Q4 FY2017 Market Update – BuildingIQ

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BuildingIQ (ASX: BIQ) - Q4 FY2017 Market Update

January 31, 2018

Financial Summary

  • Q4 FY2017 revenue: A$1.79 million, up 56% compared with A$1.15 million in the prior corresponding period (pcp)
  • Q4 cash receipts from customers: A$0.91 million (A$1.01 million pcp), a 10% decrease
  • Q4 net cash payments: A$2.20 million, (A$2.432 million pcp), a 5% decrease
  • Q4 operating expenses: A$2.31 million, (A$1.91 million pcp), a 21% increase
  • Q4 contract bookings: A$4.8 million, (A$1.96 million pcp), a 146% increase
  • Operational Summary

  • 57 buildings were added in Q4 FY2017 for a total of 1,085 buildings (approx. 101m SF) active on the 5i Platform (23 buildings added pcp)
  • Facility Worksite Service added 25 new sites in Q4 FY2017 for a total of 370 sites. Over 48,700 work order requests / transactions were processed (Q3 FY2017: over 45,550) for over 500 users
  • Cumulative YTD value of A$5.89 million delivered to clients through documented operations and energy savings from our 5i Platform (Q4 FY 2016 YTD comparative: A$5.20 million), an increase of 13%
  • " Business pipeline grew more than 40% over the same prior corresponding period.
  • Note: BuildingIQ is incorporated in Delaware and has a 31 December financial year end.

    BuildingIQ Inc. (ASX: BIQ) today released its Q4 FY2017 Market Update for the quarter ending 31 December 2017.

    In commenting on the results, BuildingIQ's President & CEO, Michael Nark, indicated the Company had experienced another solid quarter. "We are pleased that BuildingIQ continued to experience steady growth in both the financial and operational metrics of the Company during Q4 FY2017. The results delivered were a substantial improvement over both the prior corresponding period and the previous quarter.

    "Notably, the Q4 FY2017 results delivered approximately 34% quarter-on-quarter growth in revenue, the fifth consecutive quarter of recurring revenue growth and the second highest level of cash receipts from customers in 2 years. Reflecting this, total revenues increased by 56% over the prior corresponding period."

    "We have previously referred to the Company's cost efficiency strategy, which has contributed, and continues to contribute positively to our financial position. Pleasingly, eighteen months on, the strategy has resulted in our full year operating expenses being 18% lower than the prior year. Q4 FY17 operating expenses were up however, as a result of costs associated with the Entitlement Offer and Placement and an increase in the FY17 bonus accrual, reflecting achievement of FY17 KPIs."

    "Operationally, these results further demonstrate the increasing take-up of services on BuildingIQ's 5i Platform from customers in our targeted geographies, and reflect the ongoing efforts of the BuildingIQ team to manage the business efficiently, while also growing demand for the 5i Platform services."

    Financial Information

    BuildingIQ's financial results in the final quarter of FY2017 show further strong improvement in revenue and contract bookings against both the prior corresponding period and the previous quarter's results (ASX: Market Update 27 October 2017).

    Total unaudited revenue for Q4 FY2017 was A$1.79 million, which is a 56% increase on the Company's audited revenue of A$1.15 million in the pcp. The Monthly Revenue Run rate has increased steadily, with A$0.69m reached at the end of Q4 FY2017.

    Cash receipts from customers for the fourth quarter of FY2017 were A$0.91 million, 10% lower than the previous corresponding period reflecting the changing nature of the revenue mix from the services on the 5i Platform and the geographic demand for these services.

    Net cash payments of A$2.20 million, were A$0.12 million lower than in Q4 FY2016.

