Science & Technology
Science and Technology
Science and Technology
Wed, March 21, 2012
Tue, March 20, 2012 Solium Capital Inc. Releases 2011 Fourth Quarter and Year-End Results
March 20, 2012 17:24 ET
Solium Capital Inc. Releases 2011 Fourth Quarter and Year-End Results
CALGARY, ALBERTA--(Marketwire - March 20, 2012) - Solium Capital Inc. (TSX:SUM) ("Solium" or the "Company") today announced its financial results for the fourth quarter and year ended December 31, 2011.
Revenue and earnings for the fourth quarter and year ended December 31, 2011 increased over the comparable periods in the previous year. The acquisition of the business from Computershare Inc. ("Computershare") was the largest contributor to the increase in revenue and net earnings for year ended December 31, 2011 as compared to 2010.
The Company achieved several key expansion milestones in 2011, including:
- the successful integration of the acquired Computershare operations, which continue to meet or exceed the expectations set at the time of acquisition;
- the launch of an office and associated business in Europe, based in London, England; and
- the establishment of the Shareworks application as the first truly global equity administration platform.
The Company intends to continue its aggressive expansion into the U.S. and Europe, and other parts of the world on a selective basis.
Financial results for the quarter and year ended December 31, 2011:
| Three Months Ended December 31 | Year Ended December 31 | ||||||||||||||||
| 2011(1 | ) | 2010(1 | ) | % Change | 2011(1 | ) | 2010(1 | ) | % Change | ||||||||
| Revenue | $ | 10,820,707 | $ | 9,663,590 | 12 | % | $ | 46,003,977 | $ | 26,913,543 | 71 | % | |||||
| Expenses before taxes | $ | 9,387,011 | $ | 8,931,453 | 5 | % | $ | 41,374,361 | $ | 23,375,497 | 77 | % | |||||
| Adjusted EBITDA(2) | $ | 2,569,057 | $ | 1,614,844 | 59 | % | $ | 10,891,810 | $ | 4,914,475 | 122 | % | |||||
| Earnings from operations | $ | 1,342,086 | $ | 907,215 | 48 | % | $ | 6,391,141 | $ | 3,768,945 | 70 | % | |||||
| Earnings before taxes | $ | 1,433,696 | $ | 732,133 | 96 | % | $ | 4,629,616 | $ | 3,538,042 | 31 | % | |||||
| Net earnings | $ | 856,909 | $ | 184,306 | 365 | % | $ | 2,700,687 | $ | 1,834,210 | 47 | % | |||||
| Net earnings per share | |||||||||||||||||
| Basic | $ | 0.021 | $ | 0.003 | 600 | % | $ | 0.065 | $ | 0.056 | 16 | % | |||||
| Diluted(3) | $ | 0.020 | $ | 0.004 | 400 | % | $ | 0.064 | $ | 0.056 | 14 | % | |||||
| Issued and outstanding | |||||||||||||||||
| Common shares | 41,815,561 | 41,479,418 | 1 | % | |||||||||||||
| Diluted(4) | 45,668,563 | 44,530,440 | 3 | % | |||||||||||||
Notes:
- Amounts for periods after the Company's transition date to IFRS of January 1, 2010 are presented in accordance with IFRS.
- Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is a non-IFRS financial measure which does not have any standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted EBITDA provides useful information to users as it reflects the net earnings prior to the effect of non-operating expenses such as interest, tax, amortization and foreign exchange gain or loss. Management uses Adjusted EBITDA in measuring the financial performance of the Company. Management monitors Adjusted EBITDA against budget and past results on a regular basis.
The following is a reconciliation of Adjusted EBITDA to net earnings:
| Three months ended December 31 | Year ended December 31 | |||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| Adjusted EBITDA | 2,569,057 | 1,614,844 | 10,891,810 | 4,914,475 | ||||
| Foreign exchange gain (loss) | 431,669 | 58,220 | (382,338 | ) | 9,906 | |||
| Finance costs | (340,059 | ) | (233,738 | ) | (1,379,187 | ) | (240,809 | ) |
| Amortization expense | (1,226,971 | ) | (707,193 | ) | (4,500,669 | ) | (1,145,530 | ) |
| Income tax expense | (576,787 | ) | (547,827 | ) | (1,928,929 | ) | (1,703,832 | ) |
| Net earnings | 856,909 | 184,306 | 2,700,687 | 1,834,210 | ||||
- Diluted earnings per share is calculated using the treasury stock method.
