Real Matters Overview November 2017 Jason Smith Chief Executive - - PowerPoint PPT Presentation

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Real Matters Overview November 2017 Jason Smith Chief Executive - - PowerPoint PPT Presentation

Real Matters Overview November 2017 Jason Smith Chief Executive Officer Bill Herman Chief Financial Officer Caution Regarding Forward-Looking Statements This presentation contains forward-looking statements that relate to our current


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Real Matters Overview

November 2017

Jason Smith Chief Executive Officer Bill Herman Chief Financial Officer

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This presentation contains forward-looking statements that relate to our current expectations and views of future events including but not limited to future market share and transaction volumes. In some cases, these forward-looking statements can be identified by words or phrases such as ‘‘forecast’’, ‘‘target’’, ‘‘goal’’, ‘‘may’’, ‘‘might’’, ‘‘will’’, ‘‘expect’’, ‘‘anticipate’’, ‘‘estimate’’, ‘‘intend’’, ‘‘plan’’, ‘‘indicate’’, ‘‘seek’’, ‘‘believe’’, ‘‘predict’’, or ‘‘likely’’, or the negative of these terms, or other similar expressions intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe might affect our financial condition, results of operations, business strategy and financial needs. A comprehensive discussion of the risks that impact Real Matters can be found in the Company's Final Long Form Prospectus dated May 5, 2017 available on SEDAR at www.sedar.com. Actual results may differ materially from those indicated or underlying forward-looking statements as a result of various factors, including those described under the heading “Important Factors Affecting Results from Operations” outlined in the Strategy and Outlook section of the Company’s MD&A for the years ended September 30, 2017 and 2016. Real Matters cautions that the list of risk factors and uncertainties is not exhaustive and other factors could also adversely affect its

  • results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information

and are cautioned not to place undue reliance on such information. Information contained in forward-looking statements in this presentation is provided as of the date of this presentation and we disclaim any obligation to update any forward-looking statements, whether as a result of new information or future events or results, except to the extent required by applicable securities laws. All of the forward-looking statements made in this presentation are qualified by these cautionary statements and other cautionary statements or factors contained herein and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. No Non-GA GAAP M Measu sures This presentation makes reference to certain Non-GAAP financial measures. Real Matters prepares its financial statements in accordance with International Financial Reporting Standards ("IFRS" or “GAAP”). However, the Company considers certain non-GAAP financial measures as useful additional information in measuring its financial performance and condition. These measures, which the Company believes are widely used by investors, securities analysts and other interested parties in evaluating our performance, do not have a standardized meaning prescribed by GAAP and therefore may not be comparable to similarly titled measures presented by

  • ther publicly traded companies, nor should they be construed as an alternative to financial measures determined in accordance with
  • IFRS. Non-GAAP measures include “Adjusted EBITDA”, “Net Revenue” and “Adjusted Net Income or Loss”. See "Non-GAAP measures" in

Real Matters’ MD&A for the years ended September 30, 2017 and 2016 for a more complete description of these terms.

Caution Regarding Forward-Looking Statements

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Presenters

Jason Smith President and Chief Executive Officer Bill Herman Executive Vice President and Chief Financial Officer

  • 20+ years of experience building and leading

companies in North America

  • Founder, director and executive of one of the

largest technology providers to the North American mortgage industry

  • 20+ years of experience in finance and accounting,

and a proven track record of leadership in a public company environment

  • Former Executive Vice President and Interim Chief

Financial Officer at Progressive Waste Solutions, a multi-billion dollar North American full-service waste management company

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2015 2016 2017

Real Matters Overview

Leading Provider of Network Management Services for the Mortgage Lending and Insurance Industries

  • Platform combines proprietary technology and network management capabilities with

tens of thousands of independent Field Agents, such as residential real estate appraisers

