LifeSpeak Inc. Announces First Quarter 2025 Results
First quarter 2025 revenue of $11.3 million
Adjusted EBITDA 1 for first quarter 2025 of $2.7 million, representing an Adjusted EBITDA Margin 1 of 24%
Total Number of Clients 2 of 784 as at March 31, 2025
TORONTO, May 8, 2025 /CNW/ - LifeSpeak Inc. (" LifeSpeak" or the " Company") (TSX: LSPK), the leading whole-person wellbeing solution for employers, health plans and other organizations, announced today its financial and operational results for the three months ended March 31, 2025. All references to dollar values in this press release are in Canadian dollars, unless otherwise indicated.
"Consistent with our fiscal year end 2024 financial results, we continue to experience headwinds with this challenging macro-economic climate but are remaining steadfast in our ability to generate substantial Adjusted EBITDA," said Michael Held, CEO and Founder of LifeSpeak. "We announced our Go-Private Transaction as well as the extension of our Term Loan and Forbearance Agreements ("Go-Private Transaction") with our lenders on April 17, 2025. This Go-Private Transaction will provide us with the ability to de-lever the business and execute on our plan for long-term growth with our partners."
Consolidated Business Highlights for the Three Months Ended March 31, 2025
(All capitalized terms not defined herein shall have the meaning ascribed to them in the Management's Discussion and Analysis for the three months ended March 31, 2025, unless otherwise stated)
First quarter 2025 revenue reached $11.3 million, a decrease of 9% compared to the same period in 2024.
ARR 3 of $42.1 million as at March 31, 2025, a decrease of 6% over the same period in 2024. Of the $42.1 million of ARR 2, approximately $35.2 million, or 84%, originated from enterprise clients. Of the $42.1 million of ARR 2, approximately 67% originated from clients outside of Canada.
ARR 2 is reported on a constant currency basis using a 1.300 USD:CAD exchange rate. When adjusting for the exchange rate at the end of the first quarter 2025 of 1.4376 USD:CAD, ARR 2 would be approximately $45.0 million.
First quarter 2025 Adjusted EBITDA 1 of $2.7 million, remaining consistent with the same period in 2024.
First quarter 2025 Adjusted EBITDA 1 Margin of 24%, an increase from 22% in the first quarter of 2024.
First quarter 2025 net loss of $5.7 million, an increase from a net loss of $1.6 million in the first quarter of 2024.
Notable new clients for the first quarter of 2025 and shortly thereafter included Owensboro Health and MaineHealth.
The multi-product agreement with GreenShield, a leading Canadian integrated health and benefits organization, is highly significant to LifeSpeak in its scale, and continues to ramp up with meaningful financial contributions towards LifeSpeak's business.
The Term Loan Commitment matured on February 28, 2025 but was not repaid at this time. On April 17, 2025, the Company entered into forbearance arrangements with its lenders. Each lender has agreed not to enforce their rights and remedies against the Company upon certain conditions being satisfied, including completing the Go-Private Transaction on or before June 30, 2025. In addition, the Term Loan Commitment maturity date has been extended to the earlier of June 30, 2025 or the completion of the Go-Private Transaction.
On April 17, 2025, the Company entered into an Arrangement Agreement awaiting shareholder approval to raise additional capital in order to reduce its debt obligations and complete a Go-Private Transaction. The transaction is expected to close in the second quarter of 2025, subject to the satisfaction of customary closing conditions.
___________________________
1 See "Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators" for a definition of "Adjusted EBITDA" and "Adjusted EBITDA Margin"
2 See "Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators" for a definition of "Number of Clients"
3 See "Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators" for a definition of "ARR"
Go-Private Transaction
As previously announced on April 17, 2025, the Company entered into an arrangement agreement (the " Arrangement Agreement") to complete a go-private transaction (the " Go-Private Transaction") by way of a plan of arrangement, pursuant to which a purchaser entity (the "Purchaser") will acquire all of the issued and outstanding common shares in the capital of LifeSpeak (the " Common Shares") at a price of $0.32 per Common Share, in cash (the " Consideration"), other than in respect of Rolling Shareholders who will exchange their Common Shares as set out below. The Consideration represents premiums of approximately 88% and 28% to the closing price and 20-day volume-weighted average price of the Common Shares on the Toronto Stock Exchange (the " TSX") as of April 16, 2025. The Go-Private Transaction is expected to close in the second quarter of 2025, subject to the satisfaction of customary closing conditions.
As part of the Go-Private Transaction, the Company's term Loan (as defined below) and a portion of its bridge loan will be converted to preferred shares of the Purchaser, and a consortium of other investors, including Company management and a lead investor (the " Investor"), will also subscribe for preferred shares of the Purchaser. In addition, certain shareholders of the Company and members of Company management (the " Rolling Shareholders"), will exchange their common shares for common shares of the Purchaser on a 1:1 basis. Upon completion of the Go-Private Transaction, the Purchaser will own 100% of the issued and outstanding shares of the Company. Further, it is expected that, following the completion of the Go-Private Transaction, the Purchaser and the Company will amalgamate under the provisions of the Canada Business Corporations Act (the " Amalgamation") and the Rolling Shareholders will consequently become shareholders of the corporation resulting from the Amalgamation.
