Not for distribution to U.S. news wire services or for dissemination in the United States
TORONTO, Nov.24, 2017 –Avante Corp Inc., (“Avante” the “Company” or the “Group”) through its subsidiaries, Avante Security Inc. (“ASI”), INTO-Electronics Inc. (“INTO”) and City Wide Locksmiths Ltd. (“CWL”), provides best in class residential and commercial security and automation services including system design and installation, rapid alarm response, alarm monitoring, video analytics, commercial and high-rise security integration, secure transport, electronic building management and high-end lock services through the use of advanced technology and a focus on client service. The Company is pleased to announce its results for the quarter and six month period ended September 30, 2016:
RESULTS FOR THE SIX MONTH PERIOD ENDED SEPTEMBER 30, 2016
| Quarter ended | Quarter ended | Six-month period ended | Six-month period ended | |||
|---|---|---|---|---|---|---|
| Sep 30, 2016 | Sep 30, 2015 | Variance | Sep 30, 2016 | Sep 30, 2015 | Variance | |
| Total revenues | $ 4,983,862 | $3,494,705 | 42.6% | $9,707,246 | $6,849,828 | 41.7% |
| Revenues – Recurring Monitoring and Response[1] | 1,502,693 | 1,468,690 | 2.3% | 2,964,447 | 2,915,801 | 1.7% |
| Revenues – Other security services and transport | 3,481,169 | 2,026,015 | 71.8% | 6,742,799 | 3,934,027 | 71.4% |
| Total gross profit | 1,674,466 | 1,403,605 | 19.3% | 3,460,704 | 2,659,332 | 30.1% |
| Adjusted EBITDA[2] | 495,574 | 432,078 | 14.7% | 1,123,168 | 847,783 | 32.5% |
| Net income before tax[3] | 195,271 | 326,582 | (40.2%) | 566,939 | 668,770 | (15.3%) |
| Net income for the period | 157,749 | 237,597 | (33.6%) | 420,947 | 484,785 | (13.2%) |
| Basic and diluted income per share | 0.002 | 0.003 | 0.005 | 0.006 | ||
| Total common shares outstanding | 81,532,052 | 81,237,052 | 81,532,052 | 81,237,052 | ||
| Total common shares outstanding – diluted | 81,571,590 | 81,571,118 | 81,579,067 | 81,465,709 | ||
| Total assets | $17,167,284 | $15,256,409 | $17,167,284 | $15,256,409 | ||
| Total liabilities | 5,757,626 | 4,205,725 | 5,757,626 | 4,205,725 | ||
| Liabilities (excl. deferred revenue) | 3,466,225 | 2,067,048 | 3,466,225 | 2,067,048 | ||
| Deferred revenue | 2,291,401 | 2,203,745 | 2,291,401 | 2,203,745 | ||
| Shareholders’ equity | 11,409,658 | 10,985,615 | 11,409,658 | 10,985,615 | ||
| Non-controlling interests | 432,649 | - | 432,649 | - |
[1] Revenues – Recurring Monitoring and Response includes Alarm Response along with Digital, Wireless and Video Monitoring services[2] Adjusted EBITDA = Net income + income tax + depreciation / amortization + shared based payments expense + acquisition and integration costs[3] Share based payments and acquisition related amortization increased by $171,569 for the quarter and $265,700 for the six month period
During the quarter, the Company generated revenues of $4,983,862 an increase of 42.6% over the quarter ended September 30, 2015. Non-recurring revenues grew by 71.8%, primarily driven by the inclusion of CWL revenues, while recurring revenues grew by 2.3%. Non-recurring revenues showed an organic growth of 14.6%. CWL contributed $1,157,698 to the revenues for the quarter. Overall gross margin for the quarter was $1,674,467 or 33.6% as compared to $1,403,605 or 40.2% for the quarter ended September 30, 2015. The blended gross margin on rapid response, secure transport, international security travel advisory segment and monitoring services was 44.4% for the quarter ended September 30, 2016, as compared to 49.4% for the quarter ended September 30, 2015. Gross margin on installations was 9.0% for the quarter as compared to 12.0% for the same quarter in the prior year. The Company did face installation margin challenges during the quarter, but management expects that the coming quarters will fare better as it has taken measures to increase revenues and also improve efficiencies in its execution of system integration job orders. Adjusted EBITDA for the quarter amounted to $495,574 as compared to $432,078 for the quarter ended September 30, 2015. Net income for the quarter was $195,271, as compared to $326,582 in the same quarter of last year, due to increase in share based payments, depreciation and amortization.
