CALGARY, Alberta, Feb. 11, 2025 (GLOBE NEWSWIRE) — Computer Modelling Group Ltd. (“CMG Group” or the “Company”) announces its financial results for the three and nine months ended December 31, 2024, and the approval by its Board of Directors (the “Board”) of the payment of a cash dividend of $0.05 per Common Share for the third quarter ended December 31, 2024.
THIRD QUARTER 2025 CONSOLIDATED HIGHLIGHTS
As a result of CMG Group’s acquisition of Sharp Reflections GmbH (“SR” or “Sharp”) on November 12, 2024, the Company’s operations are organized into two reportable operating segments represented by “Reservoir & Production Solutions” segment (“R&P”) which reflects the operations of CMG and includes the development and licensing of reservoir simulation software and “Seismic Solutions” segment (“Seismic”) represented by Bluware-Headwave Ventures Inc. (“BHV” or “Bluware”) and SR and includes the development and licensing of seismic interpretation software.
Select financial highlights
- Closed the Company’s second major acquisition, Sharp on November 12, 2024;
- Generated total revenue of $35.8 million in the third quarter of fiscal 2025, compared to $33.0 million in the prior year’s quarter, reflecting a 1% decrease in R&P segment revenue and a 9% contribution from the Seismic segment, of which 6% was growth from acquisitions;
- Operating profit increased to $11.2 million, an increase of 37% from the same period of the previous fiscal year, primarily due to increased software and professional service revenues and a decrease in operating expenses primarily driven by a decrease in stock-based compensation in the quarter as a result of the decrease in share price. Adjusted operating profit increased by 9% from the same period of the previous fiscal year, with the R&P segment decreasing by 5% and the Seismic segment increasing by 14%, of which 1% was contributed from the acquisition;
- Adjusted EBITDA Margin was 39%, compared to 37% in the same period of the previous fiscal year with the R&P segment generating 42% and the Seismic segment generating 34% in Adjusted EBITDA Margin;
- Net income during the period was $9.6 million, a 71% increase compared to the prior year’s quarter, primarily due to a increased operating profit and significant FX gains, partially offset by a change in the fair value of contingent consideration;
- Earnings per share was $0.12, a 71% increase compared to the prior year’s quarter;
- Funds flow from operations per share was $0.12, a 20% increase from the prior year comparative period. Reported Free Cash Flow of $0.11 per share, an increase of 22%, primarily due to increased funds flow from operations and a decrease in both capital expenditures and repayment of lease liabilities.
THIRD QUARTER YEAR TO DATE 2025 CONSOLIDATED HIGHLIGHTS
Select financial highlights
- Closed the Company’s second major acquisition, Sharp on November 12, 2024;
- Generated total revenue of $95.8 million for the third quarter fiscal 2025 year-to-date period, compared to $76.4 million in the prior year-to-date period, reflecting a 3% increase in the R&P segment revenue and a 22% contribution from the Seismic segment of which 21% was growth from acquisitions;
- Operating profit decreased to $25.3 million, a decrease of 2% from the same year-to-date period of the previous fiscal year, primarily due to increased headcount and headcount related costs, increased acquisition costs, increased amortization of acquired intangible assets, and increased agent commissions as a result of increased revenues, partially offset by a decrease in stock-based compensation expense. Adjusted operating profit remained consistent with the prior year comparative period, with the R&P segment decreasing by 4% and the Seismic segment contributing an increase of 4%;
- Adjusted EBITDA Margin was 35%, compared to 43% in the same period of the previous fiscal year with the R&P Segment generating 43% and the Seismic segment generating 15% in Adjusted EBITDA Margin;
- Net income during the period was $17.3 million, a 9% decrease compared to the prior year-to-date period, primarily due to a decrease in operating profit, change in fair value of contingent consideration and increased income tax;
- Earnings per share was $0.21, a 13% decrease compared to the prior year-to-date period;
- Funds flow from operations per share was $0.29, a 15% decrease from the prior year-to-date period. Reported Free Cash Flow of $0.25 per share, a decrease of 22%, primarily due to decreased funds flow from operations and increases in both capital expenditures and repayment of lease liabilities.
