Lumine Group Inc. Announces Results for the Three and Six Months Ended June 30, 2024
The following press release should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements for the three and six months ended
Q2 2024 Headlines:
- Revenue grew 25% to
$162.8 million compared to$129.9 million in the same quarter prior year (including -12% organic growth after adjusting for foreign exchange impacts). - The Company generated operating income of
$36.6 million during the quarter, a 1% increase from$36.4 million in the same quarter prior year. - The Company generated a net loss of
$2.2 million during the quarter, from net loss of$489.1 million in the same quarter prior year. - Cash flows from operations ("CFO") decreased
$12.4 million to$10.0 million compared to$22.4 million in Q2 2023, representing a decrease of 55%. - Free cash flow available to shareholders ("FCFA2S") decreased
$14.5 million to$2.8 million compared to$17.3 million in Q2 2023, representing a decrease of 84%.
Year-to-Date Q2 2024 Headlines:
- Revenue grew 35% to
$303.9 million compared to$225.3 million in the same six-month period prior year (including -8% organic growth after adjusting for foreign exchange impacts). - The Company generated operating income of
$81.1 million in the six-month period endedJune 30, 2024 , an increase of 40% from$58.0 million in the same period prior year. - An expense of
$317.4 million was incurred in the six-month period endedJune 30, 2024 up to the Mandatory Conversion Date,$298.7 million is related to the mark to market adjustments on the fair value of thePreferred and Special Securities and$18.7 million is related to the dividend payable. Fair value of the preferred and special securities is primarily dependent on the price movement of the Company's Subordinate Voting Shares. - The Company generated a net loss of
$306.6 million during the six-month period endedJune 30, 2024 , from net loss of$1,140.7 million in the same period prior year. The net loss is primarily related to the redeemable preferred and special securities expense in 2023. - CFO increased
$7.7 million to$45.0 million compared to$37.4 million in the six-month period endedJune 30, 2023 , representing an increase of 21%. - FCFA2S increased
$2.6 million to$31.5 million compared to$29.0 million in the six-month period endedJune 30, 2023 , representing an increase of 9%.
Total revenue for the three months ended
Operating income for the three months ended
Net loss for the three months ended
For the three months ended
For the six months ended
For the three months ended
Non-IFRS Measures
Operating income (loss) refers to income (loss) before income taxes, amortization of intangible assets, redeemable Preferred and Special Share expense, and finance and other expenses (income). We believe that operating income is useful supplemental information as it provides an indication of the profitability of the Company related to its core operations. Operating income (loss) is not a recognized measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Accordingly, readers are cautioned that operating income (loss) should not be construed as an alternative to net income (loss).
The following table reconciles operating income to net income:
|
Three months ended
|
Six months ended
|
||
|
2024 |
2023 |
2024 |
2023 |
Net income (loss) |
(2.2) |
(489.1) |
(306.6) |
(1,140.7) |
Adjusted for: |
|
|
|
|
Amortization of intangible assets |
29.2 |
21.5 |
52.0 |
36.3 |
Redeemable preferred and special securities expense |
- |
496.6 |
317.4 |
1,151.2 |
Finance and other expense (income) |
5.7 |
4.3 |
10.0 |
6.3 |
Income tax expense (recovery) |
3.9 |
3.1 |
8.3 |
4.9 |
Operating income (loss) |
36.6 |
36.4 |
81.1 |
58.0 |
Free cash flow available to shareholders ''FCFA2S'' refers to net cash flows from operating activities less interest paid on lease obligations, interest paid on bank debt, transaction costs on bank debt, repayments of lease obligations, dividends paid to redeemable preferred and special securities holders, and property and equipment purchased. The Company believes that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if
FCFA2S is not a recognized measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Accordingly, readers are cautioned that FCFA2S should not be construed as an alternative to net cash flows from operating activities.
The following table reconciles FCFA2S to net cash flows from operating activities:
|
Three months ended |
Six months ended |
||
|
2024 |
2023 |
2024 |
2023 |
Net cash flows from operating activities: |
10.0 |
22.4 |
45.0 |
37.4 |
Adjusted for: |
|
|
|
|
Interest paid on lease obligations |
(0.1) |
(0.2) |
(0.3) |
(0.3) |
Interest paid on other facilities |
(5.1) |
(3.2) |
(7.6) |
(3.6) |
Credit facility transaction costs |
(0.2) |
0.0 |
(1.8) |
(1.8) |
Payment of lease obligations |
(1.5) |
(1.5) |
(3.0) |
(2.4) |
Property and equipment purchased |
(0.4) |
(0.2) |
(0.7) |
(0.4) |
Free cash flow available to shareholders |
2.8 |
17.3 |
31.5 |
29.0 |
Forward Looking Statements
Certain statements herein may be "forward looking" statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of
About
Neither
Condensed Consolidated Interim Statements of Financial Position
(In thousands of USD. Due to rounding, numbers presented may not foot.)
