Contact Information: Serenic Corporation Dwayne Kushniruk Chairman 1-877-426-5385 x 509 dkushniruk@serenic.com or Serenic Corporation Paul Johnston CFO 1-877-426-5385 x 509 pjohnston@serenic.com or Cantech Communications Nick Waddell Investor Relations (877) 737-3642 x144 ir@serenic.com
EDMONTON, ALBERTA--(Marketwire - Jan. 26, 2011) - Serenic Corporation (the "Company" or "Serenic") (TSX VENTURE:SER), an international software developer specializing in integrated financial management and human capital management solutions for Non-Profit organizations, government agencies, and Microsoft Dynamics NAV users, announces its financial results for the three months and nine months ended November 30, 2010.
Financial results are summarized as follows:
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Statement (Unaudited) (Unaudited)
of Three months ended Nine months ended:
Operations
Information
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Nov 30, Nov 30, Increase Nov 30, Nov 30, Increase
2010 2009 Decrease) 2010 2009 (Decrease)
% %
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$ $ $ $
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Revenue 2,244,504 2,588,602 (13.3) 7,459,976 8,292,794 (10.0)
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Net income
(loss) for
the
period (341,635) 154,064 (321.7) (327,117) 451,940 (172.4)
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Basic and
diluted
income
(loss) per
share (0.02) 0.01 (300.0) (0.02) 0.03 (166.7)
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EBITDA (1) (217,716) 277,448 (178.5) 23,988 845,994 (97.2)
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EBITDA as
a %
of revenue (9.7)% 10.7% (190.6) 0.3% 10.2% (97.1)
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Weighted
average
common
shares
outstanding # # # #
(basic) 15,190,458 15,185,458 15,190,385 15,185,458
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1. EBITDA represents earnings before interest, taxes, depreciation,
amortization, and stock based compensation. Please review the Serenic
Management Discussion and Analysis for the quarter ended November 30,
2010 for more information.
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Quarter Highlights
While pleased with our progress in advancing the longer term objectives of the Company, management is nonetheless disappointed with the lagging revenue recorded during the past two quarters. Particularly within North America, sales to new customers continued to be thwarted by the anemic economy, which has caused several not-for-profit ("NFP") organizations to delay their decisions to purchase Serenic's applications and services because of heightened concerns regarding their own funding and their extended diligence in researching new software purchases.
Revenue from existing customers continued to grow as a result of sustained demand for software enhancement, additional functionality and other services. Market share in Africa has also progressed during the past year, with the implementation of 13 new clients having occurred in Kenya, Somalia, Malawi, Uganda, Tanzania, and Senegal.
The declining value of the US dollar continues to be a significant negative factor to revenue growth, given that Serenic invoices almost all of its revenue in U.S. dollars. In the nine-month period of the current fiscal year, the average FX rate declined from 1.1322 to 1.0287. Prior to adjusting for currency conversions, total revenue for the nine months of this year was lower than last year by only 2.1% or $154,808; however, when adjusted for currency exchange, revenue is lower than last year by 10.0% or $832,818. In the current quarter, Serenic recorded a 13.3% decline in revenue compared to the same period last year, and a $341,635 net loss for the quarter, in contrast to net income of $154,064 reported in the comparable quarter last year.
Expenses in the current quarter were essentially similar to the past two quarters, and are reflective of the staffing and service levels required to accommodate the business and strategies anticipated. The Company funded certain additional initiatives during the current quarter to seed longer term organic revenue growth, including marketing costs for new lead generation activities, and hosting of its bi-annual User Conference (which was held in Denver, CO this year). General and administrative expenses increased in furtherance of the IFRS conversion process and due to legal fees incurred fees incurred to register a trademark, engage foreign-based employees and explore corporate development alternatives.
Please refer to the latest financial statements and MD&A filed on www.sedar.com for full financial analysis and details.
Outlook
Serenic continues to build and maintain what Management believes is a strong pipeline of potential sales opportunities and we remain optimistic that the lagging sales are only delayed rather than lost. We are managing discretionary expenditures through tight fiscal control to achieve a balance of our objectives - those are, to maximize revenue in the short term, to continue to enhance long term success probability by increasing our sales pipeline and market awareness, and to position the Company and operational infrastructure most advantageously pending resolution of next step alternatives. On October 28, 2010, the Company terminated an agreement entered into on February 8, 2010, wherein Serenic retained PricewaterhouseCoopers Corporate Finance Inc. as its sole and exclusive financial advisor. We took this action to widen our scope and explore new opportunities which could maximize stakeholder value through a capital structure review, strategic partnerships, and/or merger and acquisition alternatives. Although several opportunities have been considered during the past nine months, we continue to search for a higher value scenario for Serenic stakeholders than has been discovered to date.
We are continuing our efforts to expand our position as a preferred vendor within certain niche markets. In December, 2010, Serenic announced the release of Navigator Online, Software as a Service ("SaaS") version of its award-winning Navigator financial management system. Designed for small- and mid-sized NFP and public sector groups, Management believes that Navigator Online will allow these organizations to easily automate and simplify their business processes through "cloud computing". This new product offering is expected to appeal to organizations that have not historically purchased Serenic products due to cost and/or lack of infrastructure and the related IT expertise. Serenic Navigator Online was developed with these customers' budgets and growth goals in mind - customers can start by inexpensively renting basic functionality on-line, and should their requirements for more sophisticated functionality increase, they can easily and cost-effectively transition to the on-premise and fully functioned versions of Navigator.
Management remains optimistic that Serenic is well positioned to capitalize on the latent sales and growth opportunities that have floundered as a result of the weak global economies. With no long term debt and $3.2 million cash on hand, the Company remains well funded to finance its operations as anticipated into the foreseeable future. We look forward to reporting our anticipated continued progress and positive results.
About Serenic Corporation
Serenic Corporation publishes mission-critical software products for not-for-profits (NFP), educational institutions and governments. The Company's products are based on leading application and technology platforms from Microsoft, including Dynamics NAV, SQL Server, and .NET, and are distributed in North America and internationally through value-added resellers and a direct sales organization. Serenic Corporation is the exclusive developer of human resource management and payroll products for Microsoft Dynamics NAV ERP users in North America. Serenic has offices in Edmonton, Alberta and Denver, Colorado and staff located throughout the USA.
ON BEHALF OF THE BOARD OF DIRECTORS
By Dwayne Kushniruk, Chairman, Serenic Corporation
Forward Looking Statements
Certain statements contained in this press release, including statements which may contain words such as "could", "should", "expect", "anticipate", "believe", "will", and similar expressions and statements relating to matters that are not historical facts, are forward looking statements. Such forward looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of Serenic Corporation to be materially different from any future results, performances or achievements expressed or implied by such forward looking statements. Such factors include, but are not limited to, software industry risks, general business risks, foreign currency risks, economic dependence risks, and credit risks.