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     293  0 Kommentare Computer Modelling Group Announces Year-End Results

    CALGARY, Alberta, May 22, 2024 (GLOBE NEWSWIRE) -- Computer Modelling Group Ltd. (“CMG Group” or the “Company”) announces its financial results for the three months and year ended March 31, 2024.

    As a result of CMG Group’s acquisition of BHV on September 25, 2023, the Company’s operations are now organized into two reportable operating segments represented by CMG; the development and licensing of reservoir simulation software, and BHV; the development and licensing of seismic interpretation software.

    FOURTH QUARTER 2024 CONSOLIDATED HIGHLIGHTS

    Select financial highlights

    • Generated total revenue of $32.3 million in the fourth quarter of fiscal 2024, compared to $20.3 million in the prior year’s quarter, reflecting a 15% increase in CMG’s revenue and a 44% contribution from BHV;
    • Operating profit increased to $8.3 million, an increase of 20% from the same period of the previous fiscal year. Adjusted operating profit increased by 16% from the same period of the previous fiscal year, with CMG contributing to 9% and BHV contributing to 7% of the increase;
    • Adjusted EBITDA Margin was 32%, compared to 42% in the same period of the previous last fiscal year with BHV generating 10% and CMG generating 40% in Adjusted EBITDA Margin;
    • Net income during the period was $7.2 million, a 38% increase compared to the prior year’s quarter;
    • Earnings per share was $0.09, a 29% increase compared to the prior year’s quarter;
    • Reported Free Cash Flow of $0.12 per share, an increase of 71%.

    FISCAL 2024 CONSOLIDATED HIGHLIGHTS

    Select financial highlights

    • Generated total revenue of $108.7 million in fiscal 2024, compared to $73.8 million in the previous fiscal year, reflecting a 19% increase in CMG’s revenue and a 28% contribution from BHV;
    • Operating profit increased to $34.0 million, an increase of 31% from the previous fiscal year. Adjusted operating profit increased by 30% from the previous fiscal year, in which CMG contributed 19% and BHV contributed 11%;
    • Adjusted EBITDA Margin was 40%, compared to 45% in last fiscal year with BHV generating 18% and CMG generating 45% in Adjusted EBITDA Margin;
    • Net income during the year was $26.3 million, a 33% increase compared to the prior fiscal year;
    • Earnings per share was $0.32, a 28% increase compared to prior fiscal year;
    • Reported Free Cash Flow of $0.44 per share, an increase of 63%.

    MANAGEMENT COMMENTARY

    Fourth Quarter

    In the fourth quarter, total revenue grew by 59% from the prior fiscal year to $32.3 million, reflecting the acquisition of Bluware (“BHV”) which contributed 44%, and growth within the CMG operating segment of 15%. Adjusted EBITDA Margin was 32% compared to 42% in the prior fiscal year primarily due to the acquisition of BHV which currently operates at a lower margin than CMG. Net income for the quarter increased by 38% to $7.2 million, driven by higher revenue in the CMG operating segment. Free Cash Flow grew by 75% to $9.5 million, or $0.12 per share, from $5.4 million or $0.07 per share in the prior year’s quarter. This substantial increase in Free Cash Flow was driven by both increases in net income and an approximately $4.6 million increase due to the tax deduction for the intellectual property acquired from BHV.

    The CMG operating segment delivered strong total revenue growth of 15% in the fourth quarter with 13% growth in the recurring annuity/maintenance license revenue and increases in both perpetual licenses and professional services revenue. Energy transition, as a percentage of CMG software revenue, was 24% for the fourth quarter, evidencing continued strong demand. As expected, direct employee costs increased in the fourth quarter compared to the prior fiscal year, driven primarily by a combination of increased headcount and performance driven variable compensation. Corporate costs increased as we made investments to support our growth. Collectively, these impacts reduced Adjusted EBITDA Margin in the quarter to 40% from 42% in the prior fiscal year.