Pursuant to an exchange and rollover agreement (the " Exchange Agreement") between the Company, the Investor and Beedie Investments Ltd. (" Beedie") entered into on the date of the Arrangement Agreement, Beedie has agreed to transfer to the Purchaser its non-revolving convertible term loan in the principal amount of $15 million, plus all payment-in-kind interest and fees capitalized or accrued thereon (including default interest), as well as up to 100% of Beedie's non-convertible bridge loans in the aggregate principal amount of $4.2 million, plus all payment in kind interest and fees capitalized or accrued on such amount. In addition, Beedie has the option to assist the Company in meeting the closing condition in the Arrangement Agreement related to having a minimum cash balance by making a cash investment. The consideration for such cash investment as well as the transfer of the convertible debt and the bridge loan to the Purchaser will be preferred shares of the Purchaser.
The Go-Private Transaction is subject to court approval and will be completed pursuant to a court-approved plan of arrangement under section 192 of the Canada Business Corporations Act. Completion of the Go-Private Transaction is subject to various other closing conditions, including the required level of approval for the Go-Private Transaction, being resolution of the affirmative vote at a special meeting (" Company Meeting") of (i) 66 and 2/3 of the votes cast on such resolution by shareholders present in person or represented by proxy at the Company Meeting, and (ii) a majority of the votes cast on such resolution by shareholders present in person or represented by proxy at the Company Meeting, excluding the votes of any shareholders required to be excluded for purposes of the "minority approval" requirement under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (" MI 61-101") in the context of a "business combination"; and excluding the votes of the Rolling Shareholders and any other shareholders that may be required to be excluded pursuant to MI 61-101.
Assuming completion of the Transaction, the Company intends to make an application to cease to be a reporting issuer under Canadian securities laws (and will apply for exemptive relief in connection therewith). Following the granting of such relief, the Company expects that it will no longer be subject to the reporting requirements of applicable Canadian securities legislation.
As also previously announced on April 17, 2025, the Company entered into a forbearance and amending agreement (the " Forbearance and Amendment") with Beedie to amend the terms of its previously announced credit agreement (as amended from time to time, the " Credit Agreement") dated March 30, 2023 in respect of a non-revolving term convertible loan in the principal amount of $15 million (the " Loan"). Pursuant to the Forbearance and Amendment, Beedie has also agreed to forbear for the time being from demanding immediate repayment of the Loan and taking steps to enforce the security thereunder. Concurrent with entering into the Forbearance and Amendment, LifeSpeak has also entered into a second amendment to the existing forbearance agreement with its senior lenders (the " Senior Lenders Forbearance Amendment"). Pursuant to the Senior Lenders Forbearance Amendment, the senior lenders have agreed not to enforce their rights and remedies against the Company and the guarantors in respect of defaults under the senior facility, which ends upon certain conditions not being satisfied (such date, the " Forbearance Date"). Such conditions are primarily related to the Company completing the Go-Private Transaction and paying down its senior term loan in the timeframe set out in the Senior Lenders Forbearance Amendment. Similarly, Beedie has agreed, pursuant to the Forbearance and Amendment, to forbear until the same Forbearance Date. LifeSpeak has also entered into a commitment letter with its senior lenders (" Commitment Letter"). Pursuant to the Commitment Letter, the senior lenders commit to underwrite an extension of the term loan and revolving facility, subject to certain conditions being satisfied including completing the Go-Private Transaction, paying down the senior term loan and privatizing the Company.
ARR, Number of Clients, Consolidated Net Dollar Retention Rate and Logo Retention Rate
ARR 3 was approximately $42.1 million as at March 31, 2025, with core enterprise client ARR 3 of approximately $35.2 million.
ARR 3 was broken down as follows over the last five quarters:
Total Number of Clients 2 was 784 as at March 31, 2025, compared to 914 as at March 31, 2024.
Number of Clients 2 was broken down as follows over the last five quarters:
Consolidated Net Dollar Retention Rate 4 for the quarter was 79%, a 4% decrease from the same period in 2024. Net Dollar Retention 4 for Enterprise Clients was approximately 77% as at March 31, 2025, as compared to 83% for the comparative period in 2024. Enterprise Net Dollar Retention 4 is lower primarily due to an increase in overall Enterprise Client churn, counteracted by cross-sell and multi-product opportunities within the existing Enterprise Client base.
Logo Retention Rate 5 was 73% as at March 31, 2025 compared to 76% for the comparable period in 2024. The lower Logo Retention Rate 5 is primarily attributable to the loss of smaller enterprise client logos within the portfolio of customers. Despite the decrease in Number of Clients 4, the relative contribution to ARR 3 of new clients is, on average, larger than that of lost clients.
