Second Quarter 2024 Financial Highlights
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Revenue of $11.6 million, an increase of $1.1 million or 10%, from the same period in the prior year.
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Gross profit of $5.3 million, an increase of $0.6 million or 14% from the same period in the prior year.
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Net loss of $0.6 million, a decrease of $3 million from the same period in the prior year.
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Adjusted EBITDA1 of $0.8 million, an improvement of $1.7 million, or 181%, from the same period in the prior year.
"We are thrilled to report a significant improvement of approximately $1.7M to Adjusted EBITDA from the same period last year. This growth reflects the success of our strategic productivity margin initiatives, tight cost management and revenue expansion in an industry experiencing rapid modernization due to the integration of AI technology. We remain focused on executing our strategic priorities and financial targets. Enhancing VIQ’s Adjusted EBITDA performance remains a top priority,". Alexie Edwards, VIQ’s Chief Financial Officer stated.
1 Represents a non-IFRS measure. Non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Management believes non-IFRS measures, including Adjusted EBITDA, provide supplementary information to IFRS measures used in assessing the performance of the Company’s business. Please refer to the "Non-IFRS Measures" section below.
A copy of the Company’s unaudited financial statements and accompanying MD&A for the three and six months ended June 30, 2024 (collectively, the "Financial Information") will be available under the Company’s profile on SEDAR+ at www.sedarplus.ca.
Conference Call Details
VIQ will host a conference call and webcast to discuss Financial Information on Tuesday August 13, 2024, at 11:00 a.m. (Eastern time). The call will consist of updates by Sebastien Paré, VIQ’s Chief Executive Officer, Alexie Edwards, VIQ’s Chief Financial Officer, and Susan Sumner, VIQ’s President and Chief Operating Officer, followed by a question-and-answer period.
Investors may access a live webcast of the call on the Company’s website at www.viqsolutions.com/investors or by dialing 1-888-440-4052 (North America toll-free) or +1-646-960-0827 (international) to be connected to the call by an operator using conference ID number 4983233. Participants should dial at least 10 minutes before the call starts.
A replay of the webcast will be available on the Company’s website through the same link approximately one hour after the conference call concludes.
About VIQ Solutions
VIQ Solutions is a global provider of secure, AI-driven, digital voice and video capture technology and transcription services. VIQ offers a seamless, comprehensive solution suite that delivers intelligent automation, enhanced with human review, to drive transformation in the way content is captured, secured, and repurposed into actionable information. The cyber-secure, AI technology and services platform are implemented in the most rigid security environments including criminal justice, legal, insurance, government, corporate finance, media, and transcription service provider markets, enabling them to improve the quality and accessibility of evidence, to easily identify predictive insights and to achieve digital transformation faster and at a lower cost.
Forward-looking Statements
Certain statements included in this press release constitute forward-looking statements or forward-looking information (collectively, "forward-looking statements") under applicable securities legislation. Such forward- looking statements or information are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.
Forward-looking statements (typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words, including negatives thereof, suggesting future outcomes or that certain events or conditions "may" or "will" occur). These statements are only predictions. Forward-looking statements in this press release include but are not limited to statements with respect to the Company’s improved 2024 performance, including to gross margin, the Company’s focus and its priorities, expected higher volumes, increases in SaaS sales and the evolution of sectors in 2024, the filing of the Financial Information on SEDAR+ and the conference call to discuss the Company’s financial results.
Forward-looking statements are based on several factors and assumptions which have been used to develop such statements, but which may prove to be incorrect. Although VIQ believes that the expectations reflected in such forward-looking statements are reasonable, undue reliance should not be placed on forward-looking statements because VIQ can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding, among other things, recent initiatives, cost savings from workforce optimization, cost reductions from the Company’s workflow solutions and that sales and prospects may increase revenue. In addition to other factors and assumptions that may be identified in this press release, assumptions have been made regarding, among other things, recent initiatives, cost savings from workforce optimization, cost reductions from the Company’s workflow solutions, and that sales and prospects may increase revenue. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions that have been used.
Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates that while considered reasonable by the Company as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, including but not limited to the factors described in greater detail in the "Risk Factors" section of the Company’s annual information form and in the Company’s other materials filed with the Canadian securities regulatory authorities.
These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. Such estimates and assumptions may prove to be incorrect or overstated. The forward-looking statements contained in this press release are made as of the date of this press release and the Company expressly disclaims any obligations to update or alter such statements, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
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| VIQ Solutions Inc. | | |
| Interim Condensed Consolidated Statements of Financial Position | | |
| (Expressed in US dollars, unaudited) | | |
| | June 30,
2024 | December 31,
2023 |
| Assets | | |
| Current assets | | |
| Cash | $ | 2,101,716 | | $ | 1,621,778 | |
| Trade and other receivables, net of allowance for doubtful accounts | | 4,911,497 | | | 4,382,668 | |
| Inventories | | 25,127 | | | 29,146 | |
| Prepaid expenses and deposits | | 943,263 | | | 1,636,349 | |
| Non-current assets | | 7,981,603 | | | 7,669,941 | |
| Restricted cash | | 181,011 | | | 185,655 | |
| Property and equipment | | 872,716 | | | 1,066,194 | |
| Right-of-use assets | | 375,684 | | | 596,063 | |
| Intangible assets | | 6,971,910 | | | 8,066,733 | |
| Goodwill | | 11,977,169 | | | 12,090,609 | |
| Total assets | $ | 28,360,093 | | $ | 29,675,195 | |
| Liabilities | | |
| Current liabilities | | |
| Trade and other payables and accrued liabilities | $ | 6,320,976 | | $ | 6,269,023 | |
| Income tax payable | | 61,136 | | | 59,044 | |
| Share-based payment liability | | 28,000 | | | 25,246 | |
| Derivative warrant liability | | 133,284 | | | 188,042 | |
| Current portion of long-term debt * | | 13,929,946 | | | 19,812 | |
| Current portion of lease obligations | | 419,522 | | | 483,362 | |
| Current portion of contract liabilities | | 1,799,684 | | | 1,809,003 | |
| Non-current liabilities | | 22,692,548 | | | 8,853,532 | |
| Long-term debt * | | – | | | 13,246,176 | |
| Long-term lease obligations | | 51,004 | | | 220,750 | |
| Other long-term liabilities | | 1,091,098 | | | 1,179,639 | |
| Total liabilities | | 23,834,650 | | | 23,500,097 | |
| Shareholders' Equity | | |
| Capital stock | | 77,473,589 | | | 76,230,158 | |
| Contributed surplus | | 8,985,869 | | | 8,671,879 | |
| Accumulated other comprehensive loss | | (1,465,895 | ) | | (670,788 | ) |
| Deficit | | (80,468,120 | ) | | (78,056,151 | ) |
| Total shareholders’ equity | | 4,525,443 | | | 6,175,098 | |
| Total liabilities and shareholders’ equity | $ | 28,360,093 | | $ | 29,675,195 | |
* The Company obtained a waiver on July 25, 2024 from Beedie for the non compliance of the Maximum Total Secured Debt Leverage financial covenant for the month of June 2024. As a result, the principal amount of Note Payable and paid in kind interest owing remains due to be repaid in January 2027
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| VIQ Solutions Inc.
