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Kinaxis Inc. Reports First Quarter 2019 Results

CNW Group - Fri May 10, 5:30AM CDT

Reports 24% growth in total revenue and Adjusted EBITDA((1)) of 35% of revenue

Kinaxis® (TSX:KXS.TO) , the leader in empowering people to make confident supply chain decisions, today reported results for its fiscal first quarter ended March 31, 2019. All amounts are in U.S. dollars. All figures are prepared in accordance with International Financial Reporting Standards (IFRS), including the adoption of IFRS 15 and 16, unless otherwise indicated.

Q1 2019 total revenue increased 24% to $45.8 million; SaaS revenue grew by 17% to $27.3 million; subscription term license revenue grew 87% to $8.4 million; Adjusted EBITDA((1)) was up 29% to $16.0 million (35% of revenue); and profit increased 53% to $7.0 million from $4.6 million.

"We are pleased with these strong first quarter results and with the overall health of our global pipeline. This performance is largely due to our significantly expanded sales team and focused global marketing activities. During the quarter, we expanded business within our on-premise customer base and closed new SaaS opportunities, however some large and active deals are taking longer to finalize than expected. We fully expect strong SaaS bookings in coming quarters. Overall, we are reaffirming our full year revenue guidance, with slightly higher contribution from subscription term license revenue and related support and slightly lower SaaS revenue. Given the strength of Q1 and our business outlook, we are increasing our guidance for full year Adjusted EBITDA. As we have consistently demonstrated through marquee new partnerships and customer announcements, such as Lenovo this past quarter, our competitive position remains extremely strong. I remain firmly confident in our market position, our sales strategy, and our unique concurrent planning platform as we continue to execute against our growth plans," said John Sicard, Kinaxis CEO.

Q1 2019 Highlights

       $ USD millions, except as otherwise indicated

            Q1 2019

            Q1 2018         Change


                   Total Revenue                                           45.8                       36.8      24%


                   SaaS                                                    27.3                       23.3      17%

                   Subscription term
                    license                                                 8.4                        4.5      87%


                   Gross profit                                            33.6                       26.7      26%

                                                                          (73%)                     (72%)

                   Profit                                                   7.0                        4.6      53%

                                                          ($0.26/diluted share)     ($0.17/diluted share)

                   Adjusted EBITDA(1)                                      16.0                       12.3      29%

                                                                          (35%)                     (33%)

                   Cash from operating
                    activities                                             18.8                       10.4      81%

(1)              "Adjusted EBITDA" is a non-IFRS
                                     measure and is not a
                                     recognized, defined or a
                                     standardized measure under
                                     IFRS. This measure as well as
                                     other non-IFRS financial
                                     measures reported by Kinaxis
                                     are defined in the "Non-IFRS
                                     Measures" section of this news

Analysis of Q1 2019 vs Q1 2018 Financial Highlights Revenue: SaaS revenue growth of 17% resulted from contracts secured with new customers, as well as expansion of existing customer subscriptions. Subscription term license revenue growth of 87% relates to the timing of renewals, expansions and new engagements for on-premise and hybrid subscription arrangements, and will vary substantially quarter to quarter. Together, SaaS and subscription term license revenue growth were the main drivers behind the 24% increase in total revenue.

Gross profit margin: Growth in gross profit margin to 73% resulted from the growth in SaaS and subscription term license revenue, partly offset by an increase in costs of revenue. Such costs included headcount increases, an increase in partner and third-party costs, and higher depreciation costs associated with the expansion of data center capacity.

Profit and adjusted EBITDA: The 53% increase in profit and 29% growth in Adjusted EBITDA was due to an increase in revenue and gross profit, partly offset by an increase in operating expenses. Additional investments in research and development and sales and marketing, including new headcount and higher marketing event activity, drove operating expense growth.

Cash from operating activities: The 81% increase in cash from operating activities was due to collection of trade and other receivables and higher profit. At March 31, 2019, cash, cash equivalents and short-term investments grew by $18.3 million to $199.9 million from $181.5 million at December 31, 2018.