  • Realized significant success and disrupted segments of the mortgage lending and

insurance industries

  • Clients include more than 60 of top 100 mortgage lenders in the U.S.1 and

three of the Big Five Banks in Canada

  • Provides one in 15 residential mortgage appraisals in the U.S.2
  • Recently won MSAs with five Tier 1 mortgage lenders in the U.S.
  • Adjusted EBITDA3 positive since F2012
  • Invested significantly in our technology
  • Entered title and closing market – provides opportunity to leverage our Platform

and client relationships to grow title and closing market share

Strong Market Share Growth and Financial Performance

  • 1. Based on having completed at least one transaction with Real Matters in the fiscal year ended September 30, 2017. Top 100 mortgage lenders according to Inside Mortgage Finance website: Top 100 Mortgage Lenders (twelve months ended December 31, 2016). 2. Management

estimate based on data from the MBA Mortgage Finance Forecast Report of October 24, 2017. 3. Net Revenue and Adjusted EBITDA are non-GAAP measures. See “Non-GAAP Measures” on page 2 of this Presentation. 4. Management estimates of the residential mortgage appraisal market size of calendar 2016 based on data from the MBA Mortgage Finance Forecast Report of October 24, 2017, plus management estimates of the title market size measured by written premium based data from American Land Title Association Data as of June 30, 2017. Total addressable market based on roll-out of the Company’s Next Generation Closing strategy. 5. Management estimate based on data from the MBA Mortgage Finance Forecast Report of October 24, 2017. 6. Management estimate of Residential Title Written Premium Market Share based

  • n data from the American Land Title Association as of June 30, 2017 and Demotech, Inc. for period ending December 31, 2015.

$16B

4

Large Addressable Market with Significant Runway for Growth

4

$33.7 $68.3 $92.3 $5.3 $12.8 $9.4 2015 2016 2017 Net Revenue Adjusted EBITDA 2013 2014 2015 2016 2017

17%

2017 YoY Title & Closing Market Share6 Growth 3 3

2.4% 6.5% (in $ millions) 0.2% 0.3%

30%

2017 YoY

Mortgage Appraisal Market Share5 Growth

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Investment Highlights

Best in Class Technology-Based Platform Large Addressable Market Scalable Platform with Compelling Network Effect Large Blue-Chip Client Base with Notable Recent Tier 1 Client Wins Compelling, Multi-Pronged Growth Strategy Attractive Financial Model Proven Management Team

1 2 3 4 5 6 7

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How Our Network Management Platform Works

  • 1. Based on Real Matters` actual average for a standard interior appraisal in Prince William County, VA, during Fiscal Q3 and Q4 2016 (April to September 2016). Traditional Appraisal Management Company turn times and defect rates are management estimates of average competitor

metrics based on internal market research and do not relate to any particular competitor or geographic region.

2 to 35%

Increased Client Market Share (illustrative)

1 2 4

$77 $28 $12

$355

Appraiser Fee

  • Ave. Direct Cost Per Appraisal

Cost to Serve Contribution Margin

Best Performing Appraiser

Case Study: Prince William County, Virginia1 $472

Lender Fee

Real Matters

3

Traditional AMC

Turn Time 7-9 days

5.3 days

Defect Rate 15-20%

5.6%

Real Matters

Better Performance

Case Study: Prince William County, Virginia1

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Established and Growing Blue Chip Client Base

Client Engagement Activities Request for Information Request for Proposal On-site Visits Master Services Agreement Audits Technology Integration Roll-out Plan Market Share Expansion After Deployment

Year 1 BUILD Year 2 GROW Year 3 OPTIMIZE 0-15% 35-40%

  • Blue-chip client base developed over lengthy and

complex sales cycle

  • Proven compliance and regulatory systems in place to

meet client requirements and help retain and develop key clients Up to 5 Years to get to 1st Transaction

Lengthy and Complex Sales Cycle Developed Blue Chip Client Base

29% 28% 35% 8% Tier 1 Tier 2 Tier 3 Tier 4

~7,000 Mortgage Banks, Lenders and Credit Unions 31-100 Mortgage Banks, Lenders and Credit Unions 7-30 Mortgage Banks, Lenders and Credit Unions Top 5 Banks by Asset Size and the Largest Non-Bank Mortgage Lender

Source: Inside Mortgage Finance Top 100 Mortgage Lenders List – March 31, 2017

U.S. Customer Segmentation

Real Matters clients include 60 of top 100 mortgage lenders in the U.S.1 and all Tier 1 mortgage lenders

  • 1. Based on having completed at least one transaction with Real Matters in the fiscal year ended September 30, 2017. Top 100 mortgage lenders according to Inside Mortgage Finance website: Top 100 Mortgage Lenders (12 months ended December 31, 2016).
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Track Record of Increasing Appraisal Market Share with Clients

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  • Tier 1 mortgage lenders represent approximately 30%3 of annual

spend on residential mortgage appraisals

  • Real Matters often obtains more transaction volume relative to

competitors based on its ability to outperform

  • Real Matters has historically developed long-term client relationships

and achieved a client retention rate of approximately 95%4 30%3

Recent launches with Tier 1 clients through typical cycle are expected to result in significant market share increases over the next 5 years

