SSC Security Services Corp. Launches New Identity with Shareholder Update
New: Company name, ticker symbol, share price, website, corporate presentation
REGINA, SK, Oct. 4, 2021 /CNW/ - SSC Security Services Corp. (formerly Input Capital Corp.) ("SSC" or the "Company) (TSXV: SECU) (US: INPCF) is pleased to present the following letter to shareholders from our Chairman, President & CEO Doug Emsley.
If you have looked at your brokerage account since October 1, you will have noticed that our Company now has a new name, trades under a new ticker symbol on the TSX Venture Exchange (SECU), that our share price is 3x higher than it was on September 30, and that you own 1/3rd as many shares of the Company as you did prior. These are all a result of recent initiatives we have undertaken to change the direction of our Company. That's what this letter is about, and I'd like to take this opportunity to tell you more about your Company and where we are headed.
Input Capital is now SSC Security Services Corp.
We started a new fiscal year on October 1, so it is fitting that this also marks a fresh start in the direction of the Company. What was previously Input Capital Corp. ("Input") is now SSC Security Services Corp. ("SSC"), a leading provider of physical and cyber security services to corporate and public sector clients across Canada.
Two Acquisitions Completed in the last Eight Months
These changes are the culmination of a lot of work undertaken by our team over the last year. Part of that work includes two acquisitions that are now completed:
- On February 1, 2021, we acquired privately-held SRG Security Resource Group Inc. ("SRG"), which has a long profitable history offering physical and cyber security services to corporate and public sector clients across Canada. At the time, SRG had about 415 employees, primarily in Western Canada, but spread across the country from Newfoundland to Vancouver Island.
- On July 10, 2021, we funded SRG's acquisition of the regional operations of privately-held Impact Security Group, adding about 215 employees to SRG's physical security division, bringing our total headcount to about 625 employees today.
- These are just the first of what we hope will be several more acquisitions in the months ahead. Stay tuned!
Wrapping Up the Legacy Agriculture Business
While those acquisitions were going on, our long-standing Input team was also busy wrapping up many contracts related to our legacy agriculture business, converting them into cash. This process has gone so well that even though we used cash to complete the acquisitions above, to pay for ongoing operating expenses, to make significant repayments against our long-term debt, and to keep paying our regular quarterly dividend, our cash position has continued to increase and improve, providing us with excellent liquidity. This means we can fund our own receivables rather than turning to banks or factoring firms to finance working capital, which is often what smaller less-well-capitalized companies in this industry do.
I commit to you that we will always maintain a strong cash position to go with our strong aversion to debt as we set SSC up for a successful future. We still have more ag contracts to wrap up, but there is every indication that this process will continue to progress smoothly and profitably as we complete our exit from the agriculture industry. As our legacy agriculture business becomes smaller and smaller, you will notice that we talk less and less about it, and more and more about security.
I know that many of you think of our team as being agriculture specialists. Which might make you wonder what we know about the security industry and running security companies.
You will be reassured to know that I have been in the security business since 1988, when I co-founded a predecessor company to SRG with Blair Ross, our Chief Operating Officer. Blair and I have been business partners in the security business since that time, building that first company up to over 1,000 employees before selling it to the largest security company in the world. We ran the Western Canadian operations of that large company for a couple of years, leaving to pursue other opportunities.
That's when Blair and I started SRG, building a new security company from scratch. And around that same time, I got involved in the agriculture business with Brad Farquhar, our Chief Financial Officer, and with Gord Nystuen, Vice President. After we sold the first ag business to the Canada Pension Plan Investment Board, the same team ramped up Input into what it eventually became.
Last year, when we determined that an exit from the ag industry was the right thing for the Company. We concluded that putting Input's balance sheet together with SRG and growing in the security business would be the right thing to do. The resulting company would have a strong, cohesive leadership team that has worked together for decades, and a large balance sheet that could support an ambitious plan to build a strong national physical and cyber security company both organically and via acquisition. It made sense then, and it makes even more sense today.
The security business is a highly fragmented business. There are some big international public companies like the one Blair and I sold to about 20 years ago. There are some mid-sized national firms like SRG, most of which are also privately held. And there are a large number of smaller companies, many of which are owned by their founders and their families. Blair and I know many of these owner/operators from our long history in the security industry, and we believe there are many opportunities for us to acquire some of them as the owners look to move on or plan for retirement.
