TORONTO, ONTARIO -- (Marketwired) -- 05/25/17 -- Advantex Marketing International Inc. (CSE: ADX)(CSE: ADX.CN)(CNSX: ADX), a specialist in marketing loyalty-reward programs, announced its results for the three and nine months ended March 31, 2017.
During the period the Company's focus was to stabilize operations in an environment where it has limited access to working capital. The Company is working with its exclusive financial advisor to refinance the 12% debentures, maturing June 30, 2017, and seek growth funds to capitalize on expansion opportunities.
Highlights of results for three and nine months ended March 31, 2017 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 March 31 9 months ended March 31 2017 2016 2017 2016 $ $ $ $ Revenues $ 1,887,565 $ 2,435,120 $ 6,902,204 $ 8,526,797 Direct expenses - Cost of cardholder rewards and marketing merchants to cardholders 468,606 650,439 1,870,618 2,251,596 Direct expenses - Expense for provision against delinquent accounts 124,756 102,578 436,360 411,071 ------------ ------------ ------------ ------------ Gross profit $ 1,294,203 $ 1,682,103 $ 4,595,226 $ 5,864,130 Selling and General & Administrative 1,448,559 1,536,776 4,286,807 4,726,477 ------------ ------------ ------------ ------------ Earnings from operations before depreciation, amortization and interest $ (154,356) $ 145,327 $ 308,419 $ 1,137,653 Cash interest on loan payable and debentures 315,641 480,596 989,257 1,260,932 ------------ ------------ ------------ ------------ Earnings (loss) from operations before depreciation, amortization and non-cash interest on debentures (accretion charges) $ (469,997) $ (335,269) $ (680,838) $ (123,279) Depreciation and amortization 29,166 117,069 145,110 351,221 Non cash interest expense on debentures - 58,832 60,227 174,444 ------------ ------------ ------------ ------------ Net loss and Comprehensive loss $ (499,163) $ (511,170) $ (886,175) $ (648,944) ------------ ------------ ------------ ------------
(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 nine months ended March 31, 2017.
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 1,100 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 March At June 31, 2017 30, 2016 $ $ Assets Current assets Cash and cash equivalents $ 254,113 $ 658,678 Accounts receivable 151,819 425,402 Transaction credits 5 5,723,025 7,352,262 Inventory 6 37,902 39,914 Prepaid expenses and sundry assets 98,324 103,684 $ 6,265,183 $ 8,579,940 Non-current assets Property, plant and equipment $ 82,549 $ 116,049 Intangible assets 8,311 119,921 ------------ ------------ $ 90,860 $ 235,970 Total assets $ 6,356,043 $ 8,815,910 Liabilities Current liabilities Loan payable 7 $ 4,359,873 $ 5,533,267 Accounts payable and accrued liabilities 3,096,453 3,556,978 12% Non-convertible debentures payable 8 5,159,000 5,098,773 ------------ ------------ $ 12,615,326 $ 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 (34,832,837) (33,946,662) ------------ ------------ Total deficiency $ (6,259,283) $ (5,373,108) Total liabilities and deficiency $ 6,356,043 $ 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: 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, 2017 and 2016
(expressed in Canadian dollars)
Three months ended March Nine months ended March Note 31 31 2017 2016 2017 2016 $ $ $ $ Revenues 15 $ 1,887,565 $ 2,435,120 $ 6,902,204 $ 8,526,797 Direct expenses 14/15 593,362 753,017 2,306,978 2,662,667 ----------- ----------- ----------- ----------- 1,294,203 1,682,103 4,595,226 5,864,130 Operating expenses Selling and marketing 14/15 481,737 594,977 1,479,597 2,026,725 General and administrative 14/15 966,822 941,799 2,807,210 2,699,752 ----------- ----------- ----------- ----------- Earnings from operations before depreciation, amortization and interest (154,356) 145,327 308,419 1,137,653 Interest expense: Stated interest expense - loan payable, and debentures 7/8 315,641 480,596 989,257 1,260,932 Non-cash interest expense on debentures 8 - 58,832 60,227 174,444 ----------- ----------- ----------- ----------- (469,997) (394,101) (741,065) (297,723) Depreciation of property, plant and equipment, and amortization of intangible assets 29,166 117,069 145,110 351,221 ----------- ----------- ----------- ----------- Net loss and comprehensive loss $ (499,163) $ (511,170) $ (886,175) $ (648,944) Loss per share Basic and Diluted 13 $ (0.00) $ (0.00) $ (0.01) $ (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 nine months ended March 31, 2017 and 2016
(expressed in Canadian dollars)
Class A preference Contributed shares Common shares surplus $ $ $ Balance - July 1, 2015 $ 3,815 $ 24,526,740 $ 4,090,382 Net loss and comprehensive loss - - - ---------------- ---------------- ---------------- Balance - March 31, 2016 $ 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 - March 31, 2017 $ 3,815 $ 24,526,740 $ 4,090,382 ---------------- ---------------- ---------------- Accumulated other comprehensive loss Deficit Total $ $ $ Balance - July 1, 2015 $ (47,383) $ (33,039,219) $ (4,465,665) Net loss and comprehensive loss - (648,944) (648,944) ---------------- ---------------- ---------------- Balance - March 31, 2016 $ (47,383) $ (33,688,163) $ (5,114,609) ---------------- ---------------- ---------------- Balance - July 1, 2016 $ (47,383) $ (33,946,662) $ (5,373,108) Net loss and comprehensive loss - (886,175) (886,175) ---------------- ---------------- ---------------- Balance - March 31, 2017 $ (47,383) $ (34,832,837) $ (6,259,283) ---------------- ---------------- ----------------
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 nine months ended March 31, 2017 and 2016
(expressed in Canadian dollars)
Note At March At March 31, 2017 31, 2016 $ $ Operational activities Net loss for the period $ (886,175) $ (648,944) Adjustments for: Depreciation of property, plant and equipment, and amortization of intangible assets 145,110 351,221 Accretion charge for debentures 8 60,227 174,444 ------------ ------------ (680,838) (123,279) Changes in items of working capital Accounts receivable 273,583 64,016 Transaction credits 1,629,237 (664,057) Inventory 2,012 107,774 Prepaid expenses and sundry assets 5,360 (7,747) Accounts payable and accrued liabilities (460,525) (344,885) 1,449,667 (844,899) Net cash provided by (used in) operating activities $ 768,829 $ (968,178) Investing activities Purchase of property, plant and equipment, and intangible assets $ - $ (55,715) ------------ ------------ Net cash (used in) investing activities $ - $ (55,715) Financing activities Proceeds from loan payable 7 $ (1,173,394) $ 509,609 Net cash generated from / (used in) financing activities $ (1,173,394) $ 509,609 ------------ ------------ Increase / (decrease) in cash and cash equivalents during the period $ (404,565) $ (514,284) Cash and cash equivalents at beginning of period 658,678 1,162,609 ------------ ------------ Cash and cash equivalents at end of period $ 254,113 $ 648,325 Additional information Interest paid $ 861,980 $ 1,002,132 For purposes of the cash flow statement, cash comprises Cash $ 254,113 $ 643,325 Term deposits - 5,000 ------------ ------------ $ 254,113 $ 648,325
The accompanying notes are an integral part of these consolidated financial statements.
Contacts:
Advantex Marketing International Inc.
Mukesh Sabharwal
Vice-President and Chief Financial Officer
905-470-9558 ext. 249
mukesh.sabharwal@advantex.com
www.advantex.com