Q2 2024 revenue of $30.4 million – an increase of $5.2 million, or 20.6%, over Q2 2023. This is the strongest Q2 revenue in SSC's history.
Q2 2024 Adjusted EBITDA of $1.1 million ($0.06 per share) – an increase of $0.3 million, or 33%, over Q2 2023.
REGINA, SK, May 21, 2024 /CNW/ - SSC Security Services Corp. ("SSC" or the "Company) (TSXV: SECU) (OTCQX: SECUF), a national provider of cyber, physical and electronic security services to commercial, industrial and public sector clients across Canada, is pleased to release its results for the second quarter of the 2024 fiscal year ended March 31, 2024. All figures are presented in Canadian dollars.
"We have reached a couple of milestones this quarter with some of the strongest results in the history of the company. January to March is typically a slow period for the security industry, and our team generated record Q2 revenues while containing expenses allowing us to improve our adjusted EBITDA and overall profitability. I'm very proud of the hard work of our team this quarter and our continued progress in creating value for our shareholders", said Chairman and CEO Doug Emsley.
Q2 2024 HIGHLIGHTS
During the second quarter, which ended on March 31, 2024, revenue was the strongest in SSC's Q2 history at $30.4 million. This represents an increase of $5.2 million (20.6% organic growth) over the revenue recorded in the same period last year. This represents very strong results for what is typically a slower quarter for the Company.
Adjusted EBITDA for the quarter was $1.1 million ($0.06 per share), up from $0.8 million ($0.04 per share) during the same quarter last year (33% increase over Q2 2023).
During the quarter we paid $0.03 per share in dividends to shareholders and bought back 233,900 shares of the Company.
We finished the quarter ended March 31, 2024 with:
Cash and cash equivalents of $14.1 million (versus $9.8 million in Q1 2024);
Working capital of $28.6 million (versus $27.8 million in Q1 2024);
Further monetization of Legacy assets yielding a gain of $1.0 million during Q2 2024, and remaining Legacy assets of $6.8 million (versus $7.7 million in Q1 2024);
Total shareholders' equity of $66.3 million (versus $66.9 million in Q1 2024); and
No long-term debt.
Key Performance Indicators for the quarter and previous comparable period are summarized below:
Key Performance Indicators
Quarter ended
Six months ended
March 31
March 31
2024
2023
2024
2023
Revenue
30,402
25,218
61,284
53,237
Cost of Sales
26,133
21,213
52,474
45,000
Gross Profit
4,269
4,005
8,810
8,237
Comprehensive net income (loss)
650
(40)
716
245
Comprehensive net income (loss) per share (basic)
0.03
(0.00)
0.04
0.01
Adjusted EBITDA
1,130
848
2,501
1,728
Adjusted EBITDA per share (basic)
$0.06
$0.04
$0.13
$0.09
REVENUE, GROSS PROFIT & NET INCOME
Revenues for the quarter ended March 31, 2024, were $30.4 million compared with $25.2 million during the previous quarter ended March 31, 2023, an increase of $5.2 million (revenue increase of 20.6%). Traditionally we see a seasonal reduction in revenues in our second quarter, but over the last three months demand has remained high and revenues are therefore consistent with that of the quarter ended December 31, 2023.
Revenues for the YTD ended March 31, 2024 were $61.3 million compared with $53.2 million during the same period last year, an increase of $8.1 million or 15.2%. The increase in revenues is entirely attributable to internally generated organic growth.
Gross profit for the quarter ended March 31, 2024 increased to $4.3 million from $4.0 million during the same quarter last year. The gross margin % for both periods remains within our long-term expectations for the security business.
Comprehensive net income for the quarter ended March 31, 2024 was $0.7 million (profit of $0.03 per share), compared to a comprehensive net loss in the same quarter last year of $0.0 million (loss of $0.00 per share).
ADJUSTED EBITDA
Adjusted EBITDA, and Adjusted EBITDA per share are the primary KPI's used by the Company to measure the financial performance of the Company. Adjusted EBITDA for the quarter ended March 31, 2024, was $1.1 million ($0.06 per share), as compared to $0.8 million ($0.04 per share) during the same quarter last year.
Adjusted EBITDA for the six months ended March 31, 2024, was $2.5 million ($0.13 per share), as compared to $1.7 million ($0.09 per share) during the same six months last year.
A reconciliation of earnings to EBITDA and Adjusted EBITDA is provided in the Non-IFRS section of the MD&A published concurrently with this press release.*
BALANCE SHEET
Key balance sheet items are summarized below:
Statements of Financial Position
As at
As at
31-Mar-24
31-Mar-23
Cash
14,097
12,781
Accounts receivable
23,298
20,540
Legacy business assets
6,759
10,557
Working capital
28,586
25,968
Long-term debt
0
0
Total assets
83,774
84,959
Total liabilities
17,449
15,628
Total shareholders' equity
66,326
69,331
Common shares outstanding
18,933
19,454
UPDATE ON NORMAL COURSE ISSUER BID
During the quarter ended March 31, 2024, we bought back 233,900 shares.
We renewed our NCIB for the upcoming year on January 4, 2024 because we continue to believe that our shares have been trading in a price range which does not adequately reflect their value and that the purchase of shares under the NCIB will enhance shareholder value in general.
OUTLOOK
We expect demand for security services to continue to grow and our national presence will assist us in winning new contracts across all geographic regions in the country. Additional growth may come via acquisition, as we look to acquire other companies in the Canadian security industry. Any additional acquisitions will of course accelerate our growth, however we will continue to be disciplined and conservative in our approach to any new deals.
The majority of our remaining legacy assets are expected to convert to cash over the next year. Our objective is to make these resources available for the expansion of our security business.
We plan to continue to distribute capital to shareholders via the dividend, operate with minimal to no debt while maintaining solid liquidity, and focus on maximizing Adjusted EBITDA per share.
ABOUT SSC
SSC Security Services Corp. is a national provider of cyber, physical and electronic security services to corporate and public sector clients across Canada. For more information, please visit www.securityservicescorp.ca
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Forward Looking Statements
This release includes forward-looking statements regarding SSC and its business. Such statements are based on the current expectations and views of future events of SSC's management. In some cases the forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms, or other similar expressions intended to identify forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting SSC, including risks regarding the security industry, the agricultural industry, economic factors and the equity markets generally and many other factors beyond the control of SSC. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and SSC undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
*Non-IFRS Measures
SSC measures key performance metrics established by management as being key indicators of the Company's strength, using certain non-IFRS performance measures, including:
EBITDA, EBITDA per share, Adjusted EBITDA, and Adjusted EBITDA per share.
The Company uses these non-IFRS measures for its own internal purposes. These non-IFRS measures do not have any standardized meaning prescribed by IFRS, and these measures may be calculated differently by other companies. The presentation of these non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Company provides these non-IFRS measures to enable investors and analysts to understand the underlying operating and financial performance of the Company in the same way as it is frequently evaluated by Management. Management will periodically assess these non-IFRS measures and the components thereof to ensure their continued use is beneficial to the evaluation of the underlying operating and financial performance of the Company. For more detailed information, please refer to pages 18 and 19 of the Company's Management Discussion and Analysis dated May 17, 2024 available on the Company's website at www.securityservicescorp.ca and on SEDAR+ at www.sedarplus.ca.