Financial Results for the Three Months Ended March 31:
Notes:
(1)
" EBITDA" has the meaning ascribed herein under " Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".
(2)
" Adjusted EBITDA" has the meaning ascribed herein under " Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".
(3)
" Adjusted Net Loss" has the meaning ascribed herein under " Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".
(4)
" Adjusted loss per share – basic" has the meaning ascribed herein under " Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".
(5)
" Adjusted loss per share – diluted" has the meaning ascribed herein under " Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".
Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators
LifeSpeak supplements its results of operations determined in accordance with IFRS with certain non-IFRS financial measures, non-IFRS ratios and key performance indicators that the Company believes are useful to investors, lenders and others in assessing its performance and which highlight trends its core business that may not otherwise be apparent when relying solely on IFRS measures. LifeSpeak management also uses non-IFRS measures, non-IFRS ratios and key performance indicators for purposes of comparison to prior periods, to prepare annual operating budgets, for the development of future projections and earnings growth prospects, to measure the profitability of ongoing operations and in analyzing our financial condition, business performance and trends. As such, these measures and indicators are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective, including how it evaluates its financial performance and how it manages its capital structure. LifeSpeak also believes that securities analysts, investors and other interested parties frequently use these non-IFRS measures, non-IFRS ratios and key performance indicators in the evaluation of issuers. These non-IFRS measures, non-IFRS ratios and key performance indicators are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and may include or exclude certain items as compared to similar IFRS measures, and such measures may not be comparable to similarly-titled measures reported by other companies. Accordingly, these measures and indicators should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.
Non-IFRS Measures, Non-IFRS Ratios and Reconciliation of Non-IFRS Measures
The Company uses non-IFRS measures, including "EBITDA", "Adjusted EBITDA", "Adjusted Net Loss", and the non-IFRS ratios, including "Adjusted loss per share – basic", "Adjusted loss per share – diluted" and "Adjusted EBITDA Margin". This press release also makes reference to "Annual Recurring Revenue" or "ARR", "Net Dollar Retention Rate", "Number of Clients" and "Logo Retention Rate", which are key performance indicators used in our industry.
EBITDA and Adjusted EBITDA
"EBITDA" is defined as net loss before income tax recovery, finance expenses, net and amortization and depreciation.
"Adjusted EBITDA" is defined as EBITDA before acquisition and other costs, share based compensation, foreign exchange loss (gain), impairment, changes in fair value of contingent consideration, synergies realized and additional one time items. These non-cash and/or non-recurring costs are independent events and incurred over several financial periods.
"Adjusted EBITDA Margin" is calculated as Adjusted EBITDA divided by revenue for the relevant period.
Notes:
(1)
" EBITDA" has the meaning ascribed herein under " Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".
(2)
Synergies realized relates to the impact of the full period of cost synergies related to the reduction of employees and professional services in relation to acquisitions.
(3)
One-time costs related to IPO specific adjustments, acquisitions specific adjustments and transition costs related to the Wellbeats acquisition.
(4)
" Adjusted EBITDA" has the meaning ascribed herein under " Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".
(5)
" Adjusted EBITDA Margin" has the meaning ascribed herein under " Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".
Adjusted Net Loss / Adjusted Loss
"Adjusted Net Loss" is defined as net loss before acquisition and other costs, share based compensation, foreign exchange loss (gain), impairment, changes in fair value of contingent consideration, synergies realized and additional one-time items. These non-cash and/or non-recurring costs are independent events and incurred over several financial periods.
"Adjusted loss per share – basic" is defined as Adjusted Net Loss divided by the weighted average number of shares outstanding – basic for the relevant period.
"Adjusted loss per share – diluted" is defined as Adjusted Net Loss divided by the weighted average number of shares outstanding – diluted for the relevant period.
Notes:
(1)
Synergies realized relates to the impact of the full period of cost synergies related to the reduction of employees and professional services in relation to acquisitions.
(2)
One-time costs related to IPO specific adjustments, acquisitions specific adjustments and transition costs related to the Wellbeats acquisition.
(3)
" Adjusted Net Loss" has the meaning ascribed herein under " Cautionary Note Regarding Non-IFRS Measures and Key Performance Indicators."
(4)
" Adjusted loss per share – basic" has the meaning ascribed herein under " Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".
(5)
" Adjusted loss per share – diluted" has the meaning ascribed herein under " Cautionary Note Regarding Non-IFRS Measures, Non-IFRS Ratios and Key Performance Indicators".
