LIMERICK, Ireland, May 27, 2020 /CNW/ - kneat.com, inc. (TSXV: KSI)
("Kneat") today announced its financial results for the period
ended March 31, 2020. All
dollar amounts are presented in Canadian dollars unless otherwise
stated.
Fourth Quarter Highlights
- Revenue of $0.95 million was
recognized during the three-months ended March 31, 2020 representing an increase of 130%
over the same period in 2019.
- SaaS license fees for the three-months to March 31, 2020 were $0.41
million and this represents an increase of 528% compared
with the first quarter in 2019.
- Annualized recurring revenue ("ARR"), which includes SaaS
license fees and maintenance fees, was $2.62
million at March 31, 2020.
This is an increase of 294% compared to the ARR at March 31, 2019. More specifically, ARR from
SaaS licenses fees increased by 502% and ARR from maintenance fees
increased by 110% from March 31,
2019.
- In February, Kneat announced that it signed a three-year SaaS
agreement with a top tier medical device company. This global
company with operations in over 70 countries and over 20,000
employees selected Kneat's SaaS platform to digitize all its
validation work processes, commencing with computer system
validation.
- In March, Kneat announced that it signed a three-year SaaS
master agreement with a top ten pharmaceutical company. This global
pharmaceutical company has more than 25,000 employees across
multiple global facilities and this agreement allows this customer
to expand Kneat across its global network, to its many sites and
multiple work processes worldwide.
- During the continuing pandemic all our employees continue to
work remotely and all our operations from software development
through to product release, delivery and customer service continue
to operate effectively online.
- Due to the pandemic, we are seeing a small proportion of
companies deferring their purchasing decisions temporarily, as they
remain focused on business continuity activities. For a large
proportion, it is business as usual, including those that have
begun to deploy our software or are already using Kneat at their
sites.
- At the beginning of March 2020,
Kneat closed a short form prospectus offering, including the full
exercise of an over-allotment option resulting in aggregate gross
proceeds of $12.65 million. In
addition, Kneat also completed a non-brokered private placement for
gross proceeds of $1.83
million. The Company intends to use the net proceeds
of the Offering and the Private Placement for growth initiatives,
working capital and general corporate purposes.
Chief Executive Officer Commentary
"We are pleased to report strong revenue for quarter one,
driven by the increasing adoption of our SaaS platform and
reflecting the growing number of tier one pharma customers that are
going live and expanding our software within their networks. This
focus on SaaS, combined with our maintenance revenue stream has
contributed to strong growth in our overall annual recurring
revenue.
The long-term impact of COVID-19 on our business is difficult
to fully assess at this time. We are seeing a small proportion of
companies deferring their purchasing decisions temporarily while
others are accelerating their decision to go paperless, because of
the increased business continuity benefits that it can deliver. We
have received messages from several customers highlighting the
business continuity benefits of Kneat Gx during this pandemic.
Kneat Gx is enabling their staff to continue many aspects of their
validation activities remotely and allowing global contributors to
collaborate in the process in real time. This has reinforced the
benefits of Kneat Gx over the manual paper-based systems that it
has replaced for these customers.
We are very proud of our team as they continue to fulfil our
mission to help life sciences deliver therapies to their patients
to the highest safety standard, while working in a challenging
remote environment.
Our plan for the remainder of 2020 is to continue to add and
deploy new customers, and to expand to new work processes and new
sites within our existing customer base with a particular focus on
our SaaS platform."
-Eddie
Ryan, Chief Executive Officer of Kneat.
Financial Results Summary for the first Quarter
Revenue for the three-months ended March
31, 2020 was $0.95 million, an
increase of 130% from $0.41 million
for the same period in 2019. Gross margin of $0.05 million is consistent with the first
quarter of 2019 and reflects an increase in revenue which is offset
by an increase in cost of revenues. Cost of revenues and
professional services costs incurred during the first quarter were
expensed during the period including costs associated with
additional professional services of $0.7
million billed during the quarter which will be recognized
in future periods. The change in cost of revenue reflects increases
in salaries and benefits related to additional headcount in the
professional services team and increased hosting costs.
