CALGARY, Alberta, May 22, 2024 (GLOBE NEWSWIRE) -- Computer Modelling Group Ltd. ("CMG Group" or the "Company") announces its financial results for the three months and year ended March 31, 2024. As a result of CMG Group's acquisition of BHV on September 25, 2023, the Company's operations are now organized into two reportable operating segments represented by CMG; the development and licensing of reservoir simulation software, and BHV; the development and licensing of seismic interpretation software. FOURTH QUARTER 2024 CONSOLIDATED HIGHLIGHTS Select financial highlights Generated total revenue of $32.3 million in the fourth quarter of fiscal 2024, compared to $20.3 million in the prior year's quarter, reflecting a 15% increase in CMG's revenue and a 44% contribution from BHV; Operating profit increased to $8.3 million, an increase of 20% from the same period of the previous fiscal year. Adjusted operating profit increased by 16% from the same period of the previous fiscal year, with CMG contributing to 9% and BHV contributing to 7% of the increase; Adjusted EBITDA Margin was 32%, compared to 42% in the same period of the previous last fiscal year with BHV generating 10% and CMG generating 40% in Adjusted EBITDA Margin; Net income during the period was $7.2 million, a 38% increase compared to the prior year's quarter; Earnings per share was $0.09, a 29% increase compared to the prior year's quarter; Reported Free Cash Flow of $0.12 per share, an increase of 71%. FISCAL 2024 CONSOLIDATED HIGHLIGHTS Select financial highlights Generated total revenue of $108.7 million in fiscal 2024, compared to $73.8 million in the previous fiscal year, reflecting a 19% increase in CMG's revenue and a 28% contribution from BHV; Operating profit increased to $34.0 million, an increase of 31% from the previous fiscal year. Adjusted operating profit increased by 30% from the previous fiscal year, in which CMG contributed 19% and BHV contributed 11%; Adjusted EBITDA Margin was 40%, compared to 45% in last fiscal year with BHV generating 18% and CMG generating 45% in Adjusted EBITDA Margin; Net income during the year was $26.3 million, a 33% increase compared to the prior fiscal year; Earnings per share was $0.32, a 28% increase compared to prior fiscal year; Reported Free Cash Flow of $0.44 per share, an increase of 63%. MANAGEMENT COMMENTARY Fourth Quarter In the fourth quarter, total revenue grew by 59% from the prior fiscal year to $32.3 million, reflecting the acquisition of Bluware ("BHV") which contributed 44%, and growth within the CMG operating segment of 15%. Adjusted EBITDA Margin was 32% compared to 42% in the prior fiscal year primarily due to the acquisition of BHV which currently operates at a lower margin than CMG. Net income for the quarter increased by 38% to $7.2 million, driven by higher revenue in the CMG operating segment. Free Cash Flow grew by 75% to $9.5 million, or $0.12 per share, from $5.4 million or $0.07 per share in the prior year's quarter. This substantial increase in Free Cash Flow was driven by both increases in net income and an approximately $4.6 million increase due to the tax deduction for the intellectual property acquired from BHV. The CMG operating segment delivered strong total revenue growth of 15% in the fourth quarter with 13% growth in the recurring annuity/maintenance license revenue and increases in both perpetual licenses and professional services revenue. Energy transition, as a percentage of CMG software revenue, was 24% for the fourth quarter, evidencing continued strong demand. As expected, direct employee costs increased in the fourth quarter compared to the prior fiscal year, driven primarily by a combination of increased headcount and performance driven variable compensation. Corporate costs increased as we made investments to support our growth. Collectively, these impacts reduced Adjusted EBITDA Margin in the quarter to 40% from 42% in the prior fiscal year. In the BHV operating segment, as expected, software license revenue of $2.9 million in the fourth quarter was down sequentially from the third quarter of this fiscal year. This is due to annuity license fee revenue, which fluctuates quarterly depending on the timing of contract renewals. This impacted Adjusted EBITDA Margin for the quarter which declined to 10% from 27% in the third quarter of this year. Fiscal Year 2024 In fiscal 2024, total revenue grew by 47% from the prior fiscal year to $108.7 million, reflecting the acquisition of BHV which contributed 28% and growth within the CMG operating segment of 19%. As expected, due to the current lower profitability margins of BHV, compared to CMG, full year consolidated Adjusted EBITDA Margin was 40% compared to 45% in the prior fiscal year. Net income grew by $6.5 million, or 33% from the prior fiscal year, driven primarily by