Advantex Announces Fiscal 2016 Second Quarter Results
EBITDA (1) of $992,326 after restructuring of Fiscal year 2015
/EINPresswire.com/ -- TORONTO, ONTARIO -- (Marketwired) -- 02/23/16 -- Advantex Marketing International Inc. (CSE: ADX), a specialist in marketing loyalty-reward programs, announced its results for the three and six months ended December 31, 2015.
The financial performance is in line with the Company's expectation.
After overcoming the structural and competitive challenges of Fiscal year 2015, the Company is reporting an improvement in its financial performance for the three months ended December 31, 2015. The Company is operating in a weak economy and given its difficult operating environment it is expecting continued improvement in financial performance during the next twelve months.
The Company is expecting to renew its partnerships with Affinity partners TD Bank and CIBC which are due for renewal in June and September 2016 respectively. The Company is also engaged in discussions respecting re-financing of debentures maturing September 2016.
Highlights of Fiscal 2016 Second Quarter results are set out in the table (2). 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.
Q2 Fiscal Q1 Fiscal Q4 Fiscal Q3 Fiscal
2016 2016 2015 2015
3 months - 3 months - 3 months - 3 months -
December 31, September June 30, March 31,
2015 30, 2015 2015 2015
$ $ $ $
Earnings from operations
before one-time costs,
depreciation,
amortization and
interest 527,954 464,372 395,046 (1,221,893)
Cash interest expense 396,865 383,471 390,857 373,050
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Earnings from operations
before one-time costs,
depreciation,
amortization and non-
cash interest
(accretion charges on
debentures) 131,089 80,901 4,189 (1,594,943)
Depreciation,
amortization and non-
cash interest 161,191 188,573 172,935 181,320
One-time costs -
Restructuring costs - - 195,429 805,892
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Net (loss) $(30,102) $(107,672) $(364,175) $(2,582,155)
(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, for three and six months ended December 31, 2015, the EBITDA of $992,326 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 six months ended December 31, 2015.
(2)The tabulation is a non-GAAP presentation and is provided to assist readers in understanding the Company's financial performance. The Q2 Fiscal 2016 information is extracted from the statements of (loss) and comprehensive (loss) which is a part of the interim consolidated financial statements for the three and six months ended December 31, 2015. The Q1 Fiscal 2016 information is extracted from the statements of income (loss) and comprehensive income (loss) which is a part of the interim consolidated financial statements for the three months ended September 30, 2015. The Q4 Fiscal 2015 information is extracted from section Fourth Quarter of Fiscal 2015 (Q4 F 2015) vs. Fourth Quarter of Fiscal 2014 (Q4 F 2014) per the Management Discussion and Analysis for the Fiscal years ended June 30, 2015 and 2014. The Q3 Fiscal 2015 information is extracted from the statements of income (loss) and comprehensive income (loss) which is part of the interim consolidated financial statements for the three and nine months ended March 31, 2015.
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.
Forward-Looking Information
This Press Release contains certain "forward-looking information". All information, other than information comprised of historical fact, that addresses activities, events or developments that Advantex believes, expects or anticipates will or may occur in the future constitutes forward-looking information. Forward-looking information is typically identified by words such as: anticipate, believe, expect, goal, intend, plan, will, may, should, could and other similar expressions. Such forward-looking information relates to, without limitation, information regarding Advantex's: expectation of continued improvement in financial performance during the next twelve months; expectation of renewal of its partnerships with TD Bank and CIBC; expectation from discussions respecting re-financing of debentures maturing September 2016; and other information regarding Advantex's financial and business prospects and financial outlook is forward-looking information.
Forward-looking information reflects the current expectations or beliefs of Advantex based on information currently available to Advantex.
Forward-looking information is subject to a number of risks, uncertainties and assumptions that may cause the actual results of Advantex to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on Advantex. Factors that could cause actual results or events to differ materially from current expectations include those listed under "General Risks and Uncertainties" and "Economic Dependence" in Advantex's Management's Discussion and Analysis for the three and six months ended December 31, 2015.
All forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, Advantex disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although Advantex believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Advantex Marketing International Inc.