Interim Condensed Consolidated Statements of Loss and Comprehensive Loss
(Expressed in US dollars, unaudited) |
| | | |
| | Three months ended June 30, | Six months ended June 30, |
| | | 2024 | | | 2023 | | | 2024 | | | 2023 | |
| Revenue | $ | 11,575,614 | | $ | 10,518,893 | | $ | 21,497,287 | | $ | 20,571,464 | |
| Cost of sales | | 6,312,797 | | | 5,884,012 | | | 11,841,912 | | | 11,508,626 | |
| Gross profit | | 5,262,817 | | | 4,634,881 | | | 9,655,375 | | | 9,062,838 | |
| | | | | |
| Expenses | | | | |
| Selling and administrative expenses | | 4,328,687 | | | 5,405,644 | | | 8,639,461 | | | 10,766,945 | |
| Research and development expenses | | 155,416 | | | 189,156 | | | 320,526 | | | 333,965 | |
| Stock-based compensation | | 111,283 | | | 504,835 | | | 139,816 | | | 838,127 | |
| Gain on revaluation of RSUs | | (18,534 | ) | | (63,042 | ) | | (47,311 | ) | | (119,988 | ) |
| Loss (gain) on revaluation of the derivative warrant liability | | 7,479 | | | (24,238 | ) | | (49,686 | ) | | 134,514 | |
| Foreign exchange (gain) loss | | (590,719 | ) | | 409,270 | | | (487,886 | ) | | 646,288 | |
| Depreciation | | 194,237 | | | 183,396 | | | 389,221 | | | 409,555 | |
| Amortization | | 813,889 | | | 1,305,671 | | | 1,620,346 | | | 2,435,974 | |
| Interest expense | | 405,965 | | | 319,256 | | | 794,889 | | | 653,092 | |
| Accretion and other financing costs | | 425,216 | | | 240,570 | | | 752,094 | | | 404,286 | |
| Gain on contingent consideration | | – | | | – | | | – | | | (10,389 | ) |
| Impairment of goodwill and intangible assets | | – | | | – | | | – | | | 157,464 | |
| Restructuring costs (recovery) | | 5,874 | | | 29,454 | | | (3,820 | ) | | 56,866 | |
| Other income | | (10,208 | ) | | (4,313 | ) | | (21,413 | ) | | (9,407 | ) |
| Total expenses | | 5,828,585 | | | 8,495,659 | | | 12,046,237 | | | 16,697,292 | |
| | | | | |
| Current income tax expense (recovery) | | 6,063 | | | (47,453 | ) | | 21,107 | | | (40,091 | ) |
| Deferred income tax recovery | | – | | | (255,162 | ) | | – | | | (576,519 | ) |
| Income tax expense (recovery) | | 6,063 | | | (302,615 | ) | | 21,107 | | | (616,610 | ) |
| Net loss for the period | $ | (571,831 | ) | $ | (3,558,163 | ) | $ | (2,411,969 | ) | $ | (7,017,844 | ) |
| Exchange loss (gain) on translation of foreign operations | | (483,076 | ) | | 405,841 | | | (795,107 | ) | | 418,189 | |
| Comprehensive loss for the period | $ | (1,054,907 | ) | $ | (3,152,322 | ) | $ | (3,207,076 | ) | $ | (6,599,655 | ) |
| | | | | |
| Net loss per share | | | | |
| Basic | | (0.01 | ) | | (0.10 | ) | | (0.05 | ) | | (0.20 | ) |
| Diluted | | (0.01 | ) | | (0.10 | ) | | (0.05 | ) | | (0.20 | ) |
| Weighted average number of common shares outstanding – basic | | 51,348,578 | | | 34,804,004 | | | 48,065,488 | | | 34,693,176 | |
| Weighted average number of common shares outstanding – diluted | | 51,348,578 | | | 34,804,004 | | | 48,065,488 | | | 34,693,176 | |
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The following is a reconciliation of Net Loss to Adjusted EBITDA, the most directly comparable IFRS measure for the three and six months ended June 30, 2024, and 2023:
| | Three months ended
June 30 | | Six months ended
June 30 |
| (Unaudited) | 2024 | | 2023 | | | 2024 | | 2023 | |
| Net Loss | (571,831 | ) | (3,558,163 | ) | | (2,411,969 | ) | (7,017,844 | ) |
| Add: | | | | | |
| Depreciation | 194,237 | | 183,396 | | | 389,221 | | 409,555 | |
| Amortization | 813,889 | | 1,305,671 | | | 1,620,346 | | 2,435,974 | |
| Interest expense | 405,965 | | 319,256 | | | 794,889 | | 653,092 | |
| Current income tax (recovery) expense | 6,063 | | (47,453 | ) | | 21,107 | | (40,091 | ) |
| Deferred income tax recovery | – | | (255,162 | ) | | – | | (576,519 | ) |
| EBITDA | 848,323 | | (2,052,455 | ) | | 413,594 | | (4,135,833 | ) |
| Accretion and other financing costs | 425,216 | | 240,570 | | | 752,094 | | 404,286 | |
