VendTek Systems Announces Q2 Fiscal 2013 Financial Results
VendTek Systems Announces Q2 Fiscal 2013 Financial Results
Vancouver, British Columbia CANADA, June 28, 2013 /FSC/ - VendTek Systems Inc. (VSI - TSX Venture), (the "Company"), a developer and licensor of software for the global prepaid and financial services markets, today reported its financial results for its fiscal second quarter ended April 30, 2013 ("Q2 FY2013").
Selected Financial Information
* Revenues for the quarter ended April 30, 2013 decreased $3.6 million to $20.2 million, or 15.1% from $23.8 million for the corresponding period in fiscal 2012;
* Gross profit for Q2 FY2013 held steady at $1.3 million, while gross profit increased from 5.7% to 6.6%, respectively, compared to the corresponding period in fiscal 2012;
* A non-cash impairment charge of $0.7 million was recorded for the Company's Mobile Commerce Platform (MCP);
* Operating expenses held steady at $2.1 million (exclusive of the impairment charge);
* Adjusted EBITDA(1)loss of $0.7 million for Q2 FY2013 compared to a loss of $0.6 million for the prior comparable period;
* Net loss was $1.7 million compared to $0.9 million in the prior comparable period;
* Cash used in operations was $1.4 million for Q2 FY2013, compared to $1.1 million cash generated in operations in the prior comparable period;
* Cash and cash equivalents was $2.0 million at April 30, 2013 compared to $3.8 million in the prior comparable period.
"Our results for the past several quarters have 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 in Canada, we are pleased that our Brazil operations are demonstrating traction in the growth of registered terminals, which is an important sales metric. During the second quarter we increased our registered terminal count by about 1,000 units, which was our strongest quarter to date. Once these terminals are installed and activated we can expect increased transactional and revenue generating activity, said Mr. Buchanan.
"The Company's Q2 FY2013 financials yielded some important results", commented Irwin Studen, Interim Chief Financial Officer of VendTek. "VendTek continued to show consistent year-over-year gross profit resulting from its higher margin Brazil initiatives, despite the falloff in Canadian-based revenue. From a liquidity standpoint, the Company reported a lower cash position and weaker operating cash flow for Q2 FY2013 compared to the prior comparable period. This was primarily due to the current quarter ending on the Company's lowest cash day of its weekly collection cycle (Tuesday) compared to the highest cash day in the prior period (Wednesday), 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."
Subsequent Events
* On June 27, 2013 the Company announced that it secured approximately US$459,000 in a supplier based letter of credit facility from a major international bank for its Brazil operations.
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 July 2, 2013 at 10:30 AM EDT (7:30 AM PDT) to discuss its financial results and operational highlights for its fiscal second quarter ended April 30, 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 conference ID 31934204.
A live audio webcast of the conference call will be available at http://www.newswire.ca/en/webcast/detail/1129867/1232381. 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 Consolidated Statement of Financial Position
(All amounts expressed in Canadian dollars)
October 31, 2012 and 2011
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April 30, October 31,
Note 2013 2012
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Assets
Current assets:
Cash and cash equivalents $ 1,966,291 $ 3,792,619
Restricted cash 4 102,886 224,637
Accounts receivable 5 4,327,004 4,101,325
Inventories 1,257,082 1,935,531
Prepaid expenses and deposits 694,639 583,515
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8,347,902 10,637,627
Non-current assets:
Property, plant and equipment, net 6 1,188,827 985,457
Intangible assets 7 107,296 1,009,426
Goodwill 907,342 907,342
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$ 10,551,367 $ 13,539,852
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Liabilities and Shareholders' Equity (Deficiency)
Current liabilities:
Bank indebtedness 8 $ - $ 45,301
Accounts payable and accrued liabilities 9,342,339 9,921,976
Current portion of finance
lease obligations 8 267,209 167,645
Deferred revenue 9 12,981 295,072
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9,622,529 10,429,994
Non-current liabilities:
Long term portion of finance
lease obligations 8 343,908 252,638
Convertible debenture 8 3,518,939 3,332,066
Shareholders' equity (deficiency):
Share capital 9 12,188,130 12,188,130
Contributed surplus 9 3,895,985 3,813,238
Deficit (18,786,247) (16,222,532)
Accumulated other comprehensive
income (loss) (231,877) (253,682)
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(2,934,009) (474,846)
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$ 10,551,367 $ 13,539,852
-****-
See accompanying notes to the condensed consolidated financial statements.
VENDTEK SYSTEMS INC.
