REGINA,
SK, Dec. 11, 2023 /CNW/ - SSC Security
Services Corp. ("SSC" or the "Company) (TSXV: SECU)
(OTCQX: SECUF), a national provider of cyber, physical and
electronic security services to commercial, industrial and public
sector clients across Canada, is
pleased to release its results for the fourth quarter and year end
for the 2023 fiscal year ended September 30,
2023. All figures are presented in Canadian dollars.
"We have had a very strong year this year with positive growth
in all areas of the company. Our mission at SSC is to build a
healthy company based on a foundation of conservative cash
management and a commitment to the highest customer service levels
in our industry. We are careful capital allocators and are
constantly attempting to expand the company by being disciplined as
we continue to grow into our balance sheet," said Chairman and CEO
Doug Emsley.
"As part of our growth plan, our Cyber Security Division
recently launched a formal Partnering Strategy that will allow us
to accelerate the market penetration of our specialised suite of
cyber services. Successful share buybacks, a disciplined approach
to acquisitions, and an excellent management team creating organic
growth is the right combination to grow a strong security company.
We continue to be well capitalized, with no debt and have more than
doubled the size of the company in the past year thanks to a
dedicated management team," said Emsley.
FY2023 HIGHLIGHTS
- During the fiscal year ended September
30, 2023, revenue for the full fiscal year was $109 million, up 119% over revenue recorded in
the same period last year. During Q4, we recorded revenue of
$29.3 million, up 11% from the same
quarter last year.
- Adjusted EBITDA for the fiscal year was $4.3 million ($0.22
per share), which is 100% higher than the prior year $2.1 million ($0.11
per share). Adjusted EBITDA in Q4 was $1.6
million ($0.08 per share), up
from $1.4 million ($0.07 per share) in the same quarter in the prior
year.
- During the fiscal year, we continued to convert assets related
to our legacy business into cash, bringing in about $6.3 million in cash in the process. During the
fiscal year, we also paid $0.12 per
share in dividends to shareholders and bought back 382,500 shares
of the Company at an average of $2.87
per share.
- We finished the year ended September
30 with (comparison to previous year end):
- Cash and cash equivalents of $14.8
million ($11.2 million);
- Loans and mortgages receivable of $1.7
million ($4.5 million);
- Total shareholders' equity of $67.7
million ($70.6million);
and
- Long-term debt of nil (nil).
Key Performance Indicators for the comparable periods are
summarized below:
Key Performance
Indicators
|
Quarter
ended
Sept
30
|
Fiscal Year
ended
Sept
30
|
|
2023
|
2022
|
2023
|
2022
|
Revenue
|
29,291
|
26,506
|
109,055
|
49,697
|
Cost of
Sales
|
25,283
|
21,818
|
92,805
|
41,227
|
Gross Margin
|
4,008
|
4,688
|
16,250
|
8,470
|
Gross Margin
(%)
|
13.7 %
|
17.7 %
|
14.9 %
|
17.0 %
|
|
|
|
Comprehensive net
income (loss)
|
(146)
|
(939)
|
87
|
(981)
|
Comprehensive net
income (loss) per share (basic)
|
$(0.01)
|
$(0.05)
|
$0.00
|
$(0.05)
|
|
|
|
Adjusted
EBITDA
|
1,552
|
1,445
|
4,296
|
2,144
|
Adjusted EBITDA per
share (basic)
|
$0.08
|
$0.07
|
$0.22
|
$0.11
|
REVENUE, GROSS MARGIN & NET INCOME
Revenues for the year ended September 30,
2023 were $109.1 million
compared with $49.7 million during
the previous year, an increase of $59.3
million, or 119%. The increase in revenues was due primarily
to the acquisition of Logixx and the inclusion of Logixx' revenue
for the first full complete year. The prior year included only four
months of revenue from the Logixx acquisition. See the segment
comparisons in Note 4 of the financial statements for a
presentation of the year-to-year changes.
Gross margin for the year ended September
30, 2023 increased to $16.3
million (14.9% of revenue) from $8.5
million (17.0% of revenue) during the previous year. The
growth in gross margin is a result of the addition of Logixx
starting June 1, 2022. The gross
margin % for all periods remains within our long-term expectations
for the security business.
Comprehensive net income for the year ended September 30, 2023 was $0.1 million (income of $0.00 per share), compared to comprehensive net
loss in the previous year of $1.0
million (loss of $0.05 per
share).
ADJUSTED EBITDA
Adjusted EBITDA, and Adjusted EBITDA per share are the primary
KPI's used by the Company to measure the financial performance of
the Company. Adjusted EBITDA for the year ended September 30, 2023, was $4.3 million, as compared to $2.1 million during the previous year end. This
increase can be attributed to a full year of our Logixx
acquisitions operating results versus only four months in the prior
year (as the acquisition was made on June 1,
2022). The Adjusted EBITDA per share for the year ended
September 30, 2023 was $0.22, double the $0.11 Adjusted EBITDA per share amount for the
year ended September 30, 2022.
