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Absolute Reports Fiscal 2018 Fourth Quarter and Annual Financial Results

BusinessWire - Mon Aug 13, 2:59PM CDT

Absolute (TSX: ABT), the endpoint visibility and control company, today announced financial results for the three months and fiscal year ended June 30, 2018. All dollar figures are unaudited and stated in U.S. dollars, unless otherwise indicated.

"Our fourth-quarter performance was highlighted by continued momentum within our Enterprise sales teams, including particularly strong performances in the healthcare, financial services and professional services verticals," said Steve Munford, interim chief executive officer at Absolute. "Moving into our new fiscal year, we expect to increase our emphasis on these verticals while leveraging our strong OEM channel relationships to drive new customer acquisition opportunities. Incremental investments in these focus areas will be funded within our existing cost structure, meaning continued operating margin expansion as our top line continues to grow."

Key Financial Metrics

-- Commercial recurring revenue in Q4-F2018 was $22.9 million, representing a year-over-year increase of 5%. F2018 commercial recurring revenue was $88.9 million, increasing 4% over F2017.

-- Total revenue in Q4-F2018 was $24.1 million, representing a year-over-year increase of 4%. F2018 total revenue was $93.6 million, representing an increase of 3% over the prior year.

-- The Commercial Annual Contract Value (ACV) Base(1) at June 30, 2018, was $91.5 million, an increase of 4% year-over-year and 1% sequentially.

-- The Enterprise portion of the ACV Base increased 12% year-over-year and was up 2% sequentially. Enterprise customers represented 53% of the ACV Base at June 30, 2018, compared with 49% in the prior year. The Public Sector portion of the ACV Base decreased 3% year-over-year and increased 1% sequentially.

-- Net ACV Retention from existing Absolute customers was 101% during Q4-F2018, compared with 99% in Q4-F2017.

-- Incremental ACV from New Customers was $0.8 million in Q4-F2018, and was $3.4 million in F2018, compared with $0.8 million and $4.4 million in the respective periods of F2017.

-- Adjusted EBITDA in Q4-F2018 was $3.1 million, or 13% of revenue, compared with $2.0 million, or 9% of revenue, in Q4-F2017. For F2018, Adjusted EBITDA was $9.2 million, or 10% of revenue, compared with $7.9 million, or 9% of revenue in the prior year.

-- Cash generated from operating activities in Q4-F2018 was $5.0 million compared with $0.7 million in Q4-F2017. For F2018, cash generated from operating activities was $12.5 million, compared with $1.0 million in the prior year period. The Q4-F2018 and F2018 figures were net of a tax refund of $2.3 million and the F2017 figure was net of reorganization and income tax payments of $6.0 million.

-- Absolute paid a quarterly dividend of CAD$0.08 per common share during Q4-F2018.

Products and Organizational Developments

-- In April 2018, we announced the General Data Protection Regulation ("GDPR") Data Risk and Endpoint Readiness Assessments to help global organizations identify and secure their sensitive data and devices in order prepare for the commencement of GDPR. The assessment delivers a measurable estimate of risk and actionable recommendations to improve endpoint hygiene as well as insights into where sensitive data is at risk of being accessed, stored or shared.

-- In April 2018, the Absolute platform was recognized by three award programs. Cyber Defense Magazine's 2018 InfoSec Awards recognized the Absolute platform at RSA Conference 2018 as a winner in Endpoint Security. The Absolute platform was also named a Bronze winner in the 14th Annual 2018 Info Security Products Guide's Global Excellence Awards in the endpoint security category. Finally, the Absolute platform, featuring Reach, was also recognized recently as a finalist in endpoint security by the 2018 Cybersecurity Excellence Awards.

