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Avante Corp Inc. announces financial results for the second fiscal quarter ended September 30, 2022

By September 30, 2022March 17th, 2024No Comments

Not for distribution to U.S. news wire services or for dissemination in the United States

The Company is debt free, has cash balances of $11 million and access to $12 million of unused credit facilities.

Second quarter year-over-year revenue growth from continuing operations of 11.2% and 

Recurring Monthly Revenues improved by 8.9%.

TORONTO, Sept. 30, 2022 – Avante Corp Inc. (TSX.V: XX) (OTC: ALXXF)(“Avante” or the “Company”) is pleased to announce its financial results for its second fiscal quarter ended September 30, 2022 (all amounts in Canadian dollars thousands, unless otherwise indicated).


Three Months Ended

$ thousands unless otherwise noted

Sept. 30, 2022

June 30, 2022

March 31, 2022


Q2 F23

Q1 F23

Q4 F22

RMR in the period, continuing operations (1) (3)




Revenues, continuing operations (1)




Gross profit, continuing operations (1) (3)




Gross profit margin, continuing operations (1) (3)




Adjusted EBITDA, continuing operations (1) (3)




Net loss, continuing operations (1) (2)




Net Income (loss) (2)




Average Common Shares during the quarter




As At


Sept. 30, 2022

June 30, 2022

March 31, 2022

Cash balances & GIC investments (1)




Total funded debt as reported, IFRS




Total funded debt & lease obligations, IFRS (1)




Common Shares at period end




  1. The Company sold Logixx Security Inc. (“Logixx Security”) on June 1, 2022.  Its financial results are treated as discontinued operations for the reporting periods noted above. 
  2. The net income (loss) during the fiscal quarters ended March 31, 2022 and June 30, 2022 reflect costs related to the Board’s strategic review initiated in August 2021 and restructuring costs related to the transition of the Board and Management on March 30, 2022.  The estimated gain on sale of Logixx Security is reflected in first quarter fiscal 2023’s net income.
  3. Adjusted EBITDA and Recurring Monthly Revenues (“RMR”) are non-IFRS financial measures that have no standard meaning under IFRS and as a result may not be comparable to the calculation of similar measures by other companies.  See Description of Non-IFRS Financial Measures.  Reconciliations of Adjusted EBITDA and RMR to Net Income or Revenues, as applicable, are provided in the Company’s Management Discussion & Analysis (“MD&A”).

“As we continue to grow the Executive team, we now have a solid foundation in place to continue the evolution of our business. In the next quarter, we expect to hire a Director of Operations and Chief Technology Officer to round out a solid management team to achieve our goals.” said Manny Mounouchos, Founder, CEO & Board Chair of Avante.  “The company has maintained it’s revenue growth trajectory during this transition with a 11.2% increase in revenues.  The company expects gross margin to rebound to levels earlier in the year as cost increases are incorporated in pricing.”

Added Raj Kapoor, Chief Financial Officer of the Company, “As the company transitions from the sale of Logixx Security, management has recognized areas of efficiency and has started to implement new policies and procedures to maximize return.”


Within continuing operations, the Company reported year-over-year revenue growth of 11.2%, or $496, during the second quarter of fiscal 2023, increasing to $4,934 from $4,438 for the prior fiscal year second quarter.  Gross profit margins within continuing operations declined to 38.9% of revenue, versus 41.5% during the prior year’s second quarter, with total gross profit increasing by $79.  During the second quarter of fiscal 2023, revenues increased sequentially versus Q1 of fiscal 2023 by 8.0%, or $366, but gross profit margins declined to 38.9% versus 43.2%.

The Company’s recurring monthly revenues (“RMR”) from continuing operations during the last eight quarters are summarized below.  The Avante Security segment delivered RMR of $2,584 during the second quarter of fiscal 2023, up from $2,463 during the Company’s first quarter of fiscal 2023, but a year-over-year growth of 8.9% versus the $2,372 generated during the prior year’s second quarter.  On a trailing twelve-month basis to September 30, 2022, the Company’s RMR was $9,951 and total revenue was $19,192.

Gross profit margins over the last eight quarters ranged between 38.9% and 45.1%, and were 42.2% on a trailing twelve-month basis to September 30, 2022:

Avante Security













RMR in the period









Other revenue









Total revenue









Total Gross Profit









Gross Profit %









  1. The Company’s fiscal year end is on March 31 of each year. “F21” means the fiscal year ended March 31, 2021; “F22” means the fiscal year ended March 31, 2022; and “F23” means the fiscal year ended March 31, 2023.


The Avante Security segment reported Adjusted EBITDA of $723 during the three-month period ended September 30, 2022, versus $840 during the first fiscal quarter ended June 30, 2022.  This decrease of $117 was largely due to an increase in divisional legal and consulting costs.

The loss in Adjusted EBITDA from central corporate costs, net of eliminations, within continuing operations was $(500) during the three-month period ending September 30, 2022.  This represented a decrease of $(226) versus the $(274) Adjusted EBITDA net of central costs during the first fiscal quarter ended June 30, 2022.  The current quarterly period includes one-time costs for CFO searches and increases in Board fees for new members.  The previous quarter ended June 30, 2022 also benefited from reversals of the PSU liability. 