MANAGEMENT COMMENTARY
The company has defined Organic growth to include CMG revenue and Adjusted EBITDA and BHV revenue and Adjusted EBITDA generated beginning on October 1, 2024.
Third Quarter
In the third quarter, total revenue grew by 8% from the prior fiscal year to $35.8 million, of which 2% was Organic growth and 6% was growth from acquisitions.
Adjusted EBITDA Margin of 39% compared to 37% in the prior year period, with reductions in the Reservoir and Productions Solutions segment offset by increases in the Seismic Solutions segment.
Net income for the quarter increased to $9.6 million, up from $5.6 million in the prior year period, supported by an increase in operating profit and significant foreign exchange rate gains. Free Cash Flow increased from $0.09 per share in the prior period to $0.11 per share, impacted by the increase in funds flow from operations. At December 31, 2024, the cash balance was $39.7 million, a decrease from $61.4 million at September 30, 2024 due primarily to the acquisition of Sharp Reflections.
Reservoir and Production Solutions
Total revenue declined by 1% with declines in Professional Services revenue partially offset by gains in Perpetual license revenue. Annuity/maintenance (“A/M”) revenue was flat compared to the third quarter of 2024 with decreases in the US, Canada and South America, offset by growth in the Eastern Hemisphere. Software revenue attributable to energy transition was 23% in the quarter, compared to 22% in the comparable prior year period. From a trend perspective, on a year-to-date basis, software revenue attributable to energy transition was 23% compared to 22% in the same period of the previous year.
Operating profit in the segment for the third quarter increased to $7.0 million, from $5.9 million in the prior year period, driven by a reduction in stock-based compensation expense due to lower share price, partially offset by increased expenses, including acquisition related expenses, agent commission and other related fees, and other corporate costs. Adjusted EBITDA Margin in the quarter decreased to 42% from 44% in the prior fiscal year, due primarily to the slight decline in revenue and an increase in expenses.
Maintaining our customary high renewal rates in the fourth quarter will be important for sustaining our current growth trajectory which, on a year-to-date basis, is below our expectation of low double-digits.
Seismic Solutions
Total revenue increased 26% of which 9% was Organic growth and 17% growth from acquisitions.
A/M revenue increased 131% compared to the prior year period, of which 49% was Organic growth, due to an increase in licensing and the positive impact of foreign exchange rates. Growth from acquisitions was 82%. Annuity license fee increase of 12% Organic growth was also positively impacted by an increase in licensing and the positive impact of USD/CAD foreign exchange rates.
Operating profit in the segment for the third quarter increased to $4.2 million from $2.3 million as a result of higher revenue and lower G&A expenses. Adjusted EBITDA increased to $4.8 million from $2.7 million, of which 6% is from acquisitions. Adjusted EBITDA Margin grew to 34% from 24% in the prior year. Contract renewals in the Seismic segment typically occur in the third and fourth quarters, resulting in Adjusted EBITDA fluctuation on a quarterly basis. As a result of annuity license fee revenue recognition being skewed towards the last two quarters of the fiscal year, Adjusted EBITDA is expected to be lower in the first and second quarters of the fiscal year. We would encourage shareholders to evaluate the Seismic Solutions segment revenue and profitability on a full-year basis.