  • 1. Appraisal Market Share based on management estimates based on data from the MBA Mortgage Finance Forecast Report of October 24, 2017. 2. CAGR means Compound Annual Growth Rate. 3. Management estimates based on Inside Mortgage Finance website: Top 100 Mortgage

Lenders (12 months ended December 31, 2016). 4. Retention rate calculated since launch based on number of clients who have completed at least one transaction with the Company in the fiscal year ended September 30, 2017. Based on Real Matters clients on Inside Mortgage Finance website: Top 100 Mortgage Lenders (12 months ended December 31 2016).

Case Studies Appraisal Market Share

MSAs with Tier 1 Lenders Drive Growth

2013 2014 2015 2016 2017 2.4% 6.5%

5YR Target 15% to 20% 28%

Mortgage Appraisal Market Share1 CAGR2

Tier 1 Lender A Recently launched Tier 1 Lender B Tier 2 Lender A Tier 2 Lender B

0% 1.6% 3.5% 4.7% 4.7% 0 mth 1 mth 2 mth 3 mth 4 mth 2.0% 18.0% 20.0% 25.0% 29.0% 1 mth 6 mth 9 mth 12 mth 18 mth 10.0% 12.0% 25.0% 25.0% 40.0% 1 mth 6 mth 12 mth 24 mth 36 mth 1.0% 55.0% 85.0% 85.0% 85.0% 1 mth 6 mth 12 mth 24 mth 36 mth

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Porting Our Platform Approach in Appraisals to the Title and Closing Market

Title Search Closing Network Management Escrow Funding

Key Opportunities for Improvement

  • Reducing the number of closings

that require the borrower to re-sign

  • Improving network management to

prevent missed or re-scheduled closing appointments

  • Improve borrowers’ experience

Large Addressable Market

$13B includes purchase and refinance Ability to sell title and closing to existing appraisal clients through existing MSAs

Key Business Opportunity Key Components of Title and Closing Business

Similar Mortgage Customer Base Process Ripe for Disruption 1 2 3

Significant area of inefficiency

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Title and Closing Strategy Expands Addressable Market, Leverages Core Platform

Acquire Platform Growth Strategies

Acquired Linear Title & Closing in April 2016

  • Full-service title and closing business
  • Leading independent provider

– 0.4% market share1

  • National U.S. footprint and license coverage area
  • Established in-house search capabilities
  • Deep understanding of industry requirements
  • Currently servicing Tier 3 and 4 Tier mortgage lenders

Growth Strategies

2019

2013-2015

Title and closing identified as strategic growth opportunity

2016 2017

May-Aug Determined lender key pain points Apr 2016 Real Matters acquires Linear Sep-Oct Tested concepts with existing clients Nov-Feb Developed technical requirements Feb-Mar Developed initial prototype H2 2017 Pilot transactions with select existing clients

2018

2017 Launch beta version Launch Tier 2 mortgage lender

2019

Launch Tier 1 mortgage lender

  • 1. Management estimate of Residential Title Written Premium Market Share based on data from the American Land Title Association as of June 30, 2017 and Demotech, Inc. for period ending December 31, 2015.
  • 2. Subject to a number of known and unknown risks. See “Forward-

Looking Information” on page 2 of this Presentation.

Next Generation Closing Roll-Out Strategy2 1 2

Continue to grow existing Linear business

  • Increase market share with existing Tier 3 and Tier 4 clients
  • Grow pipeline of new Tier 3 and Tier 4 clients
  • Offer title and closing services to existing Solidifi appraisal clients

Launch Next Generation Closing

  • Solution geared toward servicing Tier 1 and Tier 2 clients
  • Purchase and refinance strategy

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Large Addressable Market

  • Includes both U.S. residential mortgage

appraisal market and title and closing market

  • Focused on key large clients
  • Top I00 mortgage lenders

represent ~90% of market

  • Agents represent ~70%
  • f market
  • Primarily focused on

centralized refinance title today

Total Addressable Market3 Appraisal Market1 Title & Closing Market2

  • Increased regulation
  • Lenders increasingly focused on core operations
  • Lenders increasingly focused on end consumer
  • Growing role of technology

$16B

$3B $13B

Industry Trends

  • 1. Management estimates based on data for calendar year 2016 from the MBA Mortgage Finance Forecast Report of October 24, 2017. 2. Title Written Premiums data from the American Land Title Association as of June 30, 2016. 3. Management estimates of the residential mortgage

appraisal market size for calendar 2016 based on data from the MBA Mortgage Finance Forecast Report of October 24, 2017, plus management estimates of the title market size measured by written premium based data from American Land Title Association Data as of June 30, 2017. Total addressable market based on roll-out of the Company’s Next Generation Closing strategy.

