Artificial Solutions International AB (SSME:ASAI) ("Artificial Solutions" or the "Company") is adjusting its guidance on one of its reported metrics, Order Intake, for the financial year ending 31[st] Dec 2019. The amended guidance does not affect Revenue, EBITDA or Cashflow, for which all guidance remains unchanged. Despite strong performance in Q2 and Q3 2019, the delay in closing one major contract in Q4 has impacted the full-year Order Intake achievement and the Company now anticipates growth in Order Intake (one of the three financial guidance indicators provided to the market) to be lower than forecasted.
A significant order from an existing major US customer that Artificial Solutions had anticipated completing before the year-end has been delayed. Information from the customer indicates that the timing of the customer's project will not be materially affected by this timing issue however the signature of the order was not completed by 31[st] December 2019. The Company expects that the transaction will complete shortly, although of course this timing cannot be guaranteed. The impact on the 2019 Order Intake metric has been meaningful as, had the order been signed, the Company would have achieved its Order Intake market guidance growth for 2019.
Based on the above, Artificial Solutions is adjusting its guidance for the 2019 financial year with Order Intake growing by 14% to SEK63.1m for the 2019 financial year.
Order Intake is a metric which the Company provides for market guidance, but it is not a recognised GAAP metric. The Company expects to report GAAP metrics on Net Sales (unaudited) SEK49.1m and EBITDA of SEK-120.3m both of which the Board believes are in line with previous market guidance. Further, the two other guidance metrics provided by the Company, namely achieving a Gross Margin of 70% by the end of 2020 and turning cash flow positive from operations in late 2020 both remain unchanged.
The Company announced a SEK120m Rights Issue on December 12th, 2019 with an Over Allotment option of further SEK30m. The Company is not changing its forward-looking cash flow guidance and therefore believes that the new capital injection will be sufficient to meet its working capital requirements through to cash flow positivity.
Lawrence Flynn, CEO Artificial Solutions comments "In a mid-size business like Artificial Solutions that sells large technology projects to large international brands, the delay of even one or two large contracts can have a material effect on our sales within a quarter. This is unfortunately what has happened in Q4, however the delay does not compromise the momentum and strong progress we made over the previous two quarters. Nonetheless, I and the Board remain confident in the outlook for the business, underpinned by the notable new-named customers that have chosen Artificial Solutions to support their conversational AI journey and our strong, award-winning Teneo technology."
For more information, please contact:
Lawrence Flynn, CEO, Artificial Solutions International AB
+46 8 663 54 50
Erik Penser Bank is Artificial Solutions' Certified Advisor at Nasdaq First North Growth Market. Tel: +46 8 463 80 00
The information in this press release is such that Artificial Solutions International AB shall announce publicly according to the EU Regulation No 596/2014 on market abuse (MAR). The information was submitted for publication, through the agency of the contact person set out above, 17 January 2020 at 18:30 CET.
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