Key Performance Indicators
Annual Recurring Revenue
"Annual Recurring Revenue" or "ARR" is equal to the annualized value of contracted recurring revenue from all clients of our platform at the date being measured. Contracted recurring revenue is revenue generated from clients who are, as of the date being measured, party to contracts with LifeSpeak. Such revenue is annualized by: (i) in the case where a contract was in existence for the entire month, multiplying recognized revenue in the calendar month of the date measured by 12; and (ii) in the case where a contract was entered into mid-month, extrapolating recognized revenue at the date measured for the entire calendar month, and then multiplying by 12. Contract lengths typically range from one to three years and, based on our past experience, the vast majority of clients renew their contracts upon expiry. ARR is mainly comprised of revenue from enterprise and embedded solutions and includes revenue from small business and ancillary services (comprised of portals, kits and events purchased by our existing clients or distributed through our channel partners). ARR provides a consolidated measure by which we can monitor the longer-term trends in our business.
"Enterprise client ARR" is ARR at a particular date attributable to enterprise clients.
Net Dollar Retention Rate
"Net Dollar Retention Rate" for a period is defined by considering a cohort of clients at the beginning of the period, and dividing the ARR from enterprise and embedded solutions attributable to that cohort at the end of the period, by the ARR from enterprise and embedded solutions attributable to that cohort at the beginning of the period. Net Dollar Retention Rate provides a consolidated measure by which we can monitor the percentage of recurring ARR retained from existing clients.
Number of Clients
"Number of Clients" is defined as the number of clients at the end of any particular period as the number of enterprise clients and clients of our embedded solutions for which the term of services has not ended, or with which the Company is negotiating contract renewal and which meet a minimum revenue threshold.
Logo Retention Rate
"Logo Retention Rate" for a period is defined by considering a cohort of clients at the beginning of the period, and dividing the Number of Clients from that cohort at the end of the period, by the Number of Clients from that cohort at the beginning of the period. Logo Retention Rate provides a consolidated measure by which the Company can monitor the percentage of contracted clients retained every year.
About LifeSpeak Inc.
Celebrating 20 years of supporting employee wellbeing, LifeSpeak Inc. is the leading provider of mental, physical, and family wellbeing solutions for employers, health plans, and other organizations across the globe. With a suite of digital solutions, LifeSpeak enables organizations to deliver best-in-class content and human expertise at scale, catering to individuals throughout their wellbeing journeys. The LifeSpeak Inc. portfolio of solutions spans every pillar of wellbeing, including LifeSpeak Mental Health & Resilience, Wellbeats Wellness, Torchlight Parenting & Caregiving, ALAViDA Substance Use, and LIFT session Fitness. Insights from LifeSpeak Inc.'s digital and data-driven solutions empower organizations and individuals to take impactful action to strengthen wellbeing and maximize workplace performance. To learn more, follow LifeSpeak Inc. on LinkedIn (http://www.linkedin.com/company/lifespeak-inc), or visit www.LifeSpeak.com. Because wellbeing can't wait.
Forward-Looking Information
This press release may contain "forward-looking information" within the meaning of applicable Canadian securities laws. Forward-looking information may relate to the Company's future business, financial outlook and anticipated events or results and may include information regarding the Company's financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, taxes, and the Company's plans and objectives. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "budget", "scheduled", "estimates", "outlook", "forecasts", "projection", "prospects", "strategy", "intends", "anticipates", "does not anticipate", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will", "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Particularly, information regarding the Company's expectations of future results, revenue growth, ARR, EBITDA, adjusted EBITDA margin, adjusted EBITDA, adjusted Net Income (Loss), adjusted Earnings (Loss), Number of Clients, Net Dollar Retention Rate, Logo Retention Rate, performance, synergies, achievements, prospects, industry trends, advancement of its strategy and acceleration of its growth, amortization, contribution of new clients to ARR, the amortization schedule and loan repayments, the amount of senior indebtedness remaining, or opportunities, including for cross-selling, or the markets in which the Company operates, the repayment of certain amounts under the Loan, Term Loan, status of discussions with the Company's lenders (including in respect of addressing defaults under the Company's facilities, ability to remedy existing defaults and breaches of financial covenants, complying with the conditions of the forbearance arrangements, and statements regarding the proposed go-private transaction, including the proposed timing and various steps contemplated in respect of the transaction and statements regarding the plans, objectives and intentions of the Company and/or the purchaser, the anticipated delisting of the Company's common shares from the TSX and the Company ceasing to be a reporting issuer under Canadian securities laws is forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding possible future events or circumstances.