    In the BHV operating segment, as expected, software license revenue of $2.9 million in the fourth quarter was down sequentially from the third quarter of this fiscal year. This is due to annuity license fee revenue, which fluctuates quarterly depending on the timing of contract renewals. This impacted Adjusted EBITDA Margin for the quarter which declined to 10% from 27% in the third quarter of this year.

    Fiscal Year 2024

    In fiscal 2024, total revenue grew by 47% from the prior fiscal year to $108.7 million, reflecting the acquisition of BHV which contributed 28% and growth within the CMG operating segment of 19%. As expected, due to the current lower profitability margins of BHV, compared to CMG, full year consolidated Adjusted EBITDA Margin was 40% compared to 45% in the prior fiscal year. Net income grew by $6.5 million, or 33% from the prior fiscal year, driven primarily by increased revenue in the CMG operating segment. Free Cash Flow grew by 62% to $35.3 million, or $0.44 per share, from $21.7 million, or $0.27 per share, in the prior fiscal year. Free Cash Flow benefited from stronger net income and the intellectual property tax deduction related to the BHV acquisition. The year ending cash balance of $63.1 million provides flexibility to continue advancing our acquisition strategy.

    The CMG operating segment delivered strong total revenue growth of 19% over the prior fiscal year, with 15% growth in the recurring annuity/maintenance license revenue and increases in both perpetual licenses and professional services revenue. Growth in software revenue was evident across all geographies, with the US and Eastern Hemisphere showing the largest contribution, and was driven by a combination of pricing, and new and increased licensing for both energy transition and traditional energy. Energy transition, as a percentage of CMG software revenue, was 23% for the full year 2024.

    Compared to the prior fiscal year, CMG operating segment Adjusted EBITDA increased by 19% to $39.5 million, with Adjusted EBITDA Margin remaining stable at 45% compared to the prior fiscal year. In fiscal 2024, Adjusted EBITDA Margin was impacted by a decrease in SR&ED investment tax credits and increased direct employee costs and other corporate costs that represent our investments supporting current and anticipated growth. These investments included additional hires, bringing headcount to 193 (from 165 on March 31, 2023), additional systems to support and accelerate the refinement of our sales and go-to-market strategies, product innovation, and internal processes. We believe these investments position the organization to deliver sustained annual growth in the coming years while maintaining strong profitability.

    In the BHV operating segment, performance is tracking to our expectation with total revenue of $20.8 million and Adjusted EBITDA Margin of 18% for the year-to-date, which reflects six months of operations. Software license revenue of $8.1 million, represented two full quarters of operations under CMG ownership. However, it is expected that revenue in the first six months of fiscal 2025 will be lower than that of Q3 and Q4 of fiscal 2024, due to the timing impact of contract renewals. It is also anticipated that Adjusted EBITDA Margin will decrease in the first two quarters of fiscal 2025 for the same reason. Annuity license fee revenue is recognized upfront when the software license is delivered to the customer which is driven by the timing of contract renewals that happen most commonly in the third and fourth quarter. For this reason, BHV performance will be best evaluated on an annual basis.

    SUMMARY OF FINANCIAL PERFORMANCE

    Three months ended March 31 CMG BHV
    Consolidated
    ($ thousands, except per share data) 2024 2023 2024 2023 2024 2023
                 
    Annuity/maintenance licenses 17,864 15,803 1,797 - 19,661 15,803
    Annuity license fee - - 1,142 - 1,142 -
    Perpetual licenses 2,130 1,556 - - 2,130 1,556
    Total software license revenue 19,994 17,359 2,939 - 22,933 17,359
    Professional services 3,280 2,906 6,078 - 9,358 2,906
    Total revenue 23,274 20,265 9,017 - 32,291 20,265
    Total revenue growth 15% 8%     59% 8%
    Annuity/maintenance licenses growth 13% 10%     24% 10%
                 
