TORONTO, ONTARIO -- (Marketwired) -- 02/27/17 -- 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, 2016.
In December 2016 the Company reached agreement to extend maturity date of its 12% debentures to March 31, 2017 from December 31, 2016. The Company is working with its exclusive financial advisor to refinance the 12% debentures and seek growth funds to capitalize on expansion opportunities.
During the period the Company's focus was to stabilize operations in an environment where it has limited access to working capital.
Highlights of results for three and six months ended December 31, 2016 are set out in the table (1). 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.
3 months ended December 6 months ended December 31 31 2016 2015 2016 2015 $ $ $ $ Revenues $ 2,410,369 $ 3,096,423 $ 5,014,639 $ 6,091,677 Direct expenses - Cost of cardholder rewards and marketing merchants to cardholders 704,248 856,738 1,402,012 1,601,157 Direct expenses - Expense for provision against delinquent accounts 132,010 169,843 311,604 308,493 ------------ ------------ ------------ ------------ Gross profit $ 1,574,111 $ 2,069,842 $ 3,301,023 $ 4,182,027 Selling and General & Administrative 1,439,997 1,541,888 2,838,248 3,189,701 ------------ ------------ ------------ ------------ Earnings from operations before depreciation, amortization and interest $ 134,114 $ 527,954 $ 462,775 $ 992,326 Cash interest on loan payable and debentures 334,622 396,865 673,616 780,336 ------------ ------------ ------------ ------------ Earnings (loss) from operations before depreciation, amortization and non- cash interest on debentures (accretion charges) $ (200,508) $ 131,089 $ (210,841) $ 211,990 Depreciation and amortization 37,099 103,045 115,944 234,152 Non cash interest expense on debentures - 58,146 60,227 115,612 Net loss and Comprehensive loss $ (237,607) $ (30,102) $ (387,012) $ (137,774) ------------ ------------ ------------ ------------
(1) 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 six months ended December 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 over 1,200 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 At December At June 31, 2016 30, 2016 $ $ Assets Current assets Cash and cash equivalents $ 370,441 $ 658,678 Accounts receivable 248,995 425,402 Transaction credits 5 5,698,419 7,352,262 Inventory 6 39,475 39,914 Prepaid expenses and sundry assets 103,289 103,684 ----------------- ----------------- $ 6,460,619 $ 8,579,940 Non-current assets Property, plant and equipment $ 93,714 $ 116,049 Intangible assets 26,312 119,921 ----------------- ----------------- $ 120,026 $ 235,970 Total assets $ 6,580,645 $ 8,815,910 Liabilities Current liabilities Loan payable 7 $ 4,090,052 $ 5,533,267 Accounts payable and accrued liabilities 3,091,713 3,556,978 12% Non-convertible debentures payable 8 5,159,000 5,098,773 ----------------- ----------------- $ 12,340,765 $ 14,189,018 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 (34,333,674) (33,946,662) Total deficiency $ (5,760,120) $ (5,373,108) Total liabilities and deficiency $ 6,580,645 $ 8,815,910
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: William Polley
Director: Kelly Ambrose
Advantex Marketing International Inc. Consolidated Statements of Loss and Comprehensive Loss (unaudited) For the three and six months ended December 31, 2016 and 2015 (expressed in Canadian dollars) Three months ended Six months ended Note December 31 December 31 2016 2015 2016 2015 $ $ $ $ Revenues 15 $ 2,410,369 $ 3,096,423 $ 5,014,639 $ 6,091,677 Direct expenses 14/15 836,258 1,026,581 1,713,616 1,909,650 ------------ ---------- ------------ ------------ ------------ ---------- ------------ ------------ 1,574,111 2,069,842 3,301,023 4,182,027 Operating expenses Selling and marketing 14/15 492,153 692,320 997,860 1,431,748 General and administrative 14/15 947,844 849,568 1,840,388 1,757,953 ------------ ------------ ------------ ------------ Earnings from operations before depreciation, amortization and interest 134,114 527,954 462,775 992,326 Interest expense: Stated interest expense - loan payable, and debentures 7/8 334,622 396,865 673,616 780,336 Non-cash interest expense on debentures 8 - 58,146 60,227 115,612 ------------ ------------ ------------ ------------ (200,508) 72,943 (271,068) 96,378 Depreciation of property, plant and equipment, and amortization of intangible assets 37,099 103,045 115,944 234,152 ------------ ------------ ------------ ------------ Net loss and comprehensive loss $ (237,607) $ (30,102) $ (387,012) $ (137,774) Loss 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, 2016 and 2015 (expressed in Canadian dollars) Class A Common Contributed preference shares shares surplus $ $ $ 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 --------------------------------------------------- Balance - July 1, 2016 $ 3,815 $ 24,526,740 $ 4,090,382 Net loss and comprehensive loss - - - --------------------------------------------------- Balance - December 31, 2016 $ 3,815 $ 24,526,740 $ 4,090,382 --------------------------------------------------- The accompanying notes are an integral part of these consolidated financial statements Accumulated other comprehensive loss Deficit Total $ $ $ 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) --------------------------------------------------- Balance - July 1, 2016 $ (47,383) $ (33,946,662) $ (5,373,108) Net loss and comprehensive loss - (387,012) (387,012) --------------------------------------------------- Balance - December 31, 2016 $ (47,383) $ (34,333,674) $ (5,760,120) --------------------------------------------------- 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 and six months ended December 31, 2016 and 2015 (expressed in Canadian dollars) At December December Note 31, 2016 31, 2015 $ $ Operational activities Net loss for the period $ (387,012) $ (137,774) Adjustments for: Depreciation of property, plant and equipment, and amortization of intangible assets 115,944 234,152 Accretion charge for debentures 8 60,227 115,612 ---------------- ---------------- (210,841) 211,990 Changes in items of working capital Accounts receivable 176,407 (200,148) Transaction credits 1,653,843 (1,214,158) Inventory 439 101,276 Prepaid expenses and sundry assets 395 (44,730) Accounts payable and accrued liabilities (465,265) (317,175) ---------------- ---------------- 1,365,819 (1,674,935) Net cash provided by (used in) operating activities $ 1,154,978 $ (1,462,945) Investing activities Purchase of property, plant and equipment, and intangible assets $ - $ (41,983) ---------------- ---------------- Net cash (used in) investing activities $ - $ (41,983) Financing activities Proceeds from loan payable 7 $ (1,443,215) $ 842,532 ---------------- ---------------- Net cash generated from / (used in) financing activities $ (1,443,215) $ 842,532 Increase / (decrease) in cash and cash equivalents during the period $ (288,237) $ (662,396) Cash and cash equivalents at beginning of period 658,678 1,162,609 ---------------- ---------------- Cash and cash equivalents at end of period $ 370,441 $ 500,213 Additional information Interest paid $ 698,988 $ 778,639 For purposes of the cash flow statement, cash comprises Cash $ 370,441 $ 495,213 Term deposits - 5,000 ---------------- ---------------- $ 370,441 $ 500,213 ---------------- ----------------
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