Click to edit Master title style FY19 Earnings Presentation For Quarter and Year Ended March 31, 2019 Presented By Craig Campbell, CEO | July 2019
Disclaimer mer and nd Forw rward rd Look ooking g Stat atement ements This presentation may contain “forward - looking information” within the meaning of applicable securities legislation. Generally, forward-looking information can be identified by the use of forward- looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “ doe s not anticipate”, or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. In particular, this presentation contains stat eme nts regarding: potential acquisition targets of Avante Logixx Inc. (“Avante”); the ability of Avante to execute on its strategic plan and acquisition strategy; the estimated transaction models for future acquisition; and the estimated potential va lue creation and total shareholder returns which management believes may be realized by Avante’s acquisition strategy. All such forward-looking information is based on certain assumptions and analyses which management of Avante believes to be reasonable in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that management believes to be appropriate in the circumstances. Such assumptions include: trends in the physical security industry; the ability of Avante to raise capital on acceptable terms; general and administrative expenses and interest expenses; Avante’s ability to maintain existing customer, sup plier and partner relationships; the ability of Avante’s management team to execute Avante’s business strategy, and other matters. Statements containing forward-looking information are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Avante to be materially different from those expressed or implied by any statements containing forward-looking information. The risks, uncertainties and other factors are difficult to predict and may include, without limitation, risks relating to: general economic conditions; industry conditions; the ability of Avante to raise capital; operating risks; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by Avante, and other factors, many of which are beyond Avante’s control. T he foregoing factors are not exhaustive. Although Avante has attempted to identify important factors that could cause actual results to differ materially from those statements containing forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Avante does not undertake to update any statements containing forward-looking information, except in accordance with applicable securities laws. Any “financial outlook” or “future - oriented financial information” in this presentation, as defined by applicable securities leg islation, has been approved by management of Avante. Such financial outlook or future-oriented financial information is provided for the purpose of providing information about management’s current expectations and plans relating t o the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Any data, graphs or information in this presentation that have been compiled by, or drawn from, a third party has been credited to that third party and Avante does not take responsibility for the accuracy of such information. This presentation is for information purposes only and is not intended to, and should not be construed to constitute, an offer t o sell or the solicitation of an offer to buy, Avante’s securities. This presentation and its contents should not be construed, under any circumstances, as investment, tax or legal advice. Any person viewing or accepting delivery of this present ation acknowledges the need to conduct their own thorough investigation into Avante’s business and its activities before considering any investment in Avante’s securities. Among other things, investors should review Avante’s pub lic filings which are available in Canada at www.sedar.com. Non-IFRS Financial Measures This presentation includes certain measures which have not been prepared in accordance with IFRS such as EBITDA, Adjusted EBITDA. 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, share-based payments, acquisition, integration and / or reorganization costs, expensing of CWL fair value adjustment per IFRS less non-controlling int erest’s share. Neither EBITDA nor Adjusted EBITDA is an earnings measure recognized by International Financial Reporting Standards (“IFRS”) and do not have a standardized meaning prescribed by IFRS. Management believes that Ad jus ted 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 issu ers and, accordingly, Avante’s Adjusted EBITDA may not be comparable to similar measures used by other issuers. 2
We are the leading ading provi ovider der of techn chnolog ology y enab able led d security curity servi vices ces. We acqu cquire, re, manag anage e and nd build ld industry dustry leading ading busi sines nesses es whic ich h provi ovide de speci ecial alize zed, mission ion-cri critica tical solution utions that at addr ddres ess the e securi curity y risks ks of our custo stome mers. rs.
Agen enda da Click to edit Master title style Focused Execution 09 Around Strategic Priorities 12 Fiscal 2019 Financial Highlights 21 Acquisition Focused 4
Company ny Overv rview • Avante Logixx Inc. (TSXV: XX) is a leading provider of security solutions to enterprise and residential clients through its operating platfo atform rms (Avante Security Inc., CityWide Locksmiths, ADH Hardware, and Logixx Security Inc. 1 ) • Avante is a progressive, growth-orientated company building a diversified security platform through multiple acqui quisiti tions ns and d orga gani nic grow rowth • Avante current has operations across Southern Ontario and Manitoba with intentions to expand nationally over the next few years through acquisition and organic expansion Target 2023 Adjusted EBITDA of $30M 0M; • Plan to deploy $200M 00M of capital through debt • and equity; Focused on accretive acquisitions • contributing to high single-digit growth in Adjusted net income per share; Aligned management team; • Disciplined management team with security • industry and acquisition expertise. 1. Logixx Security Inc. was announced on July 4, 2019. Avante intends to combine the operations of Intelligarde International Inc. and Veridin Systems Canada to create a leading full-service enterprise security solution provider 5
Platf tform orm at a G Glance ce Revenue Gross ss Profit $9,575 75 $8,287 87 $32,081 $6,825 25 $20,898 $23,337 $5,303 3 78 $3,880 80 $14,581 $3,578 $10,026 $8,938 $2,342 42 $6,746 FY13 FY14 FY15 FY16 FY17 FY18 FY19* FY FY13 13 FY14 FY 14 FY15 FY 15 FY FY16 16 FY17 FY 17 FY18 FY 18 FY19* FY 19* Trading Summar ary y – FY19 Enterp rprise se Value Ticke ker TSXV: V: XX $2.5 12,000 Thousands 10,000 $2.0 Share Pric ice @ March h 31, 2019 $1.36 8,000 $1.5 Volume Price 6,000 $1.0 21,192,005 Shares Outstanding (Diluted) 4,000 $28,821 821 $0.5 Marke ket Cap 2,000 Total Debt 1 $3,828 $0.0 - $2,176 Cash Balance Minority Interest $526 Volume Close Enterpris ise Value lue $30,999 999 All numbers in thousands of CAD except shares outstanding 1. Total Debt = bank indebtedness and vehicle loans + obligations under finance lease, + long term portion of bank indebtedness and vehicle loans 6
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