    Cost of revenue 2,394 2,365 4,076 - 6,470 2,365
    Operating expenses            
    Sales & marketing 3,691 3,294 670 - 4,361 3,294
    Research and development 5,830 4,589 1,777 - 7,607 4,589
    General & administrative 3,458 3,108 2,118 - 5,576 3,108
    Operating expenses 12,979 10,991 4,565 - 17,544 10,991
    Operating profit 7,901 6,909 376 - 8,277 6,909
    Operating Margin 34% 34% 4% -% 26% 34%
    Acquisition related expenses - - 186 - 186 -
    Amortization of acquired intangible assets 575 19 89 - 664 19
    Stock based compensation 922 1,721 - - 922 1,721
    Adjusted operating profit (1) 9,398 8,649 651 - 10,049 8,649
    Adjusted Operating Margin (1) 40% 43% 7% -% 31% 43%
                 
    Net income (loss) 7,365 5,226 (136) - 7,229 5,226
    Adjusted EBITDA (1) 9,353 8,520 866 - 10,219 8,520
    Adjusted EBITDA Margin (1) 40% 42% 10% -% 32% 42%
                 
    Earnings per share – basic         0.09 0.07
    Free cash flow per share – basic (1)         0.12 0.07
                 

    (1) Non-IFRS financial measures are defined in the “Non-IFRS Financial Measures” section.

    Year ended March 31 CMG BHV
    Consolidated
    ($ thousands, except per share data) 2024 2023 2024 2023 2024 2023
                 
    Annuity/maintenance licenses 68,537 59,690 2,993 - 71,530 59,690
    Annuity license fee - - 5,146 - 5,146 -
    Perpetual licenses 5,739 3,240 - - 5,739 3,240
    Total software license revenue 74,276 62,930 8,139 - 82,415 62,930
    Professional services 13,618 10,916 12,646 - 26,264 10,916
    Total revenue 87,894 73,846 20,785 - 108,679 73,846
    Total revenue growth 19% 12%     47% 12%
    Annuity/maintenance licenses growth 15% 12%     20% 12%
                 
    Cost of revenue 8,858 7,481 8,366 - 17,224 7,481
    Operating expenses            
    Sales & marketing 13,787 9,968 1,170 - 14,957 9,968
    Research and development 19,870 17,857 3,809 - 23,679 17,857
    General & administrative 14,234 12,680 4,601 - 18,835 12,680
    Operating expenses 47,891 40,505 9,580 - 57,471 40,505
    Operating profit 31,145 25,860 2,839 - 33,984 25,860
    Operating Margin 35% 35% 14% -% 31% 35%
    Acquisition related expenses 719 - 737 - 1,456 -
    Amortization of acquired intangible assets 1,322 19 179 - 1,501 19
    Restructuring charge - 3,943 - - - 3,943
    Stock based compensation 6,292 3,317 - - 6,292 3,317
    Adjusted operating profit (1) 39,478 33,139 3,755 - 43,233 33,139
    Adjusted Operating Margin (1) 45% 45% 18% -% 40% 45%
                 
    Net income 24,610 19,797 1,649 - 26,259 19,797
    Adjusted EBITDA (1) 39,469 33,229 3,688 - 43,157 33,229
    Adjusted EBITDA Margin (1) 45% 45% 18% -% 40% 45%
                 
    Earnings per share – basic         0.32 0.25
    Free cash flow per share – basic (1)         0.44 0.27
                 

    (1) Non-IFRS financial measures are defined in the “Non-IFRS Financial Measures” section.

    NON-IFRS FINANCIAL MEASURES AND RECONCILIATION OF NON-IFRS MEASURES

    Free Cash Flow Reconciliation to Funds Flow from Operations

    Free cash flow is a non-IFRS financial measure that is calculated as funds flow from operations less capital expenditures and repayment of lease liabilities. Free Cash Flow per share is calculated by dividing free cash flow by the number of weighted average outstanding shares during the period. Management believes that this measure provides useful supplemental information about operating performance and liquidity, as it represents cash generated during the period, regardless of the timing of collection of receivables and payment of payables, which may reduce comparability between periods. Management uses free cash flow and free cash flow per share to help measure the capacity of the Company to pay dividends and invest in business growth opportunities.