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Description Strategic Rationale and Outcomes

December 2012 Kirchmeyer & Associates U.S. mortgage appraisals

  • Acquired several large Tier 2 clients in the U.S.
  • Increased market share with key Tier 2 clients from 5%

to 25% following acquisition May 2015 Southwest Financial Services U.S. home equity valuations

  • Home equity valuation products ported to the

Real Matters Platform

  • New clients (no overlap with prior base)
  • Product and client cross-sell has resulted in broader client

relationships and new clients April 2016 Linear Title & Closing U.S. title and closing services

  • Established beachhead in $13B1 title and closing market
  • National U.S. footprint and licensing
  • Deep industry knowledge
  • Currently building out Next Generation Closing strategy

History of Successfully Acquiring Traditional Businesses that Leverage our Platform

  • 1. Residential Title Written Premiums data from the American Land Title Association as of June 30, 2017.
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Growth Strategy

Disrupt title and closing market

$13B3 annual U.S. market spend – current market share of approximately 0.3%4

  • Leverage our Platform to disrupt the closing process and drive better performance
  • Leverage existing Tier 1 and Tier 2 MSAs to accelerate sales cycle

Continue to pursue acquisition opportunities

  • Leverage our Platform
  • Strategically complement existing business

Continue to grow residential mortgage appraisal market share

$3.2B1 annual U.S. market spend – current market share of approximately 6.5%2

  • Deployment of recent Tier 1 client wins expected to drive growth
  • 1. Management estimates based on MBA Mortgage Finance Forecast Report of October 24, 2017.
  • 2. Management estimates based on data from the MBA Mortgage Finance Forecast Report of October 24, 2017.

3.Title Written Premiums data from the American Land Title Association as of June 30, 2017. 4. Management estimate of Residential Title Written Premium Market Share based on data from the American Land Title Association as of June 30, 2017 and Demotech, Inc. for period ending December 31, 2015.

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Market Share Targets1 At End of F2017 5 Year Target

Total U.S. Residential Mortgage Appraisal Market Spend $3.2B2

U.S. Mortgage Appraisal Market Share 6.5%3 15% to 20%

Total U.S. Title and Closing Market Spend $13B4

U.S. Title and Closing Market Share 0.3%5 1% to 3%

Long-Term Target Operating Model

Financial Targets Baseline 5 Year Target Revenues CAGR6 38%7 20% to 25% Net Revenue8Margin (% of revenues) 31%9 35% to 40% Adjusted EBITDA10 Margin (% of Net Revenue) 10%11 25% to 30%

  • 1. Subject to a number of known and unknown risks. See “Forward-looking Information” on page 2 of this Presentation. 2. Management estimates based on data for fiscal 2017 from the MBA Mortgage Finance Forecast Report of October 24, 2017. 3. Management estimates based on

data from the MBA Mortgage Finance Forecast Report of October 24, 2017. 4. Title Written Premiums data from the American Land Title Association as of June 30, 2017. 5. Management estimate of Residential Title Written Premium Market Share based on data from the American Land Title Association as of June 30, 2017 and Demotech, Inc. for period ending December 31, 2015. 6. CAGR means compound annual growth rate. 7. Revenue CAGR for Real Matters F2014 to F2017. 8. Net Revenue is a Non-GAAP Measure. See “Non-GAAP Measures” on page 2 of this Presentation. 9. Net Revenue Margin for Real Matters for fiscal 2017. 10. Adjusted EBITDA is a Non-GAAP Measure. See “Non-GAAP Measures” on page 2 of this Presentation. 11. Adjusted EBITDA Margins for Real Matters for fiscal 2017

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Experienced Management Team and Board

Jason Smith

President and CEO Founder

Board of Directors

Blaine Hobson1

Chairman

  • Established track record as a software and telecom entrepreneur
  • Managing partner of Whitecap Venture Partners

Jason Smith

Director

  • Founder, President and

CEO of Real Matters

  • Chairman of Holland

Bloorview Kids Rehabilitation Hospital Foundation

Robert Courteau2

Director

  • CEO of Altus Group Ltd.
  • Former President of

SAP North America

Garry M. Foster3

Director

  • President and CEO of

Baycrest Foundation

  • Former Vice-Chair of

Deloitte Canada and National Managing Partner

  • f Technology, Media and

Telco Practice

Frank V. McMahon4

Director

  • Former Vice-Chairman and

CFO of First American Corporation

  • Former CEO of Information

Solutions (Corelogic)

William T. Holland2

Director

  • Executive Chairman of

CI Financial Corp.

