Wanted earns $239,942 in fiscal Q3
2015-05-26 08:41 ET - News Release Shares issued 24,931,326 WAN Close 2015-05-25 C$ 1.20 Ms. Meredith Amdur reports WANTED TECHNOLOGIES REPORTS AN INCREASE OF 31% OF ITS RECURRING REVENUE BASE IN CANADIAN DOLLARS (15% IN US DOLLARS) FOR THE THIRD QUARTER OF FISCAL 2015 Wanted Technologies Corp. had revenues of $2,529,279 for the third quarter ending March 31, 2015, a 16-per-cent decrease over the same quarter of the prior year. Note that revenues from the third quarter of prior year included an amount of $345,862 from a reseller partner agreement that terminated in June, 2014, as well as a significant non-recurring revenue of $703,414 derived from a single agreement. Excluding the revenues from this partner and from this non-recurring agreement in the prior year, revenue grew $578,897, or 30 per cent over prior year. For the nine-month period ended March 31, 2015, the company's total revenues were $7,154,966 compared with $7,347,927 for the corresponding period in the previous fiscal year, a decrease of $192,961 or 3 per cent. Excluding revenues of $921,286 from the terminated reseller and a non-recurring revenue of $976,989 from the first nine months of the prior year, revenue grew by $1,705,314, or 31 per cent during the first three quarters of fiscal 2015 compared with the prior year. The company reported a net income of $239,942 (one cent per share) for the third quarter of fiscal 2015, compared with a net income of $777,491 (3.2 cents per share) in the third quarter of fiscal 2014, a negative variation of $537,549. For the nine-month period ended March 31, 2015, net income of $198,244 (0.8 cent per share) was reported compared with a net income of $2,251,613 (9.3 cents per share) for the same period of fiscal 2014. Note that this decrease in net income for the nine-month period mostly results from the combination of three specific elements, the change in management, the issuance of 1.53 million stock options during the first nine months of the year, and a non-recurring R&D tax credit recorded in the prior year, which together, represent approximately $1.45-million of this negative variance. "Wanted delivered another solid quarter as we continue to exploit an increasingly dynamic market for talent and broader adoption generally of analytics solutions for recruiting and work force management. Wanted's recurring revenue book for the corporate sector, the fastest growth segment, grew 53 per cent over the past three quarters, with average revenue per customer up 18 per cent over the same period, reflecting increased penetration of and within Fortune 1000 organizations and early traction upselling with international data," said Meredith Amdur, Wanted's president and chief executive officer. "We continued rolling out our international product line this past quarter, formally launching at the HR Technology convention in London in March and establishing a full-time commercial presence there to serve the United Kingdom. Our international product portfolio helps meet the market intelligence needs of our current multinational customers and enhances the overall value of our data assets as we extend our geographic reach," Ms. Amdur said. As of March 31, 2015, contracts in hand, in Canadian dollars, had an approximate value of $10.6-million in annualized recurring revenues, an increase of $2.5-million or 31 per cent over an annualized recurring revenue book of $8.1-million as of March 31, 2014. On a United States dollar basis, the contracts in hand increased 15 per cent, from $7.3-million (U.S.) as of March 31, 2014, to $8.4-million (U.S.) as of March 31, 2015. At the end of third quarter of fiscal 2015, 71 per cent of the recurring revenue base was supported by contracts from the staffing, corporate and government sectors. This compares with 66 per cent at the end of the corresponding quarter of the previous year. Operating costs for the third quarter of fiscal 2015 totalled $2,401,446, an increase of $567,598, or 31 per cent, over the same quarter of prior year. For the first nine months of fiscal 2015, operating costs totalled $7,044,688 compared with $4,474,164 for the first nine months of the previous fiscal year, an increase of $2,570,524 or 57 per cent. Note that, as mentioned earlier, approximately $1.45-million of the negative variance during the nine-month period is associated with the change in management, the issuance of stock options during the during the first and second quarters of the current year, and the non-recurring R&D tax credit which reduced the prior year's second quarter expenses. The remaining portion of the increase in operating costs is mostly due to investments in research and development and marketing and selling as the company continues to innovate in the market and expand its footprint, both in North America and internationally. FINANCIAL HIGHLIGHTS Three-month periods ended Nine-month periods ended March 31, March 31, 2015 2014 2015 2014 Revenues $2,529,279 $2,999,658 $7,154,966 7,347,927 (Cost) of sales (114,088) (110,383) (284,950) (260,412) Gross margin 2,415,191 2,889,275 6,870,016 7,087,515 Expenses Research and development (loss) (925,998) (680,105) (2,546,343) (1,516,871) Marketing and selling (loss) (895,021) (649,743) (2,330,243) (1,649,753) Administrative (loss) (568,922) (496,483) (2,143,796) (1,290,668) Other financial (expenses) (10,322) (7,278) (23,163) (16,633) Other (loss) (1,183) (239) (1,143) (239) (2,401,446) (1,833,848) (7,044,688) (4,474,164) Operating income (loss) 13,745 1,055,427 (174,672) 2,613,351 Finance income 318,057 111,466 540,212 128,048 Finance (costs) (375) (786) (1,132) (3,175) Income before tax 331,427 1,166,107 364,408 2,738,224 Current tax (expense) (107,207) (156,789) (244,408) (229,605) Deferred tax income (expense) 15,722 (231,827) 78,244 (257,006) Net income and comprehensive income 239,942 777,491 198,244 2,251,613 Basic net income per share 0.010 0.032 0.008 0.093 Diluted net income per share 0.010 0.031 0.008 0.090 Despite an increased level of investment to accelerate growth, EBITDA remained positive at $410,504 for the third quarter of fiscal 2015, compared with an EBITDA of $1,275,793 in the third quarter of fiscal 2014, a negative variation of $865,289. For the first nine months of fiscal 2015, EBITDA totalled $661,871 compared with an EBITDA of $3,074,482 in the first nine months of the previous year, a decrease of $2,412,611. EBITDA represents the net income before net finance costs excluding gain or loss due to variation in foreign exchange, income taxes on net income, and amortization and impairment of property, plant and equipment and intangible assets. As international financial reporting standards do not provide a standardized definition for this measure, it may not be comparable with similar measures used by other companies. Net income for the third quarter of fiscal 2015 was $239,942, or one cent per share. This compares with a net income of $777,491 in the third quarter of fiscal 2014 or 3.2 cents per share. Financial position As at March 31, 2015, Wanted had $7,301,072 in cash and monetary investments, including $4,077,067 in redeemable term deposits. This compares with $6,724,870 in cash and monetary investments as at June 30, 2014, an increase of $576,202. This increase of $576,202 in the company's liquidity is mostly the result of operating activities which, despite an accelerated rhythm of investment, generated $929,342 in cash flows since June 30, 2014. The positive cash flows from operating activities were however partially offset by purchases of $452,743 in computer equipment and infrastructure required to support new features, improve overall response time and upgrade the overall development and production infrastructure to support growth. As at March 31, 2015, total assets amounted to $12,966,111 compared with $11,955,516 as at June 30, 2014, an increase of $1,010,595. Those interested will be able to access the information on the March 31, 2015, unaudited interim consolidated financial statements, the notes thereto and the management discussion and analysis via the Internet at SEDAR and at the company's website as of Tuesday, May 26, 2015. We seek Safe Harbor.