Net and
comprehensive income and Adjusted EBITDA
|
Quarter
ended
Sept
30
|
Fiscal Year
ended
Sept
30
|
|
2023
|
2022
|
2023
|
2022
|
Net and
comprehensive income (loss)
|
(146)
|
(939)
|
87
|
(981)
|
Adjusted
EBITDA
|
1,552
|
1,445
|
4,296
|
2,144
|
Adjusted EBITDA per
share
|
$0.08
|
$0.07
|
$0.22
|
$0.11
|
A reconciliation of earnings to EBITDA and Adjusted EBITDA is
provided in the Non-IFRS section of the MD&A published
concurrently with this press release.*
BALANCE SHEET
Key balance sheet items are summarized below:
Statements of
Financial Position
|
As at
Sept 30,
2023
|
As at
Sept 30,
2022
|
As at
Sept 30,
2021
|
Cash
|
14,843
|
11,195
|
28,796
|
Accounts
receivable
|
21,835
|
20,889
|
4,773
|
Legacy contract
assets
|
5,817
|
8,013
|
10,470
|
Assets held for
sale
|
800
|
800
|
3,670
|
Mortgages and loans
receivable
|
1,714
|
4,504
|
12,501
|
Total
assets
|
84,776
|
87,451
|
84,888
|
Total
liabilities
|
17,089
|
16,807
|
9,021
|
Total shareholders'
equity
|
67,687
|
70,644
|
75,867
|
Common shares
outstanding
|
19,313
|
19,618
|
20,288
|
Current
assets
|
39,943
|
37,657
|
40,039
|
Current
liabilities
|
13,410
|
13,050
|
6,883
|
Working
capital
|
26,533
|
24,607
|
33,156
|
Long-term
debt
|
-
|
-
|
2,540
|
UPDATE ON NORMAL COURSE ISSUER BID
During the year ended September 30,
2023, we bought back 382,500 shares at an average price of
$2.87 per share. (Prior year: 757,700
shares at an average price of $2.90
per share.) Since October 1, 2023, to
the date of this news release, we have purchased 46,300 shares at
an average price of $2.38 per
share.
We continue to believe that our shares have been trading in a
price range which does not adequately reflect their value and that
the purchase of shares under the NCIB will enhance shareholder
value in general.
OUTLOOK
We have successfully integrated Logixx into the operations of
the Company. We expect demand for security services to continue to
grow and our national presence to assist in winning new contracts.
Additional growth may come via acquisition, as we look to acquire
other companies in the Canadian security industry. Additional
acquisitions will help us reach our goals more quickly, but we will
remain disciplined about achieving our metrics as we pursue new
opportunities.
We see growing opportunities for the integration of security
offerings, particularly where security guard services can be
combined or supplemented with electronic monitoring using cameras
and sensors. We will continue to look for opportunities to offer
these integrated security offerings.
In our legacy business, the majority of our legacy assets are
expected to convert to cash within the next year. Our objective is
to make these resources available for the expansion of our security
business.
We plan to continue to distribute capital to shareholders via
the dividend, operate with minimal to no debt while maintaining
solid liquidity, and focus on maximizing Adjusted EBITDA per
share.
ABOUT SSC
SSC Security Services Corp. is a national provider of cyber,
physical and electronic security services to corporate and public
sector clients across Canada. For
more information, please visit www.securityservicescorp.ca
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE
EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF
THIS RELEASE.
Forward Looking Statements
This release includes forward-looking statements regarding
SSC and its business. Such statements are based on the current
expectations and views of future events of SSC's management. In
some cases the forward-looking statements can be identified by
words or phrases such as "may", "will", "expect", "plan",
"anticipate", "intend", "potential", "estimate", "believe" or the
negative of these terms, or other similar expressions intended to
identify forward-looking statements. The forward-looking events and
circumstances discussed in this release may not occur and could
differ materially as a result of known and unknown risk factors and
uncertainties affecting SSC, including risks regarding the security
industry, the agricultural industry, economic factors and the
equity markets generally and many other factors beyond the control
of SSC. No forward-looking statement can be guaranteed.
Forward-looking statements and information by their nature are
based on assumptions and involve known and unknown risks,
uncertainties and other factors which may cause our actual results,
performance or achievements, or industry results, to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statement or
information. Accordingly, readers should not place undue reliance
on any forward-looking statements or information. Except as
required by applicable securities laws, forward-looking statements
speak only as of the date on which they are made and SSC undertakes
no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
*Non-IFRS Measures
SSC measures key performance metrics established by management
as being key indicators of the Company's strength, using certain
non-IFRS performance measures, including:
- EBITDA, EBITDA per share, Adjusted EBITDA, and Adjusted EBITDA
per share.
The Company uses these non-IFRS measures for its own internal
purposes. These non-IFRS measures do not have any standardized
meaning prescribed by IFRS, and these measures may be calculated
differently by other companies. The presentation of these non-IFRS
measures is intended to provide additional information and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. The Company provides
these non-IFRS measures to enable investors and analysts to
understand the underlying operating and financial performance of
the Company in the same way as it is frequently evaluated by
Management. Management will periodically assess these non-IFRS
measures and the components thereof to ensure their continued use
is beneficial to the evaluation of the underlying operating and
financial performance of the Company. For more detailed
information, please refer to pages 22 and 23 of the Company's
Management Discussion and Analysis dated December 11, 2023 available on the Company's
website at www.securityservicescorp.ca and on SEDAR+ at
www.sedarplus.ca.
SOURCE SSC Security Services Corp.