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
