10,977,009||11,545,057||10,977,009|
The Interim CEO and COO of Avante, Rod Wechsler, announced the Company’s results for the quarter and six month period ended September 30, 2017. During the quarter ended September 30, 2017, the Company generated revenues of $5,562,285, an increase of 11.6% as compared to $4,983,862 for the quarter ended September 30, 2016. For the six month period ended September 30, 2017, the Company registered growth in revenues of 12.8% as compared to the same period in the previous year. This increase was attributable to: a) organic growth in monitoring and premium executive response service offerings; and b) the addition of Architronics as of March 1, 2017, which generated, for the quarter ended September 30, 2017, $563,701 in revenues from the sale of home and commercial automation installations. Revenues from recurring monitoring and response services grew by 7.1%, largely owing to a 10.7% increase in the number of subscribers to the Company’s executive response services and a price increase in the Company’s premium response packages, which was instituted in February 2017. Revenues from other security services (residential and commercial security installations and services, lock services and smart home and commercial automation services) grew by 13.5%, which was largely aided by: a) a 40.2% growth in revenues from the sale of locks and architectural fine hardware by CWL; b) a 26.0% increase in revenues from residential installations; and c) the addition of Architronics’ installation revenues, and partially offset by reduction in revenues from: a) exited non-core guard services; and b) commercial installations. The order backlog for commercial and residential security installations, home and commercial automation and locks/fine hardware continues to be robust. The growth pattern for the six month period ended September 30, 2017 is very similar to the growth pattern for the quarter ended September 30, 2017, with recurring revenues growing at 7.5%, and non-recurring revenues growing at 15.1%.
Overall gross margin for the quarter ended September 30, 2017 was $1,951,568 or 35.1% as compared to $1,674,467 or 33.6% for the quarter ended September 30, 2016. The gross margin before the consolidation adjustment of $60,000, being the fair value adjustment of inventory (following the acquisition of CWL), was 36.2%. The blended gross margin from the rapid response, secure transport and international security travel advisory and monitoring services was 53.4% for the quarter ended September 30, 2017, as compared to 44.4% for the quarter ended September 30, 2016. Gross margin on residential and commercial security installations increased from 9.1% for the quarter ended September 30, 2016 to 14.2% for the quarter ended September 30, 2017. The blended gross margin from rapid response, secure transport and international security travel advisory and monitoring services was 52.8% for the six month period in the current fiscal year, as compared to 47.4% for the same period in the previous year. With integration of the technical services teams of ASI and INTO almost complete, the Company expects further margin improvements.
The Company’s Adjusted EBITDA for the quarter ended September 30, 2017 was $565,695, representing a 14.2% increase from the $495,574 for the same quarter in the previous year.
According to Rod Wechsler, “The contributions of CWL and Architronics have been relatively significant this year. Cross-selling opportunities have increased as Architronics has been able to demo its products to potential customers at CWL’s bespoke showroom. We have been able to increase margins by effecting major improvements to the systems integration infrastructure and customer service. Customer referrals, a good indicator of customer confidence and satisfaction, have increased considerably. These referrals contribute to building up a significant order backlog.”
After recognizing certain non-cash expenses for the quarter ended September 30, 2017, including amortization of $131,491 on intangible assets (September 30, 2016: $103,800), the fair value adjustment of $60,000 (September 30, 2016: $nil) of CWL inventory and share based payments of $64,698 (September 30, 2016: $118,736), net income before taxes amounted to $161,733 for the quarter ended September 30, 2017 as compared to $195,271 for the quarter ended September 30, 2016.
The Company maintains approximately $3.7 million of cash presently on hand with no long-term debt and continues to generate steady cash flows from operations.
As announced on Tuesday, November 21, 2017, Avante will be hosting a conference call to discuss the aforementioned results at 8:30 AM EST on Friday, November 24, 2017.
