Advantex Marketing International Inc. ("Advantex" or the "Company") (CNSX:ADX),
a leading specialist in merchant funding and loyalty marketing programs, today
announced its results for the fiscal fourth quarter and year ended June 30,
2012. All references to quarters or years are for the fiscal periods and all
currency amounts are in Canadian dollars unless otherwise noted.
"It is encouraging to report an increase in revenues and net income. The Company
increased merchant participation because it satisfies a need in the small
merchant space for cost effective loyalty marketing and business intelligence
which enables merchants to retain their existing business and target new
business - critical tools in today's economy - and provides merchants access to
unsecured working capital. For its partners, Canadian Imperial Bank of Commerce
("CIBC"), and Aeroplan Canada Inc. ("Aeroplan"), Advantex is their entry into
the small merchant world and enables them to deliver extra value to their
customers and members. The partners continue to give Advantex access to new
business segments which allows Advantex to expand merchant participation.
Advantex is uniquely placed to be a valuable partner to other service providers
who wish to sell their services to small merchants," said Kelly Ambrose,
Advantex President and Chief Executive Officer.
Financial Highlights:
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Fiscal 2012 Fiscal 2011 Fiscal 2010
----------------------------------------------------------------------------
Revenues $15,896,000 $13,523,000 $11,961,000
----------------------------------------------------------------------------
Earnings from operations before
amortization and interest (EBITDA
(i)) $ 3,214,000 $ 2,152,000 $ 2,451,000
----------------------------------------------------------------------------
Net Income/(Loss) $ 227,000 $ (492,000) $ 34,000
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(i) EBITDA is a non-GAAP financial measure which does not have any
standardized meaning prescribed by the issuer's GAAP and is unlikely to be
comparable to similar measures presented by other issuers. In case of the
Company, for Fiscal 2012 and Fiscal 2011, per consolidated financial
statements for year ended June 30, 2012, earnings from operations before
amortization and interest from continuing operations plus net income/(loss)
from discontinued operations is the nearest equivalent to EBITDA. For Fiscal
2010, per consolidated financial statements for year ended June 30, 2011,
contribution from operations and profit before amortization and interest
from continuing operations plus profit/(loss) from discontinued operations
is the nearest equivalent to EBITDA.
"The Company expects to increase merchant participation and is confident of its
future financial performance. Agreements with CIBC, Aeroplan, providers of debt
- debentures and line of credit facility - expire ten to fourteen months from
now and we expect to successfully negotiate renewals," said Mr. Ambrose.
About Advantex Marketing International Inc.
Advantex is a specialist in the marketing services industry. Advantex partners
with CIBC, and Aeroplan. On a combined basis, Advantex has contractual marketing
access to more than five million Canadian consumers with above-average personal
and household income. The Company's merchant partner base currently consists of
more than 1,350 merchants operating restaurants; golf courses; independent inns,
resorts and selected hotels; spas; retailers of men's and ladies fashion,
footwear and accessories; retailers of sporting goods; florists and garden
centres; book and newspaper stores; health and beauty centres; dry cleaners; and
gift stores; many of which are leaders in their respective categories. Advantex
is traded on the Canadian National Stock Exchange under the symbol "ADX". For
additional information on Advantex, please visit www.advantex.com.
Forward-Looking Information
This Press Release contains certain "forward-looking information". All
information, other than information comprised of historical fact, that addresses
activities, events or developments that the Company believes, expects or
anticipates will or may occur in the future constitutes forward-looking
information. Forward-looking information is typically identified by words such
as: anticipate, believe, expect, goal, intend, plan, will, may, should, could
and other similar expressions. Such forward-looking information relates to,
without limitation, information regarding the Company's: expectation regarding
merchant participation and its future financial performance; expectation with
regards to renewal, and the terms of such renewal, of its agreements with CIBC,
Aeroplan, providers of debt; and other information regarding financial and
business prospects and financial outlook is forward-looking information.