This forward-looking information and other forward-looking information are based on opinions, estimates and assumptions in light of the Company's experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the Company currently believes are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. These opinions, estimates and assumptions include, but are not limited to, the following: the Company's ability to build its market share and enter new geographies; the total available market for its products; the Company's ability to retain key personnel; the Company's ability to maintain and expand geographic scope; the Company's ability to execute on its expansion plans; the Company's ability to continue investing in infrastructure to support its growth and brand recognition; the Company's ability to maintain its existing client base; the Company's ability to continue maintaining and enhancing its technological infrastructure and functionality of its platform; to the Company's ability to obtain financing on acceptable terms; the Company's ability to meet its amortization schedule in the future; decisions made by the Company's lenders; the ability to come to an agreement with its lenders to remedy the event of default and breach of financial covenants; the ability of the Company to satisfy its obligations in the form anticipated when due; our ability to satisfy the TSX with respect to continued listing criteria; the average contract sizes in respect of future enterprise clients and embedded solutions clients will align with our recent historical experiences; the size of clients we continue to pursue will be similar in size or larger than our historical clients; the impact of competition; the changes and trends in our industry or the global economy; and changes in laws, rules, regulations, and global standards. These risks and uncertainties further include (but are not limited to), in respect of the proposed go-private transaction, the failure of the parties to obtain the necessary regulatory approvals or to otherwise satisfy the conditions to the completion of the transaction, failure of the parties to obtain such approvals or satisfy such conditions in a timely manner, significant transaction costs or unknown liabilities, failure to realize the expected benefits of the transaction, and general economic conditions. Failure to obtain the necessary shareholder, court and regulatory approvals, or the failure of the parties to otherwise satisfy the conditions to the completion of the transaction or to complete the transaction, may result in the transaction not being completed on the proposed terms, or at all. In addition, if the transaction is not completed, the Company expects that its lenders may take enforcement steps against the Company as the Company's senior credit facility has matured without repayment and the Company is in cross-default under its junior facility. Failure to complete the Arrangement will materially and negatively impact the trading price of the Company's common shares and will likely result in the delisting of the common shares from the TSX. If the go-private transaction is not completed, the Company does not expect that there will be an alternative that would provide any value to securityholders. Furthermore, in certain circumstances, the Company may be required to pay a termination fee pursuant to the terms of the arrangement agreement which could have a material adverse effect on its financial position.
The risks and uncertainties that may affect forward-looking statements include, among others: performance of the market sectors that the Company serves; general market performance including capital market conditions and availability and cost of credit; foreign currency and exchange risk; impact of factors such as increased pricing pressure and possible margin compression; the regulatory and tax environment; that expected cost and revenue synergies are not realized within the expected timeframe or at all; that revenue, ARR, EBITDA margin and cash flow expectations are not met for any number of reasons; political, labour or supplier disruptions; that our clients face recessionary pressures, and other risks detailed from time to time in the Company's filings with Canadian provincial securities regulators, including the risk factors which are described in greater detail under "Risk Factors" in the Company's annual information form for the fiscal year ended 2024. Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not currently known to the Company or that the Company currently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information.
Accordingly, prospective investors should not place undue reliance on forward-looking information. The forward-looking information contained in this press release represents the Company's expectations as of the date of this press release (or as the date it is otherwise stated to be made) and is subject to change after such date. However, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable Canadian securities laws.
All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements. Prospective investors should read this entire press release and consult their own professional advisors to ascertain and assess the income tax, legal, risk factors and other aspects of an investment in the Company.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Global News
an hour ago
- Global News
BC Ferries' plan to build new vessels in China takes heat from both sides of the aisle
BC Ferries is taking heat from port and starboard over its selection of a Chinese shipyard to build its next four major vessels. The ferry service opened bidding for its major vessel replacement project to pre-qualified shipyards last September, and on Tuesday announced it had chosen China Merchants Industry Weihai Shipyards (CMI Weihai) following a due diligence process. That decision has landed in the choppy waters of a global trade war and a surging 'buy Canadian' movement that was not on the radar last fall. 1:52 BC Ferries contract awarded to Chinese shipyard B.C. Transportation Minister Mike Farnworth said Wednesday that while BC Ferries is an independent organization that makes its own commercial decisions, he was 'disappointed (in) the fact that there is not more Canadian content' in the plan. Story continues below advertisement 'Whenever contacts like this are awarded, I want to see as much Canadian and British Columbian content as possible.' BC Ferries is a private company, not a Crown corporation. However, its sole shareholder is the B.C. government. The issue has also drawn fire from the BC Conservatives, who have called for a review of the decision. Leader John Rustad said the decision to source the ferries from China put the province's economy and security at risk, given ongoing trade and tariff tensions with China. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy 'Do we really want Canadian ships built in China?' Rustad said. 'Who knows what that relationship will look like a few years from now.' 2:55 BC Ferries is getting 4 new vessels In announcing CMI Weihai as the builder, BC Ferries cited its strong bid — including technical capabilities, experience and the 'overall cost and value' it delivered. Story continues below advertisement Cost was also front and centre when BC Ferries announced the process. 'What we are not going to do is ask our customers to pay one dollar more than they need to simply because we are picking a local company,' BC Ferries executive director of communications Dave Groot told Global News in a Sept. 27 interview. At the time, B.C.-based Seaspan shipyards said the bid process, which did not include incentives for B.C. or Canadian content, had essentially ruled it out of contention The company acknowledged there was no question that building in B.C. would cost more, but said it would create major economic spinoffs, including income tax revenues from high-paying skilled jobs. Seaspan, which handles highly complex and multi-billion-dollar contracts for the Coast Guard and Canadian Navy, says it is more than capable of delivering the new ferries. 1:03 Seaspan blows horn on BC Ferries' ship-building bidding process 'We acknowledge the need for BC Ferries to get some of these replacement vessels very fast given their aging fleet,' Seaspan senior vice-president and spokesperson Dave Hargreaves said in a Wednesday statement. Story continues below advertisement 'We are hopeful that the B.C. government will work with our B.C. industry team to develop a strategy to build some of the seven vessels, particularly the last two, in B.C. in the future.' Not all reviews of the choice have been bad, however. Bruce Williams, CEO of the Greater Victoria Chamber of Commerce, said the Chinese contract is in the best interests of ferry-dependent communities, adding that BC Ferries did years of due diligence and that no Canadian companies entered bids. 2:01 BC Ferries defends shipbuilding bid process 'This is very timely, and it's a good thing to have this happen,' Williams said, noting that there was an urgent need for greater ferry capacity. At this point, I think it's in the best interest of all the people, who rely on BC Ferries … especially up and down the coast in communities that are very reliant upon it.' Story continues below advertisement The list of pressure points between Canada and China is long. China has imposed a variety of tariffs on Canadian goods, including seafood tariffs that have directly impacted B.C.'s fishing industry. Canada has also raised concerns about the country's human rights record and its support for Russia in the war with Ukraine.