      Fiscal 2023
    Fiscal 2024
    ($ thousands, unless otherwise stated) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
    Funds flow from operations 4,558 4,974 8,169 7,656 7,920 11,491 8,477 10,367
    Capital expenditures(1) - (130) (211) (1,707) (45) (51) (459) (95)
    Repayment of lease liabilities (303) (339) (413) (553) (412) (412) (728) (803)
    Free Cash Flow 4,255 4,505 7,545 5,396 7,463 11,028 7,290 9,469
    Weighted average shares – basic (thousands) 80,335 80,412 80,511 80,603 80,685 80,834 81,067 81,314
    Free Cash Flow per share - basic 0.05 0.06 0.09 0.07 0.09 0.14 0.09 0.12


    ($ thousands, unless otherwise stated) March 31, 2024 March 31, 2023 March 31, 2022
    Funds flow from operations 38,255 25,357 23,842
    Capital expenditures (1) (650) (2,048) (703)
    Repayment of lease liabilities (2,355) (1,608) (1,356)
    Free Cash Flow 35,250 21,701 21,783
    Weighted average shares – basic (thousands) 80,975 80,464 80,316
    Free Cash Flow per share - basic 0.44 0.27 0.27

    (1) Capital expenditures include cash consideration for USI acquisition in 2023.

    Free Cash Flow has increased by 75% and 62%, respectively for the three months and year ended March 31, 2024 from the same periods of the previous fiscal year. These increases are primarily due to increases in net income in fiscal 2024 and an income tax deduction of approximately $4.6 million as a result of the acquisition of BHV’s intellectual property. Additionally, there has been a decrease in capital expenditures in the current year as a result of the acquisition of assets from Unconventional Subsurface Integration LLC (“USI”) in Q4 2023. This is partially offset in the current year due to increased repayment of lease liabilities as a result of the acquisition of BHV office leases.

    Adjusted EBITDA and Adjusted EBITDA Margin

      CMG
    BHV Consolidated
    Three months ended March 31 2024 2023 2024 2023 2024 2023
    ($ thousands)            
                 
    Net income (loss) 7,365 5,226 (136) - 7,229 5,226
    Add (deduct):            
    Depreciation and amortization 1,573 916 578 - 2,151 916
    Stock-based compensation 922 1,722 - - 922 1,722
    Acquisition related expenses - - 186 - 186 -
    Income and other tax expense 1,587 1,901 348 - 1,935 1,901
    Interest income (639) (705) (19) - (658) (705)
    Foreign exchange loss (gain) (863) 13 120 - (743) 13
    Repayment of lease liabilities (592) (553) (211) - (803) (553)
    Adjusted EBITDA (1) 9,353 8,520 866 - 10,219 8,520
    Adjusted EBITDA Margin (1) 40% 42% 10% - 32% 42%

    (1) This is a non-IFRS financial measure. Refer to definition of the measures above.

      CMG BHV
    Consolidated
    Year ended March 31 2024 2023 2024 2023 2024 2023
    ($ thousands)            
                 
    Net income 24,610 19,797 1,649 - 26,259 19,797
    Add (deduct):         -  
    Depreciation and amortization 4,997 3,649 691 - 5,688 3,649
    Stock-based compensation 6,292 3,317 - - 6,292 3,317
    Acquisition related expenses 719 - 737 - 1,456 -
    Restructuring charges - 3,943 - - - 3,943
    Income and other tax expense 7,875 6,851 1,088 - 8,963 6,851
    Interest income (3,073) (1,810) (23) - (3,096) (1,810)
    Foreign exchange loss (gain) (111) (910) 61 - (50) (910)
    Repayment of lease liabilities (1,840) (1,608) (515) - (2,355) (1,608)
    Adjusted EBITDA (1) 39,469 33,229 3,688 - 43,157 33,229
    Adjusted EBITDA Margin (1) 45% 45% 18% - 40% 45%

    (1) This is a non-IFRS financial measure. Refer to definition of the measures above.