Unaudited
|
|
|
|
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
Cash |
$ 167,773 |
$ 146,509 |
Accounts receivable, net |
127,329 |
104,955 |
Unbilled revenue, net |
49,828 |
39,858 |
Inventories |
561 |
521 |
Other assets |
46,780 |
46,377 |
|
392,271 |
338,220 |
|
|
|
Non-current assets: |
|
|
Property and equipment |
7,138 |
4,164 |
Right of use assets |
9,060 |
11,973 |
Deferred income taxes |
6,371 |
6,197 |
Other assets |
11,518 |
13,063 |
Intangible assets and goodwill |
845,525 |
762,665 |
|
879,612 |
798,062 |
|
|
|
Total assets |
$ 1,271,883 |
$ 1,136,282 |
|
|
|
Liabilities and Equity |
|
|
|
|
|
Current liabilities: |
|
|
Accounts payable and accrued liabilities |
$ 100,821 |
$ 97,533 |
Due to related parties, net |
1,529 |
2,380 |
Current portion of bank debt |
2,166 |
3,071 |
Deferred revenue |
97,110 |
91,726 |
Acquisition holdback payables |
318 |
319 |
Lease obligations |
6,073 |
6,358 |
Income taxes payable |
11,702 |
12,436 |
|
- |
4,469,996 |
|
219,720 |
4,683,819 |
|
|
|
Non-current liabilities: |
|
|
Deferred income taxes |
115,341 |
124,878 |
Bank debt |
288,818 |
149,636 |
Lease obligations |
4,079 |
6,921 |
Other liabilities |
9,684 |
12,995 |
|
417,922 |
294,430 |
|
|
|
Total liabilities |
637,641 |
4,978,249 |
|
|
|
Equity: |
|
|
Capital stock |
490,669 |
- |
Contributed surplus |
185,142 |
(1,015,661) |
Accumulated other comprehensive income (loss) |
(10,896) |
(6,296) |
Retained earnings (deficit) |
(30,673) |
(2,820,010) |
|
634,242 |
(3,841,967) |
|
|
|
Subsequent events |
|
|
|
|
|
Total liabilities and equity |
$ 1,271,883 |
$ 1,136,282 |
Condensed Consolidated Interim Statements of Income (Loss)
(In thousands of USD, except per share amounts. Due to rounding, numbers presented may not foot.)
Unaudited
|
Three months ended |
Six months ended |
|||||
|
2024 |
2023 |
2024 |
2023 |
|||
|
|
|
|
|
|||
Revenue |
|
|
|
|
|||
License |
$ 11,687 |
$ 11,094 |
$ 23,407 |
$ 21,743 |
|||
Professional services |
28,909 |
23,440 |
53,842 |
40,267 |
|||
Hardware and other |
2,326 |
4,728 |
4,743 |
9,336 |
|||
Maintenance and other recurring |
119,903 |
90,623 |
221,932 |
153,920 |
|||
|
162,825 |
129,885 |
303,924 |
225,266 |
|||
Expenses |
|
|
|
|
|||
Staff |
87,704 |
71,285 |
160,733 |
119,904 |
|||
Hardware |
1,418 |
3,132 |
2,938 |
6,451 |
|||
Third party license, maintenance and professional services |
11,867 |
8,050 |
20,406 |
12,785 |
|||
Occupancy |
975 |
789 |
1,871 |
1,566 |
|||
Travel, telecommunications, supplies, software and equipment |
12,751 |
5,214 |
19,508 |
9,886 |
|||
Professional fees |
5,655 |
2,919 |
8,487 |
10,232 |
|||
Other, net |
3,509 |
(94) |
4,455 |
2,688 |
|||
Depreciation |
2,337 |
2,195 |
4,452 |
3,705 |
|||
Amortization of intangible assets |
29,211 |
21,481 |
52,032 |
36,317 |
|||
|
155,427 |
114,971 |
274,882 |
203,535 |
|||
|
|
|
|
|
|||
|
- |
496,588 |
317,362 |