Vancouver Sun
an hour ago
- Vancouver Sun
Criticism comes from all sides after B.C. Ferries awards contract to Chinese state-owned company
Criticism of B.C. Ferries' decision to partner with a Chinese state-owned company to build four new vessels intensified Tuesday, with calls from B.C. Conservative Leader John Rustad to cancel the contract and reissue the request for proposals to make it more attractive to Canadian bidders. 'I think we should be doing everything we can to support jobs in B.C. and our economy in B.C.,' he told Postmedia News. If the B.C. companies can't build the vessels, then Rustad said the ferry service should be looking at procuring ships from other countries such as Germany and Poland that B.C. Ferries has worked with before and are more friendly to Canada. Stay on top of the latest real estate news and home design trends. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Westcoast Homes will soon be in your inbox. Please try again Interested in more newsletters? Browse here. Rustad's comments echoed sentiments from B.C. Transport Minister Mike Farnworth who expressed concern about procuring ships from a country currently engaged in a tariff war with Canada. Farnworth, however, stopped short of saying he was going to take action against the decision. 'My main concern with B.C. Ferries' decision is the lack of Canadian content in the contract. My hope is that going forward B.C. Ferries will make a greater effort to require Canadian inputs into its new vessels,' said Farnworth, explaining he had shared those concerns with the corporation. 'With respect to China specifically, my concern is focused around the ongoing trade disputes between our nations and the fact China is deliberately attacking sections of the Canadian economy through unwarranted tariffs.' B.C. Premier David Eby has repeatedly criticized the Asian economic giant over allegations of money laundering, election interference and that it's arming Russia in its invasion of Ukraine. A recent trade mission by the premier intentionally skipped China, with B.C. instead choosing to focus on strengthening ties with Japan, South Korea and Malaysia. On Tuesday, B.C. Ferries announced it had signed a deal with Chinese state-owned Weihai Shipyards to build four new vessels between 2026 and 2031 as replacements for its oldest ships. Nicholas Jimenez, the corporation's CEO, has defended the choice by saying that there were no Canadian companies that applied for the project. In September, North Vancouver-based shipbuilder Seaspan said that 'Canadian shipyards and their supply chains cannot compete with low-wage countries that have lower employment standards, lower environmental standards and lower safety standards.' The company has urged the province to follow Quebec in providing tax breaks and forgivable loans and grants to help ensure ferries can be built in B.C. Jimenez also said that China has come to dominate the global shipbuilding industry with 60 per cent of all ships in the world today having been built by the Asian behemoth. 'In the last 10 to 15 years, the technological capabilities and shipbuilding prowess inside that country has grown immeasurably,' Jimenez told reporters Tuesday. 'We consulted heavily with our colleagues in Europe, who have been in the market for more than a decade. I would note even as recently as two months ago, another very large Italian ferry organization just signed a deal for nine vessels with the very same shipyard that we intend to build in.' Jimenez promised there are provisions in the contract that ensure Weihai will not be paid in full until the ships are delivered. Additionally, he said there will be oversight teams on the ground in China during construction to ensure compliance with the contract and address any security concerns. The full contract has yet to be release and B.C. Ferries isn't releasing the amount being paid to the Chinese company, citing the need to protect future bids. Ed Hooper, B.C. Ferries head of fleet renewal, said Tuesday that the corporation took the step of travelling to all the shipyards on its shortlist and that there was a sense of strong worker safety provisions and oversight at Weihai. He did acknowledge, however, that the dominance of China in the industry is deliberate. Neither Jimenez or Hooper were made available Wednesday for further questions. Joy MacPhail, B.C. Ferries board chairwoman and former NDP cabinet minister, was also unavailable. A corporation spokesperson said that they had been having regular briefings and meetings with the provincial government throughout the procurement process and had notified the federal government of their selection of Weihai ahead of time. They also said that all IT networks and vessel systems for the ships will be installed in Canada by local suppliers and that B.C. Ferries had sought the advice of an independent risk consultancy on security measures for the project. Rustad said that while Jimenez might not have concerns about the geopolitical ramifications of the deal, there is no telling when an international incident could occur between Canada and China that might put the delivery of the vessels in jeopardy. 'Obviously there's lots of rhetoric going back and forth between the United States and China, friction with Taiwan,' Rustad told Postmedia. 'Who knows what may happen? Hopefully nothing by 2029 to 2031 which is when these ships are going to start to be constructed and delivered.' Concerns over the contract have reverberated to the federal level with Jeff Kibble, Conservative MP for Cowichan-Malahat-Langford, questioning federal Transport Minister Chrystia Freeland during question period in Ottawa. 'The Liberals are set to hand over $30 million (in federal subsidies) to B.C. Ferries while B.C. Ferries hands over critical jobs, investment and industry to China,' Kibble charged. Freeland responded that she agrees the federal government needs to be supporting local industry and working with allies and trade partners but that the B.C. Ferries' contract wasn't a federal project. Jenny Kwan, NDP MP for Vancouver East, told Postmedia that Ottawa has a role in working with provincial governments to build up the country, including ensuring that domestic companies can compete for large procurement contracts. 'We have to re-examine how that procurement process is undertaken,' said Kwan.
