Lumine Group Inc. Announces Results for the Three Months Ended March 31, 2024


TORONTO, May 01, 2024 (GLOBE NEWSWIRE) -- Lumine Group Inc. (“Lumine Group” or “the Company”) (TSXV: LMN) announces financial results for the three months ended March 31, 2024. All amounts referred to in this press release are in US dollars unless otherwise stated.

The following press release should be read in conjunction with the Company’s unaudited condensed consolidated interim financial statements for the three months ended March 31, 2024, management’s discussion and analysis (“MD&A”) for the three months ended March 31, 2024, which can be found on SEDAR+ at www.sedarplus.ca. Additional information about Lumine Group is also available on SEDAR+ and on Lumine Group’s website www.luminegroup.com

Q1 2024 Headlines:

  • Revenue grew 48% to $141.1 million compared to $95.4 million in the same quarter prior year (including -3% organic growth after adjusting for foreign exchange impacts).
  • The Company generated operating income of $44.5 million during the quarter, a 105% increase from $21.7 million in the same quarter prior year.
  • An expense of $317.4 million was incurred in the quarter up to the Mandatory Conversion Date, $298.7 million is related to the mark to market adjustments on the fair value of the Preferred and Special Securities and $18.7 million is related to the dividend payable. Fair value of the preferred and special securities is primarily dependent on the price movement of the Company’s Subordinate Voting Shares.
  • The Company generated a net loss of $304.3 million during the quarter, from net loss of $651.6 million in the same quarter prior year. The net loss is primarily related to the redeemable preferred and special share expense.
  • Cash flows from operations (“CFO”) increased $20.0 million to $35.0 million compared to $15.0 million in Q1 2023, representing an increase of 134%.
  • Free cash flow available to shareholders (“FCFA2S”) increased $17.1 million to $28.8 million compared to $11.7 million in Q1 2023, representing an increase of 146%.

Total revenue for the three months ended March 31, 2024 was $141.1 million, an increase of 48%, or $45.7 million, compared to $95.4 million for the comparable period in 2023. The increase for the three month period is primarily attributable to growth from acquisitions. The Company experienced organic growth of -2% for the three months ended March 31, 2024 or -3% after adjusting for foreign exchange impacts. For acquired companies, organic growth is calculated as the difference between actual revenues achieved by each business in the financial period following acquisition, compared to the estimated revenues they achieved in the corresponding financial period preceding the date of acquisition by the Company. Organic growth is not a standardized financial measure and might not be comparable to measures disclosed by other issuers.

Operating income for the three months ended March 31, 2024 was $44.5 million, an increase of 105%, or $22.8 million, compared to $21.7 million for the same period in 2023. The increase for the three month period is primarily attributable to growth from acquisitions. Operating income is not a standardized financial measure and might not be comparable to measures disclosed by other issuers. See “Non-IFRS Measures”.

Net loss for the three months ended March 31, 2024 was $304.3 million compared to net loss of $651.6 million for the same period in 2023. The decrease in net loss for the three month period is primarily attributable to lower expense of $337.3 million for the three months ended March 31, 2024 related to fair value adjustments and accrued dividends on the redeemable preferred and special securities compared to the same period in 2023.

For the three months ended March 31, 2024, CFO increased $20.0 million to $35.0 million compared to $15.0 million for the same period in 2023 representing an increase of 134%. The primary reason for the increase is that CFO includes the impact of changes in non-cash operating assets and liabilities exclusive of effects of business combinations partly offset by changes in non-cash operating working capital (“NCOWC”).

For the three months ended March 31, 2024, FCFA2S increased $17.1 million, or 146%, to $28.8 million compared to $11.7 million for the same period in 2023. The increase is primarily a result of higher CFO during the period. FCFA2S is not a standardized financial measure and might not be comparable to measures disclosed by other issuers. See “Non-IFRS Measures”.

Non-IFRS Measures

Operating income (loss) refers to income (loss) before income taxes, amortization of intangible assets, redeemable Preferred and Special Share expense, and finance and other expenses (income). We believe that operating income is useful supplemental information as it provides an indication of the profitability of the Company related to its core operations. Operating income (loss) is not a recognized measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Accordingly, readers are cautioned that operating income (loss) should not be construed as an alternative to net income (loss).

The following table reconciles operating income to net income:

 Three months ended March 31,
 20242023 
Net income (loss)(304.3)(651.6)
Adjusted for:  
Amortization of intangible assets22.8 14.8 
Redeemable preferred and special securities expense317.4 654.6 
Finance and other expense (income)4.3 1.9 
Income tax expense (recovery)           4.3 1.8 
Operating income (loss)44.5 21.7 
     

Free cash flow available to shareholders ‘‘FCFA2S’’ refers to net cash flows from operating activities less interest paid on lease obligations, interest paid on bank debt, transaction costs on bank debt, repayments of lease obligations, dividends paid to redeemable preferred and special securities holders, and property and equipment purchased. The Company believes that FCFA2S is useful supplemental information as it provides an indication of the uncommitted cash flow that is available to shareholders if Lumine Group does not make any acquisitions, or investments, and does not repay any debts. While the Company could use the FCFA2S to pay dividends or repurchase shares, the Company’s objective is to invest all of its FCFA2S in acquisitions which meet the Company’s hurdle rate.

