Quisitive Reports Strong Fourth Quarter and Full Year 2021 Financial Results

Irving, Texas, UNITED STATES

TORONTO, April 20, 2022 (GLOBE NEWSWIRE) -- Quisitive Technology Solutions Inc. (“Quisitive” or the “Company”) (TSXV: QUIS, OTCQX: QUISF), a premier Microsoft solutions and payment solutions provider, today reported financial results for the fourth quarter and full year ended December 31, 2021.

Management Commentary
"The progress made in 2021 represents a strong blend of organic and inorganic growth, as we acquired three dynamic companies in the calendar year and made significant progress on LedgerPay commercialization," said Quisitive CEO Mike Reinhart. “On the cloud solutions side of the business, we saw strong organic growth of 19% including cross selling and services synergies with the Mazik acquisition. In conjunction with the strong organic growth rate we’ve achieved, we are also experiencing early success in the integration of Catapult Systems technical expertise and managed services into our customer base. We look forward to calendar year 2022 where Catapult will be operating as part of the Quisitive Cloud Solutions business for the full year.

"With the recent milestone achievement of Mastercard certification, we are progressing to onboard our first pilot customers to our innovative LedgerPay solution in Q2. The Quisitive Merchant Services business enabled by the BankCard acquisition continues to see strong growth with processing volume of $3.8 billion in 2021. With our dual expansion strategy fueled by the growing industry tailwinds, we are poised for growth in our effort to further augment our footprint and capture meaningful market share within the cloud and payments ecosystems.”

Fourth Quarter and Full Year 2021 Financial Results
The Company’s audited condensed consolidated interim financial statements for three months and full year ended December 31, 2021 and related management’s discussion and analysis can be found on the Company’s website and on the Company’s issuer profile on SEDAR at www.sedar.com. All figures are expressed in United States dollars unless otherwise stated.

  • Revenue increased 155% to $33.3 million compared to $13.1 million for the quarter ended December 31, 2020.
  • Gross profit increased 141% to $13.1 million compared to $5.4 million for the quarter ended December 31, 2020.
  • Adjusted EBITDA increased 105% to $4.5 million compared to $2.2 million for the quarter ended December 31, 2020.
  • Global Payments Solutions revenue was up 770% to $10.3 million compared to $1.2 million for the quarter ended December 31, 2020.
  • As of December 31, 2021, the Company had $13.5 million in cash, an increase of $2.5 million from December 31, 2020.

Full Year 2021 Financial Results

  • Revenue for the full year 2021 increased 94% to $96.7 million compared to $49.8 million in 2020.
  • Gross profit increased 81% to $36.5 million compared to $20.2 million in 2020.
  • Adjusted EBITDA increased 78% to $14.7 million compared to $8.1 million in 2020.
  • Global Payments Solutions revenue was up 662% to $26.7 million compared to $3.5 million for the quarter ended December 31, 2020.

Fourth Quarter 2021 and Fiscal Year 2021 Operational Highlights

  • Announced closing of Catapult Systems acquisition, a transformational milestone in Quisitive’s journey to becoming the premier, global Microsoft partner
  • Acquired Independent Sales Organization BankCard USA, bringing 7,000 merchants into the Quisitive Payments Solutions’ portfolio
  • Received patent for payments age verification solution, AgeChecker
  • Completed acquisition of Microsoft healthcare cloud leader Mazik Global
  • Awarded Microsoft Healthcare Partner of the Year for excellence in healthcare innovation and implementation of customer solutions based on Microsoft technology
  • Closed LedgerPay U.S. bank sponsorship with the Bancorp to act as a sponsor for direct payment processing
  • Achieved information security and business continuity certifications and PCI-DSS certification for LedgerPay
  • Recognized with the prestigious Microsoft Business Applications 2021/2022 Inner Circle award
  • Closed private placement with Fax Capital Investment, and two bought deal financings for cumulative gross proceeds of approximately C$117 million
  • Signed a long term $70 million term credit facility with syndicate led by Bank of Montreal and including Desjardins Capital Markets
  • Added 66 solutions to the Microsoft solution marketplace demonstrating Quisitive’s commitment to Microsoft and expanding visibility and demand generation for key offerings

Events Subsequent to Year ended December 31, 2021

  • Graduated to the OTCQX® Best Market (“OTCQX”)
  • Appointed Jana Schmidt to the newly created position of President of Global Payment Solutions
  • Appointed Scott Meriwether as Chief Financial Officer and Corporate Secretary
  • Received Mastercard certification to process credit and debit payments through its LedgerPay platform
  • Executed a bank sponsorship agreement with Peoples Trust Company, which will allow LedgerPay to process payments in Canada
  • Announced it has earned a spot on the Globe and Mail’s 2022 Report on Business Women Lead Here list; an annual editorial benchmark that identifies best-in-class executive gender diversity in corporate Canada

Conference Call
Quisitive management will hold a conference call today (April 20, 2022) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.

Company CEO Mike Reinhart and CFO Scott Meriwether will host the call, followed by a question-and-answer period.

Toll Free dial-in: 1-877-704-4453
International dial-in: 1-201-389-0920
Webcast Link: Here

Please dial-in approximately 10 minutes beforehand and ask to join the Quisitive conference call. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.

A telephonic replay of the conference call will be available after 7:30 p.m. Eastern time and will expire after May 4, 2022.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13728861

For additional information, please visit the Investor Relations section of Quisitive’s website at: https://quisitive.com/investor-relations/.