Forward-looking information reflects the current expectations or beliefs of the
Company based on information currently available to the Company.
Forward-looking information is subject to a number of risks, uncertainties and
assumptions that may cause the actual results of the Company to differ
materially from those discussed in the forward-looking information, and even if
such actual results are realized or substantially realized, there can be no
assurance that they will have the expected consequences to, or effects on the
Company. Factors that could cause actual results or events to differ materially
from current expectations include those listed under "General Risks and
Uncertainties" and "Economic Dependence" in Management's Discussion and Analysis
for the fiscal year ended June 30, 2012.
All forward-looking information speaks only as of the date on which it is made
and, except as may be required by applicable securities laws, the Company
disclaims any intent or obligation to update any forward-looking information,
whether as a result of new information, future events or results or otherwise.
Although the Company believes that the assumptions inherent in the
forward-looking information are reasonable, forward-looking information is not a
guarantee of future performance and accordingly undue reliance should not be put
on such information due to the inherent uncertainty therein.
Advantex Marketing International Inc.
Consolidated Statements of Financial Position
(expressed in Canadian dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
June 30, 2012 June 30, 2011 July 1, 2010
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Assets
----------------------------------------------------------------------------
Current assets
----------------------------------------------------------------------------
Cash and cash equivalents 1,084,773 5,000 505,941
----------------------------------------------------------------------------
Accounts receivable (note 17) 966,437 842,249 700,927
----------------------------------------------------------------------------
Transaction credits 14,095,373 12,408,060 9,538,364
----------------------------------------------------------------------------
Inventory (note 5) 204,355 66,451 381,309
----------------------------------------------------------------------------
Prepaid expenses and sundry
assets 315,454 248,541 249,510
----------------------------------------------------------------------------
$ 16,666,392 $ 13,570,301 $ 11,376,051
----------------------------------------------------------------------------
Non-current assets
----------------------------------------------------------------------------
Investment (note 6) 100,000 100,000 -
----------------------------------------------------------------------------
Property, plant and equipment
(note 7a) 222,132 264,477 191,895
----------------------------------------------------------------------------
Intangibles (note 7b) 330,018 496,700 615,420
----------------------------------------------------------------------------
652,150 861,177 807,315
----------------------------------------------------------------------------
Total assets $ 17,318,542 $ 14,431,478 $ 12,183,366
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities
----------------------------------------------------------------------------
Current liabilities
----------------------------------------------------------------------------
Bank Indebtedness - 83,262 -
----------------------------------------------------------------------------
Loan payable (note 8) 6,715,691 4,917,446 3,030,549
----------------------------------------------------------------------------
Accounts payable and accrued
liabilities 4,128,264 3,751,803 3 ,093,652
----------------------------------------------------------------------------
14% Non-convertible debentures
payable (note 9) - - 2,620,705
----------------------------------------------------------------------------
Convertible debentures payable
(note 10) - - 5,217,578
----------------------------------------------------------------------------
$ 10,843,955 $ 8,752,511 $ 13,962,484
----------------------------------------------------------------------------
Non-current liabilities
----------------------------------------------------------------------------
14% Non-convertible debentures
payable (note 9) 1,770,606 1,747,497 -
----------------------------------------------------------------------------
12% Non-convertible debentures
payable (note 10) 5,779,957 5,300,492 -
----------------------------------------------------------------------------
$ 7,550,563 $ 7,047,989 $ -
----------------------------------------------------------------------------
Total Liabilities $ 18,394,518 $ 15,800,500 $ 13,962,484
----------------------------------------------------------------------------
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----------------------------------------------------------------------------
Shareholders' deficiency
----------------------------------------------------------------------------
Share capital (note 11) 24,110,096 24,110,096 24,110,096
----------------------------------------------------------------------------
Contributed surplus (note 12) 793,198 726,795 645,879
----------------------------------------------------------------------------
Equity portion of debentures
(note 10) 2,114,341 2,114,341 2,114,341
----------------------------------------------------------------------------
Warrants (note 9/10) 1,196,013 1,196,013 374,554
----------------------------------------------------------------------------
Deficit (29,289,624) (29,516,267) (29,023,988)
----------------------------------------------------------------------------
Total deficiency $ (1,075,976) $ (1,369,022) $ (1,779,118)
----------------------------------------------------------------------------
Total liabilities and
deficiency $ 17,318,542 $ 14,431,478 $ 12,183,366
Commitments and Contingencies (note 17)
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 E. Ambrose
Advantex Marketing International Inc.
