SECU SSC Security Services Corp

REGINA, SK, Dec. 9, 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 fourth quarter and year end for the 2024 fiscal year ended September 30, 2024. All figures are presented in Canadian dollars.

"Once again, we have had a very strong year with positive growth in all areas of the company. Our mission at SSC continues to be building a healthy company based on a foundation of conservative cash management and a commitment to the highest customer service levels in our industry. We are careful capital allocators and are constantly attempting to expand the company by being boring and disciplined", said Chairman and CEO Doug Emsley.

"Successful share buybacks, a disciplined approach to acquisitions, and an excellent management team creating organic growth is the right combination to grow a strong security company. We continue to be well capitalized, with no debt", said Emsley.

 FY2024 HIGHLIGHTS

• During the fiscal year ended September 30, 2024, revenue for the full fiscal year was $120.6 million, up 11% over revenue recorded last year. During Q4, we recorded revenue of $29.6 million, up 1% from the same quarter last year.
  
  
• Adjusted EBITDA for the fiscal year was $5.0 million or $0.26 per share, which is 18% higher than the prior year $0.22 per share. Adjusted EBITDA in Q4 was $1.2 million ($0.07 per share), as compared to $1.5 million ($0.08 per share) in the same quarter in the prior year.
  
  
• During the fiscal year, we continued to convert assets related to our legacy business into cash, bringing in about $2.5 million in cash in the process. During the fiscal year, we also paid $0.12 per share in dividends to shareholders and bought back 591,400 shares of the Company at an average of $2.52 per share.
  
  
• We finished the year ended September 30 with:
  • Cash and cash equivalents of $13.3 million equal to $0.71 per share;
  • Loans and mortgages receivable of $1.0 million;
  • Total shareholders' equity of $64.5 million; and
  • No long-term debt.

Key Performance Indicators for the comparable periods are summarized below:

REVENUE, GROSS PROFIT & NET INCOME

Revenues for the year ended September 30, 2024 were $120.6 million compared with $109.1 million during the previous year, an increase of $11.5 million, or 11%. The increase in revenues is entirely attributable to internally generated organic growth. See the segment comparisons in Note 4 of the financial statements for a presentation of the year-to-year changes.

Gross profit and gross margin for the year ended September 30, 2024 increased to $17.6 million (14.6% of revenue) from $16.3 million (14.9% of revenue) during the previous year. The gross margin % for all periods remains within our long-term expectations for the security business.

Comprehensive net income for the year ended September 30, 2024 was $0.6 million (income of $0.03 per share), compared to comprehensive net income in the previous year of $0.1 million (income of $0.00 per share).

ADJUSTED EBITDA

Adjusted EBITDA is the primary KPI used by the Company to measure the financial performance of the Company. Adjusted EBITDA for the year ended September 30, 2024, was $5.0 million ($0.26 per share), as compared to $4.3 million ($0.22 per share) during the previous year end. This represents a 18% increase in adjusted EBITDA per share year-over-year and displays the Company's continued improvement in the performance of the acquired companies.

BALANCE SHEET

Key balance sheet items are summarized below: 

UPDATE ON NORMAL COURSE ISSUER BID 

During the year ended September 30, 2024, we bought back 591,400 shares at an average price of $2.52 per share. (Prior year: 382,500 shares at an average price of $2.87 per share.) Since October 1, 2024, to the date of this news release, we have purchased 113,300 shares at an average price of $2.60 per share.

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 to assist in winning new contracts. Additional growth may come via acquisition, as we look to acquire other companies in the Canadian security industry. Additional acquisitions will help us reach our goals more quickly, but we will not rush to complete new deals, and we will maintain our financial conservatism throughout.

Most 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 the Company's Management Discussion and Analysis dated December 9, 2024 available on the Company's website at www.securityservicescorp.ca and on SEDAR+ at www.sedarplus.ca.

SOURCE SSC Security Services Corp.