Our stated goal is to use SSC as the public holding company that will acquire and/or fund the growth and development of a number of wholly-owned operating companies, products and brands in the security business over the next 3-5 years. In that time, we believe we can become a group of companies with $200 to $300 million in annual revenue, producing $15 to $20 million in annual EBITDA. Growing our earnings and EBITDA will enhance our ability to grow with internally generated resources, as well as to increase our ability to pay dividends over time.
The market capitalization of our Company is less than the value of our cash and tangible legacy assets (which are converting to cash very quickly), which means that buyers of the Company's shares are getting our 625-employee security company for free! With a very tangible book value of about $3.75 per share, I believe our shares are deeply undervalued, and it doesn't take too much imagination to conclude that our growth plan will produce substantial benefits to all of us as shareholders.
You should know that we don't run the company as a hired managers. Rather, we run it as if we own it – because we do. Our management team, board and employees own approximately 33.8% of the shares of the Company. And every head office employee and management team member automatically buys more shares every payday.
I believe our Company is the best capitalized security company in the country, and we are poised to deploy that capital into growing significantly larger over the next several years. The following numbers are approximate because we haven't closed the books for the Sept 30 year end yet, but they help you understand our financial strength and how well we are positioned to grow:
Cash = $28.8 million (and growing rapidly)
Ag Assets = $20+ million (and turning to cash rapidly)
Long-Term Debt = $2.8 million (and declining rapidly)
Plus, we own a multi million-dollar security company with over 600 employees that is profitable and throwing off strong cash flow.
Some of you have asked about our dividend policy going forward. On August 17, 2021, we announced a cash dividend of $0.01 per common share for the quarter ending September 30, 2021. The dividend is payable on October 15, 2021 to shareholders of record on September 30, 2021 (based on pre-consolidation share holdings).
After the dividend is paid on October 15, we plan to maintain our dividend at the same level (but adjusted for the consolidation, of course). This means that the quarterly dividend payments will become $0.03 per post-consolidation common share ($0.12 annualized) beginning with the dividend payable to shareholders in January 2022. In a well-capitalized security company, we generate cash and our dividend is easily sustainable.
I invite you to come with us on this journey. Whether you own 10 shares or 1 million shares of SSC, we're all partners in this enterprise, and we will own a much larger company together in just a few years.
What Else is Ahead?
We often get calls from investors in the United States who are frustrated by their brokers not making smaller TSX Venture Exchange companies available to them. Over the next few months, we will be taking steps to enhance the availability of our shares to US investors of all sizes. Gaining access to more investors should be good for us all as shareholders, providing greater liquidity and access to the largest pool of capital in the world.
In the past, we have won awards for Investor Relations. While we haven't had a lot of exciting news to talk about over the past few years, that has now changed. We now plan a renewed investor outreach program, getting back to some of the kinds of IR activities that served us well in the past, as well as some new ideas.
So, as you can see, we're not sitting still. We have big plans for the company and the path is now open for us to execute on our plans. We believe good things are ahead and look forward to going on that journey with you.
Chairman, President & CEO
PS. Stay in Touch & Keep Current
You can track our progress by receiving our press releases and updates via email. If you haven't already subscribed, be sure to do so at: https://securityservicescorp.ca/subscribe/
We have a new website located at www.securityservicescorp.ca, where you will find more information about the Company and links to the websites of our operating subsidiaries like SRG.
I also invite any shareholders with questions about anything regarding the security business, or our strategy, to give me a call. My phone number below rings straight through to my desk, and I always like talking to shareholders.
SSC Security Services Corp. is a leading provider of physical and cyber security services to corporate and public sector clients across Canada. Our leadership team has decades of experience in the security industry. Combined with our very strong balance sheet, we plan to rapidly grow into a much larger security services firm via incremental organic growth, by acquisition, and via expansion into new service lines within the security sector. On February 1, 2021, we acquired SRG Security Resource Group Inc., and in July 2021, we funded SRG's acquisition of a regional security business. As of October 1, 2021, SSC and its subsidiaries have approximately 625 employees 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.
SOURCE SSC Security Services Corp.