Unaudited Consolidated Interim Statements of Operations and Comprehensive Loss
(All amounts expressed in Canadian dollars)
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Three and six months ended April 30, 2013 and 2012
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Three months ended April 30, Six months ended April 30,
2013 2012 2013 2012
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Revenue:
Products and
service revenue $20,184,562 $23,820,482 $41,004,670 $48,121,340
Cost of product and
service revenues 18,853,688 22,464,122 38,307,924 45,376,322
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Gross profit 1,330,874 1,356,360 2,696,746 2,745,018
Operating expenses:
General and
Administrative 1,440,689 1,430,662 2,915,619 2,864,519
Selling and marketing 433,849 423,468 833,491 926,562
Research and development 260,854 222,360 476,486 459,947
Impairment of non-financial
assets (note 13) 671,942 - 671,942 -
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Total operating
expenses (note 11) 2,807,334 2,076,490 4,897,538 4,251,028
Loss before finance cost, loss (gain) on
disposal of assets, and foreign
exchange loss (gain) (1,476,460) (720,130) (2,200,792) (1,506,010)
Finance cost (note 12) 172,073 188,601 346,314 380,063
Loss (gain) on
disposal of assets 9,016 (9,536) 15,443 (7,169)
Foreign exchange
loss (gain) 5,015 (9,152) 1,166 (49,803)
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Net loss for period (1,662,564) (890,043) (2,563,715) (1,829,101)
Other comprehensive income (loss):
Foreign currency
translation difference 3,168 (228,867) 21,805 (423,757)
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Comprehensive loss $(1,659,396) $(1,118,910) $(2,541,910) $(2,252,858)
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Net loss per common share (note 15):
Basic and diluted $(0.03) $(0.02) $(0.04) $(0.04)
Weighted average shares outstanding:
Basic and diluted 58,357,652 52,645,652 58,357,652 52,645,652
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See accompanying notes to the condensed consolidated interim financial statements.
VENDTEK SYSTEMS INC.
Unaudited Condensed Consolidated Statements of Changes in Equity
(All amounts expressed in Canadian dollars)
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Six months ended April 30, 2013 and 2012
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Share capital Contributed
Number Value surplus
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Balance, November 1, 2011 52,545,652 $11,693,629 $3,813,517
Stock based compensation - - 34,413
Currency translation adjustment - - -
Net loss for period - - -
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Balance April 30, 2012 52,545,652 $11,693,629 $3,847,930
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Balance, November 1, 2012 58,357,652 12,188,130 3,813,238
Stock based compensation - - 82,747
Currency translation adjustment - - -
Net loss for period - - -
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Balance April 30, 2013 58,357,652 $12,188,130 $3,895,985
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Accumulated other Total Shareholders'
Comprehensive equity
income (loss) Deficit (deficiency)
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Balance, November 1, 2011 $(92,854) $(12,797,461) $2,616,831
Stock based compensation - - 34,413
Currency translation adjustment (423,757) - (423,757)
Net loss for period - (1,829,101) (1,829,101)
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Balance April 30, $(516,611) $(14,626,562) $398,386
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Balance, November 1, 2012 (253,682) (16,222,532) (474,846)
Stock based compensation - - 82,747
Currency translation adjustment 21,805 - 21,805
Net loss for period - (2,563,715) (2,563,715)
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Balance April 30, 2013 $(231,877) $(18,786,247) $(2,934,009)
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-****-
See accompanying notes to the condensed consolidated financial statements.
VENDTEK SYSTEMS INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(All amounts expressed in Canadian dollars)
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Three months ended April 30, Six months ended April 30,
2013 2012 2013 2012
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Cash provided by (used in):
Operations:
Net loss for
the period $(1,662,564) $(890,043) $(2,563,715) $(1,829,101)
Items not involving cash:
Accretion on convertible
debentures (note 8) 73,420 56,396 149,316 114,045
Mark to market loss
on derivatives (note 8) 18,467 68,277 37,556 138,072
Amortization 96,486 81,265 186,142 169,286
Loss (gain) on
disposal of assets 9,016 (9,536) 15,443 (7,169)
Foreign exchange
loss (gain) 5,015 (9,152) 1,166 (49,803)
Stock-based compensation 51,293 13,349 82,747 34,413
Impairment of non-financial
assets (note 13) 671,942 - 671,942 -
Changes in non-cash
Operating working capital
items (note 17) (771,457) 1,730,682 (355,455) 1,482,850
Interest expense on
long-term debt 80,185 63,928 159,441 127,684
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(1,428,197) 1,105,166 (1,615,417) 180,277
Financing activities:
Interest paid on
long-term debt (16,724) (15,718) (139,859) (126,140)
Repayment of
lease obligations (43,115) (35,357) (81,564) (96,654)
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(59,839) (51,075) (221,423) (222,794)
Investments activities:
Decrease (increase) in
restricted cash (3,268) (15,086) 121,751 (33,315)
Purchase of equipment (14,510) (26,977) (102,148) (44,659)
Payments to develop
intangible assets - (103,472) - (294,410)
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(17,778) (145,535) 19,603 (372,384)
Effect of foreign exchange on cash
and cash equivalents 3,827 (101,078) (9,091) (65,830)
Increase (decrease) in cash
and cash equivalents (1,501,987) 807,478 (1,826,328) (480,731)
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Cash and cash equivalents,
beginning of period 3,468,278 2,241,075 3,792,619 3,529,284
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Cash and cash equivalents,
end of period $1,966,291 $3,048,553 $1,966,291 $3,048,553
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-****-
See accompanying notes to the condensed consolidated financial statements.
1 Management defines Adjusted EBITDA as net income adjusted for financing, taxes, depreciation, amortization expenses, impairment of non-financial assets, foreign exchange differences and stock based compensation expense. Please see the Management Discussion and Analysis for more details.
To view this press release as a PDF, please click on the following link:
http://www.usetdas.com/pr/vendtek06282013.pdf
Source: VendTek Systems Inc. (TSX-V VSI) www.vendteksys.com
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