RENOWORKS ANNOUNCES RECORD FIRST QUARTER 2020 FINANCIAL RESULTS
CALGARY, ALBERTA, May 28, 2020 – Renoworks Software Inc. (TSXV: RW) (“Renoworks” or the “Company), the leading end-to-end visualization platform for the building construction industry, yesterday announced financial results for the three months ended March 31, 2020. The financial statements and related management’s discussion and analysis (“MD&A”) can be viewed on SEDAR at www.sedar.com.
Financial and business highlights for the first quarter 2020:
- Highest-to-date Q1 revenue of $1,117,854 for the three months ended March 31, 2020 compared to $1,062,482 in 2019, an increase of 5%.
- Design services revenue of $478,403 for the three months ended March 31, 2020 compared to $319,066 in 2019, up 50%.
- Adjusted EBITDA loss of $7,415, down from a loss of $44,517 in Q1, 2019.
- Gross margins continue to be strong at 69% and 74%, respectively for the first quarter of 2020 and 2019.
- Net loss of $70,667 for the quarter ended March 31, 2020 compared to $116,955 in 2019 as we focus on continued investment in our platform solution to meet client and market demand.
- As at March 31, 2020, the Company had 36,610,507 common shares issued and outstanding.
Doug Vickerson, CEO of Renoworks, stated, “We are proud to announce growth in revenue for this quarter despite the impact of COVID-19 on our industry beginning in March, 2020. Demand for online tools and services remains strong as contractors and homeowners are forced to seek virtual solutions to design, measure, estimate and plan their construction and remodeling projects. Our design services growth stands as a testament to this trend, with that business unit achieving a 50% increase in revenue over the same quarter last year.
Mr. Vickerson continued, “With revenue growth also came a net loss this quarter as we continue to invest in R&D, personnel, platform development and marketing to capture the opportunities opened up by our industry’s accelerating adoption of digital technology. We look forward to deploying our remote measurement, estimation, and design solutions to help our clients and the industry as a whole carry on business in this time when virtual solutions are needed now more than ever.
Financial results from operations for the first quarter 2020 with comparatives for 2019 are as follows:
|Three Months Ended March 31|
|Loss per share||($0.00)||($0.00)|
|Weighted Average Shares Outstanding||36,610,507||33,854,477|
The Company’s financial position as of March 31, 2020 with comparatives from 2019 is as follows:
|March 31, 2020||December 31, 2019|
|Long- term liabilities||$438,133||$471,531|
|Shareholder’s Equity (Deficiency)||($56,019)||($10,942)|
The COVID-19 virus continues to cast significant future uncertainty. The continued spread of COVID-19 in North America and globally could have an adverse impact on the company’s operations and financial results. While the impact of COVID-19 is expected to be temporary, the current circumstances are dynamic and the immediate impact to the Company’s business operations cannot be reasonably estimated at this time. The extent to which the coronavirus could impact the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and actions taken to contain the coronavirus or its impact, among other unpredictable events.
The Canadian government has announced various programs to assist companies experiencing significant impacts as a result of the COVID-19 pandemic, one of which was the Canadian Emergency Wage Subsidy (CEWS) program. This program provides a non-repayable subsidy of 75% of employee wages up to a maximum of $847 per eligible employee per program week for eligible employers. The Company is eligible to receive benefits from this non-repayable subsidy. To date the Company has received $116,576 in wage subsidies from this program for the period March 15 to April 11, 2020. A total of $58,288 of this amount is included in the trade and other receivables balance and as a reduction to general and administrative expenses of the financial statements for the period ended March 31, 2020. There can be no assurances that the Company will qualify for additional subsidies under this program.
Regarding COVID-19, management developed detailed mitigation plans commencing March 17, 2020, and meets with the Board of Directors weekly to review the Company status. Firstly, employee safety and health were paramount. Every employee has worked remotely since March 15 and every employee reports vigilance in practicing safe and healthy habits at home. No employees nor their families are known to have contracted the coronavirus as of today’s date. The transition to remote working proceeded as planned. Further, there have been no known negative impacts to deadlines or productivity with regard to customer service, software development, or employee morale. Finally, aided by the CEWS program, no employees were laid off and no employee hours were reduced as at today’s date. We continue to remotely interface with customers and monitor any cash flow impacts that may arise.
Renoworks Software Inc. develops and sells unique digital visualization software and integration solutions for the remodeling and new home construction industry. Renoworks delivers its technology to manufacturers, contractors, builders, and retailers offering solutions to one of the home improvement industry’s greatest challenges: enabling homeowners to review their product selections in a hyper-realistic, virtual environment before committing to purchases and construction. Renoworks markets its technologies as an innovative engagement, sales, and marketing platform and generates revenues from five main business lines: Renoworks Enterprise, Renoworks PRO, Renoworks Design Services, Renoworks FastTrack, and Renoworks API (Application Programming Interface). For more information, visit www.renoworks.com and www.renoworkspro.com.
For further information on Renoworks, please contact:
Doug Vickerson, CEO
Renoworks Software Inc.
2721 Hopewell Place NE
Calgary, Alberta, Canada T1Y 7J7
Adjusted EBITDA is a measure not recognized under IFRS. However, management of Renoworks believes that most shareholders, creditors, other stakeholders and investment analysts prefer to have these measures included as reported measures of operating performance, a proxy for cash flow, and to facilitate valuation analysis. Adjusted EBITDA is defined as earnings before interest income, taxes, depreciation and amortization, stock based compensation, restructuring costs, impairment charges and other non-recurring gains or losses. Management believes Adjusted EBITDA is a useful measure that facilitates period-to-period operating comparisons.
Adjusted EBITDA does not have any standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Readers are cautioned that Adjusted EBITDA is not an alternative to measures determined in accordance with IFRS and should not, on its own, be construed as indicators of performance, cash flow or profitability. References to the Renoworks’ Adjusted EBITDA should be read in conjunction with the financial statements and management’s discussion and analysis of Renoworks posted on SEDAR (www.sedar.com).
Forward Looking Information
Certain statements in this news release, other than statements of historical fact, are forward looking information that involves various risks and uncertainties. Such statements relating to, among other things, the prospects for the company to enhance operating results, realize a revenue or other return on technology and platform development, capitalize on actual or perceived opportunities in the marketplace, or adequately cope with the impact of COVID-19, are necessarily subject to risks and uncertainties, some of which are significant in scope and nature. These uncertainties may cause actual results to differ from information contained herein. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral forward looking statements are based on the estimates and opinions of the management on the dates they are made and expressly qualified in their entirety by this notice. The Company assumes no obligation to update forward-looking statements should circumstances or management’s estimates or opinions change.
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