Consolidated Statements of Income/(Loss) and Comprehensive Income/(Loss)
For the years ended June 30, 2012 and 2011
(expressed in Canadian dollars)
2012 2011
----------------------------------------------------------------------------
$ $
----------------------------------------------------------------------------
Revenues 15,895,402 13,522,952
----------------------------------------------------------------------------
Direct expenses 4,427,082 4,462,678
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating Expenses
----------------------------------------------------------------------------
Selling and marketing 3,758,766 2,906,372
----------------------------------------------------------------------------
General and administrative 4,496,048 3,983,714
----------------------------------------------------------------------------
Earnings from operations before amortization and
interest from continuing operations 3,213,506 2,170,188
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Depreciation of property, plant and equipment, and
intangibles 434,881 439,469
----------------------------------------------------------------------------
Interest expense:
----------------------------------------------------------------------------
Stated interest expense - loan payable, and
debentures 2,012,320 1,592,580
----------------------------------------------------------------------------
Non-cash interest expense on loan payable, and
debentures 539,662 612,023
----------------------------------------------------------------------------
Net income / (loss) from continuing operations 226,643 (473,884)
----------------------------------------------------------------------------
Net income / (loss) from discontinued operations - (18,395)
----------------------------------------------------------------------------
Net income / (loss) and Comprehensive income / (loss) 226,643 (492,279)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings / (Loss) per share:
----------------------------------------------------------------------------
Basic and Diluted (note 19) 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 Deficiency
For the years ended June 30, 2012 and June 30, 2011
(expressed in Canadian dollars)
-----------------------------------------------------------------
Class A
preference Common Contributed
shares shares surplus
$ $ $
-----------------------------------------------------------------
-----------------------------------------------------------------
Balance - July 1, 2010 3,815 24,106,281 645,879
-----------------------------------------------------------------
Net (loss) and
comprehensive (loss) for
the year
-----------------------------------------------------------------
Employee share options:
-----------------------------------------------------------------
Value of services
recognized 80,916
-----------------------------------------------------------------
Issue of new warrants
-----------------------------------------------------------------
Balance - June 30, 2011 3,815 24,106,281 726,795
-----------------------------------------------------------------
-----------------------------------------------------------------
Balance - July 1, 2011 3,815 24,106,281 726,795
-----------------------------------------------------------------
Net income and
comprehensive income for
the year
-----------------------------------------------------------------
Employee share options:
-----------------------------------------------------------------
Value of services
recognized 66,403
-----------------------------------------------------------------
Balance - June 30, 2012 3,815 24,106,281 793,198
----------------------------------------------------------------------------
Equity
portion of
debentures Warrants Deficit Total
$ $ $ $
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance - July 1, 2010 2,114,341 374,554 (29,023,988) (1,779,118)
----------------------------------------------------------------------------
Net (loss) and
comprehensive (loss) for
the year (492,279) (492,279)
----------------------------------------------------------------------------
Employee share options:
----------------------------------------------------------------------------
Value of services
recognized 80,916
----------------------------------------------------------------------------
Issue of new warrants 821,459 821,459
----------------------------------------------------------------------------
Balance - June 30, 2011 2,114,341 1,196,013 (29,516,267) (1,369,022)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance - July 1, 2011 2,114,341 1,196,013 (29,516,267) (1,369,022)
----------------------------------------------------------------------------
Net income and
comprehensive income for
the year 226,643 226,643
----------------------------------------------------------------------------
Employee share options:
----------------------------------------------------------------------------
Value of services
recognized 66,403
----------------------------------------------------------------------------
Balance - June 30, 2012 2,114,341 1,196,013 (29,289,624) (1,075,976)
The accompanying notes are an integral part of these consolidated financial
statements.