Financial GuidanceKinaxis has updated its 2019 fiscal year financial targets, as follows:

Previous FY 2019 Guidance

        Updated FY 2019 Guidance

     Total revenue
              $183-188 million
             $183-188 million


              22-24% growth
              20-22% growth


                                   Subscription term license
              $20-22 million
               $22-24 million

          Adjusted EBITDA margin
              23-25% of revenue
             25-27% of revenue


This guidance is provided to enhance visibility into Kinaxis' expectations for financial targets for the periods indicated. Please refer to the section regarding forward-looking statements which forms an integral part of this release.

The nature of the company's long-term contracts provides visibility into future, contracted revenue. The following table presents revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at March 31, 2019.

Remainder of 2020            2021  Total
                                            2019       and thereafter

     SaaS                              77.3  67.1            68.3  212.6


          Subscription term license          2.1                        2.1


          Maintenance and support            8.8   6.0             5.0   19.8


                              Total         88.2  73.1            73.2  234.5


This press release, along with the financial statements and MD&A for the three months ended March 31, 2019, are available on Kinaxis' website and on SEDAR at

Conference CallKinaxis will host a conference call today, May 10, 2019, to discuss these results. John Sicard, Chief Executive Officer, and Richard Monkman, Chief Financial Officer, will host the call starting at 8:30 a.m. Eastern time. A question and answer session will follow management's presentation.

     Friday, May 10, 2019

     8:30 a.m. Eastern Time



     Dial-in number:
     (647) 427-7450 or (888) 231-8191

     (416) 849-0833 or (855) 859-2056

                          Available until 12:00 a.m., Eastern Daylight Time
                           Friday, May 17, 2019

      Reference number:                                             6196908

Please call the conference telephone number five to ten minutes prior to the start time. An operator will register your name and organization.

About Kinaxis Inc.Eliminating volatility in your supply chain is impossible, but managing it is not. Trusted by top brands, Kinaxis® gives people the confidence to know they are making the best planning decisions to maximize business performance. We solve complex business problems in easy-to-understand ways faster by combining human and machine intelligence to plan for any future, monitor risks and opportunities and respond at the pace of change. With the support of our community of supply chain experts and using our unique concurrent planning technique and single integrated planning platform, customers can realize higher revenue, lower costs and fewer risks. For more Kinaxis news, visit or follow us on LinkedIn, Twitter or Facebook.

Non-IFRS MeasuresThis news release contains non-IFRS measures, specifically, Adjusted profit, Adjusted diluted earnings per share and Adjusted EBITDA. We use Adjusted profit and Adjusted diluted earnings per share, which remove the impact of our redeemable preferred shares and share based compensation plans, to measure our performance as these measurements better align the reporting of our results and improve comparability against our peers. We use Adjusted EBITDA to provide investors with a supplemental measure of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure and work capital requirements. Adjusted profit, Adjusted diluted earnings per share and Adjusted EBITDA are not recognized, defined or standardized measures under IFRS. Our definition of Adjusted profit, Adjusted diluted earnings per share and Adjusted EBITDA will likely differ from that used by other companies (including our peers) and therefore comparability may be limited. Non-IFRS measures should not be considered a substitute for or in isolation from measures prepared in accordance with IFRS. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue reliance on non-IFRS measures and view them in conjunction with the most comparable IFRS financial measures. Kinaxis has reconciled Adjusted profit and Adjusted EBITDA to the most comparable IFRS financial measure as follows:

Three months ended March 31,

                                                2019            2018

     (In thousands of USD)

     Profit                                           $
      6,966       $

      compensation                                        3,072           3,158

      profit                                         $
      10,038       $

      expense                                             3,818           3,130

     Depreciation                                         2,677           1,820

      (gain)                                                170           (196)

      income                                              (765)          (145)

                                                          5,900           4,609

      EBITDA                                         $
      15,938      $

      as a
      revenue                                               35%            33%

Forward-Looking Statements

Certain statements in this release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements as to our expectations for growth of annual total revenue, annual SaaS and Subscription term licenses revenue, and our expectations for Adjusted EBITDA margin achievement, in each case looking forward for our fiscal year ending December 31, 2019, as well as statements as to Kinaxis' growth opportunities and the potential benefits of, and markets and demand for, Kinaxis' products and services. These statements are subject to certain assumptions, risks and uncertainties, including our view of the relative position of Kinaxis' products and services compared to competitive offerings in the industry.