1,151,203 |
|||
Finance and other expenses (income) |
5,698 |
4,332 |
9,970 |
6,257 |
|||
|
5,698 |
500,920 |
327,332 |
1,157,460 |
|||
|
|
|
|
|
|||
Income (loss) before income taxes |
1,700 |
(486,006) |
(298,290) |
(1,135,729) |
|||
|
|
|
|
|
|||
Current income tax expense (recovery) |
9,209 |
10,649 |
17,555 |
18,162 |
|||
Deferred income tax expense (recovery) |
(5,274) |
(7,557) |
(9,272) |
(13,227) |
|||
Income tax expense (recovery) |
3,935 |
3,092 |
8,283 |
4,935 |
|||
|
|
|
|
|
|||
Net income (loss) |
$ (2,235) |
$ (489,098) |
$ (306,573) |
$ (1,140,664) |
|||
|
|
|
|
|
|||
Weighted average shares outstanding: |
|
|
|
|
|||
Basic |
256,620,388 |
74,008,247 |
171,366,154 |
70,914,357 |
|||
Diluted |
256,620,388 |
253,106,712 |
254,978,572 |
236,914,312 |
|||
|
|
|
|
|
|||
Earnings per share: |
|
|
|
|
|||
Basic and diluted |
$ (0.01) |
$ (6.61) |
$ (1.79) |
$ (16.09) |
|||
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
(In thousands of USD. Due to rounding, numbers presented may not foot.)
Unaudited
|
Three months ended |
Six months ended |
||
|
2024 |
2023 |
2024 |
2023 |
|
|
|
|
|
Net income (loss) |
$ (2,235) |
$ (489,098) |
$ (306,573) |
|
|
|
|
|
|
Items that are or may be reclassified subsequently to net income (loss): |
|
|
|
|
|
|
|
|
|
Foreign currency translation differences from foreign operations and other |
5,321 |
(900) |
(4,600) |
(311) |
|
|
|
|
|
Other comprehensive (loss) income for the year, net of income tax |
5,321 |
(900) |
(4,600) |
(311) |
|
|
|
|
|
Total comprehensive income (loss) for the year |
$ 3,086 |
$ (489,998) |
$ (311,173) |
|
Condensed Consolidated Interim Statement of Changes in Equity
(In thousands of USD. Due to rounding, numbers presented may not foot.)
Unaudited
Six months ended |
|
|
|
|
|
|
Capital stock |
Contributed |
Accumulated other |
Retained |
Total equity |
|
|
|
|
|
|
Balance at |
$ - |
$ (1,015,661) |
$ (6,296) |
$ (2,820,010) |
$ (3,841,967) |
|
|
|
|
|
|
Total comprehensive income (loss) for the period: |
|
|
|
|
|
Net income (loss) |
- |
- |
- |
(306,573) |
(306,573) |
|
|
|
|
|
|
Other comprehensive income (loss): |
|
|
|
|
|
Foreign currency translation differences from foreign operations and other |
- |
- |
(4,600) |
- |
(4,600) |
Total other comprehensive income (loss) for the period |
- |
- |
(4,600) |
- |
(4,600) |
|
|
|
|
|
|
Total comprehensive income (loss) for the period |
- |
- |
(4,600) |
(306,573) |
(311,173) |
|
|
|
|
|
|
Mandatory Conversion of Special and Preferred Shares |
87,368 |
- |
- |
- |
87,368 |
Settlement of Preferred and Special Share Dividends in Subordinate Voting Shares |
403,301 |
1,200,803 |
- |
3,095,910 |
4,700,014 |
Balance at |
$ 490,669 |
$ 185,142 |
$ (10,896) |
$ (30,673) |
$ 634,242 |
Condensed Consolidated Interim Statement of Changes in Equity
(In thousands of USD. Due to rounding, numbers presented may not foot.)