Advantex Marketing International Inc.
Consolidated Statements of Cash Flow
For the year ended June 30, 2012 and 2011
(expressed in Canadian dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2012 2011
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash flow provided by (used in)
----------------------------------------------------------------------------
Operating activities
----------------------------------------------------------------------------
Net income / (loss) for the period $ 226,643 $ (492,279)
----------------------------------------------------------------------------
Adjustments for:
----------------------------------------------------------------------------
Depreciation of property, plant and equipment,
and intangibles 434,881 439,469
----------------------------------------------------------------------------
Stock-based compensation 66,403 80,916
----------------------------------------------------------------------------
Accretion charge for debentures 539,662 612,023
----------------------------------------------------------------------------
1,267,589 640,129
----------------------------------------------------------------------------
Changes in items of working capital
----------------------------------------------------------------------------
Accounts receivable (124,188) (141,322)
----------------------------------------------------------------------------
Transaction credits (1,687,313) (2,869,696)
----------------------------------------------------------------------------
Inventory (137,904) 314,858
----------------------------------------------------------------------------
Prepaid expenses and sundry assets (66,913) 969
----------------------------------------------------------------------------
Accounts payable and accrued liabilities 376,461 658,151
----------------------------------------------------------------------------
(1,639,857) (2,037,040)
----------------------------------------------------------------------------
Net cash used in operating activities (372,268) (1,396,911)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Investing activities
----------------------------------------------------------------------------
Purchase of property, plant and equipment, and
intangibles (225,854) (393,331)
----------------------------------------------------------------------------
Investment - (100,000)
----------------------------------------------------------------------------
Net cash used in investing activities (225,854) (493,331)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Financing activities
----------------------------------------------------------------------------
Proceeds from loan payable 1,798,245 1,854,728
----------------------------------------------------------------------------
Payments for maturity/retirement of debentures - (8,665,000)
----------------------------------------------------------------------------
Proceeds from renewal of debentures - 8,272,000
----------------------------------------------------------------------------
Debenture renewal - additional transaction costs (37,088) (155,689)
----------------------------------------------------------------------------
Net cash generated from financing activities 1,761,157 1,306,039
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents
during the year $ 1,163,035 $ (584,203)
----------------------------------------------------------------------------
-From continuing operations 1,264,207 (844,127)
----------------------------------------------------------------------------
-From discontinued operations (note 16) (101,172) 259,924
----------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents $ 1,163,035 $ (584,203)
----------------------------------------------------------------------------
Cash and cash equivalents, including bank
indebtedness - Beginning of period (78,262) 505,941
----------------------------------------------------------------------------
Cash and cash equivalents, including bank
indebtedness - End of period 1,084,773 (78,262)
----------------------------------------------------------------------------
Additional Information $ 1,896,320 $ 1,541,817
Interest paid
For purposes of the cash flow statement, cash
comprises:
Cash $ 1,079,773 $ -
Term deposits $ 5,000 $ 5,000
Bank indebtedness $ - $ (83,262)
------------- --------------
$ 1,084,773 $ (78,262)
The accompanying notes are an integral part of these consolidated financial
statements.
FOR FURTHER INFORMATION PLEASE CONTACT:
Advantex Marketing International Inc.
Mukesh Sabharwal
Vice-President and Chief Financial Officer
905-470-9558 ext. 249
Mukesh.sabharwal@advantex.com
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