TORONTO, ONTARIO--(Marketwired - May 30, 2016) - Advantex Marketing International Inc. (CSE:ADX), a specialist in marketing loyalty-reward programs, announced its results for the three and nine months ended March 31, 2016.
The financial performance is in line with the Company's expectation of a gradual recovery after over- coming the structural and competitive challenges of the previous Fiscal year. The Company is reporting an improvement in its financial performance for the three and nine months ended March 31, 2016.
Highlights of Fiscal 2016 Third Quarter results are tabulated (2) below. Additional details are available in the Fiscal 2016 Third Quarter Consolidated Financial Statements and the Management Discussion and Analysis available under the Company's profile on www.sedar.com.
| Q3 Fiscal 2016 | Q3 Fiscal 2015 | YTD Fiscal 2016 | YTD Fiscal 2015 | ||||||||||
| $ | $ | $ | $ | ||||||||||
| Revenue | $ | 2,435,120 | $ | 2,718,764 | $ | 8,526,797 | $ | 10,048,351 | |||||
| Direct Expenses - Cost of cardholder rewards and marketing merchants to cardholders | 650,440 | 805,284 | 2,251,596 | 2,738,918 | |||||||||
| Direct Expenses - Expense for provision against delinquent accounts | 102,577 | 1,156,219 | 411,071 | 1,381,147 | |||||||||
| Gross profit | $ | 1,682,103 | $ | 757,261 | $ | 5,864,130 | $ | 5,928,286 | |||||
| Selling and General & Administrative | 1,536,776 | 1,979,153 | 4,726,477 | 6,114,672 | |||||||||
| Restructuring cost | - | 805,892 | - | 805,892 | |||||||||
| Earnings from operations before depreciation, amortization and interest | $ | 145,327 | $ | (2,027,784 | ) | $ | 1,137,653 | $ | (992,278 | ) | |||
| Cash interest on loan payable and debentures | 480,596 | 373,051 | 1,260,932 | 1,215,125 | |||||||||
| Earnings from operations before depreciation, amortization and non-cash interest on debentures (accretion charges) | $ | (335,269 | ) | $ | (2,400,835 | ) | $ | (123,279 | ) | $ | (2,207,403 | ) | |
| Depreciation and amortization | 117,069 | 125,187 | 351,221 | 328,646 | |||||||||
| Non cash interest expense on debentures | 58,832 | 56,133 | 174,444 | 170,379 | |||||||||
| Net (loss) and Comprehensive (loss) | $ | (511,170 | ) | $ | (2,582,155 | ) | $ | (648,944 | ) | $ | (2,706,428 | ) | |
| (1) | EBITDA is a non-GAAP financial measure which does not have any standardized meaning prescribed by the issuer's GAAP and is unlikely to be comparable to similar measures presented by other issuers. It is provided as additional information to assist readers in understanding a component of the Company's financial performance. In case of the Company, nine months ended March 31, 2016, the EBITDA of $1,137,653 is equivalent to Earnings from operations before depreciation, amortization and interest per the statements of (loss) and comprehensive (loss) which is a part of the interim consolidated financial statements for the three and nine months ended March 31, 2016. |
| (2) | 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 and nine months ended March 31, 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 1,600 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 | March 31, | June 30, | ||||||
| 2016 | 2015 | |||||||
| $ | $ | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 648,325 | $ | 1,162,609 | ||||
| Accounts receivable | 396,430 | 460,446 | ||||||
| Transaction credits | 5 | 8,483,704 | 7,819,647 | |||||
| Inventory | 6 | 37,100 | 144,874 | |||||
| Prepaid expenses and sundry assets | 181,524 | 173,777 | ||||||
| $ | 9,747,083 | $ | 9,761,353 | |||||
| Non-current assets | ||||||||
| Property, plant and equipment | $ | 120,847 | $ | 165,735 | ||||
| Intangible assets | 227,374 | 477,992 | ||||||
| $ | 348,221 | $ | 643,727 | |||||
| Total assets | $ | 10,095,304 | $ | 10,405,080 | ||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Loan payable | 7 | $ | 6,221,134 | $ | 5,711,525 | |||
| Accounts payable and accrued liabilities | 3,949,533 | 4,294,418 | ||||||
| 12% Non-convertible debentures payable | 8 | 5,039,246 | - | |||||
| $ | 15,209,913 | $ | 10,005,943 | |||||
| Non-current liabilities | ||||||||
| 12% Non-convertible debentures payable | 8 | $ | - | $ | 4,864,802 | |||
| Total liabilities | $ | 15,209,913 | $ | 14,870,745 | ||||
| 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 | (33,688,163 | ) | (33,039,219 | ) | ||||
| Total deficiency | $ | (5,114,609 | ) | $ | (4,465,665 | ) | ||
| Total liabilities and deficiency | $ | 10,095,304 | $ | 10,405,080 | ||||
Economic and Financial dependence (note 2a), Going concern (note 2b), 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 and nine months ended March 31, 2016 and 2015
(expressed in Canadian dollars)
| Note | Three months ended March 31 | Nine months ended March 31 | ||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||