On June 1, 2022, the Company sold its ownership interest in Logixx Security.  During first quarter ended June 30 2022, Discontinued Operations reflected two months of operations from the Logixx Security Segment, whereas the first quarter of the prior fiscal year reflected three months.  During the first quarter ended June 30, 2022, Adjusted EBITDA of Discontinued Operations was $526, compared to $2,371 during the first quarter ended June 30, 2021, a decrease of $1,845.  In addition to one less month of operations reflected this quarter, Logixx Security’s prior year quarterly period benefited more significantly from strong margins on COVID-19 related service revenues.


On June 1, 2022, all remaining funded debt of the Company was repaid from proceeds of the sale of Logixx Security.  On the same date, the Company entered into amended and restated credit facilities with its bank to provide a $2 million revolving credit facility, provided on a demand basis and subject to a customary borrowing base.  To date, the Company has not drawn on this credit facility.

On July 7, 2022, the Company entered into a definitive loan agreement with affiliates of its largest shareholder.  This agreement permits the Company to draw term loans, on a non-revolving basis, for up to $10 million at a fixed rate of 5.0% with terms to maturity ending July 7, 2027.  Drawings are subject to a minimum senior leverage test and other conditions.  A standby fee on the unused portion of the facility of 0.5% is payable annually in arrears.  To date, the Company has not drawn on this term loan facility.

With cash balances of $10.9 million, and access to the senior secured revolver of $2 million and to the $10 million unsecured term loan facility, the Company has excess liquidity to more than meet its existing requirements.

Readers should refer to the Company’s financial statements and MD&A in respect of its first fiscal quarter ended June 30, 2022, for additional risk factors, accounting policies, detailed financial disclosures, reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures, related party transactions, contingencies and reporting of subsequent events since the fiscal period ended June 30, 2022.  Such financial statements and MD&A are incorporated by reference into this news release and are filed electronically through the System for Electronic Document Analysis and Retrieval (“SEDAR”), which can be accessed at

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities described herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.  This news release does not constitute an offer of securities for sale in the United States.  The securities described herein have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent registration under U.S. federal and state securities laws or an applicable exemption from such U.S. registration requirements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

About Avante Corp

Avante Corp Inc. (TSXV: XX) is a Toronto based provider of high-end security services. 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 and consider joining our investor email list.

Emmanuel Mounouchos
Founder, CEO & Board Chair, Avante Corp Inc.
(416) 923-6984

Forward Looking Statements

All statements in this press 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 often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “planned”, “expect”, “project”, “predict”, “potential”, “targeting”, “intends”, “believe”, “potential”, and similar expressions, or describes a “goal”, or a variation of such words and phrases or state that certain actions, events or results “may”, “should”, “could”, “would”, “might” or “will” be taken, occur or be achieved. This forward-looking information includes statements with respect to, among other things, the intention to create a platform capable of supporting a business with significantly greater scale, Avante’s strategic plan, Avante’s intentions to engage in mergers and acquisitions in the near term, Avante’s intentions to identify, acquire and integrate suitable targets for mergers and acquisitions, the ability to achieve operational efficiencies and provide a better overall customer experience, Avante’s run- rate, opportunities to grow Avante’s revenue and Adjusted EBITDA profile, investments in corporate infrastructure, Avante’s ability to execute and integrate larger acquisitions, and the expected trajectory of corporate costs as a percentage of revenue. 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 ability to identify, acquire and integrate suitable targets for mergers and acquisitions, the ability to control corporate costs, and the list of risk factors identified in Avante’s Management Discussion & Analysis (MD&A), Annual Information Form (AIF) 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.

Non-IFRS Financial Measures

This press release includes certain measures which have not been prepared in accordance with IFRS such as EBITDA, Adjusted EBITDA, Gross Profit and Direct Operating Expenses. These non-IFRS measures are not recognized under IFRS and, accordingly, users are cautioned that these measures should not be construed as alternatives to net income determined in accordance with IFRS. The non-IFRS measures presented are unlikely to be comparable to similar measures presented by other issuers.

References to EBITDA are to net income before interest, taxes, depreciation and amortization. References to Adjusted EBITDA are to net income before interest, taxes, depreciation, amortization of intangibles &

capitalized commissions, share-based payments, acquisition, integration and / or reorganization costs, deferred financing costs, loss (gain) in fair value of derivative liability, expensing of CWL fair value adjustment per IFRS less non-controlling interest’s share. References to Direct Operating Expenses are net of interest expense, accretion interest expense, depreciation, amortization and share based payments. EBITDA, Adjusted EBITDA, Gross Profit and Direct Operating Expenses are not earnings measures recognized by International Financial Reporting Standards (“IFRS”) and do not have a standardized meaning prescribed by IFRS. Management believes that Adjusted EBITDA is an appropriate measure in evaluating Avante’s performance. Readers are cautioned that neither EBITDA nor Adjusted EBITDA should be construed as an alternative to net income (as determined under IFRS), as an indicator of financial performance or to cash flow from operating activities (as determined under IFRS) or as a measure of liquidity and cash flow. Avante’s method of calculating Adjusted EBITDA may differ from methods used by other issuers and, accordingly, Avante’s Adjusted EBITDA may not be comparable to similar measures used by other issuers.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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