News Release

Kinaxis Inc. Reports Fourth Quarter 2020 Results

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  • SaaS revenue grows 24% to $39.8 million in fourth quarter, and grows 25% for the year

  • Adjusted EBITDA(1) margin of 11% in fourth quarter, and 24% for the year

OTTAWA, ON, March 3, 2021 /CNW/ - Kinaxis® (TSX: KXS), the authority in driving agility for fast, confident decision-making in an unpredictable world, today reported results for its fourth quarter and year ended December 31, 2020. All amounts are in U.S. dollars. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.

"We are pleased to report another very strong quarter and year. We met or exceeded every aspect of our initial guidance for 2020, which pre-dated the pandemic – truly an impressive accomplishment by the Kinaxis team given the circumstances. I am also extremely pleased that we saw a return to strong sales momentum in Q4, when quarterly bookings of incremental subscription business and new customer wins were near all-time highs and included some truly iconic brand names. Separately, we were recently positioned furthest on the Completeness of Vision axis in the Leaders quadrant of the 2021 Gartner Magic Quadrant for Supply Chain Planning Solutions," said John Sicard, President and CEO of Kinaxis. "The COVID-related incremental booking delays we experienced earlier in 2020 have been reflected in our fiscal 2021 guidance. With the continued recovery of a more normal business environment, we expect our current momentum and positive outlook to drive a return to higher growth for 2022 and beyond. Our year-end sales pipeline grew more than 40% from 2019, as manufacturers continue to recognize the urgency in driving hyper-agility in their supply chain. We made some key strategic investments in 2020, both organically and by acquisitions, which will better enable us to execute on our growing pipeline, accelerate our product innovation, and exceed the needs of our growing customer base."

 Q4 2020 Highlights


$ USD thousands, except as otherwise
indicated

Q4 2020

Q4 2019

Change

Total Revenue

54,945

56,312

-2%

SaaS

39,815

32,006

24%

Subscription term license

1,948

12,120

-84%

Professional services

11,334

8,931

27%

Maintenance and support

1,848

3,255

-43%

Gross profit

34,841   
(63%)   

41,440   
(74%)   

-16%

Profit

-1,586   
(-$0.06/diluted share)   

7,831   
($0.29/diluted share)   

-120%

Adjusted EBITDA(1)

6,095   
(11%)   

18,134   
(32%)   

-66%

Cash from operating activities

3,200

8,025

-60%

FY 2020 Highlights

$ USD thousands, except as otherwise
indicated

FY 2020

FY 2019

Change

Total Revenue

224,189

191,549

17%

SaaS

148,873

118,860

25%

Subscription term license

17,890

26,218

-32%

Professional services

45,899

33,549

37%

Maintenance and support

11,527

12,922

-11%

Gross profit

154,058   
(69%)   

137,699   
(72%)   

12%

Profit

13,730   
($0.49/diluted share)   

23,331   
($0.87/diluted share)   

-41%

Adjusted EBITDA(1)

53,751   
(24%)   

57,727   
(30%)   

-7%

Cash from operating activities

59,470

36,599

62%

(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 release.

Financial Guidance and Outlook
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 December 31, 2020.

$USD millions

2021

2022

2023 and
later

Total
backlog

SaaS

144.5

104.9

104.1

353.5

Subscription term license

12.2

8.3

5.1

25.6

Maintenance and support

2.2

-

-

2.2

Total

158.9

113.2

109.2

381.3

Based on this backlog and the current outlook, Kinaxis is initiating fiscal 2021 financial guidance, as follows:


FY 2021 Guidance

Total revenue

$242-247 million

SaaS

17-20% growth

Subscription term license

$3-5 million

Adjusted EBITDA(1) margin

11-14%

Beyond 2021, and assuming more typical business and market conditions, the company continues to believe that annual SaaS revenue growth of 23-25% is achievable in the mid-term.

Guidance in this press release is provided to enhance visibility into Kinaxis' expectations for financial targets for the periods indicated. Please refer to the section regarding forward-looking statements that forms an integral part of this release. This press release along with the financial statements and MD&A for the three months and year ended December 31, 2020 are available on Kinaxis' website and on SEDAR at www.sedar.com.

Conference Call
Kinaxis will host a conference call tomorrow, March 4, 2021, 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. Investors and participants must register for the call in advance. See registration link below. Please call the conference telephone number fifteen minutes prior to the start time.