Summary of Key Financial Metrics
                                                                                                                                                                                                                          
-------------------------------------------- -------------------- --------------------------------------------------------------------------------------------------------------       -------------------- ------------------------------  -------------------- ------------------------------------------------------------------------------------       -------------------- -------------------
USD Millions, except per-share data                                                                                        Q4                                                                                                                                                                                YTD
                                                                  ---------------------------------------------------------------------------------------------------------------------                                                                          -------------------------------------------------------------------------------------------
                                                                   F2018                                             F2017                                    Change                              F2018                                F2017                              Change
-------------------------------------------- -------------------------------------------------------------------- -------------------------------------------------------------------- ---------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- --------------------------------
Revenue                                                                                                                                                                                                                                                                           
  Commercial recurring(1)                                                            $  22.9                                                              $  21.9                                                    5 %                                              $   88.9                                                $   85.4                                                    4 %
  Other                                                                              $   1.2                                                              $   1.3                                                  (11 %)                                             $    4.7                                                $    5.8                                                  (19 %)
  Total                                                                              $  24.1                                                              $  23.2                                                    4 %                                              $   93.6                                                $   91.2                                                    3 %
                                                                                                                                                                                                                                                                                                                                                                                  
Adjusted EBITDA(2)                                                                   $   3.1                                                              $   2.0                                                   57 %                                              $    9.2                                                $    7.9                                                   16 %
  As a percentage of revenue                                                              13 %                                                                  9 %                                                                                                         10 %                                                     9 %
                                                                                                                                                                                                                                                                                                                                                                                  
Net Income (Loss)                                                                    $   2.6                                                              $  (2.1 )                                                222 %                                              $    3.1                                                $   (5.0 )                                                163 %
  Per share (basic)                                                                  $  0.06                                                              $ (0.05 )                                                                                                   $   0.08                                                $  (0.13 )
  Per share (diluted)                                                                $  0.06                                                              $ (0.05 )                                                                                                   $   0.08                                                $  (0.13 )
                                                                                                                                                                                                                                                                                                                                                                                  
Cash from (used in) operating activities                                             $   5.0                                                              $   0.7                                                  611 %                                              $   12.5                                                $    1.0                                                 1119 %
                                                                                                                                                                                                                                                                                                                                                                                  
Dividends paid                                                                       $   2.5                                                              $   2.3                                                    6 %                                              $   10.1                                                $    9.5                                                    6 %
  Per share (CAD)                                                                    $  0.08                                                              $  0.08                                                    -                                                $   0.32                                                $   0.32                                                    -
                                                                                                                                                                                                                                                                                                                                                                                  
Cash, equivalents and short-term investments                                         $  34.3                                                              $  32.9                                                    4 %
Total assets                                                                         $  97.0                                                              $  98.3                                                   (1 %)
Deferred revenue                                                                     $ 139.2                                                              $ 138.4                                                    1 %
                                                                                                                                                                                                                                                                                                                                                                                  
Common shares outstanding                         40.2        39.7              1 %                                                           
-------------------------------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- ----- -------------------- -------------------- ---------- -------------------- -------------------- ------------------------------------------------------- ------------------------------------------------------- ---------------------
1.   Commercial recurring revenue represents revenue derived from term
                        licenses and recurring managed services, both of which are included
                        as part of our Commercial ACV Base. Other revenue represents revenue
                        derived from professional services and ancillary product lines,
                        including consumer products.
2.                      "Adjusted EBITDA" is used as a profitability measure. Please refer
                        to the "Non-IFRS Measures" section of the Company's June 30, 2018
                        MD&A for further discussion on this measure.

F2019 Corporate Outlook

The Company's outlook for F2019 is as follows:

-- Revenue is expected to be between $96.0 million and $99.0 million, representing 3% to 6% annual growth;

-- Adjusted EBITDA is expected to be between 13% and 16% of revenue;

-- Cash from operating activities is expected to be between 10% and 14% of revenue; and

-- Capital expenditures are expected to be between $3.5 million and $4.0 million.

Quarterly Dividend

On July 23, 2018, the Company declared a quarterly dividend of CAD$0.08 per share on its common shares, payable in cash on August 23, 2018, to shareholders of record at the close of business on August 2, 2018.

Quarterly Filings

Management's Discussion and Analysis (MD&A) and Consolidated Financial Statements and the notes thereto for the fiscal year ended June 30, 2018 can be obtained today from Absolute's corporate website at www.absolute.com. The documents will also be available at www.sedar.com.