FCFA2S is not a recognized measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Accordingly, readers are cautioned that FCFA2S should not be construed as an alternative to net cash flows from operating activities.

The following table reconciles FCFA2S to net cash flows from operating activities:

 Three months ended March 31,
 2024 2023 
Net cash flows from operating activities:35.0 15.0 
Adjusted for:  
Interest paid on lease obligations(0.2)(0.1)
Interest paid on other facilities(2.5)(0.3)
Credit facility transaction costs(1.7)(1.8)
Payment of lease obligations(1.6)(0.8)
Property and equipment purchased(0.4)(0.2)
Free cash flow available to shareholders28.8 11.7 
     

Forward Looking Statements

Certain statements herein may be “forward looking” statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Lumine Group or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events and operating performance and are made as of the date hereof and Lumine Group assumes no obligation, except as required by law, to update any forward looking statements to reflect new events or circumstances.

About Lumine Group Inc.

Lumine Group acquires, strengthens, and grows, vertical market software businesses in the communications and media industry. Learn more at www.luminegroup.com.  

For further information:

David Nyland
Chief Executive Officer
Lumine Group
david.nyland@luminegroup.com
+1-437-353-4910

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.

Lumine Group Inc.
Condensed Consolidated Interim Statements of Financial Position

(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited

 March 31, 2024December 31, 2023
   
Assets  
   
Current assets:  
Cash$259,789 $146,509 
Accounts receivable 100,817  104,955 
Unbilled revenue 42,786  39,858 
Inventories 572  521 
Other assets 44,104  46,377 
  448,068  338,220 
   
Non-current assets:  
Property and equipment 3,848  4,164 
Right of use assets 10,648  11,973 
Deferred income taxes 6,009  6,197 
Other assets 11,794  13,063 
Intangible assets and goodwill 737,489  763,081 
  769,788  798,478 
   
Total assets$1,217,856 $1,136,698 
   
Liabilities and Equity  
   
Current liabilities:  
Accounts payable and accrued liabilities$91,206 $97,533 
Due to related parties, net 1,117  2,380 
Current portion of bank debt 2,228  3,071 
Deferred revenue 94,382  91,726 
Acquisition holdback payables 318  319 
Lease obligations 6,434  6,358 
Income taxes payable 9,310  12,436 
Preferred and Special Securities -  4,469,996 
  204,995  4,683,819 
   
Non-current liabilities:  
Deferred income taxes 120,803  125,294 
Bank debt 238,497  149,636 
Lease obligations 5,436  6,921 
Other liabilities 10,672  12,995 
  375,408  294,846 
   
Total liabilities 580,403  4,978,665 
   
Equity:  
Capital stock 490,669  - 
Contributed surplus 185,142  (1,015,661)
Accumulated other comprehensive income (loss) (9,921) (6,296)
Retained earnings (deficit) (28,437) (2,820,010)
  637,453  (3,841,967)
   
Subsequent events  
   
Total liabilities and equity$1,217,856 $1,136,698 
       

Lumine Group Inc.
Condensed Consolidated Interim Statements of Income (Loss)
(In thousands of USD, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited

 Three months ended March 31,
  20242023 
   
Revenue  
License$11,720 $10,649 
Professional services 24,933  16,827 
Hardware and other 2,417  4,608 
Maintenance and other recurring 102,029  63,297 
  141,099  95,381 
Expenses  
Staff 73,028  48,619 
Hardware 1,520  3,319 
Third party license, maintenance and professional services 8,539  4,735 
Occupancy 896  777 
Travel, telecommunications, supplies, software and equipment 6,757  4,672 
Professional fees 2,832  7,313 
Other, net 946  2,782 
Depreciation 2,115  1,510 
Amortization of intangible assets 22,821  14,836 
  119,454  88,563 
   
Redeemable Preferred and Special Securities expense 317,362  654,615 
Finance and other expenses (income) 4,272  1,925 
  321,634  656,540 
   
Income (loss) before income taxes (299,989) (649,722)
   
Current income tax expense (recovery) 8,346  7,513 
Deferred income tax expense (recovery) (3,998) (5,670)
Income tax expense (recovery) 4,348  1,843 
   
Net income (loss)$(304,337)$(651,565)
   
Weighted average shares outstanding:  
Basic 86,111,920  67,787,851 
Diluted 253,336,755  236,683,131 
   
