Renoworks reports sixth consecutive quarter of record revenues
CALGARY, ALBERTA, November 28, 2017 – Renoworks Software Inc. (TSXV: RW)(“Renoworks” or the “Company”) a leading provider of digital home imaging software and web solutions for new home construction and existing home renovations, today announced financial results for the third quarter ended September 30, 2017.
Financial highlights for the third quarter 2017:
• Sixth consecutive quarter of record revenues.
• Record revenues of $800,356 for the three months ended September 30, 2017 compared to $730,835 in 2016, an increase of 10%.
• Annual Recurring Revenue of $414,284 for the quarter ending September 30, 2017 increased from $392,217 for the same period in 2016, an
increase of 6%.
• 52% of the third quarter’s revenue in 2017 is attributable to annual recurring customer contracts.
• Gross margins continue to be strong at 73% and 72%, respectively for the third quarter 2017 and the 9 months ended September 2017.
• Long term debt continues to decline, from $241,284 at December 31, 2016 to $183,885 at September 30,2017, a decrease of $57,399. The
Company sees no additional borrowing needs in the near future as cash balances allow the Company to execute its strategy.
• Working capital remains strong in 2017. At September 30, 2017 working capital is $848,412 compared to $328,795 at December 31, 2016 and
$362,133 at September 30, 2016. Cash balances remain strong allowing the Company to continue executing on its growth strategy.
• Deferred revenue increased to $535,480 from $392,904 at December 31, 2016. Of that total $293,000 is from annual client recurring
revenues. This has increased from $221,000 at September 30, 2016, an increase in recurring client balances of 25%. These balances
represent annual licensing billings to customers that currently utilize our visualization solutions.
Doug Vickerson, CEO of Renoworks, stated, “The past 9 months and sixth consecutive quarter of record revenues underscores what we believe is a sustainable sales momentum that should further springboard sales in the 4th quarter strengthening an already record year.” Mr. Vickerson continued, “Although we are very pleased with our financial results year-to-date, we are even more pleased about the investments we have made in our team to position us for growth in 2018. Over the last year we have added to both our Development and Project Management Team in order to keep up with the increase in demand for our solutions across all four business units. For the remainder of the year we will also be expanding our sales team. Coming into 2018, the Renoworks business will be ready for growth.”
Business highlights and activity for the third quarter 2017:
Operational and Development Team Expansion – In order to meet current market demand for Renoworks’ solutions, the Company has invested into its operational and development team. During the third quarter of 2017 three new resources were added. This is in addition to the fifteen resources added since the beginning of 2017. With this increased capacity Renoworks is now positioned to capitalize on market demand and increase our financial performance in future quarters.
Platform R&D – The investment in adding additional capacity has also allowed the Company to reallocate resources into R&D activities that will benefit all business units. During the fiscal year R&D expenses have increased by 68% over the same period as last year. The Company continues to make strategic investments into our platform to allow us to scale both more efficiently and effectively. In addition to performance improvements, Renoworks is also making investments in new technology that will be introduced to the market in future quarters.
Enterprise Business Unit – The demand for enterprise solutions continues to be high for new clients. Given the recent investment in Research and Development, the Company is realizing continued growth with existing clientele with the advent of new and exciting products and solutions. Strategies on expanding this segment continue to be a focus and the Company expects to increase market share in 2018.
RW PRO Business Unit – Our Renoworks PRO business unit is broken down into two categories – remodel and new home construction. In the remodel category, we continue to expand with contractors to provide both visualization software and our newly expanded Design services offering. In the builder category, we see this as a natural move to expand our offering as most if not all our Enterprise customers also have builders as a target market.
GSB Design Services Business Unit – The Design Services offering will continue to be a key area of focus for Renoworks in 2018. We are excited about bringing on new customers to this expanded service offering and continuing to grow this business unit.
Renoworks SDK Business Unit – Renoworks continues to partner and speak with potential partners on utilizing our visualization platform for new industry solutions. We are currently working with a number of new partners and look forward to seeing this business unit expand in 2018.
Mr. Vickerson added, “Our strategic decision to invest from an R & D perspective into our solution platform will expand our market reach in 2018. Partnerships and the Builder market represent the area for market expansion.”
Financial results from operations for the third quarter 2017 with comparatives for 2016 are as follows:
Financial results from operations for the year to date 2017 with comparatives for 2016 are as follows:
The Company’s financial position as of September 30, 2017 with comparatives from 2016 is as follows:
Renoworks Software Inc. develops and sells unique digital visualization software for the remodelling and new home construction industry, primarily in the United States and Canada. Delivered online, as a custom developed app or desktop software, Renoworks provides its technology to manufacturers, contractors, builders and retailers offering the solution to one of the home remodelling industry’s greatest challenges: enabling customers to see how their product choices will look in a realistic, virtual environment – even in their own home – before they make a purchase decision.Renoworks markets its software as a cost-effective lead generation tool and generates revenues from four main business lines: Enterprise, Renoworks PRO, Renoworks GSB and Renoworks SDK (Software Development Kit). For more information, visit www.renoworks.com
For further information please contact:
Doug Vickerson, CEO
Email: [email protected]
Renoworks Software Inc.
2816 -21st Street NE, Suite 7
Calgary, Alberta, Canada T2E 6Z2
For investor information please contact:
Email: [email protected]
Contact Financial Corp.
810 – 609 Granville St.
Vancouver, BC, Canada V7Y 1G5
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, 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.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Not for dissemination in the United States or for distribution to United States news wire services.