Notice of Conference Call

Absolute will hold a conference call to discuss the Company's Q4-F2018 results on Monday, August 13, 2018, at 5:00 p.m. ET. All interested parties can join the call by dialing 647-427-7450 or 888-231-8191. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until Monday, August 20, 2018, at midnight ET. To access the archived conference call, please dial 416-849-0833 or 1-855-859-2056 and enter the reservation code 2580187.

A live audio webcast of the conference call will be available at www.absolute.com and https://bit.ly/2JswxK1. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. An archived replay of the webcast will be available on the Company's website for 90 days.

Non-IFRS Measures and Definitions Throughout this press release, the Company refers to a number of measures that the Company believes are meaningful in the assessment of the Company's performance. All these metrics are nonstandard measures under International Financial Reporting Standards (-IFRS-), and are unlikely to be comparable to similarly titled measures reported by other companies. Readers are cautioned that the disclosure of these items is meant to add to, and not replace, the discussion of financial results or cash flows from operations as determined in accordance with IFRS. For a discussion of the purpose of these non-IFRS measures, please refer to the Company's June 30, 2018 MD&A on SEDAR at www.sedar.com.

These measures, as well as their method of calculation or reconciliation to IFRS measures, are as follows:

1) Commercial ACV Base, Net ACV Retention and ACV from New Customers As the majority of the Company's customer contracts are sold under multiyear term licenses, there is a significant lag between the timing of the billing and the associated revenue recognition. As a result, the Company focuses on the aggregate annualized value of its subscriptions under contract, measured by Annual Contract Value, as an indicator of its future revenues.

Commercial ACV Base measures the amount of recurring annual revenue Absolute will receive from its commercial customers under contract at a point in time, and therefore is an indicator of the Company's future revenue streams. Net ACV Retention measures the percentage increase or decrease in the Commercial ACV Base at the end of a period for the customers that made up the Commercial ACV Base at the beginning of the same period. This metric provides insight into the effectiveness of Absolute's customer retention and expansion functions. ACV from New Customers measures the addition to the Commercial ACV Base from sales to new commercial customers during the quarter.

We believe that increases in the amount of ACV from New Customers, and improvement in the Company's Net ACV Retention, will grow our Commercial ACV Base and, in turn, our future revenues.

2) Adjusted EBITDA Management believes that analyzing operating results exclusive of significant noncash items or items not controllable in the period provides a useful measure of the Company's performance. The term "Adjusted EBITDA" refers to earnings before deducting interest and investment gains (losses), income taxes, amortization of acquired intangible assets and property and equipment, foreign exchange gain or loss, share-based compensation, and restructuring and reorganization charges and post-retirement benefits. The items excluded in the determination of Adjusted EBITDA are share-based compensation, amortization of acquired intangibles, amortization of property and equipment, and restructuring and reorganization charges and certain post-retirement benefits.

3) Adjusted Operating Expenses A number of significant noncash or nonrecurring expenses are reported in the Company's Cost of Revenue and Operating Expenses. Management believes that analyzing these expenses exclusive of these noncash or nonrecurring items provides a useful measure of the cash invested in the operations of its business. The items excluded in the determination of Adjusted Operating Expenses are share-based compensation, amortization of acquired intangible assets, amortization of property and equipment, and restructuring and reorganization charges and certain post-retirement benefits. For a description of the reasons these items are adjusted, please refer to the "Non-IFRS Measures" section of the June 30, 2018, MD&A.

About Absolute Absolute provides visibility and resilience for every endpoint with self-healing endpoint security and always-connected IT asset management to protect devices, data, applications and users -- on and off the network. Bridging the gap between security and IT operations, only Absolute gives enterprises visibility they can act on to protect every endpoint, remediate vulnerabilities, and ensure compliance in the face of insider and external threats. Absolute's patented Persistence technology is already embedded in the firmware of PC and mobile devices and trusted by over 12,000 customers worldwide. For the latest information, visit www.absolute.com and follow us at @absolutecorp.

