TORONTO, ONTARIO -- (Marketwire) -- 06/02/11 -- Cyberplex Inc. (TSX: CX) a leader in online publishing and customer acquisition strategies today announced its financial results for the first quarter ended March 31, 2011. Total revenue for the quarter was $14.6 million, an increase from the $12.3 million recorded in the same quarter of 2010, and adjusted EBITDA for the quarter was approximately $150,000 as compared to $135,000 in the same period of 2010. The net loss for the quarter was $3.6 million as compared to a net loss of $141,000 in the same year ago period.
"Although tremendous progress was made during the quarter to rebuild the Tsavo business unit, the impact resulting from the Yahoo-Bing integration significantly affected our financial results" said Geoffrey Rotstein, Chief Executive Officer of Cyberplex. "Our team responded quickly in redesigning our systems and technology platform, and as a result we continue to see month-over-month progress. Other divisions continued to execute against our strategic initiatives, securing several new client engagements and partnerships to leverage our interactive agency and targeted distribution."
The Company also reported that negotiations with Tsavo Media's principal lender, American Capital, remain ongoing. As previously stated, the Company raised certain concerns with American Capital regarding the transactions that gave rise to the Credit Agreement with Tsavo Media, and has been working towards a resolution with American Capital for some time.
"To date, discussions with American Capital have been productive. However, there are details and issues that remain subject to further discussions and so we cannot conclude that we have an agreement in place with the lender at this time", said Mr. Rotstein.
First Quarter Operational Highlights
-- Restructured divisions to streamline operations and better align cost
structure to the current organization;
-- Partnered with Jaguar Canada to develop location based mobile
advertising campaigns through a strategic partnership with Poynt
Corporation;
-- Expanded operations of EQ Advertising's demand side platform ("DSP")
through investments in infrastructure and agency sales initiatives;
-- Transitioned cost-per-action vertical focus from the health and wellness
sector to premium advertisers in the education, group buying and online
dating verticals;
-- Launched five new web properties to increase online audience development
in the health and women's verticals and enhance various lead generation
activities;
-- Continued to deliver strategic interactive solutions with leading brand
advertisers including Quest Personals, a leader in the tele-personals
industry; Travelers Insurance, and Softchoice; and
-- Delivered various mobile and video applications to clients as the
Company continued to evolve its targeted search and customer acquisition
platforms into new distribution channels;
Results for the first quarter ended March 31, 2011
-- The Company generated revenue of $14.6 million, an increase of 19%
compared to $12.3 million generated during the same quarter in 2010;
-- Adjusted EBITDA for the quarter was $150,000 compared to $135,000 in
2010; Net loss for the quarter was $3.6 million compared to a net loss
of $141,000 in 2010.
"Although the beginning of 2011 has been challenging, we are very proud of our team and the number of strategic initiatives that we have been able to deploy over a relatively short time period" said Ted Hastings, President of Cyberplex. "We continue to believe that the skills, expertise and technology that we have within Cyberplex will allow us to compete with anyone in the online space and take advantage of many exciting strategic and growth opportunities."
Non-GAAP Financial Measures
This press release includes a discussion of "Adjusted EBITDA," which is a non-GAAP financial measure. The Company defines Adjusted EBITDA as net income (loss) before (a) Finance costs (income), net; (b) income tax expense (recovery); (c) depreciation of property and equipment and amortization of intangible assets; (d) stock-based compensation expense related to the Company's grant of stock options and (e) employee termination costs.
Management uses Adjusted EBITDA as a measurement of the Company's operating performance because it provides information related to the Company's ability to provide cash flows for acquisitions, capital expenditures and working capital requirements. The Company also believes that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in its industry.
The non-GAAP financial measure is used in addition to and in conjunction with results presented in accordance with the Company's GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review the Company's consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. In addition, the Company expects to continue to incur expenses similar to the non-GAAP adjustments described above, and exclusion of these items from the Company's non-GAAP measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring.
The table below reconciles net income (loss) and Adjusted EBITDA for the periods presented:
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Three months ended March 31
(In thousands of Canadian dollars) 2011 2010
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Net loss $ (3,594) $ (141)
Add:
Depreciation of property and equipment 381 79
Amortization of intangible assets 2,210 77
Finance costs (income), net 873 (250)
Employee termination costs 263 -
Stock based compensation 147 164
Income tax expense (recovery) (130) 206
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Adjusted EBITDA $ 150 $ 135
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Conference Call Details
In conjunction with the release, Cyberplex will host a conference call on Thursday, June 2, 2011 at 4:30 p.m. EST to discuss the financial results. To access the call, please dial 1-888-892-3255. Please call five minutes prior to the call. A replay of the conference call will be available following the call as of 12:00 a.m. To access the replay dial 1-800-937-6305 followed by the pass code 676594.
About Cyberplex
Cyberplex Inc. (www.cyberplex.com) is a North American leader in online publishing and customer acquisition strategies. The Company, through its subsidiaries, leverages over 300 proprietary web properties and its vast publisher network to efficiently connect advertisers to their most relevant online customers and prospects. By combining high quality publishing initiatives with efficient technology solutions and online marketing expertise, the Company is able to deliver the optimal targeted audience to online advertisers. Cyberplex delivers measurable results that improve advertiser ROI, monetize the value of online properties and build targeted, loyal online audiences.