SUMMARY OF FINANCIAL PERFORMANCE
| Reservoir & Production Solutions |
Seismic Solutions |
Consolidated |
||||||||||
| Three months ended December 31, ($ thousands, except per share data) |
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||
| Annuity/maintenance licenses | 17,706 | 17,625 | 2,746 | 1,189 | 20,452 | 18,814 | ||||||
| Annuity license fee | – | – | 4,303 | 3,846 | 4,303 | 3,846 | ||||||
| Perpetual licenses | 804 | 584 | – | – | 804 | 584 | ||||||
| Total software license revenue | 18,510 | 18,209 | 7,049 | 5,035 | 25,559 | 23,244 | ||||||
| Professional services | 3,181 | 3,594 | 7,033 | 6,169 | 10,214 | 9,763 | ||||||
| Total revenue | 21,691 | 21,803 | 14,082 | 11,204 | 35,773 | 33,007 | ||||||
| Total revenue growth | (1 | %) | 12 | % | 26 | % | 8 | % | 70 | % | ||
| Annuity/maintenance licenses growth | (0 | %) | 13 | % | 131 | % | 9 | % | 21 | % | ||
| Cost of revenue | 2,389 | 2,288 | 3,918 | 4,068 | 6,307 | 6,356 | ||||||
| Operating expenses | ||||||||||||
| Sales & marketing | 2,914 | 4,379 | 1,449 | 478 | 4,363 | 4,857 | ||||||
| Research and development | 4,656 | 5,337 | 2,684 | 1,916 | 7,340 | 7,253 | ||||||
| General & administrative | 4,743 | 3,890 | 1,803 | 2,434 | 6,546 | 6,324 | ||||||
| Operating expenses | 12,313 | 13,606 | 5,936 | 4,828 | 18,249 | 18,434 | ||||||
| Operating profit | 6,989 | 5,909 | 4,228 | 2,308 | 11,217 | 8,217 | ||||||
| Operating Margin | 32 | % | 27 | % | 30 | % | 21 | % | 31 | % | 25 | % |
| Acquisition related expenses | 1,533 | 146 | 54 | 551 | 1,587 | 697 | ||||||
| Amortization of acquired intangible assets | 575 | 565 | 430 | 87 | 1,005 | 652 | ||||||
| Stock-based compensation | (82 | ) | 2,974 | 3 | – | (79 | ) | 2,974 | ||||
| Adjusted operating profit (1) | 9,015 | 9,594 | 4,715 | 2,946 | 13,730 | 12,540 | ||||||
| Adjusted Operating Margin (1) | 42 | % | 44 | % | 33 | % | 26 | % | 38 | % | 38 | % |
| Net income (loss) | 5,496 | 3,918 | 4,110 | 1,692 | 9,606 | 5,610 | ||||||
| Adjusted EBITDA (1) | 9,003 | 9,583 | 4,821 | 2,689 | 13,824 | 12,272 | ||||||
| Adjusted EBITDA Margin (1) | 42 | % | 44 | % | 34 | % | 24 | % | 39 | % | 37 | % |
| Earnings per share – basic & diluted | 0.12 | 0.07 | ||||||||||
| Funds flow from operations per share – basic | 0.12 | 0.10 | ||||||||||
| Free Cash Flow per share – basic (1) | 0.11 | 0.09 | ||||||||||
(1) Non-IFRS financial measures are defined in the “Non-IFRS Financial Measures” section.
| Reservoir & Production Solutions |
Seismic Solutions |
Consolidated |
||||||||||
| Nine months ended December 31, ($ thousands, except per share data) |
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||
| Annuity/maintenance licenses | 52,257 | 50,673 | 5,832 | 1,196 | 58,089 | 51,869 | ||||||
| Annuity license fee | – | – | 4,552 | 4,004 | 4,552 | 4,004 | ||||||
| Perpetual licenses | 5,063 | 3,609 | – | – | 5,063 | 3,609 | ||||||
| Total software license revenue | 57,320 | 54,282 | 10,384 | 5,200 | 67,704 | 59,482 | ||||||
| Professional services | 9,843 | 10,338 | 18,216 | 6,568 | 28,059 | 16,906 | ||||||
| Total revenue | 67,163 | 64,620 | 28,600 | 11,768 | 95,763 | 76,388 | ||||||
| Total revenue growth | 4 | % | 21 | % | 143 | % | 25 | % | 43 | % | ||
| Annuity/maintenance licenses growth | 3 | % | 15 | % | 388 | % | 12 | % | 18 | % | ||
| Cost of revenue | 7,341 | 6,464 | 10,850 | 4,290 | 18,191 | 10,754 | ||||||
| Operating expenses | ||||||||||||
| Sales & marketing | 10,418 | 10,096 | 3,105 | 500 | 13,523 | 10,596 | ||||||
| Research and development | 15,170 | 14,040 | 6,843 | 2,032 | 22,013 | 16,072 | ||||||
| General & administrative | 12,276 | 10,776 | 4,447 | 2,483 | 16,723 | 13,259 | ||||||
