SSC Security Services Corp. Announces Continued Record Growth with FY2024 Q1 Results

• Strongest Q1 Revenue in SSC's history. Q1 2024 revenue of $30.9 million – an increase of 10.2% over Q1 2023, and $1.6 million higher than the last quarter (5.4% increase from the last quarter).
• Q1 2024 Adjusted EBITDA of $1.4 million ($0.07 per share) – an increase of $0.5 million over Q1 2023 (56% increase over Q1 2023)
• Q1 2024 Adjusted net income of $0.7 million ($0.04 per share) compared with an adjusted net income of $0.3 million ($0.01 per share) in Q1 2023.

REGINA, SK, Feb. 12, 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 first quarter of the 2024 fiscal year ended December 31, 2023. All figures are presented in Canadian dollars.

"Our results this quarter represent a strong start to our new fiscal year and our strategy of maintaining a strong balance sheet with no debt, robust organic growth, and careful cost management is paying off for our shareholders." said Chairman and CEO Doug Emsley.

Q1 2024 HIGHLIGHTS

• During the first quarter ended December 31, 2023, revenue was $30.9 million, up $2.9 million (10.2% organic growth) over revenue recorded in the same period last year and representing an increase of 5.4% from last quarter (Q4 2023).
• Adjusted EBITDA for the quarter was $1.4 million ($0.07 per share), up from $0.9 million ($0.04 per share) during the same quarter last year (56% increase over Q1 2023).
• During the quarter we paid $0.03 per share in dividends to shareholders and bought back 128,100 shares of the Company at an average of $2.59 per share.
• We finished the quarter ended December 31 with (comparison to prior quarter – Q4 2023):
  • Cash and cash equivalents of $9.8 million ($14.8 million);
  • Working capital of $27.8 million ($28.3 million);
  • Legacy assets (including assets held for sale and mortgages & loans receivable) of $7.7 million ($8.3 million);
  • Total shareholders' equity of $66.9 million ($67.7 million); and
  • Long-term debt of nil (nil).

Key Performance Indicators for the quarter and previous comparable period are summarized below:

Key Performance Indicators	Quarter ended
	31-Dec
	2023	2022
Revenue	30,882	28,024
Cost of Sales	26,341	23,787
Gross Profit	4,541	4,237
Gross Margin (%)	14.7 %	15.1 %
Comprehensive net income	66	286
Comprehensive net income per share (basic)	$0.00	$0.01
Adjusted EBITDA	1,371	879
Adjusted EBITDA per share (basic)	$0.07	$0.04

REVENUE, GROSS PROFIT & NET INCOME

During the first quarter ended December 31, 2023, revenue was $30.9 million, up $2.9 million (or 10.2%) over revenue recorded in the same period last year and representing organic growth of 5.4% from last quarter (Q4 2023).  The year-over-year and quarter-over-quarter increases are entirely attributed to internally generated organic growth.

Gross profit for the quarter ended December 31, 2023 increased to $4.5 million (14.7% of revenue) from $4.2 million (15.1% of revenue) 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 December 31, 2023 was $0.1 million (profit of $0.00 per share), compared to a comprehensive net income in the same quarter last year of $0.3 million (profit of $0.01 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 December 31, 2023, was $1.4 million ($0.07 per share), as compared to $0.9 million ($0.04 per share) during the same quarter last year.

Net Income and Adjusted EBITDA	Quarter ended
	31-Dec
	2023	2022
Net income	66	286
Adjusted EBITDA	1,371	879
Adjusted EBITDA per share	$0.07	$0.04

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-Dec-23	31-Dec-22
Cash	9,779	9,199
Accounts receivable	25,298	23,524
Legacy contract assets	5,817	7,093
Assets held for sale	800	800
Mortgages and loans receivable	1,090	4,076
Total assets	82,755	86,965
Total liabilities	15,872	16,969
Total shareholders' equity	66,882	69,997
Common shares outstanding	19,193	19,484
Working capital	27,808	25,151
Long-term debt	0	0

UPDATE ON NORMAL COURSE ISSUER BID

During the quarter ended December 31, 2023, we bought back 128,100 shares at an average price of $2.59 per share.

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 February 12, 2024 available on the Company's website at www.securityservicescorp.ca and on SEDAR+ at www.sedarplus.ca.  

SOURCE SSC Security Services Corp.

Doug Emsley, President & CEO, [phone], [email protected]; Brett Leonard, Chief Financial Officer, [phone], [email protected]