Net loss for the first quarter of 2020 was $0.47 million as compared to a net loss of
$1.97 million for the same period in
2019. The decrease in net loss reflects favourable foreign currency
movements resulting in a foreign exchange gain of $1.48 million in the first quarter of 2019.
This press release should be read in conjunction with the
unaudited condensed interim consolidated financial statements and
management's discussion and analysis for the period ended
March 31, 2020 which have been filed
on SEDAR at www.sedar.com and Kneat's
website at www.kneat.com
Conference Call
Mr. Eddie Ryan, Chief Executive
Officer of Kneat, and Mr. Hugh
Kavanagh, Chief Financial Officer of Kneat, will host a
conference call and Q&A for analysts via webcast on
Thursday, May 28, 2020 at
09:00 EDT (14:00 BST).
Interested parties can register for the live
webcast via the following
link:
https://bit.ly/2ZtdEBY
Or, attend via teleconference
Ireland: +353 16 572 652
Canada: +1 (647) 497-9386
USA: +1 (951) 384-3421
United Kingdom: +44 330 221
9922
The unaudited condensed interim consolidated financial
statements for the period ended March 31,
2020 will be available from the Financial Information
section of the Investors page on the Kneat Solutions website, at:
https://kneat.com/investors/
About Kneat
Kneat, a Canadian company with operational headquarters in
Limerick, Ireland, develops and
markets the next generation Kneat Gx software platform. Multiple
business work processes can be configured on the platform from
equipment to computer system validation, through to quality
document management. Kneat's software allows users to author,
review, approve, execute testing online, manage any exceptions and
post approve final deliverables in a controlled FDA 21 CFR Part 11/
Eudralex Annex 11 compliant platform. Macro and micro report
dashboards enable powerful oversight into all systems, projects,
and processes globally. Customer case studies are reporting
productivity improvements in excess of 100% and a higher data
integrity and compliance standard. For more information
visit www.kneat.com.
Non-GAAP measure
Annualized recurring revenues is used by Kneat to assess the
expected annual recurring revenue from the customers that are live
on Kneat Gx at the end of the period. Annualized recurring revenue
is calculated as the licenses delivered to customers at the period
end, multiplied by the expected customer retention rate of 100% and
multiplied by the contracted annual SaaS license fee or maintenance
fee at the related quarter end. Since many of the customer
contracts are in currencies other than the Canadian dollar, the
Canadian dollar equivalent is calculated using the related period
end exchange rate multiplied by the contracted currency amount.
Cautionary and Forward-Looking Statements
Except for the statements of historical fact contained herein,
certain information presented constitutes "forward-looking
information" within the meaning of applicable Canadian securities
laws. Such forward-looking information, includes, but is not
limited to, the relationship between Kneat and the customer,
Kneat's business development activities, the use and implementation
timelines of Kneat's software within the customer's validation
processes, the ability and intent of the customer to scale the use
of Kneat's software within the customer's organization and the
compliance of Kneat's platform under regulatory audit and
inspection. While such forward-looking statements are expressed by
Kneat, as stated in this release, in good faith and believed by
Kneat to have a reasonable basis, they are subject to important
risks and uncertainties. As a result of these risks and
uncertainties, the events predicted in these forward-looking
statements may differ materially from actual results or events.
These forward-looking statements are not guarantees of future
performance, given that they involve risks and uncertainties. The
forward-looking information in this press release does not include
a full assessment or reflection of the unprecedented impacts of the
COVID-19 pandemic that occurred in the first quarter of 2020 and
the ongoing and developing resulting indirect global and regional
economic impacts. This has resulted in significant economic
uncertainty and even though the company has to date experienced no
significant impact to its operations, any potential impact on our
future is difficult to understand or measure at this time.
Kneat does not undertake any obligation to release publicly
revisions to any forward-looking statement, except as may be
required under applicable securities laws. Investors should not
assume that any lack of update to a previously issued
forward-looking statement constitutes a reaffirmation of that
statement. Continued reliance on forward-looking statements is at
an investors' own risk
Neither the 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.
SOURCE kneat.com, inc.