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TORONTO, Feb.23, 2017  – Avante Logixx Inc. (TSXV: XX)(OTC: ALXXF) (“Avante” or the “Company”)through its subsidiaries, Avante Security Inc. (“ASI”), INTO-Electronics Inc. (“INTO”) and City Wide Locksmiths Ltd. (“CWL”), provides best in class residential and commercial security and automation services including system design and installation, rapid alarm response, alarm monitoring, video analytics, commercial and high-rise security integration, secure transport, electronic building management and high-end lock services through the use of advanced technology and a focus on client service. The Company is pleased to announce its results for the quarter and nine month period ended December 31, 2016:

Q1 2019 Highlights

  • Generated revenues of $5,574,984 for the three-month period ended June 30, 2018 which represented 3.5% YoY growth
  • Recurring revenue grew by 10.4%; number of alarm response packages sold grew by 10.4%
  • Increase in operating expenditure of $420K, due to investment in infrastructure to support future growth initiatives
  • Generated adjusted EBITDA of $351,085 which reflects platform investments for future growth
  • Strong balance sheet; cash on hand $11.3 M and shareholders’ equity $19.3 M

RESULTS FOR THE NINE MONTH PERIOD ENDED DECEMBER 31, 2016

 Quarter endedQuarter ended Six-month period endedSix-month period ended 
Dec 31, 2016

Dec 31, 2015

Variance Dec 31, 2016
Dec 31, 2015

Variance
Total revenues$5,788,796

$3,899,376

48.5%

$15,496,043

$10,749,203

44.2%

Revenues – Other security services and transport 4,263,3512,402,27977.5%

11,006,150

6,336,305

73.7%


Revenues – Recurring Monitoring and Response[1]1,525,445

1,497,097

1.9%

4,489,892

4,412,898

1.7%


Total gross profit2,043,862

1,350,594

51.3%

5,504,566

4,010,731

37.2%

Adjusted EBITDA[2]687,498

423,996

62.1%

1,810,665

1,286,521

40.7%

Net income before tax[3]464,128

(354,820)

1,031,067

313,951

Net income for the period
339,128

(304,821)

760,075

179,966

Basic and diluted income per share$0.004

$(0.004)

$0.008

$0.002

Total common shares outstanding 81,532,052

81,375,802

81,532,052

81,382,052

Total common shares outstanding – diluted 81,767,422

84,104,782

84,104,782

83,337,948

Total assets $17,938,600

$15,160,343

Total liabilities 6,148,515

4,399,134

Liabilities (excl. deferred revenue) 3,644,0352,153,215
Deferred revenue 2,504,481

2,245,919

Shareholders’ equity $11,340,884

$10,761,209

Non-controlling interests$449,200

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During the quarter, the Company generated record revenues of $5,788,796, an increase of 48.5% over the quarter ended December 31, 2015. Non-recurring revenues grew by 77.5%, primarily driven by the inclusion of CWL revenues and significant organic growth in commercial security installations. The Company registered organic growth in non-recurring revenues for the quarter was approximately 16.0%. CWL, which was acquired on April 1, 2016, contributed $1,272,232 to the Company’s revenues for the quarter. The Company’s overall gross profit for the quarter was $2,043,862 or 35.3% as compared to $1,350,594 or 34.6% for the quarter ended December 31, 2015. The blended gross margin on rapid response, secure transport, international security travel advisory segment and monitoring services was 49.0% for the quarter ended December 31, 2016, as compared to 46.4% for the quarter ended December 31, 2015. Gross margin from installations was 17.7% for the quarter as compared to 16.6% for the same quarter in the prior year.  The improvement in margin on installations is attributable to efficiencies in the execution of system integration job orders. Adjusted EBITDA for the quarter amounted to $687,498 as compared to $423,996 for the quarter ended December 31, 2015, while net income for the quarter amounted to $339,128, as compared to a loss of $304,821 in the same quarter of last year. The loss in this quarter last year was attributable to certain integration costs amounting to $622,279, and increases in share based payments, depreciation and amortization.