    The following table summarises cash receipts, net cash and operating cash payments per quarter for FY2017, and FY2016:

    Receipts from Customers A$'000 Receipts R&D Rebate A$'000 Net Cash Payments A$'000 Operating Cash Payments A$'000
    Q4 FY17 909 - 2,204 2,781
    Q3 FY17 643 883 1,613 2,800
    Q2 FY17 759 1,323 1,632* 2,825
    Q1 FY17 715 - 3,358* 2,536
    Q4 FY16 1,006 - 2,316 2,443
    Q3 FY16 770 - 2,476 2,742
    Q2 FY16 890 1,692 2,514* 3,189
    Q1 FY16 335 - 3,118 2,700

    *Includes cash flows from investments, related to the purchase of NorthWrite, Inc.

    The annual receipt of R&D tax rebates, accrued at approximately A$0.40 million per quarter, is important in supporting BuildingIQ's continued product development. In total the rebates represent approximately 45% of eligible expenditures.

    BuildingIQ has secured R&D tax rebates until the end of FY2019. The total amount received in FY2017 was $2.21 million, an increase of $0.53 million over the $1.68 million received in FY2016. The R&D tax rebates for the next 2 years should follow a similar pattern, with approximately A$2.0 million expected in Q1 FY2018.

    Cash held at the end of Q4 FY2017 was A$2.42 million.

    Subsequent to the end of the fourth quarter, BuildingIQ completed a A$6.0 million capital raising (ASX: BIQ 24 January, 2018), in addition to $0.569m raised in December 2017, the proceeds of which will be used to fund the Company's growing sales pipeline, its 5i Platform services development and to provide additional working capital.

    Operational Information

    BuildingIQ has delivered consecutive quarters of solid growth in the number of buildings active on the 5i Platform since June 2016. As noted in the chart following, the Company now provides services to over 1,085 buildings (158 new buildings under contract in FY2017), representing approximately 101m SF under contract.

    During the fourth quarter, 57 buildings were added to the portfolio. Whilst we continued to grow the building portfolio, the average SF per booked building decreased by approximately 7% from Q3 FY2017 reflecting the smaller average floorspace of buildings using the visualisation and energy analytics services (Energy Worksite) of the 5i Platform.

    The full financial impact of these new buildings, which are typically contracted for terms of between 12 and 36 months, will be seen in the financial results between now and FY2019.

    Additionally, (as shown in the chart following) our Facility Worksite Service added 25 new sites in Q4 FY2017 for a total of 370 sites. Users of the Facility Worksite Service pay an annual subscription fee and realise average operational savings of at least A$4.00 for every work order processed.

    The volume of work order requests / transactions processed on the Platform in Q4 was over 48,700 (Q3 FY2017: over 45,550).

    Future Updates

    The Company will hold a conference call at 11am (AEDT) on 31 January 2018 to discuss this announcement. Please refer below for the dial-in details. Please use the computer login details below if you wish to submit typed questions via the "chat" functionality.

    Quarterly investor call details:

    Time: 11 am (AEDT)
    Date: Wednesday, 31 January, 2018
    Phone: +61 2 8355 1038 (AU) or (646) 749-3117 (US)
    Access code: 609-815-309
    Optional computer login: https://global.gotomeeting.com/join/609815309

    Financial Calendar

    Dates* Details
    February 23, 2018 FY2017 Annual results
    March 20, 2018 Annual General Meeting
    April 27, 2018 Appendix 4C & Q1 FY2018 Market Update
    July 31, 2018 Appendix 4C & Q2 FY2018 Market Update
    August 31, 2018 FY2018 Interim results
    October 31, 2018 Appendix 4C & Q3 FY2018 Market Update

    *NOTE: Dates may be subject to change


    For further information contact:

    Lisa Jones
    Company Secretary
    Ph.:  +61 422 133 352
    E: lisajones@buildingiq.com

    Christine Bowen
    Ph.: +61 414 861 629
    E: christine@communicaterelate.com.au

    About BuildingIQ

    BuildingIQ (ASX: BIQ) helps building owners and operators worldwide lower energy use, increase building operations efficiency and enhance tenant comfort. The Company's 5i cloud-based platform and Managed Services deliver on the promise of Internet of Things (IoT) for buildings with none of the drawbacks. Over 100M square feet of building space is currently under management with BuildingIQ.