- Diluted shares as presented equals issued and outstanding common shares plus outstanding stock options and restricted share units.
HIGHLIGHTS OF FINANCIAL PERFORMANCE
- Revenue from Canadian operations was $5.5 million in the fourth quarter of 2011 (2010 - $5.6 million) and $22.9 million in the year ended December 31, 2011 (2010 - $18.4 million), while revenue from US operations was $5.3 million in the fourth quarter of 2011 (2010 - $4.1 million) and $23.1 million in the year ended December 31, 2011 (2010 - $8.5 million).
- Adjusted EBITDA in Canada was $1.6 million in the fourth quarter of 2011 (2010: $1.0 million) and $6.8 million in the year ended December 31, 2011 (2010: $5.2 million), while Adjusted EBITDA in the U.S. was $1.0 million in the fourth quarter of 2011 (2010: $0.6 million) and $4.1 million in the year ended December 31, 2011 (2010: loss $0.3 million).
- Net earnings were impacted by unrealized foreign exchange gains and losses during the year ended December 31, 2011 as a result of Company's U.S. dollar denominated obligation due to Computershare. The exchange rate of the Canadian dollar against the U.S. dollar resulted in an unrealized foreign exchange gain of $0.4 million in the fourth quarter of 2011 (2010 - gain $0.06 million) and an unrealized foreign exchange loss of $0.4 million in the year ended December 31, 2011 (2010 - gain $0.01 million). Net earnings per share, after taking into account unrealized foreign exchange gains and losses, was $0.021 in the fourth quarter of 2011 (2010 - $0.003) and $0.065 in the year ended December 31, 2011 (2010 - $0.056). Although the U.S. dollar denominated liability due to Computershare affects net earnings and the balance sheet, it is economically hedged as the U.S. dollar cash flow of the Company's U.S. operations exceeds the U.S. dollar monthly payment of the obligation. An unrealized foreign exchange gain or loss occurs when, for financial reporting purposes, the U.S. dollar denominated obligation is marked to market with respect to Canadian dollars. The future cash flows from U.S. operations are not marked to market and thus there is no offsetting unrealized foreign exchange gain or loss relating to the economic hedge recorded for financial reporting purposes. Beginning in 2012, the Company has designated the U.S. denominated liability as an accounting hedge against the Company's net investment in its U.S. operations. The designation will have the effect of mitigating volatility on net earnings by offsetting foreign exchange gains and losses on the liability with foreign exchange gains and losses on its net investment in U.S. operations that are presented in other comprehensive income.
- Cash on hand as at December 31, 2011 was $16.9 million (December 31, 2010 - $12.5 million).
- Cash increased by $4.5 million during the year ended December 31, 2011 (2010 - $6.6 million). Cash generated from operations was $9.6 million in 2011 (2010 - $3.8 million), which was offset by working capital used for operating activities of $0.03 million (2010 - $1.9 million). Cash used in financing activities was $4.0 million in 2011 (2010 - positive $2.2 million) mainly resulting from $4.3 million payments to Computershare in 2011 (2010 - $0.4 million). Cash used in investing activities was $1.8 million (2010 - positive $2.4 million) mainly resulting from purchases of capital assets, net of non-cash working capital changes.
- Working capital as at December 31, 2011 was $9.6 million (December 31, 2010 - $5.5 million).
- The Company continues to accelerate investment for the future. Such expenditures include investments in the UK, more robust equity trade execution capability in Canada, and research and development activities. The Company has increased such investment each year based on prudent forecasts of cash reserves, and investing all cash in excess of such targeted reserves. The purposeful effect of this is the expected growth of top line revenue at a rate that exceeds the growth rate of both EBITDA and net earnings.
About Solium Capital Inc.
Solium Capital Inc. (TSX:SUM) is a SaaS (Software as-a-Service) company that specializes in technology and services for the administration and execution of equity-based incentive and savings programs for corporations and their employees. Solium's technology platforms, Shareworks, StockVantage and Transcentive, are leading online solutions that integrate the management of multiple equity plan types including stock options, share units, share appreciation rights ("SARs"), restricted stock awards, and employee share purchase plans on one comprehensive platform for a client.
The Management's Discussion and Analysis and the consolidated financial statements for the year ended December 31, 2011 referred to herein are available on SEDAR at [ www.sedar.com ] under Solium Capital Inc., or at [ www.solium.com ].