Forward-Looking Statements

This press release contains forward-looking statements and financial outlook that involve risks and uncertainties. These forward-looking statements and financial outlook relate to, among other things, the expected performance, functionality and availability of the Company's services and products, and other expectations, intentions and plans contained in this press release that are not historical facts. When used in this press release, the words "plan," "expect," "believe" and similar expressions generally identify forward-looking statements. These statements reflect the Company's current expectations. They are subject to a number of risks and uncertainties, including, but not limited to, changes in technology and general market conditions. In light of the many risks and uncertainties, readers of the press release should understand that Absolute cannot assure them that the forward-looking statements and financial outlook contained in this press release will be realized. Furthermore, the forward-looking statements and financial outlook contained in this press release are made as of the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements and financial outlook, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

(C)2018 Absolute Software Corporation. All rights reserved. Absolute and Persistence are registered trademarks of Absolute Software Corporation. For patent information, visit www.absolute.com/patents. The Toronto Stock Exchange has neither approved nor disapproved of the information contained in this news release.

ABSOLUTE SOFTWARE CORPORATION
Consolidated
Statements of Financial Position
(Expressed in United
States dollars) (Unaudited)
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                      
                                                                                              June 30, 2018                                            June 30, 2017
                                                                         --------------------------------------------------------------------------- -------------------------------------------------------
                                                                                                                                                      
ASSETS
                                                                                                                                                      
CURRENT
   Cash and cash equivalents                                                                $   33,956,988                                                              $   32,511,093
   Short-term investments                                                                          372,316                                                                     366,789
   Trade and other receivables                                                                  17,302,871                                                                  19,460,872
   Income tax receivable                                                                           345,228                                                                      83,487
   Prepaid expenses and other                                                 2,455,977          2,419,881  
                                                                         -------------------- ------------ -------------------- -------------------- -------------------- ------------ --------------------
                                                                                                54,433,380                                                                  54,842,122
PROPERTY AND EQUIPMENT                                                                           5,962,829                                                                   6,304,152
DEFERRED INCOME TAX ASSETS                                                                      23,318,605                                                                  22,286,804
INTANGIBLE ASSETS AND GOODWILL                                               13,316,129         14,894,518  
                                                                         -------------------- ------------ -------------------- -------------------- -------------------- ------------ --------------------
                                                                                            $   97,030,943                        $   98,327,596  
                                                                         -------------------- ------------ -------------------- -------------------- -------------------- ------------ --------------------
                                                                                                                                                      
LIABILITIES
                                                                                                                                                      
CURRENT
   Trade and other payables                                                                 $   13,676,397                                                              $   13,079,456
   Income tax payable                                                                              407,226                                                                      -
   Accrued warranty                                                                                270,000                                                                     570,000
   Deferred revenue - current                                   75,325,574         72,361,648  
                                                                         -------------------- ------------ -------------------- -------------------- -------------------- ------------ --------------------
                                                                                                89,679,197                                                                  86,011,104
                                                                                                                                                      
DEFERRED REVENUE                                                             63,861,112         66,040,653  
                                                                         -------------------- ------------ -------------------- -------------------- -------------------- ------------ --------------------
                                                                                               153,540,309                                                                 152,051,757
COMMITMENTS
CONTINGENCIES
                                                                                                                                                      
SHAREHOLDERS' DEFICIENCY
   Share capital                                                                                68,362,445                                                                  64,875,130
   Equity reserve                                                                               36,972,197                                                                  36,254,893
   Treasury shares                                                                                (359,973 )                                                                  (499,443 )
   Deficit                                                                 (161,484,035 )                        (154,354,741 )
                                                                         -------------------- ------------ -------------------- -------------------- -------------------- ------------ --------------------
                                                                            (56,509,366 )                         (53,724,161 )
                                                                         -------------------- ------------ -------------------- -------------------- -------------------- ------------ --------------------
                                                                                            $   97,030,943                        $   98,327,596  
                                                                         -------------------- ------------ -------------------- -------------------- -------------------- ------------ --------------------
ABSOLUTE SOFTWARE CORPORATION
Consolidated
Statements of Operations and Comprehensive Income (Loss)
Three
months and year ended June 30, 2018 and 2017
(Expressed
in United States dollars) (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                              
                                                                                                                                       Three months ended                                                                                                                   Year ended
                                                                                                                                            June 30,                                                                                                                                            June 30,
                                                                                 ------------------------------------------------------------------------------------------------------------------------       -------------------- ------------------------------------------------------------------------------------------------------------------------
                                                                                                         2018                                                   2017                                                   2018                                                   2017
                                                                                 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- -----------------------------------------------------
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                
REVENUE                                                                                             $ 24,075,168                                                              $ 23,184,480                                                              $ 93,621,832                                                              $ 91,210,550
                                                                                                                                                                                                                                                                                                                