Earnings per share:  
Basic and diluted$(3.53)$(9.61)
   

Lumine Group Inc.
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited

 Three months ended March 31,
  2024  2023 
   
Net income (loss)$(304,337)$(651,565)
   
Items that are or may be reclassified subsequently to net income (loss):  
   
Foreign currency translation differences from foreign operations and other (3,625) 589 
               
Other comprehensive (loss) income for the year, net of income tax (3,625) 589 
   
Total comprehensive income (loss) for the year$(307,962)$(650,976)
       

Lumine Group Inc.
Condensed Consolidated Interim Statement of Changes in Equity
(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited

Three months ended March 31, 2024     
 Capital
stock
Contributed
surplus
Accumulated
other comprehensive
(loss) income
Retained
earnings (deficit)
Total
equity
      
Balance at January 1, 2024$-$(1,015,661)$(6,296)$2,820,010)$(3,841,967)
      
Total comprehensive income (loss) for the year:     
Net income (loss) - -  -  (304,337) (304,337)
      
Other comprehensive income (loss):     
Foreign currency translation differences from foreign operations and other - -  (3,625) -  (3,625)
      
Total other comprehensive income (loss) for the year - -  (3,625) -  (3,625)
      
Total comprehensive income (loss) for the year - -  (3,625) (304,337) (307,962)
      
Mandatory Conversion of Special and Preferred Shares 403,301 1,200,803  -  3,095,910  4,700,014 
Settlement of Preferred and Special Share Dividends 87,368 -  -  -  87,368 
      
Balance at March 31, 2024$490,669$185,142 $(9,921)$(28,437)$637,453 
               

Lumine Group Inc.
Condensed Consolidated Interim Statement of Changes in Equity
(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited              
Three months ended March 31, 2023              
 Capital
stock
Contributed
surplus
Accumulated other comprehensive (loss) incomeRetained
earnings (deficit)
Total
equity
      
Balance at January 1, 2023$ - $ 162,692  $ (8,912)$ -  $ 153,780  
      
Total comprehensive income (loss) for the year:     
Net income (loss) - -  -  (651,565) (651,565)
      
Other comprehensive income (loss):     
Foreign currency translation differences from foreign operations and other - -  589  -  589 
      
Total other comprehensive income (loss) for the year  -   -    589    -   589  
      
Total comprehensive income (loss) for the year  -   -    589    (651,565)  (650,976)
      
Transactions with Parent, recorded directly in equity     
Capital contributions by Parent - 22,451  -  -  22,451 
Amalgamation with Lumine Group (Holdings) Inc. - (1,200,804) -  -  (1,200,804)
Special Share conversion (note 14) - -  -  1,067  1,067 
      
Balance at March 31, 2023$ - $ (1,015,661)$ (8,323)$ (650,498)$ (1,674,482)
               


Lumine Group Inc.
Condensed Consolidated Interim Statements of Cash Flows
(In thousands of USD. Due to rounding, numbers presented may not foot.)

Unaudited 
 Three months ended March 31,
  20242023 
   
Cash flows from (used in) operating activities:  
Net income (loss)$(304,337)$(651,565)
Adjustments for:  
Depreciation 2,115  1,510 
Amortization of intangible assets 22,821  14,836 
Contingent consideration adjustments 43  670 
Preferred and Special Securities expense (income) 317,362  654,615 
Finance and other expenses (income) 4,272  1,925 
Income tax expense (recovery) 4,348  1,843 
Change in non-cash operating assets and liabilities exclusive of effects of business combinations (7,991) (4,031)
Income taxes (paid) received (3,637) (4,834)
Net cash flows from (used in) operating activities 34,996  14,969 
   
Cash flows from (used in) financing activities:  
Interest paid on lease obligations (154) (93)
Interest paid on bank debt (2,472) (342)
Cash transferred from (to) Parent (2,107) (4,670)
Proceeds from issuance of bank debt 90,000  175,000 
Repayments of bank debt (244) (244)
Transaction costs on bank debt (1,655) (1,771)
Payments of lease obligations (1,566) (840)
Issuance of Preferred Shares to Parent -  181,484 
Net cash flows from (used in) in financing activities 81,802  348,524 
   
Cash flows from (used in) investing activities:  
Acquisition of businesses -  (314,760)
Cash obtained with acquired businesses -  33,965 
Post-acquisition settlement payments, net of receipts (685) (362)
Property and equipment purchased (361) (241)
Other investing activities 6  - 
Net cash flows from (used in) investing activities (1,039) (281,399)
     
     
Effect of foreign currency on cash and cash equivalents (2,479) 302 
Increase (decrease) in cash 113,280  82,396 
     
Cash, beginning of period 146,509  67,085 
Cash, end of period$259,789 $149,481