The following table summarizes results for the fourth quarter and full years ended December 31, 2021 and 2020:

  Three Months Ended December 31, Year Ended December 31,
  2021  2020  2021  2020 
Revenue$33,295 $13,073 $96,678 $49,764 
Cost of Revenue  20,221  7,649  60,161  29,570 
Gross Margin 13,074  5,424  36,517  20,194 
Operating Expenses    
Sales and marketing expense 2,209  942  6,362  4,227 
General and administrative 6,344  2,182  15,683  7,569 
Development 96  97  614  275 
Share-based compensation 596  173  1,247  720 
Interest expense 142  442  3,437  3,502 
Grant Income -  (34) -  (91)
Amortization 3,750  1,022  10,881  4,098 
Earn-out settlement loss 6,180  736  7,261  1,176 
Acquisition Related Compensation 1,069  -  1,575  - 
US payroll protection loan forgiveness -  (1,247) (1,683) (1,247)
Depreciation 522  178  1,563  740 
Foreign exchange loss (gain) 754  (1,056) 1,041  (507)
Acquisition-related, transaction and other expenses 1,085  348  6,178  1,328 
Loss on debt extinguishment 1,369  -  1,369  - 
Change in fair value of derivative liability -  -  -  8,430 
Loss Before Income Taxes  (11,042) 1,641  (19,011) (10,026)
Income tax expense — current 118  211  1,548  983 
Deferred income tax expense (recovery) (2,271) (567) (3,756) (1,101)
Net Loss for the Period $ (8,889)$ 1,997  $ (16,803)$ (9,908)

About Quisitive:
Quisitive (TSXV: QUIS, OTCQX: QUISF) is a premier, global Microsoft partner that harnesses the Microsoft platform and complementary technologies, including custom solutions and first-party offerings, to generate transformational impact for enterprise customers. Our Cloud Solutions business focuses on helping enterprises move, operate, and innovate in the three Microsoft clouds. Centering on our LedgerPay product suite, our Payments Solutions business leverages the Microsoft Azure cloud to transform the payment processing industry into an entirely new source of customer engagement and consumer value. Quisitive serves clients globally from seventeen employee hubs across the world. For more information, visit www.Quisitive.com and follow @BeQuisitive.

Quisitive Investor Contact
Matt Glover and John Yi
Gateway Investor Relations

Tami Anders
Chief of Staff

Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenue

Financial Measures and Adjusted EBITDA
There are measures included in this news release that do not have a standardized meaning under generally accepted accounting principles (GAAP) and therefore may not be comparable to similarly titled measures and metrics presented by other publicly traded companies. The Company includes these measures because it believes certain investors use these measures and metrics as a means of assessing financial performance. EBITDA (earnings before interest, taxes, depreciation and amortization is calculated as net earnings before finance costs (net of finance income), income tax expense, and depreciation and amortization of intangibles) is a non-GAAP financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.

We prepare and release quarterly unaudited and annual audited financial statements prepared in accordance with IFRS. We also disclose and discuss certain non-GAAP financial information, used to evaluate our performance, in this and other earnings releases and investor conference calls as a complement to results provided in accordance with IFRS. We believe that current shareholders and potential investors in the Company use non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues, in making investment decisions about the Company and measuring our operational results.

The term "Adjusted EBITDA" refers to a financial measure that we define as earnings before certain charges that management considers to be non-operating expenses and which consist of interest, taxes, depreciation, amortization, stock-based compensation (for which we include related fees and taxes), changes in fair value of derivatives, transaction and acquisition-related expenses, US payroll protection plan loan forgiveness, earn-out settlement losses and non-recurring development costs associated with obtaining bank sponsorship and operational certifications required to complete Ledger Pay. Adjusted EBITDA as a percentage of revenues divides Adjusted EBITDA for a period by the revenues for the corresponding period and expresses the quotient as a percentage.

Management considers these non-operating expenses to be outside the scope of Quisitive' ongoing operations and the related expenses are not used by management to measure operations. Accordingly, these expenses are excluded from Adjusted EBITDA, which we reference to both measure our operations and as a basis of comparison of our operations from period-to-period.

Management believes that investors and financial analysts measure our business on the same basis, and we are providing the Adjusted EBITDA financial metric to assist in this evaluation and to provide a higher level of transparency into how we measure our own business. However, Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues are non-GAAP financial measures and may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues should not be construed as a substitute for net income determined in accordance with IFRS or other non-GAAP measures that may be used by other companies, such as EBITDA. The use of Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues does have limitations. As these acquisition-related expenses charges may continue as we pursue our consolidation strategy, some investors may consider these charges and expenses as a recurring part of operations rather than expenses that are not part of operations.

Cautionary Note Regarding Forward Looking Information

This news release contains certain “forward‐looking information” and “forward‐looking statements” (collectively, “forward‐ looking statements”) within the meaning of applicable Canadian securities legislation regarding Quisitive and its business. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward‐looking statements. Forward‐ looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward‐looking statements. These forward-looking statements include, but are not limited to, statements relating to: internal business integrations, onboarding of pilot merchants, completion of additional certifications, expectations regarding go-to-market strategy and future success of the Company’s LedgerPay platform, growth prospects, projected milestones and timelines, and other anticipated benefits and impacts of the Mastercard certification.

The risks and uncertainties that may affect forward-looking statements, or the material factors or assumptions used to develop such forward-looking information, are described under the heading "Risks Factors" in the Company's annual information form dated April 20, 2021, which are available under the Company’s issuer profile on SEDAR at www.sedar.com. There can be no assurance that forward-looking information, or the material factors or assumptions used to develop such forward-looking information, will prove to be accurate. The Company does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.

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.