Serenic Corporation (the "Company" or "Serenic") (TSX VENTURE:
SER), an international software developer specializing in
integrated financial management and human capital management
solutions for Non-Profit organizations, government agencies, and
Microsoft Dynamics NAV users, is pleased to announce its financial
results for the three months ended February 28, 2011 ("Q4") and
year ended February 28, 2011 ("Fiscal 2011").
Financial results are summarized as follows:
---------------------------------------------------------------------------
(Unaudited)
Three months ended:
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Increase
Feb 28, (decrease)
Feb 28, 2011 2010 %
---------------------------------------------------------------
$ $
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Revenue 3,092,462 2,446,115 26.4%
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Net income (loss) 409,923 (154,260) 465.7%
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Basic and diluted income (loss) per
share 0.03 (0.01) 400.0%
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EBITDA (1) 557,400 (41,373) 1545.8%
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EBITDA as a % of sales 18.0% (1.7%) 19.7%
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Weighted average common shares
outstanding 15,190,458 15,185,458
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Audited
Year ended:
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Increase
(decrease)
Feb 28, 2011 Feb 28, 2010 %
---------------------------------------------------------------
$ $
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Revenue 10,552,438 10,738,909 (1.7)%
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Net income (loss) 82,806 297,684 (72.1)%
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Basic and diluted income (loss) per
share 0.01 0.02 (50.0)%
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EBITDA (1) 581,388 804,622 (26.7)%
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EBITDA as a % of sales 5.5% 7.5% (2.0)%
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Weighted average common shares
outstanding 15,190,403 15,185,458
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1. EBITDA represents earnings before interest, taxes, depreciation,
amortization, and stock based compensation. Please review the Serenic
Management Discussion and Analysis for the fiscal year ended February
28, 2011 for more information.
Quarter Highlights
-- Serenic posted a strong finish in Q4 to the 2011 year as compared to the
previous year. Revenue increased by $646,347 or 26.4%, due to a 70.5%
increase in new software license sales in Q4 year over year. In
addition, there was a 14.1% increase in recurring maintenance revenue
resulting from a larger client base and high retention rates of those
clients. Client services sales declined by 9.6% in the quarter.
-- Lower expenses were recorded in the current quarter primarily due to
reduced amortization expense and the capitalization of development costs
pertaining to BudgetVision, the newest module developed for the Serenic
Navigator ERP software suite. Higher compensation costs were incurred in
Q4 this year over last, due to wage and benefit enhancements that were
implemented in the past year to remain competitive. The foreign exchange
loss increased because of the strengthening Canadian dollar relative to
the U.S. dollar and income tax expense increased due to profitability in
the quarter.
-- The increase in revenue and gross profit coupled with the reduction in
expenses resulted in a $564,183 increase in net income to $409,923 in
Q4, 2011. Due to the increase in net income, EBITDA increased to
$557,400 in sharp contrast to the EBITDA loss of $41,373 in the
comparable period last year.
Fiscal 2011 Corporate Highlights
-- Serenic continued to make significant progress in becoming a major
global provider of financial software applications to not-for-profit and
international non-governmental organizations. New reseller partner
additions announced in Fiscal 2011 included two UK based organizations,
Touch Stone and Probitas, and the Netherlands based Cherry-T
organization. New customer additions occurred in North America, Africa,
and Europe, and included several high profile organizations such as
American Refugee Committee, Mercy Corps, Denver Mental Health Center and
Human Rights Watch.
-- We continued to secure future opportunities by rolling out BudgetVision,
a new product that enhances the Serenic Navigator software suite. We
also released a new software-as-a-service ("SaaS") or cloud computing
version of our Navigator application, which accommodates entry into a
large new market that we have not historically been able to serve. These
developments all contribute to creating greater value for the Company
over time, which is ultimately expected to benefit all stakeholders.
-- Serenic received, as in previous years, several awards of distinction,
including appointments again to Microsoft's Inner Circle and President's
Clubs for outstanding dedication to customer service through the
delivery of innovative business solutions, and recognition as one of the
top growth companies identified by Alberta Venture Magazine's 2011 Fast
Growth 50 List.
-- Several alternatives to maximize shareholder value were investigated and
considered during Fiscal 2011 but all proposals were rejected because
management believes they did not reflect adequate fair value for Serenic
shareholders. Initiatives in this regard will continue.
-- Despite the US dollar devaluing by nearly 8% against the Canadian dollar
(our reporting currency) during Fiscal 2011, the Company operated
profitably, generated positive EBITDA and increased cash which exceeded
$4.1 million at fiscal year-end.