CONFERENCE CALL DETAILS

DATE:

Thursday, March 4, 2021

TIME: 

8:30 a.m. Eastern Time

CALL REGISTRATION:

http://www.directeventreg.com/registration/event/3383678

WEBCAST:

https://bit.ly/39ih534

REPLAY:

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


Available until 11:59 p.m. ET, Thursday, March 18, 2021

REFERENCE NUMBER:

3383678

About Kinaxis Inc.
Everyday volatility and uncertainty demand quick action. Kinaxis® delivers the agility to make fast, confident decisions across integrated business planning and the digital supply chain. People can plan better, live better and change the world. Trusted by innovative brands, we combine human intelligence with AI and concurrent planning to help companies plan for any future, monitor risks and opportunities and respond at the pace of change. Powered by an extensible, cloud-based platform, Kinaxis delivers industry-proven applications so everyone can know sooner, act faster and remove waste. For more Kinaxis news, follow us on LinkedIn or Twitter.

Non-IFRS Measures
This news release contains non-IFRS measures, specifically Adjusted EBITDA and Adjusted EBITDA margin. 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 working capital requirements. Adjusted EBITDA and Adjusted EBITDA margins are not recognized, defined or standardized measures under IFRS. Our definition of Adjusted EBITDA and Adjusted EBITDA margin 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 EBITDA to the most comparable IFRS financial measure as follows:


Three months ended
December 31,


Year ended

December 31,


2020


2019


2020


2019


(In thousands of USD)

Profit (loss)..................................................................

$

(1,586)


$

7,831


$

13,730


$

23,331

Share-based compensation........................................


4,986


3,177


17,217


13,367

Adjusted profit............................................................

$

3,400


$

11,008


$

30,947


$

36,698

Income tax expense (recovery)...................................


(2,354)


4,484


7,740


11,932

Depreciation and amortization...................................


4,494


3,212


15,562


11,908

Foreign exchange loss.................................................


364


40


196


226

Net finance expense (income)....................................


191


(610)


(694)


(3,037)



2,695


7,126


22,804


21,029

Adjusted EBITDA.........................................................

$

6,095


$

18,134


$

53,751


$

57,727

Adjusted EBITDA as a percentage of revenue............


11%


32%


24%


30%

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 years ending December 31, 2021; and
  • contracted revenue in future periods, including 2021, 2022 and 2023 and later.

This release also includes forward-looking 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 2021 annual total revenue, annual SaaS and Subscription term license revenue and annual Adjusted EBITDA margin, is subject to certain assumptions and associated risks 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.

Our guidance and commentary for achievement of contracted revenue in future periods, including in 2021, 2022 and 2023 and later, is based on assumptions and associated risks including:

  • our ability to satisfy material unperformed obligations under our long-term contracts; and
  • the continued financial capacity and creditworthiness of our customers under long-term contracts.

Our guidance and commentary for annual SaaS revenue growth beyond 2021 is based on assumptions and associated risks including normalization of macroeconomic factors, including business and market conditions, relative to recent conditions that have been affected by the COVID-19 pandemic. 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 March 3, 2021, under the heading "Risk Factors" in our Annual Information Form dated March 23, 2020 and in our other public documents filed with Canadian securities regulatory authorities, which are available at www.sedar.com. 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.
Consolidated Statements of Financial Position

As at December 31, 2020 and December 31, 2019
(Expressed in thousands of USD)


December 31,
2020

December 31,
2019

Assets



Current assets:



Cash and cash equivalents

182,958

182,284

Short-term investments 

30,180

30,319

Trade and other receivables

82,883

80,623

Investment tax credits recoverable

1,109

-

Prepaid expenses

9,264

6,534


306,394

299,760

Non-current assets:



Property and equipment

30,746

25,704

Right-of-use assets

15,722

8,671

Contract acquisition costs

16,484

15,497

Unbilled receivables

2,013

249

Other receivables

752

713

Deferred tax assets

2,308

149

Investment tax credits recoverable

980

-

Intangible assets

13,023

-

Goodwill

39,988

-


428,410

350,743

Liabilities and Shareholders' Equity



Current liabilities:



Trade payables and accrued liabilities

33,030

20,770

Deferred revenue

94,275

83,673

Lease obligations

4,554

2,288


131,859

106,731

Non-current liabilities:



Lease obligations

12,065

6,818

Deferred tax liabilities

2,729

7,092


14,794

13,910

Shareholders' equity:



Share capital

173,104

140,961

Contributed surplus

35,846

30,392

Accumulated other comprehensive loss

(20)

(348)

Retained earnings

72,827

59,097


281,757

230,102


428,410

350,743

Kinaxis Inc.
Consolidated Statements of Comprehensive Income

For the three months and years ended December 31, 2020 and 2019
(Expressed in thousands of USD, except share and per share data)







For the three months ended December 31,

For the year ended December 31,


2020

2019

2020

2019

Revenue

54,945

56,312

224,189

191,549

Cost of revenue

20,104

14,872

70,131

53,850

Gross profit

34,841

41,440

154,058

137,699

Operating expenses:





