Kinaxis Inc. Reports First Quarter 2021 Results

• SaaS revenue grows 19% to $40.6 million
• Adjusted EBITDA⁽¹⁾ margin of 16%

OTTAWA, ON, May 4, 2021 /CNW/ - Kinaxis® (TSX: KXS), the authority in driving agility for fast, confident decision-making in an unpredictable world, today reported results for its first quarter. All amounts are in U.S. dollars. All figures are prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise indicated.

"We're pleased with the results of our first quarter, which represent a good initial step towards achieving our outlook for the year. While COVID-related delays are not fully behind us, the environment for booking new business has shown continued signs of improvement. We won a record number of new customers for a first quarter, which together with project expansions, resulted in record first quarter incremental subscription bookings. Overall, we continue to see a heightened level of interest from companies looking to drive hyper-agility in their supply chain," said John Sicard, President and CEO of Kinaxis.

Q1 2021 Highlights

$ USD thousands, except as otherwise indicated	Q1 2021	Q1 2020	Change
Total Revenue	57,728	52,755	9%
SaaS	40,576	33,995	19%
Subscription term license	2,059	4,904	(58%)
Professional services	12,027	10,673	13%
Maintenance and support	3,066	3,183	(4%)
Gross profit	37,222 64%	36,919 70%	1%
Profit (Loss)	(1,534) ($0.06)/diluted share	5,581 $0.20/diluted share	(127%)
Adjusted EBITDA^(1)	9,041 16%	15,052 29%	(40%)
Cash from operating activities	20,649	20,960	(1%)

(1)	"Adjusted EBITDA" is a non-IFRS measure and is not a recognized, defined or a standardized measure under IFRS. This measure as well as other non-IFRS financial measures reported by Kinaxis are defined in the "Non-IFRS Measures" section of this news release.

Financial Guidance and Outlook
The nature of the company's long-term contracts provides visibility into future, contracted revenue. The following table presents revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at March 31, 2021.

$USD millions	2021	2022	2023 and later	Total backlog
SaaS	119.8	118.6	122.4	360.8
Maintenance and support	9.2	8.4	5.1	22.7
Subscription term license	0.5	-	-	0.5
Total	129.5	127.0	127.5	384.0

Based on this backlog and the current outlook, Kinaxis is reiterating its fiscal 2021 financial guidance, as follows:

	FY 2021 Guidance
Total revenue	$242-247 million
SaaS	17-20% growth
Subscription term license	$3-5 million
Adjusted EBITDA^(1) margin	11-14%

Beyond 2021, and assuming more typical business and market conditions, the company continues to believe that annual SaaS revenue growth of 23-25% is achievable in the mid-term.

Guidance in this press release is provided to enhance visibility into Kinaxis' expectations for financial targets for the periods indicated. Please refer to the section regarding forward-looking statements that forms an integral part of this release. This press release along with the financial statements and MD&A for the three months ended March 31, 2021 are available on Kinaxis' website and on SEDAR at www.sedar.com.

Conference Call
Kinaxis will host a conference call tomorrow, May 5, 2021, to discuss these results. John Sicard, Chief Executive Officer, and Richard Monkman, Chief Financial Officer, will host the call starting at 8:30 a.m. Eastern Time. A question and answer session will follow management's presentation. Investors and participants must register for the call in advance. See registration link below. Please call the conference telephone number fifteen minutes prior to the start time.

CONFERENCE CALL DETAILS
DATE:	Wednesday, May 5, 2021
TIME:	8:30 a.m. Eastern Time
CALL REGISTRATION:	http://www.directeventreg.com/registration/event/8858568
WEBCAST:	https://bit.ly/3tl0i7d
REPLAY:	[phone] or [phone]
	Available through Wednesday, May 19, 2021
REFERENCE NUMBER:	8858568

About Kinaxis Inc.
Everyday volatility and uncertainty demand quick action. Kinaxis® delivers the agility to make fast, confident decisions across integrated business planning and the digital supply chain. People can plan better, live better and change the world. Trusted by innovative brands, we combine human intelligence with AI and concurrent planning to help companies plan for any future, monitor risks and opportunities and respond at the pace of change. Powered by an extensible, cloud-based platform, Kinaxis delivers industry-proven applications so everyone can know sooner, act faster and remove waste. For more Kinaxis news, follow us on LinkedIn or Twitter.

