VendTek Systems Loses $901,151 in Q1 2013-03-18 10:09 AT - News Release
Mr. Doug Buchanan reports
VENDTEK SYSTEMS ANNOUNCES Q1 FISCAL 2013 FINANCIAL RESULTS
VendTek Systems Inc. has provided its financial results for its fiscal first quarter ended Jan. 31, 2013.
Selected Financial Information
* Revenues for the quarter ended January 31, 2013 decreased $3.5 million to $20.8 million, or 14.4% from $24.3 million for the corresponding period in fiscal 2012;
* Gross profit for Q1 FY2013 held steady at $1.4 million, while gross margin increased from 5.7% to 6.6%, respectively, compared to the corresponding period in fiscal 2012;
* Operating expenses were reduced to $2.1 million from $2.2 million;
* Adjusted EBITDA1 improved to a loss of $0.6 million for Q1 FY2013 compared to a loss of $0.7 million for the prior comparable period;
* Net loss was $0.9 million, both in the current and prior comparable periods;
* Cash used in operations was $0.2 million for Q1 FY2013, compared to $0.9 million in the prior comparable period;
* Cash and cash equivalents was $3.5 million at January 31, 2013.compared to $3.8 million in the prior comparable period.
"Our results for the past several quarters has demonstrated the anticipated reduction in transactional volume of our Canadian prepaid wireless business", said Doug Buchanan, President and Chief Executive Officer of VendTek. "Despite this expected decline, we are pleased that subsequent to quarter-end we continue to maintain strong customer relationships as evidenced by the renewal of our longstanding agreement with Canadian Tire. We are also pleased that subsequent to quarter-end we entered into an agreement with Tio Networks ("TIO"), a cloud-based bill payment processor serving the largest telecom, wireless, cable and utility bill issuers in North America. This agreement will enable TIO to rapidly expand its walk up bill pay presence into Canada as Canadian consumers will be able to conveniently pay bills at any of VendTek's 14,000 plus retail locations across the country. It will also provide VendTek with a new product line, which will enhance its competitive position in Canada and enable the company to recapture a segment of the market that had moved away from the traditional pre-paid business in favour of subscription products offered by the new wireless entrants", added Mr. Buchanan.
"The Company's Q1 FY2013 results yielded some important positive results", commented Irwin Studen, Interim Chief Financial Officer of VendTek. "VendTek continued to show improved gross margins resulting from its higher margin international initiatives, despite the falloff in Canadian-based revenue. From a liquidity standpoint, the Company reported a slightly lower cash position but with improved operating cash flow for Q1 FY2013 compared to the prior comparable period." Added Mr. Studen, "As discussed in our MD&A, we continue to explore financing options for the Company to ensure the viability of its ongoing operations."
1 Management defines Adjusted EBITDA as net income adjusted for financing, taxes, depreciation, amortization expenses, foreign exchange differences and stock based compensation expense. Please see the Management Discussion and Analysis for more details.
Subsequent Events
* On February 21, 2013 the Company announced a commercial partnership with TIO Networks. This agreement will enable TIO to rapidly expand its walk-up bill pay presence in Canada as Canadian consumers will be able to conveniently pay bills at any of VendTek's 14,000 plus retail locations across the country. It will also provide VendTek with a new product line, which will enhance its competitive position in Canada and allow the Company to recapture a segment of the market that had moved away from the traditional pre-paid business in favour of subscription products offered by the new wireless entrants.
* On March 5, 2013 the Company announced the renewal of its agreement with Canadian Tire Petroleum ("CTP"), one of Canada's largest independent gasoline retailers. The agreement, which was originally entered into in 2006, calls for VendTek to continue to provide pre-paid products and services to CTP's many merchant locations. Under the agreement, VendTek will use the e-Fresh(tm) software to provide CTP with a wide range of prepaid products and services that will be sold to CTP's customers. The e-FreshTM system reduces shrinkage and inventory requirements for CTP while improving consumer access to prepaid products and services by completely eliminating physical cards and vouchers.
VendTek's MD&A and complete financial statements and notes are available at www.sedar.com and the Company's website www.vendteksystems.com.
For more information or to receive the complete statements please contact Samantha White at 604-805-4653 or 1-800-806-4958 or investment@vendteksystems.com.
Conference Call
VendTek management will host a conference call on Monday March 18, 2013 at 4:00 PM EDT (1:00 PM PDT) to discuss its financial results and operational highlights for its fiscal first quarter ended January 31, 2013.
To access the conference call by telephone, dial 1-416-764-8688 or 1-888-390-0546 and reference the company name, VendTek Systems Inc., or the conference code 80749206 .
A live audio webcast of the conference call will be available at https://www.newswire.ca/en/webcast/detail/1112023/1212037. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.
VENDTEK SYSTEMS INC.Unaudited Condensed Consolidated Interim Statements of Operations and Comprehensive Loss(All amounts expressed in Canadian dollars)------------------------------------------------------------------------- Three months ended Three months ended January 31, January 31, Note 2013 2012Revenue Products and service revenue 10 $ 20,820,108 $ 24,300,858 Cost of product and service revenue 19,454,236 22,912,200------------------------------------------------------------------------- Gross profit 1,365,872 1,388,658Operating expenses: 11 General and administrative 1,474,930 1,622,708 Selling and marketing 399,642 317,086 Research and development 215,632 234,744-------------------------------------------------------------------------Total operating expenses 2,090,204 2,174,538Loss before finance costs, loss on disposal of assets and foreignexchange loss (gain) (724,332) (785,880)Finance costs 12 174,241 191,462Loss on disposal of assets 6,427 2,367Foreign exchange gain (3,849) (40,651)-------------------------------------------------------------------------Net loss (901,151) (939,058)Other comprehensive income (loss): Foreign currency translation difference 18,637 (194,890)-------------------------------------------------------------------------Comprehensive loss $(882,514) $(1,133,948)=========================================================================Net loss per common share: Basic and diluted 14 $ (0.02) $ (0.02) Weighted average shares outstanding: Basic and diluted 14 58,357,652 52,545,652=========================================================================