Dial in details are as follows:
Local: (+1) 416-764-8658 Toll Free: (+1) 888-886-7786 Conference ID: 29185944
Playback details below, available until Friday, December 8, 2017:
Local: (+1) 416-764-8692 Toll Free: (+1) 877-674-7070 Playback Pin: 185944 #
About Avante Logixx
Avante Logixx Inc. (TSXV:XX) is a Toronto based security, monitoring, system integration and technology company. Its subsidiaries, Avante Security Inc. (www.avantesecurity.com), INTO Electronics Inc., (www.247into.com), City Wide Locksmiths Ltd. (www.citywidelocksmith.ca) and Architronics Limited (www.architronics.com) together provide best in class security systems and services for residential and commercial clients, and high-rise condominium applications, with industry leadership in designing and installing complex security systems, access control, intelligent video analytics, high-end lock services and smart home automation. Avante’s group of companies strives to be best in class in each of its verticals including an industry leading rapid alarm response offering combined with alarm system and live video analytics monitoring. Avante’s Executive Services team provides unparalleled end-to-end security solutions for high profile and high net worth families to ensure their safety in a comprehensive yet discrete manner, including an executive transportation option. Avante’s International Travel Security team helps corporations protect traveling employees working abroad in medium/high risk jurisdictions and has executed travel details in over 60 countries. Avante continuously develops innovative products and applications within its core competencies. Please visit our website at www.avantelogixx.com and consider joining our investor email list.
Avante Logixx Inc.
FORWARD LOOKING STATEMENTS
All statements in this press release, other than statements of historical fact, are “forward looking information” with respect to Avante within the meaning of applicable securities laws. Forward-looking information is often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “planned”, “expect”, “project”, “predict”, “potential”, “targeting”, “intends”, “believe”, “potential”, and similar expressions, or describes a “goal”, or a variation of such words and phrases or state that certain actions, events or results “may”, “should”, “could”, “would”, “might” or “will” be taken, occur or be achieved.
Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking information, including, without limitation, the list of risk factors identified in Avante’s Management Discussion & Analysis (MD&A), Annual Information Form (AIF) and other continuous disclosure, which list is not exhaustive of the factors that may affect any of Avante’s forward-looking information. In connection with the forward-looking statements contained in this and subsequent press releases, Avante has made certain assumptions about its business and the industry in which it operates and has also assumed that no significant events occur outside of Avante’s normal course of business. Although management believes that the assumptions inherent in the forward-looking statements are reasonable as of the date the statements are made, forward-looking statements are not guarantees of future performance and, accordingly, undue reliance should not be put on such statements due to the inherent uncertainty therein. Avante’s forward-looking information is based on the beliefs, expectations and opinions of management on the date the statements are made, and Avante does not assume any obligation to update forward-looking information, whether as a result of new information, future events or otherwise, other than as required by applicable law. For the reasons set forth above, readers should not place undue reliance on forward-looking information.
References to EBITDA are to net income before interest, taxes, depreciation and amortization. References to Adjusted EBITDA are to net income plus interest, taxes, depreciation and amortization and charges for share-based payments and integration and acquisition costs, expensing of CWL fair value adjustment in accordance with International Financial Reporting Standards (“IFRS”). Neither EBITDA nor Adjusted EBITDA is an earnings measure recognized by IFRS and do not have a standardized meaning prescribed by IFRS. Management believes that Adjusted EBITDA is an appropriate measure in evaluating Avante’s performance. Readers are cautioned that neither EBITDA nor Adjusted EBITDA should be construed as an alternative to net income (as determined under IFRS), as an indicator of financial performance or to cash flow from operating activities (as determined under IFRS) or as a measure of liquidity and cash flow. Avante’s method of calculating Adjusted EBITDA may differ from methods used by other issuers and, accordingly, Avante’s Adjusted EBITDA may not be comparable to similar measures used by other issuers.
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.
 Revenues – Recurring Monitoring and Response includes Alarm Response along with Digital, Wireless and Video Monitoring services Adjusted EBITDA = Net income + income tax + depreciation / amortization + Exp. of CWL FV adjustment + shared based payments expense + acquisition and integration costs