TORONTO, ONTARIO--(Marketwire - Nov. 26, 2012) - Advantex Marketing International Inc. (CNSX:ADX) ("Advantex" or the "Company"), a leading specialist in merchant funding and loyalty marketing programs, today announced its results for the three months ended September 30, 2012. All references to quarters or years are for the fiscal periods and all currency amounts are in Canadian dollars unless otherwise noted.
"We are pleased to report continuing improvement in the Company's financial performance. The growth of the Company's small merchant centric business model is reflected in the better revenues, earnings from operations before amortization and interest, and net income," said Kelly Ambrose, Advantex President and Chief Executive Officer.
"The Company continues to seek new business partners where we can sell our proprietary programs, as well as work with existing affinity partners on new business opportunities. Recently, we received Canadian Imperial Bank of Commerce ("CIBC") approval to expand our existing programs into home décor, and from January, 2013 we expect to expand our new relationship with Canadian Tire Group ("CTG"). Finally, we are attempting to improve the retention of participating merchants in our programs by introducing new services that deliver additional value to merchants such as digital marketing platforms," said Mr. Ambrose.
Financial Highlights:
Three months ended September 30, 2012 | Three months ended September 30, 2011 | |||||
Revenues | $ | 4,403,000 | $ | 3,835,000 | ||
Earnings from operations before amortization and interest (EBITDA (i)) | $ | 1,040,000 | $ | 976,000 | ||
Net Income | $ | 274,000 | $ | 261,000 |
(i) 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 months ended September 30, 2012 and 2011, per consolidated financial statements for three months ended September 30, 2012, earnings from operations before amortization and interest is the nearest equivalent to EBITDA. |
"The Company's agreements with its affinity partners - CIBC, and Aeroplan Canada Inc. ("Aeroplan") - and its financial partners - 14% and 12% debenture holders, and provider of loan payable - come up for renewal between August and December, 2013. The Company expects to successfully negotiate renewal of the agreements," said Mr. Ambrose.
About Advantex Marketing International Inc.
Advantex is a specialist in the marketing services industry. Advantex partners with CIBC, and Aeroplan. On a combined basis, Advantex has contractual marketing access to more than five million Canadian consumers with above-average personal and household income. The Company's merchant partner base currently consists of more than 1,350 merchants operating restaurants; golf courses; independent inns, resorts and selected hotels; spas; retailers of men's and ladies fashion, footwear and accessories; retailers of sporting goods; florists and garden centres; book and newspaper stores; health and beauty centres; dry cleaners; gift stores; and home decor; many of which are leaders in their respective categories. Advantex is traded on the Canadian National Stock Exchange under the symbol "ADX". For additional information on Advantex, please visit 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 the Company 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 the Company's: expectation respecting enrolling new merchants; belief in its ability to influence the retention of participating merchants; expectation with regards to the renewal, including the timing and the terms of such renewal, of its agreements with its affinity and financial partners; expectation with respect to expanding relationship with CTG; and other information regarding financial and business prospects and financial outlook is forward-looking information.
Forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.
Forward-looking information is subject to a number of risks, uncertainties and assumptions that may cause the actual results of the Company 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 the Company. 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 Management's Discussion and Analysis for the three months ended September 30, 2012.
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, the Company 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 the Company 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) |
September 30, 2012 | June 30, 2012 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 617,532 | 1,084,773 | ||||||
Accounts receivable | 1,044,566 | 966,437 | ||||||
Transaction credits | 14,014,562 | 14,095,373 | ||||||
Inventory (note 5) | 165,317 | 204,355 | ||||||
Prepaid expenses and sundry assets | 421,412 | 315,454 | ||||||
$ | 16,263,389 | $ | 16,666,392 | |||||
Non-current assets | ||||||||
Investment (note 6) | 100,000 | 100,000 | ||||||
Property, plant and equipment (note 7a) | 222,015 | 222,132 | ||||||
Intangibles (note 7b) | 273,524 | 330,018 | ||||||
595,539 | 652,150 | |||||||
Total assets | $ | 16,858,928 | $ | 17,318,542 | ||||
Liabilities | ||||||||
Current liabilities | ||||||||
Loan payable (note 8) | 6,540,205 | 6,715,691 | ||||||
Accounts payable and accrued liabilities | 3,813,676 | 4,128,264 | ||||||
$ | 10,353,881 | $ | 10,843,955 | |||||
Non-current liabilities | ||||||||
14% Non-convertible debentures payable (note 9) | 1,711,428 | 1,770,606 | ||||||
12% Non-convertible debentures payable (note 10) | 5,623,830 | 5,779,957 | ||||||
$ | 7,335,258 | $ | 7,550,563 | |||||
Total Liabilities | $ | 17,689,139 | $ | 18,394,518 | ||||