Cision Canada
an hour ago
- Cision Canada
Martello Reports Financial Results for the Fourth Quarter and 2025 Fiscal Year
With a continued focus on managed service providers (MSPs), Martello introduced new innovations designed to give partners a competitive edge. As a growing number of Microsoft Teams customers now buy Premium, Phone or Teams Rooms, Martello was first to market with a proactive monitoring solution for Microsoft Teams Phone, allowing MSPs to differentiate themselves with unique service delivery capabilities targeted towards Teams Phone. For businesses that use both Microsoft Teams and Zoom, the Company launched unified experience management for hybrid environments, making IT teams and MSPs more efficient and effective. Martello continues to invest in its Mitel business, working closely with Mitel and its channel partners to offer experience management solutions for Mitel, Microsoft Teams and Zoom environments and extend its capabilities into Unify. Chairman Terry Matthews demonstrated continued support and confidence in Martello by investing CAD $2M in a private placement completed in Q4 FY25. OTTAWA, ON, June 11, 2025 /CNW/ - Martello Technologies Group Inc., ("Martello" or the "Company") (TSXV: MTLO), a provider of user experience management solutions for cloud communication and collaboration systems such as Microsoft Teams and Microsoft 365, today released financial results for the three and twelve months ended March 31, 2025. Martello's software proactively detects performance issues before they impact users of these systems. Terence Matthews, Chairman of Martello noted growing interest in the Company's technology by partners: "As businesses expand their collaboration toolsets to drive productivity, MSPs are increasingly expected to manage service delivery in complex hybrid collaboration environments leveraging premium tools such as Microsoft Teams Phone," said Mr. Matthews. "I'm pleased that Martello continues to lead the industry with innovations that give these MSPs a competitive edge in this dynamic and rapidly evolving market." "In FY25 in addition to considerable innovation, Martello laid the foundation to efficiently onboard MSPs, investing in automation of partner enablement and training", said Jim Clark, Chief Executive Officer of Martello. "Working with MSPs including Orange Business Services, Yorktel and many Mitel partners, we continue to execute joint go-to-market strategies designed to drive revenue growth with these partners." Q4 and FY25 Financial Highlights Financial Highlights March 31, March 31, March 31, March 31, (in 000's) 2025 2024 2025 2024 (Three months ended) (Twelve months ended) Sales $ 3,376 3,808 14,531 15,773 Cost of Goods Sold 468 482 2,000 1,943 Gross Margin 2,908 3,326 12,530 13,830 Gross Margin % 86.1 % 87.3 % 86.2 % 87.7 % Operating Expenses 4,249 4,567 16,669 17,425 Loss from operations (1,341) (1,242) (4,138) (3,595) Other income/(expense) (361) (459) (1,686) (2,163) Loss before income tax (1,701) (1,700) (5,824) (5,759) Income tax recovery 94 - 128 15 Net loss (1,607) (1,700) (5,696) (5,744) Total Comprehensive loss $ (1,580) (1,770) (5,877) (5,680) EBITDA (1) $ (734) (886) (2,193) (1,799) Adjusted EBITDA (1) $ (820) (791) (2,022) (1,487) (1) Non-IFRS measure. See "Non-IFRS Financial Measures". Revenue was $14.5M in FY25 and $3.38M in Q4 FY25, representing an 8% and 11% decrease, respectively, compared to the prior period. The decline in revenue was due to expected declines in legacy products and related support and maintenance revenue. Vantage DX contributed $2.55M in revenue in FY25, a 6% increase compared to FY24. Vantage DX monthly recurring revenue ("MRR") decreased by 6% in Q4 FY25 compared to Q4 FY24. Sunsetting legacy product revenue declined by 25% or $0.38M in Q4 FY25 compared to Q4 FY24, and 15% or $0.97M in FY25 compared to FY24. The ongoing decline of legacy product revenue is proceeding as expected. Revenue from the Mitel business segment decreased slightly by 3% in Q4 FY25 compared to the same period in the prior year and decreased by 6% in FY25 compared to FY24. This decrease is attributable to a revenue mix change from various Mitel Performance Analytics offerings. The Mitel business represents a growth opportunity as it continues to be a large source of revenue and gross margin, representing 45% of total revenues in FY25 (compared to 44% in FY24) and 97% gross margin as a percentage of segment revenue. 