Renoworks $RW Announces 2017 Third Quarter Financial Results

Renowork(TSX.V: RW)

Renoworks Software Inc. a leading provider of digital home imaging software and web solutions for new home construction and existing home renovations, today announced financial results for the third quarter ended September 30, 2017.

Financial highlights for the third quarter 2017:

  • Sixth consecutive quarter of record revenues.
  • Record revenues of $800,356 for the three months ended September 30, 2017 compared to $730,835 in 2016, an increase of 10%.
  • Annual Recurring Revenue of $414,284 for the quarter ending September 30, 2017 increased from $392,217 for the same period in 2016, an increase of 6%.
  • 52% of the third quarter’s revenue in 2017 is attributable to annual recurring customer contracts.
  • Gross margins continue to be strong at 73% and 72%, respectively for the third quarter 2017 and the 9 months ended September 2017.
  • Long term debt continues to decline, from $241,284 at December 31, 2016 to $183,885 at September 30,2017, a decrease of $57,399.  The Company sees no additional borrowing needs in the near future as cash balances allow the Company to execute its strategy.
  • Working capital remains strong in 2017.  At September 30, 2017 working capital is $848,412 compared to $328,795 at December 31, 2016 and $362,133 at September 30, 2016.  Cash balances remain strong allowing the Company to continue executing on its growth strategy.
  • Deferred revenue increased to $535,480 from $392,904 at December 31, 2016.  Of that total $293,000 is from annual client recurring revenues.  This has increased from $221,000 at September 30, 2016, an increase in recurring client balances of 25%.  These balances represent annual licensing billings to customers that currently utilize our visualization solutions.

“The past 9 months and sixth consecutive quarter of record revenues underscores what we believe is a sustainable sales momentum that should further springboard sales in the 4th quarter strengthening an already record year. Although we are very pleased with our financial results year-to-date, we are even more pleased about the investments we have made in our team to position us for growth in 2018.  Over the last year we have added to both our Development and Project Management Team in order to keep up with the increase in demand for our solutions across all four business units.  For the remainder of the year we will also be expanding our sales team.  Coming into 2018, the Renoworks business will be ready for growth.”

Doug Vickerson, CEO of Renoworks

Business highlights and activity for the third quarter 2017:

Operational and Development Team Expansion – In order to meet current market demand for Renoworks’ solutions, the Company has invested into its operational and development team.  During the third quarter of 2017 three new resources were added.  This is in addition to the fifteen resources added since the beginning of 2017.  With this increased capacity Renoworks is now positioned to capitalize on market demand and increase our financial performance in future quarters.

Platform R&D – The investment in adding additional capacity has also allowed the Company to reallocate resources into R&D activities that will benefit all business units.  During the fiscal year R&D expenses have increased by 68% over the same period as last year.  The Company continues to make strategic investments into our platform to allow us to scale both more efficiently and effectively.  In addition to performance improvements, Renoworks is also making investments in new technology that will be introduced to the market in future quarters.

Enterprise Business Unit – The demand for enterprise solutions continues to be high for new clients. Given the recent investment in Research and Development, the Company is realizing continued growth with existing clientele with the advent of new and exciting products and solutions.  Strategies on expanding this segment continue to be a focus and the Company expects to increase market share in 2018.

RW PRO Business Unit – Our Renoworks PRO business unit is broken down into two categories – remodel and new home construction.  In the remodel category, we continue to expand with contractors to provide both visualization software and our newly expanded Design services offering.  In the builder category, we see this as a natural move to expand our offering as most if not all our Enterprise customers also have builders as a target market.

GSB Design Services Business Unit – The Design Services offering will continue to be a key area of focus for Renoworks in 2018.  We are excited about bringing on new customers to this expanded service offering and continuing to grow this business unit.

Renoworks SDK Business Unit – Renoworks continues to partner and speak with potential partners on utilizing our visualization platform for new industry solutions. We are currently working with a number of new partners and look forward to seeing this business unit expand in 2018.

“Our strategic decision to invest from an R & D perspective into our solution platform will expand our market reach in 2018.  Partnerships and the Builder market represent the area for market expansion.”

Doug Vickerson, CEO of Renoworks

Financial results from operations for the third quarter 2017 with comparatives for 2016 are as follows:

Three Months Ended September 30

2017

2016

Revenue

$800,356

$730,835

Gross Margin

$584,795

$560,063

Expenses

$800,392

$465,956

Profit (Loss)

($295,410)

$87,697

Earnings (loss) per share

($0.01)

$0.00

Adjusted EBITDA*

($240,704)

$119,764

Weighted Average
Shares Outstanding

33,562,810

29,332,185

 

Financial results from operations for the year to date 2017 with comparatives for 2016 are as follows:

Nine Months Ended September 30

2017

2016

Revenue

$2,234,806

$2,055,983

Gross Margin

$1,604,086

$1,594,116

Expenses

$2,180,004

$1,573,976

Profit (Loss)

($634,376)

($48,862)

Earnings (loss) per share

($0.02)

$0.00

Adjusted EBITDA*

($514,534)

$32,510

Weighted Average Shares
Outstanding

33,368,317

28,842,428

Cash used in operations

$472,900

$109,085

 

The Company’s financial position as of September 30, 2017 with comparatives from 2016 is as follows:


September 30, 2017


September 30, 2016

Cash Balance

$916,397

$389,085

Accounts Receivable

$518,699

$575,611

Working Capital

$848,412

$362,133

Deferred Revenue

$535,480

$481,640

Long- term liabilities

$100,371

$183,885

Shareholder’s Equity

$800,850

$229,024

Deficit

($6,062,873)

($5,367,611)

Total Assets

$1,585,382

$1,074,937