In particular, our guidance for 2019 annual total revenue, annual SaaS and Subscription term license revenue and annual Adjusted EBITDA margin, is subject to certain assumptions, including:

--  our ability to win business from new customers and expand
        business from existing customers;
    --  the timing of new customer wins and expansion decisions by our
        existing customers;
    --  maintaining our current customer retention levels; and
    --  with respect to Adjusted EBITDA, our ability to contain expense
        levels while expanding our business.

These and other assumptions, risks and uncertainties may cause Kinaxis' actual results, performance, achievements and developments to differ materially from the results, performance, achievements or developments expressed or implied by forward-looking statements. Material risks and uncertainties relating to our business are described under the headings "Forward-Looking Statements" and "Risks and Uncertainties" in our annual MD&A dated February 28, 2019, under the heading "Risk Factors" in our Annual Information Form dated March 29, 2018, and in our other public documents filed with Canadian securities regulatory authorities, which are available at Forward-looking statements are provided to help readers understand management's expectations as at the date of this release and may not be suitable for other purposes. Readers are cautioned not to place undue reliance on forward-looking statements. Kinaxis assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.

Kinaxis Inc.

       Condensed Consolidated Interim Statements of Financial Position

       As at March 31, 2019 and December 31, 2018

       (Expressed in thousands of USD)


     March 31,
     December 31,
                                                                               2019            2018



       Current assets:

       Cash and cash equivalents                                           156,984         126,144

       Short-term investments                                               42,907          55,404

       Trade and other receivables                                          43,848          64,330

       Prepaid expenses                                                      6,926           5,815


                                                                            250,665         251,693

       Non-current assets:

       Property and equipment                                               21,598          22,785

       Right-of-use assets                                                  11,541           8,873

       Contract acquisition costs                                           13,337          13,902

       Unbilled receivables                                                  2,977             457

       Deferred tax assets                                                      27              49

                                                                            300,145         297,759

                Liabilities and Shareholders' Equity

       Current liabilities:

       Trade payables and accrued liabilities                               14,148          21,623

       Deferred revenue                                                     75,001          78,496

       Lease obligations                                                     2,720           2,572


                                                                             91,869         102,691

       Non-current liabilities:

       Lease obligations                                                     8,987           6,311

       Deferred tax liabilities                                              3,680           4,075


                                                                             12,667          10,386

       Shareholders' equity:

       Share capital                                                       126,339         124,951

       Contributed surplus                                                  26,913          24,284

       Accumulated other comprehensive loss                                  (375)          (319)

       Retained earnings                                                    42,732          35,766


                                                                            195,609         184,682

                                                                            300,145         297,759
Kinaxis Inc.

       Condensed Consolidated Interim Statements of Comprehensive Income

       For the three months ended March 31, 2019 and 2018

       (Expressed in thousands of USD, except share and per share data)


                                                                                    2019       2018


       Revenue                                                                   45,754     36,849

       Cost of revenue                                                           12,191     10,135

       Gross profit                                                              33,563     26,714

       Operating expenses:

       Selling and marketing                                                      9,315      7,386

       Research and development                                                   7,994      6,749

       General and administrative                                                 6,065      5,237

    ---                                                                                        ---

                                                                                  23,374     19,372

                                                                                  10,189      7,342

       Other income (expense):

       Foreign exchange gain (loss)                                               (170)       196

       Net finance income                                                           765        145

    ---                                                                                        ---

                                                                                     595        341

       Profit before income taxes                                                10,784      7,683

       Income tax expense                                                         3,818      3,130

       Profit                                                                     6,966      4,553

       Other comprehensive income (loss):

       Items that are or may be reclassified subsequently to profit or loss:

       Foreign currency translation differences - foreign operations               (56)       400

       Total comprehensive income                                                 6,910      4,953

    ===                                                                                        ===

       Basic earnings per share                                                    0.27       0.18

       Weighted average number of basic Common Shares                        26,091,542 25,542,978

       Diluted earnings per share                                                  0.26       0.17

       Weighted average number of diluted Common Shares                      26,805,963 26,667,141
Kinaxis Inc.