    Adjusted EBITDA Margin for the three months and year ended March 31, 2024, was 32% and 40%, respectively, a decrease from the same periods of the previous fiscal year. Adjusted EBITDA Margins which were 42% and 45%, respectively, for the three months and year ended March 31, 2024.

    CMG’s Adjusted EBITDA Margin is 40% for the three months ended March 31, 2024, compared to 42% in the prior year comparative quarter, primarily due to an increase in operating expenses as a result of an increase in headcount and headcount related costs and other corporate costs. Refer to the “Operating Expenses” section of the MD&A for further detail on the increase in operating expenses by category. CMG’s Adjusted EBITDA Margin for the year ended March 31, 2024 was 45%, which was consistent with the prior year.

    BHV’s Adjusted EBITDA Margin is 10% and 18%, respectively, for the three months and year ended March 31, 2024. The recognition of annuity license fees as a result of contract renewals in the third and fourth quarters had a positive effect on Adjusted EBITDA. We expect that Adjusted EBITDA will fluctuate on a quarterly basis as a result of annuity license fee revenue recognition which is skewed towards the last two quarters of the fiscal year.

    Consolidated Statements of Financial Position

    (thousands of Canadian $) March 31, 2024 March 31, 2023
         
    Assets    
    Current assets:    
    Cash 63,083 66,850
    Restricted cash 142 -
    Trade and other receivables 36,550 23,910
    Prepaid expenses 2,321 1,060
    Prepaid income taxes 3,841 444
      105,937 92,264
    Intangible assets 23,683 1,321
    Right-of-use assets 29,072 30,733
    Property and equipment 9,877 10,366
    Goodwill 3,745 -
    Deferred tax asset 59 2,444
    Total assets 172,373 137,128
         
    Liabilities and shareholders’ equity    
    Current liabilities:    
    Trade payables and accrued liabilities 16,582 9,883
    Income taxes payable 1,604 33
    Acquisition holdback payable 2,292 -
    Deferred revenue 41,120 34,797
    Lease liabilities 2,566 1,829
      64,164 46,542
    Lease liabilities 34,395 36,151
    Stock-based compensation liabilities 2,593 1,985
    Acquisition earnout 1,503 -
    Other long-term liabilities 305 -
    Deferred tax liabilities 1,598 -
    Total liabilities 104,558 84,678
         
    Shareholders’ equity:    
    Share capital 87,304 81,820
    Contributed surplus 15,667 15,471
    Cumulative translation adjustment (367) -
    Deficit (34,789) (44,841)
    Total shareholders’ equity 67,815 52,450
    Total liabilities and shareholders' equity 172,373 137,128
         

    Consolidated Statements of Operations and Comprehensive Income

       
    Years ended March 31,
    (thousands of Canadian $ except per share amounts)
    2024
    2023
         
    Revenue
    Cost of revenue
    108,679
    17,224
    73,846
    7,481
    Gross profit 91,455 66,365
         
    Operating expenses    
    Sales and marketing 14,957 9,968
    Research and development 23,679 17,857
    General and administrative 18,835 12,680
      57,471 40,505
    Operating profit 33,984 25,860
         
    Finance income 3,146 2,720
    Finance costs (1,908) (1,932)
    Profit before income and other taxes 35,222 26,648
    Income and other taxes 8,963 6,851
         
    Net income 26,259 19,797
         
    Other comprehensive income:    
    Foreign currency translation adjustment (367) -
    Other comprehensive income (367) -
    Total comprehensive income 25,892 19,797
         
    Net income per share – basic 0.32 0.25
    Net income per share – diluted 0.32 0.24
    Dividend per share 0.20 0.20
         