  • Former CEO of

CI Financial Corp.

Kevin Walton

Executive Vice President, Corporate Development

Loren Cooke

Executive Vice President President, Solidifi

Ryan Smith

Executive Vice President and Chief Technology Officer

Greg Twinney

Executive Vice President

Craig Rowsell

Executive Vice President, Operations and Program Management, Solidifi

Kim Montgomery

Executive Vice President

Bill Herman Executive Vice President

and Chief Financial Officer

Lisa Melchior4

Director

  • Founder and CEO of

Vertu Capital

  • Former Managing Director
  • f OMERS Private Equity

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  • 1. Compensation Committee Chair
  • 2. Compensation Committee Member
  • 3. Audit Committee Chair
  • 4. Audit Committee Member
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Q4 and FY 2017 Financial Results

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Business Highlights

  • Exited Fiscal 2017 with 6.5% market share in appraisal – 30% increase YoY
  • Significant market share gains with all Tier 1 lenders
  • Title and closing market share up 17% YoY
  • Completed hardening of existing title and closing platform – readiness for regulated banks
  • Purchase pilot work continues – in discussions to expand to other Top 100 lenders
  • Announced expansion of our platform into title and closing at the Mortgage

Bankers Association conference in October, rolled out enhanced inspection scheduling – extension of our platform

  • One sales team, brand and value proposition
  • On target to achieve our market share growth objectives

Q4 and Fiscal 2017 Highlights

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Revenues

(US$ millions)

Market Adjusted Revenue Growth

$81.0 $82.9 Q4 2016 Q4 2017 $248.5 $303.0 FY 2016 FY 2017

26%

Fiscal 2017

17%

Q4 2017

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Q4 and Fiscal 2017 Summary Financial Information

(US$ millions)

Q4 2017 Q4 2016 Change FY 2017 FY 2016 Change Revenues $82.9 $81.0 2% $303.0 $248.5 22% Net Revenue1 $24.0 $25.0 (4%) $92.3 $68.3 35% Adjusted EBITDA1 $2.9 $5.3 (45%) $9.4 $12.8 (27%) Net (loss) income $(3.8) $1.6 − $(23.8) $(6.1)

  • Adjusted

Net Income1 $0.7 $3.1 (77%) $2.8 $6.0 (54%)

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  • 1. Net Revenue, Adjusted EBITDA and Adjusted Net Income are Non-GAAP measures. See pages 21-23.
  • Organic growth driven by market share gains and new clients helped offset the estimated market decline
  • Net revenue margins impacted by change in revenue mix in the U.S., investments in capacity in the first

half of 2017 for new clients and growth from market share gains, and transition of certain title and closing service offerings to a network management model

  • Network effect in appraisal business delivered margin improvements in second half of 2017
  • Higher operating expenses in Corporate segment included stock-based compensation expense and higher

public company costs – remainder of the opex increase driven by investment to support our growth

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Q4 and Fiscal 2017 Segment Revenue

(US$ millions)

Q4 2017 Q4 2016 Change FY 2017 FY 2016 Change U.S. Appraisal and Ancillary $57.0 $52.3 9% $200.2 $181.1 11% Title and Closing 16.8 19.8 (15%) 69.5 36.9 88% Other 0.4 0.1

  • 1.5

0.3

  • Total U.S.