| Operating expenses | 37,864 | 34,912 | 14,395 | 5,015 | 52,259 | 39,927 | ||||||
| Operating profit | 21,958 | 23,244 | 3,355 | 2,463 | 25,313 | 25,707 | ||||||
| Operating Margin | 33 | % | 36 | % | 12 | % | 21 | % | 26 | % | 34 | % |
| Acquisition related expenses | 1,928 | 719 | 423 | 551 | 2,351 | 1,270 | ||||||
| Amortization of acquired intangible assets | 1,726 | 746 | 608 | 92 | 2,334 | 838 | ||||||
| Stock-based compensation | 3,057 | 5,370 | 3 | – | 3,060 | 5,370 | ||||||
| Adjusted operating profit (1) | 28,669 | 30,079 | 4,389 | 3,106 | 33,058 | 33,185 | ||||||
| Adjusted Operating Margin (1) | 43 | % | 47 | % | 15 | % | 26 | % | 35 | % | 43 | % |
| Net income (loss) | 15,491 | 17,245 | 1,842 | 1,785 | 17,333 | 19,030 | ||||||
| Adjusted EBITDA (1) | 28,774 | 30,116 | 4,425 | 2,822 | 33,199 | 32,938 | ||||||
| Adjusted EBITDA Margin (1) | 43 | % | 47 | % | 15 | % | 24 | % | 35 | % | 43 | % |
| Earnings per share – basic & diluted | 0.21 | 0.24 | ||||||||||
| Funds flow from operations per share – basic | 0.29 | 0.34 | ||||||||||
| Free Cash Flow per share – basic (1) | 0.25 | 0.32 | ||||||||||
(1) Non-IFRS financial measures are defined in the “Non-IFRS Financial Measures” section.
Q3 2025 Dividend
Computer Modelling Group’s Board approved a cash dividend of $0.05 per Common Share. The dividend will be paid on March 14, 2025, to shareholders of record at the close of business on March 6, 2025.
All dividends paid by Computer Modelling Group Ltd. to holders of Common Shares in the capital of the Company will be treated as eligible dividends within the meaning of such term in section 89(1) of the Income Tax Act (Canada), unless otherwise indicated.
NON-IFRS FINANCIAL MEASURES AND RECONCILIATION OF NON-IFRS MEASURES
Free Cash Flow Reconciliation to Funds Flow from Operations
Free cash flow is a non-IFRS financial measure that is calculated as funds flow from operations less capital expenditures and repayment of lease liabilities. Free Cash Flow per share is calculated by dividing free cash flow by the number of weighted average outstanding shares during the period. Management believes that this measure provides useful supplemental information about operating performance and liquidity, as it represents cash generated during the period, regardless of the timing of collection of receivables and payment of payables, which may reduce comparability between periods. Management uses free cash flow and free cash flow per share to help measure the capacity of the Company to pay dividends and invest in business growth opportunities.
| Fiscal 2023 | Fiscal 2024 | Fiscal 2025 | ||||||||||||||
| ($ thousands, unless otherwise stated) | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||||||||
| Funds flow from operations | 7,656 | 7,920 | 11,491 | 8,477 | 10,367 | 6,515 | 7,101 | 9,937 | ||||||||
| Capital expenditures(1) | (1,707 | ) | (45 | ) | (51 | ) | (459 | ) | (95 | ) | (93 | ) | (236 | ) | (432 | ) |
| Repayment of lease liabilities | (553 | ) | (412 | ) | (412 | ) | (728 | ) | (803 | ) | (743 | ) | (769 | ) | (689 | ) |
| Free Cash Flow | 5,396 | 7,463 | 11,028 | 7,290 | 9,469 | 5,679 | 6,096 | 8,816 | ||||||||
| Weighted average shares – basic (thousands) |
80,603 |
80,685 |
80,834 |
81,067 |
81,314 |
81,476 |
81,887 |
82,753 |
||||||||
| Free Cash Flow per share – basic | 0.07 | 0.09 | 0.14 | 0.09 | 0.12 | 0.07 | 0.07 | 0.11 | ||||||||
| Funds flow from operations per share- basic | 0.09 | 0.10 | 0.14 | 0.10 | 0.13 | 0.08 | 0.09 | 0.12 | ||||||||
(1) Capital expenditures include cash consideration for USI acquisition in Q4 2023.
