Alithya Group Inc. (NASDAQ:ALYA) Q4 2019 Earnings Conference Call - Final Transcript

Jun 19, 2019 • 09:00 am ET

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Alithya Group Inc. (NASDAQ:ALYA) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Claude Thibault

page five. Since Paul has already covered our top line positive variations, I will focus on some other financial statement highlights.

Gross margin more than doubled in the fourth quarter, increasing to CAD21.3 million compared to CAD8.9 million in the corresponding quarter last year. This significant growth was primarily driven by the contribution from the US acquisition. As a percentage, gross margin increased to 29.3% from 22.1% for the same quarter last year. The significant increase was primarily due to the USA acquisition, which had a robust margin of 37.3%. In line with our long-term strategy to transition the business towards higher value-added revenue streams, our operations in Canada and France also showed good improvement, with overall gross margin increasing by 80 basis points.

During the fourth quarter, SG&A went up by CAD11.2 million, mainly coming from the US but also from Alithya Canada, as we incurred additional cost as a result of our stock market listing and corporate transformation. Interestingly, if you look at the Edgewater public filings of last year on a pro forma basis, the combined adjusted SG&A of USA and Alithya decreased by approximately CAD4 million in Q4 of this year compared to the same quarter last year. We also have some additional reductions coming over the next quarters as integration continues.

With respect to our adjusted EBITDA, it increased 14.6% in the fourth quarter from CAD1.9 million to CAD2.2 million. The positive contribution from the USA acquisition was partially offset by a combination of non-recurring and recurring expenses associated with becoming a public company and expanding the business.

Consequently, we reported a net loss of CAD2.7 million or CAD0.08 per share compared to a net loss of CAD3.4 million or CAD0.15 per share for the same period last year. This quarter's net loss of CAD2.7 million must be viewed in relation to a similar amount of amortization of intangibles from previous acquisitions among other noncash elements.

Now turning to our liquidity and financial position on page six. On January 22, 2019, we closed a new CAD60 million revolving credit facility coming with an additional CAD15 million accordion option. We are pleased to have increased and secured a significant credit facility for three years which is a testament to the confidence in our business plan and what we have achieved in recent years. This new agreement provides us with great financial flexibility to pursue our development strategy through organic growth and acquisitions.

Alithya ended the year in a healthy financial position. As of March 31, 2019, we had only CAD8.7 million of net bank debt, with CAD16.3 million in cash, short-term deposits and restricted cash and a total debt of CAD22.3 (ph) million including long-term debt, a balance of sale from a previous acquisition and the current portion of long-term debt.

Please turn to page seven for our outlook. We are maintaining our objective of achieving revenues in the range of CAD300 million to CAD320 million and adjusted EBITDA in the range of CAD22 million to