Fiscal 2011 Financial Highlights
-- Revenue was similar to last year, despite the 7.1 percent decrease in
the U.S. to Canadian foreign exchange rate which negatively impacted the
Company, as nearly all of our revenue is derived in U.S. dollars. Had
the foreign exchange rate remained constant from last year, revenue
would have been approximately $11,357,000 in Canadian dollars, and would
have represented a year over year increase of $618,000 or 5.8%.
-- Software license sales increased year over year, including international
sales which accounted for 19% of total license revenue in Fiscal 2011.
Revenue from software maintenance contracts increased, as did training
revenues. Client services revenues did not increase year over year
primarily due to a temporary stoppage on a large implementation contract
being performed by one of our reseller partners.
-- Serenic generated more gross profit this year than last, as gross profit
increased from $7,562,573 or 70.4% of sales last year, to $7,820,614 or
74.1% of sales this year. The higher revenues and a shift in the sales
mix to more profitable revenue components accounted for this increase.
-- Expenses were $377,098 higher this year, totalling $7,614,558 versus
$7,237,460 last year, due to higher staff compensation, marketing and
administrative costs which were somewhat offset by a reduction in
amortization expense. As previously noted, the Company developed a new
product, BudgetVision, and the reduction in total expense due to
capitalization of development costs was $137,995 less than in the prior
year.
-- The higher gross profit this year was offset by higher expenses and
resulted in income before tax of $136,108 this year, nearly the same as
last year's figure of $142,433. With income tax expense this year of
$53,302 and an income tax recovery last year of $155,251, reported net
income this year was $82,806, versus $297,684 recorded for last year.
EBITDA of $581,388 was recorded for the current year, versus $804,622
for last year.
-- The Company continues to operate on a positive cash basis. At year-end,
our cash balances exceeded $4.1 million, a healthy increase of $683,699
over the prior year.
Please refer to the latest financial statements and MD&A
filed on www.sedar.com for full financial analysis and details.
Outlook
Serenic's management continues to believe the outlook remains
positive. The strategy for Fiscal 2012 is to continue organic
growth of core operations through prudent re-investment of our
resources, to maintain EBITDA positive results as we grow our
business and to continue to explore and pursue scenarios to
maximize value for our shareholders beyond what organic growth
would produce.
From an operational perspective, this will entail continued
pursuit of new business through our traditional reseller and direct
channel business models, accelerating activities that pertain to
international markets, and aggressive new campaigns to market our
SaaS product, Navigator On-line. We have also enacted an internal
initiative termed "The Year of the Customer", which involves
revamping current processes and systems throughout the company in
an effort to better support and serve our customers and partners
and to ensure their ongoing satisfaction and loyalty.
From a corporate development focus, we will continue exploration
and pursuit of various strategic opportunities to maximize
shareholder value, including but not limited to, a capital
structure review, strategic partnerships, and/or merger and
acquisition scenarios. Management strongly believes that the
current market capitalization of the Company does not adequately
reflect Serenic's fair value and is determined to take judicious
action that would best serve the interests of shareholders to
rectify this situation, as soon as practical.
With $4.1 million of cash on hand at Fiscal 2011 year end and no
long term debt, the Company is adequately financed to operate as
anticipated. The management team is excited and committed to
achieve the objectives as stated, and we anticipate another
fruitful year of advancement for the Company.
About Serenic Corporation
Serenic Corporation publishes mission-critical software products
for not-for-profits (NFP), educational institutions and
governments. The Company's products are based on leading
application and technology platforms from Microsoft, including
Dynamics NAV, SQL Server, and .NET, and are distributed in North
America and internationally through value-added resellers and a
direct sales organization. Serenic Corporation is the exclusive
developer of human resource management and payroll products for
Microsoft Dynamics NAV ERP users in North America. Serenic has
offices in Edmonton, Alberta and Denver, Colorado and staff located
throughout the USA.
ON BEHALF OF THE BOARD OF DIRECTORS
Dwayne Kushniruk, Chairman
SERENIC CORPORATION
Forward Looking Statements
Certain statements contained in this press release, including
statements which may contain words such as "could", "should",
"expect", "anticipate", "believe", "will", and similar expressions
and statements relating to matters that are not historical facts,
are forward looking statements. Such forward looking statements
involve known and unknown risks and uncertainties which may cause
the actual results, performances or achievements of Serenic
Corporation to be materially different from any future results,
performances or achievements expressed or implied by such forward
looking statements. Such factors include, but are not limited to,
software industry risks, general business risks, foreign currency
risks, economic dependence risks, and credit risks.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Contacts: Serenic Corporation Dwayne Kushniruk Chairman
1-877-426-5385 x509 dkushniruk@serenic.com Serenic Corporation Paul
Johnston CFO 1-877-426-5385 x509 pjohnston@serenic.com Cantech
Communications Investor Relations Nick Waddell Toll free: (877)
737-3642 x144 ir@serenic.com
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