Free Cash Flow per share increased by 22% for the three months ended December 31, 2024, and decreased by 22% for the nine months ended December 31, 2024, as compared to the three and nine months ended December 31, 2023, respectively. The increase in Free Cash Flow for the three months ended December 31, 2024, primarily relates to an increase in net income and decrease in the repayment of lease liabilities relating to timing of payments as the BHV office lease in Houston concluded during the period. The decrease in Free Cash Flow for the nine months ended December 31, 2024, primarily relates to a decrease in net income and increase in repayment of lease liabilities compared to the prior year comparative period as a result of the acquisition of BHV.
Adjusted EBITDA and Adjusted EBITDA Margin
| Reservoir & Production Solutions |
Seismic Solutions |
Consolidated |
||||||||||
| Three months ended December 31, ($ thousands) |
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||
| Net income (loss) | 5,496 | 3,918 | 4,110 | 1,692 | 9,606 | 5,610 | ||||||
| Add (deduct): | ||||||||||||
| Depreciation and amortization | 1,460 | 1,449 | 807 | 106 | 2,267 | 1,555 | ||||||
| Stock-based compensation | (82 | ) | 2,974 | 3 | – | (79 | ) | 2,974 | ||||
| Acquisition related expenses | 1,533 | 146 | 54 | 551 | 1,587 | 697 | ||||||
| Loss on contingent consideration | 150 | – | – | – | 150 | – | ||||||
| Income and other tax expense | 2,497 | 1,805 | 1,065 | 702 | 3,562 | 2,507 | ||||||
| Interest income | (474 | ) | (982 | ) | (179 | ) | (2 | ) | (653 | ) | (984) | |
| Foreign exchange loss (gain) | (1,146 | ) | 701 | (781 | ) | (59 | ) | (1,927 | ) | 642 | ||
| Repayment of lease liabilities | (431 | ) | (428 | ) | (258 | ) | (300 | ) | (689 | ) | (728 | ) |
| Adjusted EBITDA (1) | 9,003 | 9,583 | 4,821 | 2,689 | 13,824 | 12,272 | ||||||
| Adjusted EBITDA Margin (1) | 42 | % | 44 | % | 34 | % | 24 | % | 39 | % | 37 | % |
(1) This is a non-IFRS financial measure. Refer to definition of the measures above.
| Reservoir & Production Solutions |
Seismic Solutions |
Consolidated |
||||||||||
| Nine months ended December 31, ($ thousands) |
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||
| Net income (loss) | 15,491 | 17,245 | 1,842 | 1,785 | 17,333 | 19,030 | ||||||
| Add (deduct): | ||||||||||||
| Depreciation and amortization | 4,496 | 3,424 | 1,601 | 113 | 6,097 | 3,537 | ||||||
| Stock-based compensation | 3,057 | 5,370 | 3 | – | 3,060 | 5,370 | ||||||
| Acquisition related expenses | 1,928 | 719 | 423 | 551 | 2,351 | 1,270 | ||||||
| Loss on contingent consideration | 2,063 | – | – | – | 2,063 | – | ||||||
| Income and other tax expense | 5,913 | 6,288 | 2,381 | 740 | 8,294 | 7,028 | ||||||
| Interest income | (1,934 | ) | (2,434 | ) | (358 | ) | (4 | ) | (2,292 | ) | (2,438 | ) |
| Foreign exchange loss (gain) | (948 | ) | 752 | (558 | ) | (59 | ) | (1,506 | ) | 693 | ||
| Repayment of lease liabilities | (1,292 | ) | (1,248 | ) | (909 | ) | (304 | ) | (2,201 | ) | (1,552 | ) |
| Adjusted EBITDA (1) | 28,774 | 30,116 | 4,425 | 2,822 | 33,199 | 32,938 | ||||||
| Adjusted EBITDA Margin (1) | 43 | % | 47 | % | 15 | % | 24 | % | 35 | % | 43 | % |
(1) This is a non-IFRS financial measure. Refer to definition of the measures above.