COST OF REVENUE                                                                     3,347,432        3,612,129       14,361,888       14,450,858  
                                                                                 -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                
GROSS MARGIN                                                                                          20,727,736                                                                19,572,351                                                                79,259,944                                                                76,759,692
                                                                                                                                                                                                                                                                                                                
OPERATING EXPENSES
  Sales and marketing                                                                                 10,213,879                                                                10,862,189                                                                40,912,473                                                                44,381,582
  Research and development                                                                             4,818,759                                                                 4,347,797                                                                20,054,992                                                                17,524,536
  General and administration                                                                           3,408,748                                                                 3,304,667                                                                12,358,472                                                                12,851,255
  Share-based compensation                                                          1,409,027          743,888        3,055,632        3,971,161  
                                                                                 -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                   19,850,413       19,258,541       76,381,569       78,728,534  
                                                                                 -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                
OPERATING INCOME (LOSS)                                                                                  877,323                                                                   313,810                                                                 2,878,375                                                                (1,968,842 )
                                                                                                                                                                                                                                                                                                                
OTHER EXPENSE
  Interest income, net                                                                                    86,204                                                                     8,200                                                                   145,872                                                                    81,546
  Foreign exchange loss                                                              (122,679 )                           (79,296 )                          (164,394 )                          (119,881 )
                                                                                 -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                      (36,475 )                           (71,096 )                           (18,522 )                           (38,335 )
                                                                                 -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                
NET INCOME (LOSS) BEFORE INCOME TAXES                                                                    840,848                                                                   242,714                                                                 2,859,853                                                                (2,007,177 )
                                                                                                                                                                                                                                                                                                                
INCOME TAX RECOVERY (EXPENSE)                                                       1,711,000       (2,335,000 )                           251,000       (2,944,000 )
                                                                                 -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                
NET INCOME (LOSS) AND                                                                               $  2,551,848                        $ (2,092,286 )                                         $  3,110,853                        $ (4,951,177 )
COMPREHENSIVE INCOME (LOSS)
                                                                                 -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                
BASIC INCOME (LOSS) PER SHARE                                                                       $       0.06                        $      (0.05 )                                         $       0.08                        $      (0.13 )
                                                                                 -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
DILUTED INCOME (LOSS) PER SHARE                                                                     $       0.06                        $      (0.05 )                                         $       0.08                        $      (0.13 )
                                                                                 -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC                        40,204,331       39,183,227       40,028,465       39,082,732  
                                                                                 -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
ABSOLUTE SOFTWARE CORPORATION
Condensed
Consolidated Statement of Changes in Shareholders' Deficiency
(Expressed
in United States dollars) (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                        Share Capital
                                                                                         ----------------------------------------------------------------------------------------------------------
                                                                                                      Number                                      Amount                                                 Equity                                               Treasury                                                Deficit                                                   Total
                                                                                                        of                                                                                                                                     reserve                                                                  shares
                                                                                                      Common
                                                                                                      shares
                                                                                         ------------------------------  -------------------- --------------------------------------------------   -------------------- --------------------------------------------------   -------------------- ------------------------------------------------   -------------------- ----------------------------------------------------   -------------------- ---------------------------------------------------
                                                                                                                          
