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