98% of total revenues were recurring in FY25 and the comparative period, with 97% of revenues recurring in Q4 FY25 compared to 98% in Q4 FY24. Gross margin was 86% in Q4 FY25 and in FY25, compared to 88% in Q4 FY24 and FY24. The decrease is attributable to lower revenue and an increase in installation, delivery and hosting costs. Management continues to execute a strategy to reduce hosting costs. Monthly recurring revenue ("MRR") decreased by 13% to $1.09M in Q4 FY25 compared to $1.25M in the prior year. The decrease is primarily attributable to expected declines in sunsetting legacy product renewal revenue and changes in the mix of users subscribed to certain Mitel offerings. Operating expenses decreased by 7% to $4.25M in Q4 FY25 and by 4% to $16.67M in FY25, compared to $4.57M in Q4 FY24, and $17.43M in FY24. The decrease is attributed to higher government grants and lower headcount costs, partially offset by an increase in marketing spend, professional fees and software subscriptions. The Company continues to invest in Vantage DX revenue growth as management monitors value for spend in all functions of the value chain. Loss from operations was $1.34M in Q4 FY25 and $4.14M in FY25, compared to $1.24M and $3.60M, respectively. The increase in loss from operations is attributable to the decrease in revenue as described above, partially offset by lower operating expenses. Adjusted EBITDA (a non-IFRS measure) was a loss of $0.82M in Q4 FY25 and $2.02M in FY25 compared to $0.79M in Q4 FY24 and $1.49M in FY24, attributable to the items described above. The Company's cash and short-term investments balance was $6.69M as of March 31, 2025 (compared to $7.72M at March 31, 2024). The financial statements, notes and Management Discussion and Analysis ("MD&A") are available under the Company's profile on SEDAR+ at and on Martello's website at The financial statements include the wholly-owned subsidiaries of Martello. All amounts are reported in Canadian dollars. MRR is a non-IFRS measure, representing average monthly recurring revenues earned in a fiscal quarter. This press release does not constitute an offer of the securities of the Company for sale in the United States. The securities of the Company have not been registered under the United States Securities Act of 1933, (the " 1933 Act") as amended, and may not be offered or sold within the United States absent registration or an exemption from registration under the 1933 Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. About Martello Technologies Group Martello (TSXV: MTLO) is a technology company that provides experience management solutions for enterprise collaboration tools such as Microsoft Teams and Mitel unified communications. The Company's Vantage DX solution enables IT teams and managed service providers (MSPs) to deliver a frictionless Microsoft Teams user experience. With Vantage DX, they can move from reactive to proactive support by detecting potential performance issues before they impact users, and speeding resolution time from days to minutes. This leads to increased productivity, realizes efficiencies, and allows businesses to harness the full value of Microsoft Teams. Martello is a public company headquartered in Ottawa, Canada with employees in Europe, the United States and the Asia Pacific region. Learn more at Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release. Cautionary Note Regarding Forward-Looking Information This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods and " includes, but is not limited to, statements with respect to activities, events or developments that the Company expects or anticipates will or may occur in the future, including management's aim to reduce hosting costs, the aim to expand Martello's capabilities into Unify, and the aim to drive revenue growth with partners. Forward-looking information is neither a statement of historical fact nor assurance of future performance. Instead, forward-looking information is based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking information relates to the future, such statements are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking information. Therefore, you should not rely on any of the forward-looking information. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking information include, among others, the following: Continued volatility in the capital or credit markets and the uncertainty of additional financing. Our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so. Changes in customer demand. Disruptions to our technology network including computer systems and software, as well as natural events such as severe weather, fires, floods and earthquakes or man-made or other disruptions of our operating systems, structures or equipment. Delayed purchase timelines and disruptions to customer budgets, as well as Martello's ability to maintain business continuity as a result of COVID-19. and other risks disclosed in the Company's filings with Canadian Securities Regulators, which are available on the Company's profile on SEDAR+ at Any forward-looking information provided by the Company in this news release is based only on information currently available and speaks only as of the date on which it is made. Except as required by applicable securities laws, we undertake no obligation to publicly update any forward-looking information, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. SOURCE Martello Technologies Group Inc.