Non-IFRS Measures
This news release contains non-IFRS measures, specifically Adjusted EBITDA and Adjusted EBITDA margin. We use Adjusted EBITDA to provide investors with a supplemental measure of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures.  We believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers.  Management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure and working capital requirements. Adjusted EBITDA and Adjusted EBITDA margins are not recognized, defined or standardized measures under IFRS. Our definition of Adjusted EBITDA and Adjusted EBITDA margin will likely differ from that used by other companies (including our peers) and therefore comparability may be limited.  Non-IFRS measures should not be considered a substitute for or in isolation from measures prepared in accordance with IFRS. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue reliance on non-IFRS measures and view them in conjunction with the most comparable IFRS financial measures. Kinaxis has reconciled Adjusted EBITDA to the most comparable IFRS financial measure as follows:

	Three months ended March 31,
	2021			2020
	(In thousands of USD)
Profit (loss)..................................................................	$	(1,534)		$	5,581
Share-based compensation........................................	5,307			3,776
Adjusted profit............................................................	$	3,773		$	9,357
Income tax expense....................................................	68			3,476
Depreciation and amortization...................................	4,470			2,941
Foreign exchange loss (gain)......................................	468			(49)
Net finance income (expense)....................................	262			(673)
	5,268			5,695
Adjusted EBITDA.........................................................	$	9,041		$	15,052
Adjusted EBITDA as a percentage of revenue............		16%		29%

Forward-Looking Statements
Certain statements in this release constitute forward-looking statements within the meaning of applicable securities laws.  Forward-looking statements include statements as to our expectations for:

• growth of annual total revenue, annual SaaS and Subscription term licenses revenue, and our expectations for Adjusted EBITDA margin achievement, in each case looking forward for our fiscal years ending December 31, 2021; and
• contracted revenue in future periods, including 2021, 2022 and 2023 and later.

This release also includes forward-looking statements as to Kinaxis' growth opportunities and the potential benefits of, and markets and demand for, Kinaxis' products and services. These statements are subject to certain assumptions, risks and uncertainties, including our view of the relative position of Kinaxis' products and services compared to competitive offerings in the industry.

In particular, our guidance for 2021 annual total revenue, annual SaaS and Subscription term license revenue and annual Adjusted EBITDA margin, is subject to certain assumptions and associated risks including:

• our ability to win business from new customers and expand business from existing customers;
• the timing of new customer wins and expansion decisions by our existing customers;
• maintaining our current customer retention levels; and
• with respect to Adjusted EBITDA, our ability to contain expense levels while expanding our business.

Our guidance and commentary for achievement of contracted revenue in future periods, including in 2021, 2022 and 2023 and later, is based on assumptions and associated risks including:

• our ability to satisfy material unperformed obligations under our long-term contracts; and
• the continued financial capacity and creditworthiness of our customers under long-term contracts.

Our guidance and commentary for annual SaaS revenue growth beyond 2021 is based on assumptions and associated risks including normalization of macroeconomic factors, including business and market conditions, relative to recent conditions that have been affected by the COVID-19 pandemic. These and other assumptions, risks and uncertainties may cause Kinaxis' actual results, performance, achievements and developments to differ materially from the results, performance, achievements or developments expressed or implied by forward-looking statements. Material risks and uncertainties relating to our business are described under the headings "Forward-Looking Statements" and "Risks and Uncertainties" in our annual MD&A dated March 3, 2021, under the heading "Risk Factors" in our Annual Information Form dated March 25, 2021 and in our other public documents filed with Canadian securities regulatory authorities, which are available at www.sedar.com. Forward-looking statements are provided to help readers understand management's expectations as at the date of this release and may not be suitable for other purposes. Readers are cautioned not to place undue reliance on forward-looking statements. Kinaxis assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.

Kinaxis Inc.

Condensed Consolidated Interim Statements of Financial Position

(Expressed in thousands of USD)
(Unaudited)

	March 31, 2021	December 31, 2020
Assets
Current assets:
Cash and cash equivalents	199,143	182,958
Short-term investments	30,182	30,180
Trade and other receivables	70,945	82,883
Investment tax credits recoverable	-	1,109
Prepaid expenses	10,138	9,264
	310,408	306,394
Non-current assets:
Property and equipment	32,019	30,746
Right-of-use assets	15,127	15,722
Contract acquisition costs	17,152	16,484
Unbilled receivables	913	2,013
Other receivables	701	752
Deferred tax assets	2,986	2,308
Investment tax credits recoverable	2,514	980
Intangible assets	12,462	13,023
Goodwill	39,988	39,988
	434,270	428,410
Liabilities and Shareholders' Equity
Current liabilities:
Trade payables and accrued liabilities	29,437	33,030
Deferred revenue	98,182	94,275
Lease obligations	4,796	4,554
	132,415	131,859
Non-current liabilities:
Lease obligations	11,316	12,065
Deferred tax liabilities	3,018	2,729
	14,334	14,794
Shareholders' equity:
Share capital	176,263	173,104
Contributed surplus	40,254	35,846
Accumulated other comprehensive loss	(289)	(20)
Retained earnings	71,293	72,827
	287,521	281,757
	434,270	428,410

