TORONTO, Nov. 29, 2017 (GLOBE NEWSWIRE) -- Advantex Marketing International Inc. (CSE:ADX), a specialist in marketing loyalty-reward programs, announced its results for the three months ended September 30, 2017.
During the past fifteen months Advantex’s focus has been to stabilize operations in an environment where it had limited access to working capital. Furthermore, Advantex’s new 12% debentures mature December 31, 2017 and will have to be re-financed.
In response to this situation Advantex has developed a financial restructuring plan (‘Plan”). The Plan requires accommodations from Advantex’s employees, its affinity partners and its financial backers. Successful implementation would enable Advantex to re-finance the new 12% debentures and provide working capital to support a gradual sustained recovery of its business. Some measures have been implemented while others are in process. Advantex expects the Plan to be fully implemented by December 31, 2017. Advantex believes implementing the Plan is the most effective way to transition to the next phase of recovery of its core business, during which it expects a gradual but sustained growth in its CIBC/TD program merchant base and related revenues. This transition will ultimately benefit all of its stakeholders.
Highlights of results for Fiscal 2018 First Quarter are set out in the table (1). Additional details are available in the Consolidated Financial Statements and the Management Discussion and Analysis available under Advantex’s profile on www.sedar.com.
| Fiscal 2018 First Quarter | Fiscal 2017 First Quarter | Increase/ (Decrease) | |||||||
| $ | $ | $ | |||||||
| Revenues | $ | 2,006,169 | $ | 2,604,270 | $ | (598,101 | ) | ||
| Direct expenses | |||||||||
| Cost of cardholder rewards and marketing in connection with Advantex's merchant based loyalty programs | $ | 481,575 | $ | 697,764 | $ | (216,189 | ) | ||
| Expense for provision against delinquent accounts | $ | 131,904 | $ | 179,594 | $ | (47,690 | ) | ||
| Gross profit | $ | 1,392,690 | $ | 1,726,912 | $ | (334,222 | ) | ||
| Selling and General & Administrative expenses | $ | 1,229,282 | $ | 1,398,251 | $ | (168,969 | ) | ||
| Earnings from operations before depreciation, amortization and interest | $ | 163,408 | $ | 328,661 | $ | (165,253 | ) | ||
| Stated interest expense - loan payable, and debentures | $ | 325,822 | $ | 338,994 | $ | (13,172 | ) | ||
| Loss from operations before depreciation, amortization and non cash interest | $ | (162,414 | ) | $ | (10,333 | ) | $ | 152,081 | |
| Depreciation, amortization and non-cash interest expense | $ | 8,891 | $ | 139,072 | $ | (130,181 | ) | ||
| Net loss and Comprehensive loss | $ | (171,305 | ) | $ | (149,405 | ) | $ | 21,900 | |
(1) The tabulation is a non-GAAP presentation and is provided to assist readers in understanding Advantex’s financial performance. The information is extracted from consolidated financial statements for the three months ended September 30, 2017.
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 partnerships with Aeroplan, Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Caesars Entertainment, Advantex has contractual access to millions of consumers with above-average personal and household income. Advantex also has partnerships with about 1,025 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.
Forward-Looking Information
This news release contains “forward-looking statements” within the meaning of applicable securities laws relating to the future business and operations of Advantex, including implementation of the Plan, timeline for implementation of the Plan, Plan being most effective way forward, outcomes for the business and stakeholders and their timing upon implementation of the Plan. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements. The business and operations of Advantex described herein is dependent on a number of factors and is subject to a number of risks and uncertainties. Factors that could cause actual results to differ materially include those listed under “Working Capital and Liquidity Management”, “General Risks and Uncertainties” and “Economic Dependence” in Advantex’s Management’s Discussion and Analysis for the three months ended September 30, 2017.
The statements in this news release are made as of the date of this release. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and Advantex undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.
Contact:
Mukesh Sabharwal
Vice-President and Chief Financial Officer
Tel: 905-470-9558 ext. 249
Email: mukesh.sabharwal@advantex.com
Advantex Marketing International Inc.