Shareholders' deficiency | ||||||||
Share capital (note 11) | 24,110,096 | 24,110,096 | ||||||
Contributed surplus (note 12) | 793,198 | 793,198 | ||||||
Equity portion of debentures (note 10) | 2,114,341 | 2,114,341 | ||||||
Warrants (note 9/10) | 1,167,874 | 1,196,013 | ||||||
Deficit | (29,015,720 | ) | (29,289,624 | ) | ||||
Total deficiency | $ | (830,211 | ) | $ | (1,075,976 | ) | ||
Total liabilities and deficiency | $ | 16,858,928 | $ | 17,318,542 |
Economic and Financial dependence (note 2)
Commitments and Contingencies (note 14)
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 E. Ambrose | |||
Advantex Marketing International Inc. |
Consolidated Statements of Income and Comprehensive Income |
For the three months ended September 30, 2012 and September 30, 2011 - (unaudited) |
(expressed in Canadian dollars) |
September 30, 2012 | September 30, 2011 | ||||
$ | $ | ||||
Revenues | 4,403,417 | 3,835,107 | |||
Direct expenses | 1,376,029 | 1,044,193 | |||
Operating Expenses | |||||
Selling and marketing | 909,837 | 776,330 | |||
General and administrative | 1,077,848 | 1,038,091 | |||
Earnings from operations before amortization and interest | 1,039,703 | 976,493 | |||
Depreciation of property, plant and equipment, and intangibles | 107,914 | 92,402 | |||
Interest expense: | |||||
Stated interest expense - loan payable, and debentures | 516,596 | 490,834 | |||
Non-cash interest expense on loan payable, and debentures | 141,289 | 132,004 | |||
Net income and Comprehensive income | 273,904 | 261,253 | |||
Earnings per share | |||||
Basic and Diluted (note 15) | 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 Deficiency |
For the three months ended September 30, 2012 and September 30, 2011 - (unaudited) |
(expressed in Canadian dollars) |
Class A preference shares $ |
Common shares $ |
Contributed surplus $ |
Equity portion of debentures $ |
Warrants $ |
Deficit $ |
Total $ |
||||||||||||
Balance - July 1, 2011 | 3,815 | 24,106,281 | 726,795 | 2,114,341 | 1,196,013 | (29,516,267 | ) | (1,369,022 | ) | |||||||||
Net income and comprehensive income for the period | 261,253 | 261,253 | ||||||||||||||||
Employee share options: | ||||||||||||||||||
Value of services recognized | 6,000 | 6,000 | ||||||||||||||||
Balance - September 30, 2011 | 3,815 | 24,106,281 | 732,795 | 2,114,341 | 1,196,013 | (29,255,014 | ) | (1,101,769 | ) | |||||||||
Balance - July 1, 2012 | 3,815 | 24,106,281 | 793,198 | 2,114,341 | 1,196,013 | (29,289,624 | ) | (1,075,976 | ) | |||||||||
Net income and comprehensive income for the period | 273,904 | 273,904 | ||||||||||||||||
Employee share options: | ||||||||||||||||||
Value of services recognized | - | - | ||||||||||||||||
Partial early prepayment of debentures (notes 9 and 10) | (28,139 | ) | (28,139 | ) | ||||||||||||||
Balance - September 30, 2012 | 3,815 | 24,106,281 | 793,198 | 2,114,341 | 1,167,874 | (29,015,720 | ) | (830,211 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
Advantex Marketing International Inc. |
Consolidated Statements of Cash Flow |
For the three months ended September 30, 2012 and September 30, 2011 - (unaudited) |
(expressed in Canadian dollars) |
30-09-2012 | 30-09-2011 | ||||||||
$ | $ | ||||||||
Cash flow provided by (used in) | |||||||||
Operating activities | |||||||||
Net income for the period | $ | 273,904 | $ | 261,253 | |||||
Adjustments for: | |||||||||
Depreciation of property, plant and equipment, and intangibles | 107,914 | 92,402 | |||||||
Stock-based compensation | - | 6,000 | |||||||
Accretion charge for debentures | 141,289 | 132,004 | |||||||
523,107 | 491,659 | ||||||||
Changes in items of working capital | |||||||||
Accounts receivable | (78,129 | ) | (14,195 | ) | |||||
Transaction credits | 80,811 | (908,265 | ) | ||||||
Inventory | 39,038 | 66,451 | |||||||
Prepaid expenses and sundry assets | (105,958 | ) | (72,280 | ) | |||||
Accounts payable and accrued liabilities | (314,588 | ) | (100,541 | ) | |||||
(378,826 | ) | (1,028,830 | ) | ||||||
Net cash provided by (used in) operating activities | 144,281 | (537,171 | ) | ||||||
Investing activities | |||||||||
Purchase of property, plant and equipment, and intangibles | (51,303 | ) | (67,655 | ) | |||||
Net cash used in investing activities | (51,303 | ) | (67,655 | ) | |||||
Financing activities | |||||||||
Proceeds from loan payable | (175,486 | ) | 1,105,328 | ||||||
Partial early prepayment of debentures | (376,033 | ) | - | ||||||
Debenture early prepayment / renewal - additional transaction costs | (8,700 | ) | (28,573 | ) | |||||
Net cash (used in) generated from financing activities | (560,219 | ) | 1,076,755 | ||||||
Increase (decrease) in cash and cash equivalents during the period | $ | (467,241 | ) | $ | 471,929 | ||||
From continuing operations | (435,135 | ) | 497,006 | ||||||
From discontinued operations (note 17) | (32,106 | ) | (25,077 | ) | |||||
Increase (decrease) in cash and cash equivalents during the period | $ | (467,241 | ) | $ | 471,929 | ||||
Cash and cash equivalents, including bank indebtedness - Beginning of period | 1,084,773 | (78,262 | ) | ||||||
Cash and cash equivalents, including bank indebtedness - End of period | 617,532 | 393,667 | |||||||
Additional Information | ||||||
Interest paid | $ | 713,073 | $ | 569,666 | ||
For purposes of the cash flow statement, cash comprises: | ||||||
Cash | $ | 612,532 | $ | 388,667 | ||
Term deposits | $ | 5,000 | $ | 5,000 | ||
$ | 617,532 | $ | 393,667 |
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