Unaudited |
|
|
|
|
|
|
||
Six months ended |
|
|
|
|
|
|
||
|
Capital stock |
Contributed |
Accumulated other |
Retained |
Total equity |
|||
|
|
|
|
|
|
|||
Balance at |
$ - |
$ 162,692 |
$ (8,912) |
$ - |
$ 153,780 |
|||
|
|
|
|
|
|
|||
Total comprehensive income (loss) for the period: |
|
|
|
|
|
|||
Net income (loss) |
- |
- |
- |
(1,140,664) |
(1,140,664) |
|||
|
|
|
|
|
|
|||
Other comprehensive income (loss): |
|
|
|
|
|
|||
Foreign currency translation differences from foreign operations and other |
- |
- |
(311) |
- |
(311) |
|||
|
|
|
|
|
|
|||
Total other comprehensive income (loss) for the period |
- |
- |
(311) |
- |
(311) |
|||
|
|
|
|
|
|
|||
Total comprehensive income (loss) for the period |
- |
- |
(311) |
(1,140,664) |
(1,140,975) |
|||
|
|
|
|
|
|
|||
Transactions with Parent, recorded directly in equity |
|
|
|
|
|
|||
Capital contributions by Parent |
- |
22,451 |
- |
- |
22,451 |
|||
Amalgamation with |
- |
(1,200,803) |
- |
- |
(1,200,803) |
|||
Special Share conversion |
- |
- |
- |
4,040 |
4,040 |
|||
|
|
|
|
|
|
|||
Balance at |
$ - |
$ (1,015,660) |
$ (9,223) |
|
|
|||
|
|
|
|
|
|
|
|
|
Condensed Consolidated Interim Statements of Cash Flows
(In thousands of USD. Due to rounding, numbers presented may not foot.)
Unaudited |
|
|
|
|
|
Three months ended |
Six months ended |
||
|
2024 |
2023 |
2024 |
2023 |
|
|
|
|
|
Cash flows from (used in) operating activities: |
|
|
|
|
Net income (loss) |
$ (2,235) |
$ (489,098) |
$ (306,573) |
$ (1,140,664) |
Adjustments for: |
|
|
|
|
Depreciation |
2,337 |
2,195 |
4,452 |
3,705 |
Amortization of intangible assets |
29,211 |
21,481 |
52,032 |
36,317 |
Contingent consideration adjustments |
915 |
(3,149) |
958 |
(2,478) |
|
- |
496,588 |
317,362 |
1,151,203 |
Finance and other expenses (income) |
5,698 |
4,332 |
9,970 |
6,257 |
Income tax expense (recovery) |
3,935 |
3,092 |
8,283 |
4,935 |
Change in non-cash operating assets and liabilities exclusive of effects of business combinations |
(26,134) |
(6,355) |
(34,127) |
(10,388) |
Income taxes (paid) received |
(3,680) |
(6,679) |
(7,317) |
(11,512) |
Net cash flows from (used in) operating activities |
10,047 |
22,407 |
45,040 |
37,375 |
|
|
|
|
|
Cash flows from (used in) financing activities: |
|
|
|
|
Interest paid on lease obligations |
(130) |
(167) |
(284) |
(259) |
Interest paid on bank debt |
(5,130) |
(3,249) |
(7,602) |
(3,591) |
Cash transferred from (to) Parent |
118 |
(7,165) |
(1,990) |
(11,835) |
Proceeds from issuance of bank debt |
50,500 |
- |
140,500 |
175,000 |
Repayments of bank debt |
(244) |
(410) |
(488) |
(654) |
Transaction costs on bank debt |
(194) |
- |
(1,849) |
(1,771) |
Payments of lease obligations |
(1,468) |
(1,525) |
(3,034) |
(2,365) |
Issuance of Preferred Shares to Parent |
- |
- |
- |
181,484 |
Dividends paid |
- |
(12) |
- |
(12) |
Net cash flows from (used in) in financing activities |
43,452 |
(12,528) |
125,253 |
335,997 |
|
|
|
|
|
Cash flows from (used in) investing activities: |
|
|
|
|
Acquisition of businesses |
(144,325) |
- |
(144,325) |
(314,760) |
Cash obtained with acquired businesses |
- |
- |
- |
33,965 |
Post-acquisition settlement payments, net of receipts |
- |
(2,307) |
(685) |
(2,669) |
Property and equipment purchased |
(363) |
(180) |
(724) |
(421) |
Other investing activities |
(271) |
(657) |
(265) |
(657) |
Net cash flows from (used in) investing activities |
(144,959) |
(3,143) |
(145,999) |
(284,542) |
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency on cash and cash equivalents |
(554) |
(314) |
(3,030) |
(12) |
|
|
|
|
|
Increase (decrease) in cash |
(92,014) |
6,422 |
21,264 |
88,818 |
|
|
|
|
|
Cash, beginning of period |
259,787 |
149,481 |
146,509 |
67,085 |
|
|
|
|
|
Cash, end of period |
$ 167,773 |
$ 155,903 |
$ 167,773 |
$ 155,903 |
SOURCE