Consolidated Statements of Financial Position (unaudited)
(expressed in Canadian dollars)
| Note | At September 30, 2017 | At June 30, 2017 | |||||
| $ | $ | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 426,376 | $ | 367,357 | |||
| Accounts receivable | 252,157 | 180,517 | |||||
| Transaction credits | 5 | 5,546,596 | 5,549,712 | ||||
| Inventory | 6 | 32,573 | 35,038 | ||||
| Prepaid expenses and sundry assets | 87,958 | 82,413 | |||||
| $ | 6,345,660 | $ | 6,215,037 | ||||
| Non-current assets | |||||||
| Property, plant and equipment | $ | 64,172 | $ | 72,142 | |||
| Intangible assets | - | 921 | |||||
| $ | 64,172 | $ | 73,063 | ||||
| Total assets | $ | 6,409,832 | $ | 6,288,100 | |||
| Liabilities | |||||||
| Current liabilities | |||||||
| Loan payable | 7 | $ | 4,628,336 | $ | 4,476,421 | ||
| Accounts payable and accrued liabilities | 3,373,256 | 3,232,134 | |||||
| 12% Non-convertible debentures payable | 8 | 5,159,000 | 5,159,000 | ||||
| $ | 13,160,592 | $ | 12,867,555 | ||||
| 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 | (35,324,314 | ) | (35,153,009 | ) | |||
| Total deficiency | $ | (6,750,760 | ) | $ | (6,579,455 | ) | |
| Total liabilities and deficiency | $ | 6,409,832 | $ | 6,288,100 | |||
| 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, 2017 and 2016
(expressed in Canadian dollars)
| Note | 2017 | 2016 | |||||
| $ | $ | ||||||
| Revenues | 15 | $ | 2,006,169 | $ | 2,604,270 | ||
| Direct expenses | 14/15 | 613,479 | 877,358 | ||||
| 1,392,690 | 1,726,912 | ||||||
| Operating expenses | |||||||
| Selling and marketing | 14/15 | 480,198 | 505,707 | ||||
| General and administrative | 14/15 | 749,084 | 892,544 | ||||
| Earnings from operations before depreciation, amortization and interest | 163,408 | 328,661 | |||||
| Interest expense: | |||||||
| Stated interest expense - loan payable, and debentures | 7/8 | 325,822 | 338,994 | ||||
| Non-cash interest expense on debentures | 8 | - | 60,227 | ||||
| (162,414 | ) | (70,560 | ) | ||||
| Depreciation of property, plant and equipment, and amortization of intangible assets | 8,891 | 78,845 | |||||
| Net loss and comprehensive loss | $ | (171,305 | ) | $ | (149,405 | ) | |
| 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, 2017 and 2016
(expressed in Canadian dollars)
| Class A preference shares | Common shares | Contributed surplus | Accumulated other comprehensive loss | Deficit | Total | |||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||
| 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 | ) | |||||
| Balance - July 1, 2017 | $ | 3,815 | $ | 24,526,740 | $ | 4,090,382 | $ | (47,383 | ) | $ | (35,153,009 | ) | $ | (6,579,455 | ) | |||||
| Net loss and comprehensive loss | - | - | - | - | (171,305 | ) | (171,305 | ) | ||||||||||||
| Balance - September 30, 2017 | $ | 3,815 | $ | 24,526,740 | $ | 4,090,382 | $ | (47,383 | ) | $ | (35,324,314 | ) | $ | (6,750,760 | ) | |||||
| 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, 2017 and 2016
(expressed in Canadian dollars)
| Note | 2017 | 2016 | |||||
| $ | $ | ||||||
| Operational activities | |||||||
| Net loss for the period | $ | (171,305 | ) | $ | (149,405 | ) | |
| Adjustments for: | |||||||
| Depreciation of property, plant and equipment, and amortization of intangible assets | 8,891 | 78,845 | |||||
| Accretion charge for debentures | 8 | - | 60,227 | ||||
| (162,414 | ) | (10,333 | ) | ||||
| Changes in items of working capital | |||||||
| Accounts receivable | (71,640 | ) | 212,268 | ||||
| Transaction credits | 3,116 | 1,099,515 | |||||
| Inventory | 2,465 | 563 | |||||
| Prepaid expenses and sundry assets | (5,545 | ) | (16,084 | ) | |||
| Accounts payable and accrued liabilities | 141,122 | (121,716 | ) | ||||
| 69,518 | 1,174,546 | ||||||
| Net cash (used in) provided by operating activities | $ | (92,896 | ) | $ | 1,164,213 | ||
| Financing activities | |||||||
| Utilization (Repayment) of loan payable | 7 | $ | 151,915 | $ | (724,974 | ) | |
| Net cash generated from (used in) financing activities | $ | 151,915 | $ | (724,974 | ) | ||
| Increase in cash and cash equivalents during the period | $ | 59,019 | $ | 439,239 | |||
| Cash and cash equivalents at beginning of the period | 367,357 | 658,678 | |||||
| Cash and cash equivalents at end of the period | $ | 426,376 | $ | 1,097,917 | |||
| Additional information | |||||||
| Interest paid | $ | 169,780 | $ | 183,378 | |||
| For purposes of the cash flow statement, cash comprises | |||||||
| Cash | $ | 426,376 | $ | 1,092,917 | |||
| Term deposits | - | 5,000 | |||||
| $ | 426,376 | $ | 1,097,917 | ||||
| The accompanying notes are an integral part of these consolidated financial statements | |||||||