SSC Security Services Corp. Reports Second Quarter Results with Improved Margins, Consistent Adjusted EBTIDA, and Continued Share Buybacks

Cision Canada

15-05-2025

, May 15, 2025 /CNW/ - SSC Security Services Corp. (" SSC" or the " Company) (TSXV: SECU) (OTCQX: SECUF), a national provider of cyber, physical and electronic security services to commercial, industrial and public sector clients across Canada, is pleased to release its results for the second quarter ended March 31, 2025. All figures are presented in Canadian dollars.
"Our second quarter results came in as expected. We are seeing improved profitability from stronger margins as a result of careful expense management. While our year over year comparative revenue shows a slight decline from last year, this is simply because we secured fewer temporary contracts during this quarter versus that seen in Q2 2024. The good news is our gross margin has continued to strengthen, and our base business of recurring revenue continues to grow profitably. We like it when temporary contracts come in the door and they add nicely to our top line picture, however more important is strong operational management and gross margin growth within our baseline recurring monthly revenue. The size and scale of our operations nicely positions us for the temporary opportunities when they do arise. In addition, we continue to buy back our shares and take a disciplined approach to acquisitions. Our objective is always to protect our cash and be opportunistic in our efforts to grow the Company. We continue to be well capitalised and debt free," said Chairman and CEO Doug Emsley.
Key Highlights for Q2 2025:
Continued Margin Improvement - Gross profit margin for the quarter ended March 31, 2025 was 16.1% up from 15.2% of revenue during the same quarter last year. The six-month year-to-date gross profit margin is 16.3% of revenues, up from 15.5% during the same six-month period last year.
35 th Consecutive Quarterly Dividend - During the quarter we paid $0.03 per share in dividends to shareholders.
NCIB Share Buybacks - During the quarter we bought back 99,500 shares of the Company at an average of $2.54 per share (cancelling all 99,500 shares).
Consistent Adjusted EBITDA - During the second quarter ended March 31, 2025, adjusted EBITDA was $1.0 million, consistent with adjusted EBITDA of $1.1 million in the second quarter of last year.
We finished the quarter ended March 31, 2025 with:
Cash and cash equivalents of $12.5 million equal to $0.68 per share;
Working capital of $25.6 million;
Total shareholders' equity of $62.6 million; and
No long-term debt.
Key Performance Indicators for the comparable periods are summarized below:
REVENUE, GROSS PROFIT & NET INCOME
Revenues for the quarter ended March 31, 2025, were $27.7 million compared with $30.4 million during the quarter ended March 31, 2024, a decrease of $2.7 million (revenue decrease of 8.9%). Traditionally we see a seasonal reduction in revenues in our second quarter. In addition to seasonality, our second quarter of fiscal year 2024 had significant short-term temporary contracts that we did not see in Q2 2025. These types of short-term contracts are intermittent, but our recurring monthly revenues continue to be strong.
Gross profit for the quarter ended March 31, 2025 was $4.5 million (16.1% of revenue) compared to $4.6 million (15.2% of revenue) during the same quarter last year. The gross profit was consistent with the prior year Q2 amount, while we continued to see a slow and steady improvement to our gross profit margin percentages. These improvements are a result of our continued focus on operating efficiencies and cost reduction initiatives.
Comprehensive net income for the quarter ended March 31, 2025 was $0.0 million (profit of $0.00 per share), compared to a comprehensive net income in the same quarter last year of $0.7 million (profit of $0.03 per share).
ADJUSTED NET INCOME & ADJUSTED EBITDA
Adjusted EBITDA is the primary KPI used by the Company to measure the financial performance of the Company. Adjusted EBITDA for the quarter ended March 31, 2025, was $1.0 million ($0.06 per share), consistent with the adjusted EBITDA of $1.1 million ($0.06 per share) for the prior year second quarter ended March 31, 2024.
Adjusted net income for the quarter ended March 31, 2025 was $0.4 million (profit of $0.02 per share), compared to an adjusted net income in the same quarter last year of $0.01 million (profit of $0.00 per share).
A reconciliation of earnings to adjusted net income and Adjusted EBITDA is provided in the Non-IFRS section of the MD&A published concurrently with this press release.*
BALANCE SHEET
Key balance sheet items are summarized below:
UPDATE ON NORMAL COURSE ISSUER BID
During the quarter ended March 31, 2025, we bought back 99,500 shares at an average price of $2.54 per share (same quarter last year: 233,900 shares at an average price of $2.50 per share). All shares bought back under the normal course issuer bid have been cancelled.
We continue to believe that our shares have been trading in a price range which does not adequately reflect their value and that the purchase of shares under the NCIB will enhance shareholder value in general. Over the past eight fiscal years, the Company has bought back and cancelled roughly 47% of the outstanding shares.
OUTLOOK
We are seeing continued growth in demand for the kind of innovative and cost-effective security services and solutions that we offer at SSC. Our ability to combine physical and electronic security services in a fully integrated way is the future of our industry. Additional growth may also come via acquisition, as we look to acquire other profitable companies in the Canadian security industry. Acquisitions may help us reach our growth targets more quickly, but we will not rush to complete new deals, and we will maintain our financial conservatism throughout.
Most of our remaining legacy assets are expected to convert to cash over the next year. Our objective is to make these resources available for the expansion of our security business.
We also plan to continue to distribute capital to shareholders via our dividend, operate with minimal to no debt while maintaining solid liquidity, focusing on maintaining strong margins, and maximizing our Adjusted EBITDA per share.
ABOUT SSC
SSC Security Services Corp. is a national provider of cyber, physical and electronic security services to corporate and public sector clients across Canada. For more information, please visit www.securityservicescorp.ca
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Forward Looking Statements
This release includes forward-looking statements regarding SSC and its business. Such statements are based on the current expectations and views of future events of SSC's management. In some cases the forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms, or other similar expressions intended to identify forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting SSC, including risks regarding the security industry, the agricultural industry, economic factors and the equity markets generally and many other factors beyond the control of SSC. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and SSC undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
*Non-IFRS Measures
SSC measures key performance metrics established by management as being key indicators of the Company's strength, using certain non-IFRS performance measures, including:
EBITDA, EBITDA per share, Adjusted EBITDA, and Adjusted EBITDA per share.
The Company uses these non-IFRS measures for its own internal purposes. These non-IFRS measures do not have any standardized meaning prescribed by IFRS, and these measures may be calculated differently by other companies. The presentation of these non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Company provides these non-IFRS measures to enable investors and analysts to understand the underlying operating and financial performance of the Company in the same way as it is frequently evaluated by Management. Management will periodically assess these non-IFRS measures and the components thereof to ensure their continued use is beneficial to the evaluation of the underlying operating and financial performance of the Company. For more detailed information, please refer to the Company's Management Discussion and Analysis dated May 15, 2025 available on the Company's website at www.securityservicescorp.ca and on SEDAR+ at www.sedarplus.ca.