For the six month period, revenues grew by 41.7% over the same period last year. Non-recurring revenues grew by 71.4%, while recurring revenues grew by 1.7%. Non-recurring revenues showed organic growth of 8.5% for the six month period. CWL contributed $2,472,804 of revenues for this period. Gross margin for the six month period was $3,460,704 or 35.7% as compared to $2,659,332 or 38.8% for the same period last year. Adjusted EBITDA for the six month period ended September 30, 2016 amounted to $1,123,168 as compared to $847,783 for same period last year.
Avante’s CEO, George Rossolatos expressed satisfaction with the results for the quarter and the six month period, while acknowledging the need to improve installation margins. According to George, “we are very happy with the progress of our strategy. We continue to work to grow the top line and create further efficiencies in the organization as a result of our acquisitions. Certain actions and directives are being executed and implemented which will result in improved margins in the systems integrations business. Further, ASI will be putting forth a price increase on recurring revenues for the first time in several years. CWL has been playing a critical role in ensuring that that cross-selling opportunities are fully optimized. Towards furthering this endeavour, office improvements are being undertaken at the CWL showroom wherein the products / offerings of all the group companies will be on display. Avante continues to pursue several acquisition targets and is hopeful of closing one or more of these in the coming quarters.”
APPOINTMENT OF CHIEF OPERATING OFFICER
George Rossolatos is pleased to announce the appointment Rodney Wechsler (“Rod”) to the newly created position of Chief Operating Officer (“COO”) of Avante Corp Inc. As Founder and President of INTO, Rod has played a key role in the development of INTO’s business. In the two years since Avante’s acquisition of INTO, he has helped grow its business by almost 50%. In his new role, Rod will play a significant role in the strategy and execution of the operations of ASI, while remaining as the President of INTO. Rod will help execute a plan to integrate the systems integration teams, and consolidate the 24/7 support centres of both these subsidiaries under one roof and create a unified sales and fulfillment strategy.
‘We are very excited to appoint Rod to the position of COO. We believe he will add meaningful value to the entire Avante group, given his track record at INTO. We expect his appointment to this new role to accelerate value creation going forward”, said George Rossolatos.
CONFERENCE CALL
As announced on Wednesday, November 23, 2016, Avante will be hosting a conference call on Monday, November 28, 2016, to discuss the aforementioned results at 8:30 AM EST.
Dial in details are as follows:
Local: (+1) 416-764-8658 Toll Free: (+1) 888-886-7786 Conference ID: 66594800
Playback details below, available until December 12, 2016:
Local: (+1) 416-764-8692 Toll Free: (+1) 877-674-7070 Playback Pin: 594800#
About Avante Corp
Avante Corp Inc. (XX.V) is a Toronto based provider of technology enabled security solutions. We acquire, manage and build industry leading businesses which provide specialized, mission-critical solutions that address the needs of our customers. Our businesses continuously develop innovative solutions that enable our customers to achieve their objectives. With an experienced team and a proven track record of solid growth, we are taking steps to establish a broad portfolio of security businesses to provide our customers and shareholders with exceptional returns. Please visit our website at www.avantecorp.ca and consider joining our investor email list.
George Rossolatos
CEO
(416) 923-6984
george@avantecorp.ca
FORWARD LOOKING STATEMENTS
All statements in this news release, other than statements of historical fact, may constitute “forward looking information” with respect to Avante within the meaning of applicable securities laws. Forward-looking information is frequently characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. This forward-looking information includes statements with respect to, among other things, the effective date of the consolidation of the Common Shares.
Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied by the forward looking information, including, without limitation, the Company being unable to complete the steps necessary to cause the consolidation to occur on the timelines stated in this news release and the risks identified in Avante’s Management Discussion & Analysis, Annual Information Form and other continuous disclosure, which list is not exhaustive of the factors that may affect any of Avante’s forward-looking information. In connection with the forward-looking statements contained in this and subsequent press releases, Avante has made certain assumptions about its business and the industry in which it operates and has also assumed that no significant events occur outside of Avante’s normal course of business. Although management believes that the assumptions inherent in the forward-looking statements are reasonable as of the date the statements are made, forward-looking statements are not guarantees of future performance and, accordingly, undue reliance should not be put on such statements due to the inherent uncertainty therein. Avante’s forward-looking information is based on the beliefs, expectations and opinions of management on the date the statements are made, and Avante does not assume any obligation to update forward-looking information, whether as a result of new information, future events or otherwise, other than as required by applicable law. For the reasons set forth above, readers should not place undue reliance on forward-looking information as there can be no assurance that the credit agreement will be entered into or on the terms described in this news release or at all.
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