$74.2 $72.2 3% 271.2 218.3 24% Canada Appraisal and Ancillary $7.8 $7.8 − $28.1 $26.7 5% Other 0.9 1.0 (10%) 3.6 3.6 (1%) Total Canada $8.7 $8.8 (1%) $31.7 $30.3 5%

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  • Increase in U.S. appraisal and ancillary revenues related to market share gains and new customers
  • Decrease in U.S. title and closing due to market decline, partially offset by organic growth
  • Increase in Canadian appraisal and ancillary due to higher volumes for the year, change in Q4

due to market decline fully offset by market share gains and FX

  • Decrease in insurance inspection revenues in Canada due to lower market activity
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Recon conciliation

  • n o
  • f

No Non-GAAP Me Measu asures

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Net Revenue

Net Revenue should not be construed as a measure of income or of cash flows. The reconciling items between net income or loss and Net Revenue are detailed in the consolidated statement of operations and comprehensive income or loss for the years ended September 30, 2017 and 2016. A reconciliation between net income or loss and Net Revenue is provided below. Management typically calculates Net Revenue as follows:

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2017 2016 2017 2016 Net (loss) income (3,822) $ 1,634 $ (23,769) $ (6,079) $ Operating expenses 21,482 19,669 86,411 55,476 Acquisition and IPO (recovery) costs (1,151) 485 1,609 3,005 Amortization 5,348 5,853 21,241 14,001 Impairment of assets

  • 5,096
  • Interest expense

160 222 889 687 Interest income (116) (5) (139) (20) Net foreign exchange loss (gain) 3,076 (3,538) 3,390 (2,841) (Gain) loss on fair value of warrants (281) 22 5,011 5,437 Re-measurement loss on previously held equity method investment

  • 976
  • Net income from equity accounted investees

(104) (139) (18) (475) Income tax (recovery) expense (563) 750 (8,403) (891) Net Revenue 24,029 $ 24,953 $ 92,294 $ 68,300 $ Three months ended September 30 Year ended September 30 2017 2016 2017 2016 Revenues 82,892 $ 80,983 $ 302,976 $ 248,547 $ Less: Transaction costs 58,863 56,030 210,682 180,247 Net Revenue 24,029 $ 24,953 $ 92,294 $ 68,300 $ Three months ended September 30 Year ended September 30

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Adjusted EBITDA

Management typically calculates Adjusted EBITDA as follows:

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2017 2016 2017 2016 Net (loss) income (3,822) $ 1,634 $ (23,769) $ (6,079) $ Stock-based compensation expense 369

  • 3,497
  • Acquisition and IPO (recovery) costs

(1,151) 485 1,609 3,005 Amortization 5,348 5,853 21,241 14,001 Impairment of assets

  • 5,096
  • Interest expense

160 222 889 687 Interest income (116) (5) (139) (20) Net foreign exchange loss (gain) 3,076 (3,538) 3,390 (2,841) (Gain) loss on fair value of warrants (281) 22 5,011 5,437 Re-measurement loss on previously held equity method investment

  • 976
  • Net income from equity accounted investees

(104) (139) (18) (475) Income tax (recovery) expense (563) 750 (8,403) (891) Adjusted EBITDA 2,916 $ 5,284 $ 9,380 $ 12,824 $ Three months ended September 30 Year ended September 30 2017 2016 2017 2016 Revenues 82,892 $ 80,983 $ 302,976 $ 248,547 $ Less: Transaction costs 58,863 56,030 210,682 180,247 Less: Operating expenses 21,482 19,669 86,411 55,476 Add: Stock-based compensation expense 369

  • 3,497
  • Adjusted EBITDA

2,916 $ 5,284 $ 9,380 $ 12,824 $ Three months ended September 30 Year ended September 30

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Adjusted Net Income

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2017 2016 2017 2016 Net (loss) income (3,822) $ 1,634 $ (23,769) $ (6,079) $ Stock-based compensation expense 369

  • 3,497
  • Acquisition and IPO (recovery) costs

(1,151) 485 1,609 3,005 Amortization of intangibles 4,918 5,483 19,649 12,839 Impairment of assets

  • 5,096
  • Net foreign exchange loss (gain)

3,076 (3,538) 3,390 (2,841) (Gain) loss on fair value of warrants (281) 22 5,011 5,437 Re-measurement loss on previously held equity method investment

  • 976
  • Related tax effects

(2,392) (960) (12,696) (6,389) Adjusted Net Income 717 $ 3,126 $ 2,763 $ 5,972 $ Weighted average number of shares

  • utstanding (thousands), basic

87,370 75,128 80,280 69,489 Weighted average number of shares

  • utstanding (thousands), diluted

92,182 82,245 85,092 76,606 Adjusted Net Income per weighted average share, basic 0.01 $ 0.04 $ 0.03 $ 0.09 $ Adjusted Net Income per weighted average share, diluted 0.01 $ 0.04 $ 0.03 $ 0.08 $ Three months ended September 30 Year ended September 30