Forward-Looking Statements
This news release may contain forward-looking statements that are based on management's current expectations and are subject to known and unknown uncertainties and risks, which could cause actual results to differ materially from those contemplated or implied by such forward-looking statements. Cyberplex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.
Cyberplex Inc.
Consolidated Statements of Financial Position
(In thousands of Canadian dollars)
(Unaudited)
March 31, December 31, January 1,
2011 2010 2010
Assets
Current assets:
Cash and cash equivalents $ 6,166 $ 5,192 $ 10,222
Restricted cash 632 2,310 -
Short-term investments 257 1,551 11,270
Available-for-sale financial assets 148 140 271
Accounts receivable 8,960 13,879 9,930
Income taxes recoverable 632 632 -
Prepaid expenses and other assets 2,145 2,321 3,029
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Total current assets 18,940 26,025 34,722
Non-current assets:
Restricted cash 3,221 1,749 -
Property and equipment 2,589 2,921 845
Intangible assets 29,566 32,504 756
Goodwill 2,303 2,357 14,616
Deferred tax assets - - 583
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Total non-current assets 37,679 39,531 16,800
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Total assets $ 56,619 $ 65,556 $ 51,522
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Liabilities and Equity
Current liabilities:
Accounts payable and accrued
liabilities $ 7,961 $ 10,177 $ 3,694
Current portion of provisions 590 590 576
Current portion of term loans 30,048 9,402 -
Deferred revenue 783 665 668
Income taxes payable 1,724 1,729 631
Current portion of deferred lease
inducements 115 115 107
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Total current liabilities 41,221 22,678 5,676
Non-current liabilities:
Long-term portion of term loans - 23,583 -
Provisions 2,756 2,756 -
Deferred tax liabilities 1,860 1,990 -
Deferred lease inducements 156 185 156
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Total non-current liabilities 4,772 28,514 156
Equity:
Share capital 65,452 65,452 33,335
Contributed surplus 2,091 1,944 1,471
Accumulated other comprehensive income
(loss) (2,791) (2,500) 247
Retained earnings (deficit) (54,126) (50,532) 10,637
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Total equity $ 10,626 $ 14,364 $ 45,690
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Total liabilities and equity $ 56,619 $ 65,556 $ 51,522
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Cyberplex Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands of Canadian dollars, except per share amounts)
Three months ended March 31, 2011 and 2010
(Unaudited)
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2011 2010
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Revenue $ 14,603 $ 12,261
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Expenses:
Publishing and advertising costs 8,916 8,806
Employee compensation and benefits 3,904 1,816
Other operating expenses 1,780 1,668
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14,600 12,290
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Income (loss) before the undernoted 3 (29)
Depreciation of property and equipment 381 79
Amortization of intangible assets 2,210 77
Restructuring expenses 263 -
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Loss from operations (2,851) (185)
Finance costs (income), net 873 (250)
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Income (loss) before income taxes (3,724) 65
Income tax expense (recovery) (130) 206
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Loss for the period (3,594) (141)
Other comprehensive loss:
Net change in fair value of available-for-
sale financial assets 8 (40)
Foreign currency translation adjustments to
equity (299) (1,187)
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Other comprehensive loss for the period, net
of income tax (291) (1,227)
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Total comprehensive loss for the period $ (3,885) $ (1,368)
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Loss per share:
Basic (0.03) (0.00)
Diluted (0.03) (0.00)
Cyberplex Inc.
Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
Three months ended March 31, 2011 and 2010
(Unaudited)
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2011 2010
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Cash flows from operating activities:
Loss for the period $ (3,594) $ (141)
Adjustments to reconcile net loss to net cash
flows from operating activities:
Depreciation of property and equipment 381 79
Amortization of intangible assets 2,210 77
Amortization of deferred lease inducements (29) (27)
Stock-based compensation 147 164
Unrealized foreign exchange loss 130 158
Finance costs (income), net 873 (25)
Income tax expense (recovery) (130) 206
Change in non-cash operating working capital 2,786 (5,401)
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Cash generated from (used in) operating
activities 2,774 (4,910)
Income taxes paid - (774)
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Net cash from (used in) operating activities 2,774 (5,684)
Cash flows from financing activities:
Repayment of term loans (2,176) -
Proceeds from exercise of stock options - 8
Interest paid (814) (3)
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Net cash from (used in) financing activities (2,990) 5
Cash flows from investing activities:
Sale of short-term investments 1,294 2,043
Interest income received 19 28
Decrease in restricted cash 115 -
Additions to property and equipment (97) (298)
Additions to intangible assets (11) (51)
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Net cash from investing activities 1,320 1,722
Increase (decrease) in cash and cash equivalents 1,104 (3,957)
Cash and cash equivalents, beginning of period 5,192 10,222
Foreign exchange loss on cash held in foreign
currency (130) (158)
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Cash and cash equivalents, end of period $ 6,166 $ 6,107
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Contacts:
Cyberplex Inc.
David Katz
EVP Corporate Development
416.597.8889
416.597.2345 (FAX)
press@cyberplex.com
www.cyberplex.com