Consolidated Statements of Financial Position (unaudited)
(expressed in Canadian dollars)
Note December 31, June 30,
2015 2015
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$ $
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Assets
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Current assets
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Cash and cash equivalents $ 500,213 $ 1,162,609
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Accounts receivable 660,594 460,446
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Transaction credits 5 9,033,805 7,819,647
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Inventory 6 43,598 144,874
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Prepaid expenses and sundry assets 218,507 173,777
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$ 10,456,717 $ 9,761,353
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Non-current assets
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Property, plant and equipment $ 134,696 $ 165,735
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Intangible assets 316,862 477,992
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$ 451,558 $ 643,727
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Total assets $ 10,908,275 $ 10,405,080
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Liabilities
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Current liabilities
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Loan payable 7 $ 6,554,057 $ 5,711,525
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Accounts payable and accrued liabilities 3,977,243 4,294,418
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12% Non-convertible debentures payable 8 4,980,414 -
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$ 15,511,714 $ 10,005,943
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Non-current liabilities
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12% Non-convertible debentures payable 8 $ - $ 4,864,802
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Total liabilities $ 15,511,714 $ 14,870,745
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Shareholders' deficiency
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Share capital 9 $ 24,530,555 $ 24,530,555
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Contributed surplus 4,090,382 4,090,382
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Accumulated other comprehensive loss (47,383) (47,383)
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Deficit (33,176,993) (33,039,219)
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Total deficiency $ (4,603,439) $ (4,465,665)
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Total liabilities and deficiency $ 10,908,275 $ 10,405,080
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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 six months ended December 31, 2015 and 2014
(expressed in Canadian dollars)
Three months ended Six months ended
Note December 31 December 31
2015 2014 2015 2014
$ $ $ $
Consolidated Statements
of (loss)
Revenues 15 $3,096,423 $3,799,990 $6,091,677 $7,329,587
Direct expenses 15 1,026,581 1,209,064 1,909,650 2,158,562
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2,069,842 2,590,926 4,182,027 5,171,025
Operating expenses
Selling and marketing 692,320 990,814 1,431,748 1,822,937
General and
administrative 849,568 1,180,873 1,757,953 2,312,582
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Earnings from operations
before depreciation,
amortization and
interest 527,954 419,239 992,326 1,035,506
Interest expense:
Stated interest expense
- loan payable, and
debentures 7, 8 396,865 397,612 780,336 842,074
Non-cash interest
expense on debentures 8 58,146 55,477 115,612 114,246
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72,943 (33,850) 96,378 79,186
Depreciation of
property, plant and
equipment, and
amortization of
intangible assets 103,045 110,229 234,152 203,459
Net (loss) and
comprehensive (loss) $(30,102) $(144,079) $(137,774) $(124,273)
Earnings per share
Basic and Diluted 13 $0.00 $0.00 $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 and six months ended December 31, 2015 and 2014
(expressed in Canadian dollars)
Class A Common Contributed
preference shares surplus
shares
$ $ $
Balance - July 1, 2014 $3,815 $24,526,740 $4,090,382
Net (loss) and comprehensive
(loss) - - -
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Balance - December 31, 2014 $3,815 $24,526,740 $4,090,382
Balance - July 1, 2015 $3,815 $24,526,740 $4,090,382
Net (loss) and comprehensive
(loss) - - -
Balance - December 31, 2015 $3,815 $24,526,740 $4,090,382
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 six months ended December 31, 2015 and 2014
(expressed in Canadian dollars)
Accumulated Deficit Total
other
comprehen -
sive loss
$ $ $
Balance - July 1, 2014 $(47,383)$ (29,968,616) $(1,395,062)
Net (loss) and comprehensive
(loss) - (124,273) (124,273)
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Balance - December 31, 2014 $ (47,383)$ (30,092,889) $(1,519,335)
Balance - July 1, 2015 $(47,383)$ (33,039,219) (4,465,665)
Net (loss) and comprehensive
(loss) - (137,774) (137,774)
Balance - December 31, 2015 $(47,383)$ (33,176,993) (4,603,439)
The accompanying notes are an integral part of these consolidated
financial statements
Advantex Marketing International Inc. Consolidated Statements of Cash Flow
(unaudited)
For the six months ended December 31, 2015 and 2014
(expressed in Canadian dollars)
Note December 31, December 31,
2015 2014
$ $
Operational activities
Net (loss) for the period $(137,774) $(124,273)
Adjustments for:
Depreciation of property, plant and
equipment, and 234,152 203,459
amortization of intangible assets
Accretion charge for debentures 8 115,612 114,246
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211,990 193,432
Changes in items of working capital
Accounts receivable (200,148) 86,059
Transaction credits (1,214,158) 889,286
Inventory 101,276 (62,540)
Prepaid expenses and sundry assets (44,730) (82,661)
Accounts payable and accrued liabilities (317,175) (575,321)
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(1,674,935) 254,823
Net cash provided by operating activities $(1,462,945) $448,255
Investing activities
Purchase of property, plant and
equipment, and intangible assets (41,983) $(237,535)
Net cash (used in) investing activities $(41,983) $(237,535)
Financing activities
Proceeds from loan payable 7 $842,532 $(960,784)
Transaction costs respecting debentures
financing - (24,206)
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Net cash generated from / (used in)
financingactivities $842,532 $(984,990)
Increase / (decrease) in cash and cash
equivalentsduring the period $(662,396) $(774,270)
Cash and cash equivalents at beginning of
period 1,162,609 1,815,805
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Cash and cash equivalents at end of
period $500,213 $1,041,535
Additional information
Interest paid
For purposes of the cash flow statement,
cash comprises $778,639 $1,131,824
Cash $495,213 $1,036,535
Term deposits 5,000 5,000
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$500,213 $1,041,535
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The accompanying notes are an integral part of these consolidated financial
statements
Contacts:
Mukesh Sabharwal
Vice-President and Chief Financial Officer
905-470-9558 ext. 249
mukesh.sabharwal@advantex.com
