TORONTO, ONTARIO--(Marketwired - Nov. 21, 2016) - Advantex Marketing International Inc. (CSE:ADX)(CSE:ADX.CN)(CNSX:ADX), a specialist in marketing loyalty-reward programs, announced its results for the three months ended September 30, 2016.
The Company's business performance was stable for the Quarter, while it continues to seek growth funds through recapitalization, in order to take advantage of expansion opportunities.
Highlights of Fiscal 2017 First Quarter results are set out in the table(1). Additional details are available in the Consolidated Financial Statements and the Management Discussion and Analysis available under the Company's profile on www.sedar.com.
| Fiscal 2017 First Quarter |
Fiscal 2016 First Quarter |
Change | ||||||||
| $ | $ | $ | ||||||||
| Revenues | $ | 2,604,270 | $ | 2,995,254 | $ | (390,984 | ) | |||
| Direct expenses | ||||||||||
| Cost of cardholder rewards and marketing in connection with Company's merchant based loyalty programs | $ | 697,764 | $ | 744,419 | $ | (46,655 | ) | |||
| Expense for provision against delinquent accounts | $ | 179,594 | $ | 138,650 | $ | 40,944 | ||||
| Gross profit | $ | 1,726,912 | $ | 2,112,185 | $ | (385,273 | ) | |||
| Selling and General & Administrative expenses | $ | 1,398,251 | $ | 1,647,813 | $ | (249,562 | ) | |||
| Earnings from operations before depreciation, amortization and interest | $ | 328,661 | $ | 464,372 | $ | (135,711 | ) | |||
| Stated interest expense - loan payable, and debentures | $ | 338,994 | $ | 383,471 | $ | (44,477 | ) | |||
| Profit (Loss) from operations before depreciation, amortization and non cash interest | $ | (10,333 | ) | $ | 80,901 | $ | (91,234 | ) | ||
| Depreciation, amortization and non-cash interest expense | $ | 139,072 | $ | 188,573 | $ | (49,501 | ) | |||
| Net loss and Comprehensive loss | $ | (149,405 | ) | $ | (107,672 | ) | $ | (41,733 | ) | |
(1) The tabulation is a non-GAAP presentation and is provided to assist readers in understanding the Company's financial performance. The information is extracted from consolidated financial statements for the three months ended September 30, 2016.
About Advantex:
Advantex provides specialized marketing programs that enable members of affinity groups to earn frequent-flyer miles and other loyalty rewards through purchases at participating merchants.
Through our partnerships with Aeroplan, Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Caesars Entertainment, we have contractual access to millions of consumers with above-average personal and household income. We also have partnerships with about 1,300 merchants in Canada and the US.
Advantex shares trade on the Canadian Securities Exchange under the symbol ADX. For more information, go to www.advantex.com.
| Advantex Marketing International Inc. |
| Consolidated Statements of Financial Position (unaudited) |
| (expressed in Canadian dollars) |
| Note | At September 30, 2016 |
At June 30, 2016 |
||||||
| $ | $ | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 1,097,917 | $ | 658,678 | ||||
| Accounts receivable | 213,134 | 425,402 | ||||||
| Transaction credits | 5 | 6,252,747 | 7,352,262 | |||||
| Inventory | 6 | 39,351 | 39,914 | |||||
| Prepaid expenses and sundry assets | 119,768 | 103,684 | ||||||
| $ | 7,722,917 | $ | 8,579,940 | |||||
| Non-current assets | ||||||||
| Property, plant and equipment | $ | 104,882 | $ | 116,049 | ||||
| Intangible assets | 52,243 | 119,921 | ||||||
| $ | 157,125 | $ | 235,970 | |||||
| Total assets | $ | 7,880,042 | $ | 8,815,910 | ||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Loan payable | 7 | $ | 4,808,293 | $ | 5,533,267 | |||
| Accounts payable and accrued liabilities | 3,435,262 | 3,556,978 | ||||||
| 12% Non-convertible debentures payable | 8 | 5,159,000 | 5,098,773 | |||||
| $ | 13,402,555 | $ | 14,189,018 | |||||
| Shareholders' deficiency | ||||||||
| Share capital | 9 | $ | 24,530,555 | $ | 24,530,555 | |||
| Contributed surplus | 4,090,382 | 4,090,382 | ||||||
| Accumulated other comprehensive loss | (47,383 | ) | (47,383 | ) | ||||
| Deficit | (34,096,067 | ) | (33,946,662 | ) | ||||
| Total deficiency | $ | (5,522,513 | ) | $ | (5,373,108 | ) | ||
| Total liabilities and deficiency | $ | 7,880,042 | $ | 8,815,910 | ||||
Economic and Financial dependence (note 2 a), Going concern (note 2 b), Commitments and contingencies (note 12)
The accompanying notes are an integral part of these consolidated financial statements.