       Condensed Consolidated Interim Statements of Changes in Shareholders' Equity

       For the three months ended March 31, 2019 and 2018

       (Expressed in thousands of USD)



     Total equity


        income (loss)


       Balance, December 31, 2017                                                       108,253           19,294                  (284)           (2,475)           124,788

       Adjustment on initial application of IFRS 15                                           -                                                  23,833             23,833

    ---                                                                                                                                                                ---

       Adjusted balance, January 1, 2018                                                108,253           19,294                  (284)            21,358            148,621

       Profit                                                                                 -                                                   4,553              4,553

       Other comprehensive income                                                             -                                   400                                  400

    ---                                                                                                                                                                ---

       Total comprehensive income                                                             -                                   400              4,553              4,953

       Share options exercised                                                            3,798          (1,020)                                                     2,778

       Share based payments                                                                   -           3,158                                                      3,158

    ---                                                                                                                                                                ---

       Total shareholder transactions                                                     3,798            2,138                                                      5,936

       Balance, March 31, 2018                                                          112,051           21,432                    116             25,911            159,510


       Balance, December 31, 2018                                                       124,951           24,284                  (319)            35,766            184,682

       Profit                                                                                 -                                                   6,966              6,966

       Other comprehensive loss                                                               -                                  (56)                                (56)

    ---                                                                                                                                                                ---

       Total comprehensive income (loss)                                                      -                                  (56)             6,966              6,910

       Share options exercised                                                            1,388            (443)                                                       945

       Share based payments                                                                   -           3,072                                                      3,072

    ---                                                                                                                                                                ---

       Total shareholder transactions                                                     1,388            2,629                                                      4,017

       Balance, March 31, 2019                                                          126,339           26,913                  (375)            42,732            195,609

Kinaxis Inc.

       Condensed Consolidated Interim Statements of Cash Flows

       For the three months ended March 31, 2019 and 2018

       (Expressed in thousands of USD)


                                                                           2019      2018


       Cash flows from operating activities:

       Profit                                                            6,966     4,553

       Items not affecting cash:

       Depreciation of property and equipment and right-of-use assets    2,677     1,820

       Share-based payments                                              3,072     3,158

       Investment tax credits recoverable                                    -      911

       Net finance income                                                (765)    (145)

       Income tax expense                                                3,818     3,130

       Change in operating assets and liabilities                       13,019   (1,759)

       Interest received                                                   873       361

       Interest paid                                                     (112)    (148)

       Income taxes paid                                              (10,789)  (1,501)

    ---                                                                              ---

                                                                         18,759    10,380

       Cash flows from investing activities:

       Purchase of property and equipment                                (893)  (4,821)

       Purchase of short-term investments                             (15,005) (15,043)

       Redemption of short-term investments                             27,506    40,005

    ---                                                                              ---

                                                                         11,608    20,141

       Cash flows from financing activities:

       Payment of lease obligations                                      (600)    (454)

       Common shares issued on exercise of stock options                   945     2,778

    ---                                                                              ---

                                                                            345     2,324

       Increase in cash and cash equivalents                            30,712    32,845

       Cash and cash equivalents, beginning of period                  126,144   103,392

       Effects of exchange rates on cash and cash equivalents              128       350

       Cash and cash equivalents, end of period                        156,984   136,587

    ===                                                                              ===

SOURCE Kinaxis Inc.

View original content:

SOURCE: Kinaxis Inc.

Investor Relations, Rick Wadsworth, Kinaxis, Tel: (613) 907-7613,; Media Relations, Danielle McNeil Taylor, Kinaxis, Tel: (343)

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