| Gain on revaluation of RSUs | (18,534 | ) | (63,042 | ) | | (47,311 | ) | (119,988 | ) |
| Loss (Gain) on revaluation of the derivative warrant liability | 7,479 | | (24,238 | ) | | (49,686 | ) | 134,514 | |
| Impairment of intangible assets | – | | – | | | – | | 157,464 | |
| Restructuring costs | 5,874 | | 29,454 | | | (3,820 | ) | 56,866 | |
| Other expense (income) | (10,208 | ) | (4,313 | ) | | (21,413 | ) | (9,407 | ) |
| Stock-based compensation | 111,283 | | 504,835 | | | 139,816 | | 838,127 | |
| Foreign exchange (gain) loss | (590,719 | ) | 409,270 | | | (487,886 | ) | 646,288 | |
| | | | | | |
| Adjusted EBITDA | 778,714 | | (959,919 | ) | | 695,388 | | (2,027,683 | ) |
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Non-IFRS Measures
The Company prepares its financial statements in accordance with IFRS. Non-IFRS measures are provided by management to provide additional insight into our performance and financial condition. VIQ believes non-IFRS measures are an important part of the financial reporting process and are useful in communicating information that complements and supplements the consolidated financial statements. Adjusted EBITDA is not a measure recognized by IFRS and does not have a standardized meaning prescribed by IFRS. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Investors are cautioned that Adjusted EBITDA should not be construed as an alternative to net income (loss) as determined in accordance with IFRS. For a reconciliation of net income (loss) to Adjusted EBITDA please see the Company’s MD&A for the three and six months ended June 30, 2024.
To evaluate the Company’s operating performance as a complement to results provided in accordance with IFRS, the term "Adjusted EBITDA" refers to net income (loss) before adjusting earnings for stock-based compensation, depreciation, amortization, interest expense, accretion, and other financing expense, (gain) loss on revaluation of options, (gain) loss on revaluation of restricted share units, gain (loss) on revaluation of derivative warrant liability, restructuring costs, (gain) loss on revaluation of conversion feature liability impairment of property and equipment, impairment of goodwill and intangibles, other expense (income), foreign exchange (gain) loss, current and deferred income tax expense. We believe that the items excluded from Adjusted EBITDA are not connected to and do not represent the operating performance of the Company.
We believe that Adjusted EBITDA is useful supplemental information as it provides an indication of the results generated by the Company’s main business activities prior to taking into consideration how those activities are financed and taxed as well as expenses related to stock-based compensation, depreciation, amortization, impairment of goodwill and intangibles, loss on modification or extinguishment of debt, other expense (income), and foreign exchange (gain) loss. Accordingly, we believe that this measure may also be useful to investors in enhancing their understanding of the Company’s operating performance.
Trademarks
This press release includes trademarks, such as "NetScribe", which are protected under applicable intellectual property laws and are the property of VIQ. Solely for convenience, our trademarks referred to in this press release may appear without the ® or TM symbol, but such references are not intended to indicate, in any way, that we will not assert our rights to these trademarks, trade names, and services marks to the fullest extent under applicable law. Trademarks that may be used in this press release, other than those that belong to VIQ, are the property of their respective owners.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240812754639/en/
Contacts
Media Contact:
Jacob Manning VIQ Solutions
Email: marketing@viqsolutions.com
For more information about VIQ, please visit viqsolutions.com.