Approved by the Board
| Director: Signed "William Polley" | Director: Signed "Kelly Ambrose" |
| William Polley | Kelly Ambrose |
| Advantex Marketing International Inc. |
| Consolidated Statements of Loss and Comprehensive Loss (unaudited) |
| For the three months ended September 30, 2016 and 2015 |
| (expressed in Canadian dollars) |
| Note | 2016 | 2015 | ||||||
| $ | $ | |||||||
| Revenues | 15 | $ | 2,604,270 | $ | 2,995,254 | |||
| Direct expenses | 14/15 | 877,358 | 883,069 | |||||
| 1,726,912 | 2,112,185 | |||||||
| Operating expenses | ||||||||
| Selling and marketing | 14/15 | 505,707 | 739,428 | |||||
| General and administrative | 14/15 | 892,544 | 908,385 | |||||
| Earnings from operations before depreciation, amortization and interest | 328,661 | 464,372 | ||||||
| Interest expense: | ||||||||
| Stated interest expense - loan payable, and debentures | 7/8 | 338,994 | 383,471 | |||||
| Non-cash interest expense on debentures | 8 | 60,227 | 57,466 | |||||
| (70,560 | ) | 23,435 | ||||||
| Depreciation of property, plant and equipment, and amortization of intangible assets | 78,845 | 131,107 | ||||||
| Net loss and comprehensive loss | $ | (149,405 | ) | $ | (107,672 | ) | ||
| Loss per share | ||||||||
| Basic and Diluted | 13 | $ | (0.00 | ) | $ | (0.00 | ) | |
The accompanying notes are an integral part of these consolidated financial statements.
| Advantex Marketing International Inc. |
| Consolidated Statements of Changes in Shareholders' Deficiency (unaudited) |
| For the three months ended September 30, 2016 and 2015 |
| (expressed in Canadian dollars) |
| Class A preference shares |
Common shares |
Contributed surplus |
Accumulated other comprehensive loss |
Deficit | Total | |||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||
| Balance - July 1, 2015 | $ | 3,815 | $ | 24,526,740 | $ | 4,090,382 | $ | (47,383 | ) | $ | (33,039,219 | ) | $ | (4,465,665 | ) | |||
| Net loss and comprehensive loss | - | - | - | - | (107,672 | ) | (107,672 | ) | ||||||||||
| Balance - September 30, 2015 | $ | 3,815 | $ | 24,526,740 | $ | 4,090,382 | $ | (47,383 | ) | $ | (33,146,891 | ) | $ | (4,573,337 | ) | |||
| Balance - July 1, 2016 | $ | 3,815 | $ | 24,526,740 | $ | 4,090,382 | $ | (47,383 | ) | $ | (33,946,662 | ) | $ | (5,373,108 | ) | |||
| Net loss and comprehensive loss | - | - | - | - | (149,405 | ) | (149,405 | ) | ||||||||||
| Balance - September 30, 2016 | $ | 3,815 | $ | 24,526,740 | $ | 4,090,382 | $ | (47,383 | ) | $ | (34,096,067 | ) | $ | (5,522,513 | ) | |||
The accompanying notes are an integral part of these consolidated financial statements.
| Advantex Marketing International Inc. |
| Consolidated Statements of Cash Flow (unaudited) |
| For the three months ended September 30, 2016 and 2015 |
| (expressed in Canadian dollars) |
| Note | 2016 | 2015 | |||||||
| $ | $ | ||||||||
| Operational activities | |||||||||
| Net loss for the period | $ | (149,405 | ) | $ | (107,672 | ) | |||
| Adjustments for: | |||||||||
| Depreciation of property, plant and equipment, and amortization of intangible assets | 78,845 | 131,107 | |||||||
| Accretion charge for debentures | 8 | 60,227 | 57,466 | ||||||
| (10,333 | ) | 80,901 | |||||||
| Changes in items of working capital | |||||||||
| Accounts receivable | 212,268 | 32,057 | |||||||
| Transaction credits | 1,099,515 | (887,519 | ) | ||||||
| Inventory | 563 | 75,562 | |||||||
| Prepaid expenses and sundry assets | (16,084 | ) | (72,034 | ) | |||||
| Accounts payable and accrued liabilities | (121,716 | ) | (170,631 | ) | |||||
| 1,174,546 | (1,022,565 | ) | |||||||
| Net cash provided by (used in) operating activities | $ | 1,164,213 | $ | (941,664 | ) | ||||
| Investing activities | |||||||||
| Purchase of property, plant and equipment, and intangible assets | $ | - | $ | (18,026 | ) | ||||
| Net cash (used in) investing activities | $ | - | $ | (18,026 | ) | ||||
| Financing activities | |||||||||
| Utilization (Repayment) of loan payable | 7 | $ | (724,974 | ) | $ | 696,586 | |||
| Net cash generated (used in) financing activities | $ | (724,974 | ) | $ | 696,586 | ||||
| Increase (Decrease) in cash and cash equivalents during the period | $ | 439,239 | $ | (263,104 | ) | ||||
| Cash and cash equivalents at beginning of the period | 658,678 | 1,162,609 | |||||||
| Cash and cash equivalents at end of the period | $ | 1,097,917 | $ | 899,505 | |||||
| Additional information | |||||||||
| Interest paid | $ | 183,378 | $ | 227,429 | |||||
| For purposes of the cash flow statement, cash comprises | |||||||||
| Cash | $ | 1,092,917 | $ | 894,505 | |||||
| Term deposits | 5,000 | 5,000 | |||||||
| $ | 1,097,917 | $ | 899,505 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
Contact Information:
Mukesh Sabharwal
Vice-President and Chief Financial Officer
905-470-9558 ext. 249
mukesh.sabharwal@advantex.com
www.advantex.com