Adjusted EBITDA Margin for the three and nine months ended December 31, 2024, was 39% and 35%, respectively, down from 37% and 43% during the period year comparative periods.
The R&P segment’s Adjusted EBITDA Margin is 42% and 43% for the three and nine months ended December 31, 2024, respectively, compared to 44% and 47%, respectively for the three and nine months ended December 31, 2023. The decline in Adjusted EBITDA Margin for the three months ended December 31, 2024, is primarily due to a slight decline in revenue and increase in other corporate costs. The decline in Adjusted EBITDA Margin for the nine months ended December 31, 2024, is primarily due to an increase in headcount and headcount related costs and other corporate costs, partially offset by an increase in total revenues. Refer to the “Operating Expenses” section of this MD&A for further detail on the increase in operating expenses by category.
The Seismic segment’s Adjusted EBITDA Margin for the three and nine months ended December 31, 2024, is 34% and 15%, respectively, compared to 24% for the three and nine months ended December 31, 2023. Seismic Adjusted EBITDA for the three months ended December 31, 2024, increased by 79%, of which 6% is due to growth from acquisitions. The increase in Seismic Adjusted EBITDA not related to growth from acquisitions for the three months ended December 31, 2024, is primarily due to higher revenues and lower G&A expenses. Seismic Adjusted EBITDA for the nine months ended December 31, 2024, increased by 57%, of which there was an 8% decline due to acquisitions. The increase in Seismic Adjusted EBITDA not related to growth from acquisitions for the nine months ended December 31, 2024, is impacted by the same reasons as the three months ended December 31, 2024. The decrease in Seismic Adjusted EBITDA due to decline from acquisitions for the nine months ended December 31, 2024, is primarily due to negative Adjusted EBITDA in the first six months of fiscal 2025, influenced by revenue recognition being skewed to the last two quarters of the fiscal year. Contract renewals in the Seismic segment typically occur in the third and fourth quarters, resulting in Adjusted EBITDA fluctuation on a quarterly basis. As a result of annuity license fee revenue recognition being skewed towards the last two quarters of the fiscal year, Adjusted EBITDA is expected to be lower in the first and second quarters of the fiscal year.