| $ | $ | $ | $ | |||||||||||
| Consolidated Statements of (loss) | ||||||||||||||
| Revenues | 15 | $ | 2,435,120 | $ | 2,718,764 | $ | 8,526,797 | $ | 10,048,351 | |||||
| Direct expenses | 14/15 | 753,017 | 1,961,503 | 2,662,667 | 4,120,065 | |||||||||
| 1,682,103 | 757,261 | 5,864,130 | 5,928,286 | |||||||||||
| Operating expenses | ||||||||||||||
| Selling and marketing | 14/15 | 594,977 | 841,932 | 2,026,725 | 2,664,869 | |||||||||
| General and administrative | 14/15 | 941,799 | 1,137,221 | 2,699,752 | 3,449,803 | |||||||||
| Restructuring cost | - | 805,892 | - | 805,892 | ||||||||||
| Earnings from operations before depreciation, amortization and interest | 145,327 | (2,027,784 | ) | 1,137,653 | (992,278 | ) | ||||||||
| Interest expense: | ||||||||||||||
| Stated interest expense - loan payable, and debentures | 7,8 | 480,596 | 373,051 | 1,260,932 | 1,215,125 | |||||||||
| Non-cash interest expense on debentures | 8 | 58,832 | 56,133 | 174,444 | 170,379 | |||||||||
| (394,101 | ) | (2,456,968 | ) | (297,723 | ) | (2,377,782 | ) | |||||||
| Depreciation of property, plant and equipment, and amortization of intangible assets | 117,069 | 125,187 | 351,221 | 328,646 | ||||||||||
| Net (loss) and comprehensive (loss) | $ | (511,170 | ) | $ | (2,582,155 | ) | $ | (648,944 | ) | $ | (2,706,428 | ) | ||
| Earnings per share | ||||||||||||||
| Basic and Diluted | 13 | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.00 | ) | $ | (0.02 | ) | |
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 and nine months ended March 31, 2016 and 2015
(expressed in Canadian dollars)
| Class A preference shares | Common shares | Contributed surplus | Accumulated other comprehensive loss | Deficit | Total | |||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||
| Balance - July 1, 2014 | $ | 3,815 | $ | 24,526,740 | $ | 4,090,382 | $ | (47,383 | ) | $ | (29,968,616 | ) | $ | (1,395,062 | ) | |||
| Net (loss) and comprehensive (loss) | - | - | - | - | (2,706,428 | ) | (2,706,428 | ) | ||||||||||
| Balance - March 31, 2015 | $ | 3,815 | $ | 24,526,740 | $ | 4,090,382 | $ | (47,383 | ) | $ | (32,675,044 | ) | $ | (4,101,490 | ) | |||
| 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) | - | - | - | - | (648,944 | ) | (648,944 | ) | ||||||||||
| Balance - March 31, 2016 | $ | 3,815 | $ | 24,526,740 | $ | 4,090,382 | $ | (47,383 | ) | $ | (33,688,163 | ) | $ | (5,114,609 | ) | |||
The accompanying notes are an integral part of these consolidated financial statements
Advantex Marketing International Inc.
Consolidated Statements of Cash Flow (unaudited)
For the nine months ended March 31, 2016 and 2015
(expressed in Canadian dollars)
| Note | March 31, | March 31, | |||||||
| 2016 | 2015 | ||||||||
| $ | $ | ||||||||
| Operational activities | |||||||||
| Net (loss) for the period | $ | (648,944 | ) | $ | (2,706,428 | ) | |||
| Adjustments for: | |||||||||
| Depreciation of property, plant and equipment, and amortization of intangible assets | 351,221 | 328,646 | |||||||
| Accretion charge for debentures | 8 | 174,444 | 170,379 | ||||||
| (123,279 | ) | (2,207,403 | ) | ||||||
| Changes in items of working capital | |||||||||
| Accounts receivable | 64,016 | 378,145 | |||||||
| Transaction credits | (664,057 | ) | 2,084,164 | ||||||
| Inventory | 107,774 | (84,451 | ) | ||||||
| Prepaid expenses and sundry assets | (7,747 | ) | (76,756 | ) | |||||
| Accounts payable and accrued liabilities | (344,885 | ) | 16,518 | ||||||
| (844,899 | ) | 2,317,620 | |||||||
| Net cash provided by operating activities | $ | (968,178 | ) | $ | 110,217 | ||||
| Investing activities | |||||||||
| Purchase of property, plant and equipment, and intangible assets | $ | (55,715 | ) | $ | (305,750 | ) | |||
| Net cash (used in) investing activities | $ | (55,715 | ) | $ | (305,750 | ) | |||
| Financing activities | |||||||||
| Proceeds from loan payable | 7 | $ | 509,609 | $ | (470,115 | ) | |||
| Transaction costs respecting debentures financing | - | (24,206 | ) | ||||||
| Net cash generated from / (used in) financing activities | $ | 509,609 | $ | (494,321 | ) | ||||
| Increase / (decrease) in cash and cash equivalents during the period | $ | (514,284 | ) | $ | (689,854 | ) | |||
| Cash and cash equivalents at beginning of period | 1,162,609 | 1,815,805 | |||||||
| Cash and cash equivalents at end of period | $ | 648,325 | $ | 1,125,951 | |||||
| Additional information | |||||||||
| Interest paid | $ | 1,002,132 | $ | 1,352,224 | |||||
| For purposes of the cash flow statement, cash comprises | |||||||||
| Cash | $ | 643,325 | $ | 1,120,951 | |||||
| Term deposits | 5,000 | 5,000 | |||||||
| $ | 648,325 | $ | 1,125,951 | ||||||
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