Selling and marketing

15,521

13,747

52,630

44,270

Research and development

13,822

9,443

47,420

34,125

General and administrative

8,983

6,505

33,232

26,852


38,326

29,695

133,282

105,247


(3,485)

11,745

20,776

32,452

Other income (expense):





Foreign exchange gain (loss)

(364)

(40)

(196)

(226)

Net finance and other income

(91)

610

890

3,037


(455)

570

694

2,811

Profit (loss) before income taxes

(3,940)

12,315

21,470

35,263

Income tax expense (recovery)

(2,354)

4,484

7,740

11,932

Profit (loss)

(1,586)

7,831

13,730

23,331

Other comprehensive income (loss):





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





Foreign currency translation differences - foreign operations

237

100

328

(29)

Total comprehensive income (loss)

(1,349)

7,931

14,058

23,302

Basic earnings (loss) per share

(0.06)

0.30

0.51

0.89

Weighted average number of basic Common Shares

26,993,691

26,294,645

26,716,027

26,180,034

Diluted earnings (loss) per share

(0.06)

0.29

0.49

0.87

Weighted average number of diluted Common Shares

28,212,731

27,184,684

28,138,911

26,967,805

Kinaxis Inc.
Consolidated Statements of Changes in Shareholders' Equity

For the years ended December 31, 2020 and 2019
(Expressed in thousands of USD)




Accumulated






other




Share

Contributed

Comprehensive

Retained



capital

surplus

income (loss)

earnings

Total equity







Balance, December 31, 2018

124,951

24,284

(319)

35,766

184,682







Profit

-

-

-

23,331

23,331

Other comprehensive loss

-

-

(29)

-

(29)

Total comprehensive income (loss)

-

-

(29)

23,331

23,302







Share options exercised

12,042

(3,291)

-

-

8,751

Restricted share units vested

3,968

(3,968)

-

-

-

Share based payments                              

-

13,367

-

-

13,367

Total shareholder transactions

16,010

6,108

-

-

22,118







Balance, December 31, 2019

140,961

30,392

(348)

59,097

230,102







Balance, December 31, 2019

140,961

30,392

(348)

59,097

230,102







Profit

-

-

-

13,730

13,730

Other comprehensive income

-

-

328

-

328

Total comprehensive income

-

-

328

13,730

14,058







Share options exercised

27,187

(6,807)

-

-

20,380

Restricted share units vested

4,956

(4,956)

-

-

-

Share based payments

-

17,217

-

-

17,217

Total shareholder transactions

32,143

5,454

-

-

37,597







Balance, December 31, 2020

173,104

35,846

(20)

72,827

281,757


Kinaxis Inc.
Consolidated Statements of Cash Flows

For the three months and years ended December 31, 2020 and 2019
(Expressed in thousands of USD)



For the three months ended December 31,

For the year ended December 31,




2020

2019

2020

2019


Cash flows from  operating activities:






Profit (loss)

(1,586)

7,831

13,730

23,331


Items not affecting cash:






Depreciation of property and equipment and right-of-use assets

3,932

3,212

14,335

11,908


Amortization of intangible assets

562

-

1,227

-


Share-based payments

4,986

3,177

17,217

13,367


Net finance income

91

(610)

(890)

(3,037)


Income tax expense

(2,354)

4,484

7,740

11,932


Income tax credits recoverable

(2,089)

-

(2,089)

-


Change in operating assets and liabilities

18

(8,074)

10,492

(9,161)


Interest received

103

660

1,761

3,653


Interest paid

(187)

(112)

(674)

(531)


Income taxes received (paid)

(276)

(2,543)

(3,379)

(14,863)



3,200

8,025

59,470

36,599


Cash flows from (used in) investing activities:






Acquisition of businesses, net of cash acquired

(24)

-

(61,767)

-


Purchase of property and equipment

(2,102)

(1,378)

(14,439)

(11,719)


Purchase of short-term investments

(15,164)

(10,000)

(110,616)

(60,108)


Redemption of short-term investments

15,154

10,000

110,558

85,108



(2,136)

(1,378)

(76,264)

13,281


Cash flows from  financing activities:






Payment of lease obligations

(1,103)

(679)

(3,742)

(2,674)


Common shares issued on exercise of stock options

2,484

4,428

20,380

8,751



1,381

3,749

16,638

6,077


(Decrease) increase in cash and cash equivalents

2,445

10,396

(156)

55,957








Cash and cash equivalents, beginning of period

179,856

171,957

182,284

126,144








Effects of exchange rates on cash and cash equivalents

657

(69)

830

183


Cash and cash equivalents, end of period

182,958

182,284

182,958

182,284









 

SOURCE Kinaxis Inc.

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