    Consolidated Statements of Cash Flows

       
    Years ended March 31,
    (thousands of Canadian $)
    2024 2023
         
    Operating activities    
    Net income 26,259 19,797
    Adjustments for:    
    Depreciation and amortization of property, equipment, right-
    of use assets
    4,187 3,649
    Amortization of intangible assets 1,501 -
    Deferred income tax expense (recovery) 3,518 (235)
    Stock-based compensation 2,795 2,146
    Foreign exchange and other non-cash items (5) -
    Funds flow from operations 38,255 25,357
    Movement in non-cash working capital:    
    Trade and other receivables (6,697) (6,403)
    Trade payables and accrued liabilities 2,618 2,315
    Prepaid expenses and other assets (1,183) (268)
    Income taxes receivable (payable) (1,826) 535
    Deferred revenue 4,910 4,343
    Change in non-cash working capital (2,178) 522
    Net cash provided by operating activities 36,077 25,879
         
    Financing activities    
    Repayment of acquired line of credit (2,012) -
    Proceeds from issuance of common shares 4,193 1,066
    Repayment of lease liabilities (2,355) (1,608)
    Dividends paid (16,207) (16,099)
    Net cash used in financing activities (16,381) (16,641)
         
    Investing activities    
    Corporate acquisition, net of cash acquired (22,814) -
    Intangible asset additions - (1,340)
    Property and equipment additions, net of disposals (650) (708)
    Net cash used in investing activities (23,464) (2,048)
         
    Increase (decrease) in cash (3,768) 7,190
    Effect of foreign exchange on cash 1 -
    Cash, beginning of year 66,850 59,660
    Cash, end of year 63,083 66,850
         
    Supplementary cash flow information    
    Interest received 3,096 1,810
    Interest paid 1,908 1,932
    Income taxes paid 7,201 6,635
         

    CORPORATE PROFILE

    CMG Group (TSX:CMG) is a global software and consulting company that combines science and technology with deep industry expertise to solve complex subsurface and surface challenges for the new energy industry around the world. The Company is headquartered in Calgary, AB, with offices in Houston, Oxford, Dubai, Bogota, Rio de Janeiro, Bengaluru, and Kuala Lumpur. For more information, please visit www.cmgl.ca.

    QUARTERLY FILINGS AND RELATED QUARTERLY FINANCIAL INFORMATION

    Management’s Discussion and Analysis (“MD&A”) and consolidated financial statements and the notes thereto for the three months and year ended March 31, 2024 can be obtained from our website www.cmgl.ca. The documents will also be available under CMG Group’s SEDAR+ profile www.sedarplus.ca.

    For further information, please contact:    
         
    Pramod Jain   Sandra Balic
    Chief Executive Officer   Vice President, Finance & CFO
    (403) 531-1300   (403) 531-1300
    pramod.jain@cmgl.ca   sandra.balic@cmgl.ca
         
    For investor inquiries, please contact:    
    Kim MacEachern    
    Director, Investor Relations    
    cmg-investors@cmgl.ca    
         
    For media inquiries, please contact:    
    marketing@cmgl.ca    
         

    Cautionary Note Regarding Forward-Looking Statements

    This press release contains "forward-looking statements". Forward-looking statements can be identified by words such as: "anticipate", "intend", "plan", "goal", "seek", "believe", "project", "estimate", "expect", "strategy", "future", "likely", "may", "should", "will", and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding the benefits of the acquired technology, the ongoing development thereof; and the ability of data analytics to improve efficiency, cut costs and reduce risks.

    Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are detailed in the companies’ public filings.

    Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by applicable securities laws, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.





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    Computer Modelling Group Announces Year-End Results CALGARY, Alberta, May 22, 2024 (GLOBE NEWSWIRE) - Computer Modelling Group Ltd. (“CMG Group” or the “Company”) announces its financial results for the three months and year ended March 31, 2024. As a result of CMG Group’s acquisition of BHV on …