Condensed Consolidated Statements of Financial Position
| UNAUDITED (thousands of Canadian $) | December 31, 2024 | March 31, 2024 | April 1, 2023 | |||
| Assets | ||||||
| Current assets: | ||||||
| Cash | 39,731 | 63,083 | 66,850 | |||
| Restricted cash | 194 | 142 | – | |||
| Trade and other receivables | 43,193 | 36,550 | 23,910 | |||
| Prepaid expenses | 2,267 | 2,321 | 1,060 | |||
| Prepaid income taxes | 647 | 3,841 | 444 | |||
| 86,032 | 105,937 | 92,264 | ||||
| Intangible assets | 59,919 | 23,683 | 1,321 | |||
| Right-of-use assets | 28,969 | 29,072 | 30,733 | |||
| Property and equipment | 9,808 | 9,877 | 10,366 | |||
| Goodwill | 14,850 | 4,399 | – | |||
| Deferred tax asset | 97 | – | 2,444 | |||
| Total assets | 199,675 | 172,968 | 137,128 | |||
|
Liabilities and shareholders’ equity |
||||||
| Current liabilities: | ||||||
| Trade payables and accrued liabilities | 16,420 | 18,551 | 11,126 | |||
| Income taxes payable | 2,842 | 2,136 | 33 | |||
| Acquisition holdback payable | 7,214 | 2,292 | – | |||
| Acquisition earnout | 3,782 | – | – | |||
| Deferred revenue | 34,822 | 41,120 | 34,797 | |||
| Lease liabilities | 2,298 | 2,566 | 1,829 | |||
| Government loan | 299 | – | – | |||
| 67,677 | 66,665 | 47,785 | ||||
| Lease liabilities | 35,144 | 34,395 | 36,151 | |||
| Stock-based compensation liabilities | 252 | 624 | 742 | |||
| Government loan | 1,169 | – | – | |||
| Acquisition earnout | – | 1,503 | – | |||
| Acquisition holdback payable | 1,213 | – | – | |||
| Other long-term liabilities | 213 | 305 | – | |||
| Deferred tax liabilities | 12,303 | 1,661 | – | |||
| Total liabilities | 117,971 | 105,153 | 84,678 | |||
|
Shareholders’ equity: |
||||||
| Share capital | 94,255 | 87,304 | 81,820 | |||
| Contributed surplus | 15,452 | 15,667 | 15,471 | |||
| Cumulative translation adjustment | 1,745 | (367 | ) | – | ||
| Deficit | (29,748 | ) | (34,789 | ) | (44,841 | ) |
| Total shareholders’ equity | 81,704 | 67,815 | 52,450 | |||
| Total liabilities and shareholders’ equity | 199,675 | 172,968 | 137,128 | |||
Condensed Consolidated Statements of Operations and Comprehensive Income
| Three months ended December 31 |
Nine months ended December 31 |
|||||||
| UNAUDITED (thousands of Canadian $ except per share amounts) | 2024 | 2023 | 2024 | 2023 | ||||
| Revenue Cost of revenue |
35,773 6,307 |
33,007 6,356 |
95,763 18,191 |
76,388 10,754 |
||||
| Gross profit | 29,466 | 26,651 | 77,572 | 65,634 | ||||
| Operating expenses | ||||||||
| Sales and marketing | 4,363 | 4,857 | 13,523 | 10,596 | ||||
| Research and development | 7,340 | 7,253 | 22,013 | 16,072 | ||||
| General and administrative | 6,546 | 6,324 | 16,723 | 13,259 | ||||
| 18,249 | 18,434 | 52,259 | 39,927 | |||||
| Operating profit | 11,217 | 8,217 | 25,313 | 25,707 | ||||
| Finance income | 2,580 | 986 | 3,798 | 2,438 | ||||
| Finance costs | (479 | ) | (1,086 | ) | (1,421 | ) | (2,087 | ) |
| Change in fair value of contingent consideration | (150 | ) | – | (2,063 | ) | – | ||
| Profit before income and other taxes | 13,168 | 8,117 | 25,627 | 26,058 | ||||
| Income and other taxes | 3,562 | 2,507 | 8,294 | 7,028 | ||||
| Net income for the period | 9,606 | 5,610 | 17,333 | 19,030 | ||||
| Other comprehensive income: | ||||||||
| Foreign currency translation adjustment | 1,402 | (453 | ) | 2,112 | (449 | ) | ||
| Other comprehensive income | 1,402 | (453 | ) | 2,112 | (449 | ) | ||
| Total comprehensive income | 11,008 | 5,157 | 19,445 | 18,581 | ||||
| Net income per share – basic | 0.12 | 0.07 | 0.21 | 0.24 | ||||
| Net income per share – diluted | 0.12 | 0.07 | 0.21 | 0.23 | ||||