For the nine month period, revenues grew by 44.2% over the same period last year. Non-recurring revenues grew by 73.7%, while recurring revenues grew by 1.7%. Non-recurring revenues showed organic growth of 14.6% for the nine month period. CWL’s contribution to the overall revenues amounted to $3,745,036 for the nine month period ended December 31, 2016. Gross margin for the nine month period was $5,504,566 or 35.5% as compared to $4,010,731 or 37.3% for the same period last year. Adjusted EBITDA for the nine month period ended December 31, 2016 amounted to $1,810,665 as compared to $1,286,521 for same period last year.

Avante’s CEO, George Rossolatos said, while commenting on the results for the quarter and the nine month period, “We are very pleased with the results for the third quarter. Certain initiatives which were put in place the end of the previous quarter are starting to yield results, particularly in the systems integration division. The integration of the technical services teams of ASI and INTO will further improve labour efficiencies, which will have a favourable impact on profitability.”

Over the past six months, CWL has been offering preferential rates on its offerings to existing Avante customers. This initiative has been received very well by the customers, resulting in incremental revenues for CWL and the Company. Also, the showroom in which all the offerings of the Company are on display has already caught the attention of regular customers. The Company believes that this could have a significant impact in improving the top line of the Company in the coming quarters.

Avante’s acquisitions over the past two years have been performing well. Avante also continues to pursue several acquisition targets and is hopeful of closing one before the end of the current fiscal year.

CONFERENCE CALL

As announced on Tuesday, February 21, 2017, Avante will be hosting a conference call to discuss the aforementioned results on Monday, February 27, 2017 at 8:30 AM EST.

Dial in details are as follows: 

Local: (+1) 416-764-8658          Toll Free: (+1) 888-886-7786                        Conference ID: 42701904

Playback details below, available until March 13, 2017:

Local: (+1) 416-764-8692          Toll Free: (+1) 877-674-7070                        Playback Pin: 701904#

About Avante Logixx

Avante Logixx Inc. (XX.V) is a Toronto based provider of technology enabled security solutions. We acquire, manage and build industry leading businesses which provide specialized, mission-critical solutions that address the needs of our customers. Our businesses continuously develop innovative solutions that enable our customers to achieve their objectives. With an experienced team and a proven track record of solid growth, we are taking steps to establish a broad portfolio of security businesses to provide our customers and shareholders with exceptional returns. Please visit our website at www.avantelogixx.com and consider joining our investor email list.

FORWARD LOOKING STATEMENTS

All statements in this news release, other than statements of historical fact, may constitute “forward looking information” with respect to Avante within the meaning of applicable securities laws. Forward-looking information is frequently characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. This forward-looking information includes statements with respect to, among other things, the effective date of the consolidation of the Common Shares.

Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied by the forward looking information, including, without limitation, the Company being unable to complete the steps necessary to cause the consolidation to occur on the timelines stated in this news release and the risks identified in Avante’s Management Discussion & Analysis, Annual Information Form and other continuous disclosure, which list is not exhaustive of the factors that may affect any of Avante’s forward-looking information. In connection with the forward-looking statements contained in this and subsequent press releases, Avante has made certain assumptions about its business and the industry in which it operates and has also assumed that no significant events occur outside of Avante’s normal course of business. Although management believes that the assumptions inherent in the forward-looking statements are reasonable as of the date the statements are made, forward-looking statements are not guarantees of future performance and, accordingly, undue reliance should not be put on such statements due to the inherent uncertainty therein. Avante’s forward-looking information is based on the beliefs, expectations and opinions of management on the date the statements are made, and Avante does not assume any obligation to update forward-looking information, whether as a result of new information, future events or otherwise, other than as required by applicable law. For the reasons set forth above, readers should not place undue reliance on forward-looking information as there can be no assurance that the credit agreement will be entered into or on the terms described in this news release or at all.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

[1] Revenues – Recurring Monitoring and Response includes Alarm Response along with Digital, Wireless and Video Monitoring services

[2] Adjusted EBITDA = Net income + income tax + depreciation / amortization + shared based payments expense + acquisition and integration costs

[3] Share based payments and acquisition related amortization increased by $138,420 and $158,500 for the nine month period