BALANCE, JUNE 30, 2016                                                                   38,881,307                                                              $ 58,607,382                                                              $ 36,732,175                                                              $     -                                                                 $ (139,049,869 )                                                            $ (43,710,312 )
Shares issued on options exercised                                                          661,838                                                                 4,039,782                                                                (1,313,196 )                                                                  -                                                                         -                                                                       2,726,586
Shares issued under Employee Share Purchase Plan                                             84,455                                                                   361,477                                                                         -                                                                    -                                                                         -                                                                         361,477
Shares issued under Phantom Share Unit plan                                                 327,145                                                                 2,281,206                                                                (2,281,206 )                                                                  -                                                                         -                                                                           -
Shares issued under Performance and Restricted Share Unit plan                                7,104                                                                    35,131                                                                   (35,131 )                                                                  -                                                                         -                                                                           -
Shares repurchased and cancelled under the Normal Course Issuer Bid                        (280,100 )                                                                (449,848 )                                                                   -                                                                        -                                                                       (876,845 )                                                               (1,326,693 )
Treasury shares repurchased under the Normal Course Issuer Bid                                -                                                                         -                                                                         -                                                                    (499,443 )                                                                    -                                                                        (499,443 )
Share-based compensation expense                                                              -                                                                         -                                                                     3,152,251                                                                    -                                                                         -                                                                       3,152,251
Dividends paid                                                                                -                                                                         -                                                                         -                                                                        -                                                                     (9,476,850 )                                                               (9,476,850 )
Net loss and total comprehensive loss                                                         -                -                -               -            (4,951,177 )                         (4,951,177 )
                                                                                         ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- ----------- --------------------
BALANCE, JUNE 30, 2017                                                                   39,681,749                        $ 64,875,130                        $ 36,254,893                        $ (499,443 )                                         $ (154,354,741 )                                         $ (53,724,161 )
                                                                                         ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- ----------- --------------------
Shares issued on options exercised                                                          334,750                                                                 2,219,174                                                                  (568,506 )                                                                  -                                                                         -                                                                       1,650,668
Shares issued under Employee Share Purchase Plan                                             99,477                                                                   440,714                                                                     -                                                                        -                                                                         -                                                                         440,714
Shares issued under Phantom Share Unit plan                                                  50,812                                                                   297,786                                                                  (297,786 )                                                                  -                                                                         -                                                                           -
Shares issued under Performance and Restricted Share Unit plan                              107,243                                                                   602,822                                                                  (751,474 )                                                               139,470                                                                      -                                                                          (9,182 )
Shares repurchased and cancelled under the Normal Course Issuer Bid                         (49,800 )                                                                 (73,181 )                                                                   -                                                                        -                                                                       (172,243 )                                                                 (245,424 )
Share-based compensation expense                                                              -                                                                         -                                                                     2,335,070                                                                    -                                                                         -                                                                       2,335,070
Dividends paid                                                                                -                                                                         -                                                                         -                                                                        -                                                                    (10,067,904 )                                                              (10,067,904 )
Net income and total comprehensive income                                                     -                -                -               -             3,110,853         3,110,853  
                                                                                         ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- ----------- --------------------
BALANCE, JUNE 30, 2018                                                                   40,224,231                        $ 68,362,445                        $ 36,972,197                        $ (359,973 )                                         $ (161,484,035 )                                         $ (56,509,366 )
                                                                                         ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- -------- -------------------- -------------------- -------------------- ------------ -------------------- -------------------- -------------------- ----------- --------------------
ABSOLUTE SOFTWARE CORPORATION
Condensed
Consolidated Statements of Cash Flows
Three months and
year ended June 30, 2018 and 2017
(Expressed in United
States dollars) (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                 
                                                                                                                                                          Three months ended                                                                                                                    Year ended
                                                                                                                                                               June 30,                                                                                                                                             June 30,
                                                                                                    ------------------------------------------------------------------------------------------------------------------------       -------------------- -------------------------------------------------------------------------------------------------------------------------
                                                                                                                            2018                                                   2017                                                    2018                                                   2017
                                                                                                    ------------------------------------------------------------------------- ------------------------------------------------------------------------- -------------------------------------------------------------------------- -----------------------------------------------------
                                                                                                                                                                                                                                                                                            