| Dividend per share | 0.05 | 0.05 | 0.15 | 0.15 | ||||
Condensed Consolidated Statements of Cash Flows
| Three months ended December 31 |
Nine months ended December 31 |
|||||||
| UNAUDITED (thousands of Canadian $) | 2024 | 2023 | 2024 | 2023 | ||||
| Operating activities | ||||||||
| Net income | 9,606 | 5,610 | 17,333 | 19,030 | ||||
| Adjustments for: | ||||||||
| Depreciation and amortization of property, equipment, right- of use assets |
1,262 | 890 | 3,763 | 2,686 | ||||
| Amortization of intangible assets | 1,005 | 665 | 2,334 | 851 | ||||
| Deferred income tax expense (recovery) | (150 | ) | 1,104 | (228 | ) | 3,082 | ||
| Stock-based compensation | (641 | ) | 513 | (855 | ) | 2,222 | ||
| Foreign exchange and other non-cash items | (1,295 | ) | (305 | ) | (857 | ) | 17 | |
| Change in fair value of contingent consideration | 150 | – | 2,063 | – | ||||
| Funds flow from operations | 9,937 | 8,477 | 23,553 | 27,888 | ||||
| Movement in non-cash working capital: | ||||||||
| Trade and other receivables | (3,827 | ) | (5,413 | ) | (1,981 | ) | (2,112 | ) |
| Trade payables and accrued liabilities | (645 | ) | 2,413 | (3,712 | ) | 24 | ||
| Prepaid expenses and other assets | 85 | (639 | ) | 193 | (349 | ) | ||
| Income taxes receivable (payable) | 1,567 | (181 | ) | 3,678 | (1,432 | ) | ||
| Deferred revenue | 1,149 | (4,214 | ) | (7,697 | ) | (9,351 | ) | |
| Change in non-cash working capital | (1,671 | ) | (8,034 | ) | (9,519 | ) | (13,220 | ) |
| Net cash provided by (used in) operating activities | 8,266 | 443 | 14,034 | 14,668 | ||||
| Financing activities | ||||||||
| Repayment of acquired line of credit | – | – | – | (2,012 | ) | |||
| Repayment of government loan | (63 | ) | – | (63 | ) | – | ||
| Proceeds from issuance of common shares | 2,395 | 1,783 | 5,124 | 2,996 | ||||
| Repayment of lease liabilities | (689 | ) | (364 | ) | (2,201 | ) | (1,188 | ) |
| Dividends paid | (4,115 | ) | (4,059 | ) | (12,292 | ) | (12,140 | ) |
| Net cash used in financing activities | (2,472 | ) | (2,640 | ) | (9,432 | ) | (12,344 | ) |
| Investing activities | ||||||||
| Corporate acquisition, net of cash acquired | (27,071 | ) | 157 | (27,071 | ) | (22,893 | ) | |
| Change in non-cash working capital | – | (517 | ) | – | (517 | ) | ||
| Property and equipment additions | (432 | ) | (459 | ) | (761 | ) | (555 | ) |
| Repayment of acquisition holdback payable | (2,130 | ) | – | (2,130 | ) | – | ||
| Net cash used in investing activities | (29,633 | ) | (819 | ) | (29,962 | ) | (23,965 | ) |
| Increase (decrease) in cash | (23,839 | ) | (3,016 | ) | (25,360 | ) | (21,641 | ) |
| Effect of foreign exchange on cash | 2,197 | (26 | ) | 2,008 | (26 | ) | ||
| Cash, beginning of period | 61,373 | 48,225 | 63,083 | 66,850 | ||||
| Cash, end of period | 39,731 | 45,183 | 39,731 | 45,183 | ||||
| Supplementary cash flow information | ||||||||
| Interest received | 653 | 986 | 2,292 | 2,438 | ||||
| Interest paid | 479 | 444 | 1,421 | 1,394 | ||||
| Income taxes paid | 2,128 | 1,071 | 7,853 | 5,429 | ||||
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, Oslo, Stavanger, Kaiserslautern, 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 condensed consolidated interim financial statements and the notes thereto for the three and nine months ended December 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 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.
CONTACT: For further information, please contact: Pramod Jain Chief Executive Officer (403) 531-1300 pramod.jain@cmgl.ca or Sandra Balic Vice President, Finance & CFO (403) 531-1300 sandra.balic@cmgl.ca