increased revenue in the CMG operating segment. Free Cash Flow grew by 62% to $35.3 million, or $0.44 per share, from $21.7 million, or $0.27 per share, in the prior fiscal year. Free Cash Flow benefited from stronger net income and the intellectual property tax deduction related to the BHV acquisition. The year ending cash balance of $63.1 million provides flexibility to continue advancing our acquisition strategy. The CMG operating segment delivered strong total revenue growth of 19% over the prior fiscal year, with 15% growth in the recurring annuity/maintenance license revenue and increases in both perpetual licenses and professional services revenue. Growth in software revenue was evident across all geographies, with the US and Eastern Hemisphere showing the largest contribution, and was driven by a combination of pricing, and new and increased licensing for both energy transition and traditional energy. Energy transition, as a percentage of CMG software revenue, was 23% for the full year 2024. Compared to the prior fiscal year, CMG operating segment Adjusted EBITDA increased by 19% to $39.5 million, with Adjusted EBITDA Margin remaining stable at 45% compared to the prior fiscal year. In fiscal 2024, Adjusted EBITDA Margin was impacted by a decrease in SR&ED investment tax credits and increased direct employee costs and other corporate costs that represent our investments supporting current and anticipated growth. These investments included additional hires, bringing headcount to 193 (from 165 on March 31, 2023), additional systems to support and accelerate the refinement of our sales and go-to-market strategies, product innovation, and internal processes. We believe these investments position the organization to deliver sustained annual growth in the coming years while maintaining strong profitability. In the BHV operating segment, performance is tracking to our expectation with total revenue of $20.8 million and Adjusted EBITDA Margin of 18% for the year-to-date, which reflects six months of operations. Software license revenue of $8.1 million, represented two full quarters of operations under CMG ownership. However, it is expected that revenue in the first six months of fiscal 2025 will be lower than that of Q3 and Q4 of fiscal 2024, due to the timing impact of contract renewals. It is also anticipated that Adjusted EBITDA Margin will decrease in the first two quarters of fiscal 2025 for the same reason. Annuity license fee revenue is recognized upfront when the software license is delivered to the customer which is driven by the timing of contract renewals that happen most commonly in the third and fourth quarter. For this reason, BHV performance will be best evaluated on an annual basis. SUMMARY OF FINANCIAL PERFORMANCE Three months ended March 31 CMG BHV Consolidated ($ thousands, except per share data) 2024 2023 2024 2023 2024 2023               Annuity/maintenance licenses 17,864 15,803 1,797 - 19,661 15,803 Annuity license fee - - 1,142 - 1,142 - Perpetual licenses 2,130 1,556 - - 2,130 1,556 Total software license revenue 19,994 17,359 2,939 - 22,933 17,359 Professional services 3,280 2,906 6,078 - 9,358 2,906 Total revenue 23,274 20,265 9,017 - 32,291 20,265 Total revenue growth 15% 8%     59% 8% Annuity/maintenance licenses growth 13% 10%     24% 10%               Cost of revenue 2,394 2,365 4,076 - 6,470 2,365 Operating expenses             Sales & marketing 3,691 3,294 670 - 4,361 3,294 Research and development 5,830 4,589 1,777 - 7,607 4,589 General & administrative 3,458 3,108 2,118 - 5,576 3,108 Operating expenses 12,979 10,991 4,565 - 17,544 10,991 Operating profit 7,901 6,909 376 - 8,277 6,909 Operating Margin 34% 34% 4% -% 26% 34% Acquisition related expenses - - 186 - 186 - Amortization of acquired intangible assets 575 19 89 - 664 19 Stock based compensation 922 1,721 - - 922 1,721 Adjusted operating profit (1) 9,398 8,649 651 - 10,049 8,649 Adjusted Operating Margin (1) 40% 43% 7% -% 31% 43%               Net income (loss) 7,365 5,226 (136) - 7,229 5,226 Adjusted EBITDA (1) 9,353 8,520 866 - 10,219 8,520 Adjusted EBITDA Margin (1) 40% 42% 10% -% 32% 42%               Earnings per share – basic         0.09 0.07 Free cash flow per share – basic (1)         0.12 0.07               (1) Non-IFRS financial measures are defined in the "Non-IFRS Financial Measures" section. Year ended March 31 CMG BHV Consolidated ($ thousands, except per share data) 2024 2023 2024 2023 2024 2023               Annuity/maintenance licenses 68,537 59,690 2,993 - 71,530 59,690 Annuity license fee - - 5,146 - 5,146 - Perpetual licenses 5,739 3,240 - - 5,739 3,240 Total software license revenue 74,276 62,930 8,139 - 82,415 62,930 Professional services 13,618 10,916 12,646 - 26,264 10,916 Total revenue 87,894 73,846 20,785 - 108,679 73,846 Total revenue growth 19% 12%