OPERATING ACTIVITIES
   Net income (loss)                                                                                                   $  2,551,848                                                              $ (2,092,286 )                                                            $   3,110,853                                                              $ (4,951,177 )
   Items not involving cash
     Amortization of property and equipment                                                                                 823,524                                                                   808,239                                                                  3,215,924                                                                 2,971,483
     Amortization of acquired intangible assets                                                                                   -                                                                   108,750                                                                     51,250                                                                   204,676
     Amortization of intangible assets - contract costs and brand                                            2,274,011                                                                 2,250,650                                                                  9,129,915                                                                 9,017,238
     Share-based compensation                                                                                               979,924                                                                   743,888                                                                  2,335,070                                                                 3,971,161
     Deferred income taxes                                                                                               (2,521,194 )                                                               1,368,574                                                                 (1,031,801 )                                                                  66,587
     Amortization of investment premium                                                                                           -                                                                     1,567                                                                          -                                                                   468,452
   Change in non-cash working capital
     Trade and other receivables                                                                                         (2,889,564 )                                                              (7,798,007 )                                                                2,158,001                                                                 1,677,479
     Income taxes receivable                                                                                              1,559,235                                                                   146,662                                                                   (261,741 )                                                              (3,450,524 )
     Prepaid expenses and other                                                                                             (33,949 )                                                                 (29,194 )                                                                  (36,096 )                                                                 (40,647 )
     Intangible assets - contract costs and brand additions                                                 (2,059,926 )                                                              (2,769,286 )                                                               (7,602,776 )                                                              (8,642,571 )
     Trade and other payables                                                                                             1,281,365                                                                 1,715,210                                                                    589,445                                                                  (800,721 )
     Income taxes payable                                                                                                   407,226                                                                         -                                                                    407,226                                                                         -
     Accrued warranty                                                                                                       (70,000 )                                                                  80,000                                                                   (300,000 )                                                                 110,000
     Deferred revenue                                                                                  2,696,681        6,167,899           784,385          428,139  
                                                                                                    -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                    
CASH FROM OPERATING ACTIVITIES                                                                                            4,999,181                                                                   702,666                                                                 12,549,655                                                                 1,029,575
INVESTING ACTIVITIES
   Purchase of property and equipment                                                                                      (188,599 )                                                                (319,175 )                                                               (2,909,081 )                                                              (4,287,421 )
   Purchase of intangible assets                                                                                                  -                                                                  (160,000 )                                                                        -                                                                  (160,000 )
   Income taxes paid on disposal of business unit                                                                                 -                                                                         -                                                                          -                                                                (2,623,890 )
   Proceeds from investments                                                                                                      -                                                                         -                                                                          -                                                                13,218,146
   Proceeds from sale of investments                                                                           -                -                 -       10,405,000  
                                                                                                    -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                    
CASH (USED IN) FROM INVESTING ACTIVITIES                                                                                   (188,599 )                                                                (479,175 )                                                               (2,909,081 )                                                              16,551,835
FINANCING ACTIVITIES
   Dividends paid                                                                                                        (2,496,900 )                                                              (2,349,244 )                                                              (10,067,904 )                                                              (9,476,850 )
   Repurchase of common shares for cancellation                                                                                   -                                                                         -                                                                   (245,424 )                                                              (1,326,693 )
   Purchase of treasury shares                                                                                                    -                                                                         -                                                                          -                                                                  (499,443 )
   Issuance of common shares                                                                             126,205          370,035         2,151,073        3,127,733  
                                                                                                    -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                    
CASH USED IN FINANCING ACTIVITIES                                                                                        (2,370,695 )                                                              (1,979,209 )                                                               (8,162,255 )                                                              (8,175,253 )
                                                                                                                                                                                                                                                                                                                                    
FOREIGN EXCHANGE EFFECT ON CASH                                                                          (15,989 )                            61,798           (32,424 )                            12,084  
                                                                                                    -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                    
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                          2,423,898                                                                (1,693,920 )                                                                1,445,895                                                                 9,418,241
                                                                                                                                                                                                                                                                                                                                    
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                        31,533,090       34,205,013        32,511,093       23,092,852  
                                                                                                    -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                    
CASH AND CASH EQUIVALENTS, END OF PERIOD                                                                               $ 33,956,988                        $ 32,511,093                        $  33,956,988                        $ 32,511,093  
                                                                                                    -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ---------- --------------------

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20180813005618r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: https://www.businesswire.com/news/home/20180813005618/en/

SOURCE: Absolute

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InkHouse 
Darah Patton, 317-695-5630 
absolute@inkhouse.com 
or 
Investor Relations 
MKR Group 
Joo-Hun Kim, 212-868-6760 
joohunkim@mkrir.com

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