Kinaxis Inc.
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)

For the three months ended
(Expressed in thousands of USD, except share and per share data)
(Unaudited)

	March 31,	March 31,
	2021	2020
Revenue	57,728	52,755
Cost of revenue	20,506	15,836
Gross profit	37,222	36,919
Operating expenses:
Selling and marketing	12,838	11,975
Research and development	13,682	9,677
General and administrative	11,542	6,932
	38,062	28,584
	(840)	8,335
Other income (expense):
Foreign exchange gain (loss)	(468)	49
Net finance and other income (expense)	(158)	673
	(626)	722
Profit (loss) before income taxes	(1,466)	9,057
Income tax expense	68	3,476
Profit (loss)	(1,534)	5,581
Other comprehensive income (loss):
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation differences - foreign operations	(269)	(124)
Total comprehensive income (loss)	(1,803)	5,457
Basic earnings (loss) per share	(0.06)	0.21
Weighted average number of basic Common Shares	27,109,227	26,432,585
Diluted earnings (loss) per share	(0.06)	0.20
Weighted average number of diluted Common Shares	27,109,227	27,534,441

Kinaxis Inc.
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity

For the three months ended March 31, 2021 and 2020
(Expressed in thousands of USD)
(Unaudited)

			Accumulated
			other
	Share	Contributed	comprehensive	Retained
	capital	surplus	income (loss)	earnings	Total equity
Balance, December 31, 2019	140,961	30,392	(348)	59,097	230,102
Profit	-	-	-	5,581	5,581
Other comprehensive (loss)	-	-	(124)	-	(124)
Total comprehensive income (loss)	-	-	(124)	5,581	5,457
Share options exercised	6,724	(1,714)	-	-	5,010
Share based payments	-	3,776	-	-	3,776
Total shareholder transactions	6,724	2,062	-	-	8,786
Balance, March 31, 2020	147,685	32,454	(472)	64,678	244,345
Balance, December 31, 2020	173,104	35,846	(20)	72,827	281,757
Profit (loss)	-	-	-	(1,534)	(1,534)
Other comprehensive (loss)	-	-	(269)	-	(269)
Total comprehensive (loss)	-	-	(269)	(1,534)	(1,803)
Share options exercised	3,159	(899)	-	-	2,260
Share based payments	-	5,307	-	-	5,307
Total shareholder transactions	3,159	4,408	-	-	7,567
Balance, March 31, 2021	176,263	40,254	(289)	71,293	287,521

Kinaxis Inc.
Condensed Consolidated Interim Statements of Cash Flows

For the three months ended            
(Expressed in thousands of USD)
(Unaudited)

	March 31,	March 31,
	2021	2020
Cash flows from operating activities:
Profit (loss)	(1,534)	5,581
Items not affecting cash:
Depreciation of property and equipment and right-of-use assets	3,909	2,899
Amortization of intangible assets	561	42
Share-based payments	5,307	3,776
Net finance and other income (expense)	158	(673)
Income tax expense	68	3,476
Income tax credits recoverable	(425)	-
Change in operating assets and liabilities	12,940	6,856
Interest received	23	862
Interest paid	(184)	(120)
Income taxes paid	(174)	(1,739)
	20,649	20,960
Cash flows used in investing activities:
Acquisition of businesses, net of cash acquired	(800)	(2,410)
Purchase of property and equipment	(4,441)	(1,709)
Purchase of short-term investments	(15,006)	(65,302)
Redemption of short-term investments	15,006	20,102
	(5,241)	(49,319)
Cash flows from financing activities:
Payment of lease obligations	(1,172)	(591)
Common shares issued on exercise of stock options	2,260	5,010
	1,088	4,419
Increase (decrease) in cash and cash equivalents	16,496	(23,940)
Cash and cash equivalents, beginning of period	182,958	182,284
Effects of exchange rates on cash and cash equivalents	(311)	(196)
Cash and cash equivalents, end of period	199,143	158,148

SOURCE Kinaxis Inc.

Investor Relations: Rick Wadsworth | Kinaxis, Tel: [phone], [email protected]; Media Relations: Danielle McNeil Taylor | Kinaxis, Tel: [phone], [email protected]

Related Links

www.kinaxis.com