Advantex Marketing International Inc.
CSE : ADX
CSE : ADX.CN

Advantex Marketing International Inc.

November 21, 2016 16:01 ET

Advantex Announces Fiscal 2017 First Quarter Results

TORONTO, ONTARIO--(Marketwired - Nov. 21, 2016) - Advantex Marketing International Inc. (CSE:ADX)(CSE:ADX.CN)(CNSX:ADX), a specialist in marketing loyalty-reward programs, announced its results for the three months ended September 30, 2016.

The Company's business performance was stable for the Quarter, while it continues to seek growth funds through recapitalization, in order to take advantage of expansion opportunities.

Highlights of Fiscal 2017 First Quarter results are set out in the table(1). Additional details are available in the Consolidated Financial Statements and the Management Discussion and Analysis available under the Company's profile on www.sedar.com.

Fiscal 2017
First Quarter
Fiscal 2016
First Quarter
Change
$ $ $
Revenues $ 2,604,270 $ 2,995,254 $ (390,984 )
Direct expenses
Cost of cardholder rewards and marketing in connection with Company's merchant based loyalty programs $ 697,764 $ 744,419 $ (46,655 )
Expense for provision against delinquent accounts $ 179,594 $ 138,650 $ 40,944
Gross profit $ 1,726,912 $ 2,112,185 $ (385,273 )
Selling and General & Administrative expenses $ 1,398,251 $ 1,647,813 $ (249,562 )
Earnings from operations before depreciation, amortization and interest $ 328,661 $ 464,372 $ (135,711 )
Stated interest expense - loan payable, and debentures $ 338,994 $ 383,471 $ (44,477 )
Profit (Loss) from operations before depreciation, amortization and non cash interest $ (10,333 ) $ 80,901 $ (91,234 )
Depreciation, amortization and non-cash interest expense $ 139,072 $ 188,573 $ (49,501 )
Net loss and Comprehensive loss $ (149,405 ) $ (107,672 ) $ (41,733 )

(1) The tabulation is a non-GAAP presentation and is provided to assist readers in understanding the Company's financial performance. The information is extracted from consolidated financial statements for the three months ended September 30, 2016.

About Advantex:

Advantex provides specialized marketing programs that enable members of affinity groups to earn frequent-flyer miles and other loyalty rewards through purchases at participating merchants.

Through our partnerships with Aeroplan, Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Caesars Entertainment, we have contractual access to millions of consumers with above-average personal and household income. We also have partnerships with about 1,300 merchants in Canada and the US.

Advantex shares trade on the Canadian Securities Exchange under the symbol ADX. For more information, go to www.advantex.com.

Advantex Marketing International Inc.
Consolidated Statements of Financial Position (unaudited)
(expressed in Canadian dollars)
Note At
September 30,
2016
At
June 30,
2016
$ $
Assets
Current assets
Cash and cash equivalents $ 1,097,917 $ 658,678
Accounts receivable 213,134 425,402
Transaction credits 5 6,252,747 7,352,262
Inventory 6 39,351 39,914
Prepaid expenses and sundry assets 119,768 103,684
$ 7,722,917 $ 8,579,940
Non-current assets
Property, plant and equipment $ 104,882 $ 116,049
Intangible assets 52,243 119,921
$ 157,125 $ 235,970
Total assets $ 7,880,042 $ 8,815,910
Liabilities
Current liabilities
Loan payable 7 $ 4,808,293 $ 5,533,267
Accounts payable and accrued liabilities 3,435,262 3,556,978
12% Non-convertible debentures payable 8 5,159,000 5,098,773
$ 13,402,555 $ 14,189,018
Shareholders' deficiency
Share capital 9 $ 24,530,555 $ 24,530,555
Contributed surplus 4,090,382 4,090,382
Accumulated other comprehensive loss (47,383 ) (47,383 )
Deficit (34,096,067 ) (33,946,662 )
Total deficiency $ (5,522,513 ) $ (5,373,108 )
Total liabilities and deficiency $ 7,880,042 $ 8,815,910

Economic and Financial dependence (note 2 a), Going concern (note 2 b), Commitments and contingencies (note 12)

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 Ambrose
Advantex Marketing International Inc.
Consolidated Statements of Loss and Comprehensive Loss (unaudited)
For the three months ended September 30, 2016 and 2015
(expressed in Canadian dollars)
Note 2016 2015
$ $
Revenues 15 $ 2,604,270 $ 2,995,254
Direct expenses 14/15 877,358 883,069
1,726,912 2,112,185
Operating expenses
Selling and marketing 14/15 505,707 739,428
General and administrative 14/15 892,544 908,385
Earnings from operations before depreciation, amortization and interest 328,661 464,372
Interest expense:
Stated interest expense - loan payable, and debentures 7/8 338,994 383,471
Non-cash interest expense on debentures 8 60,227 57,466
(70,560 ) 23,435
Depreciation of property, plant and equipment, and amortization of intangible assets 78,845 131,107
Net loss and comprehensive loss $ (149,405 ) $ (107,672 )
Loss per share
Basic and Diluted 13 $ (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 Shareholders' Deficiency (unaudited)
For the three months ended September 30, 2016 and 2015
(expressed in Canadian dollars)
Class A
preference
shares
Common
shares
Contributed
surplus
Accumulated
other
comprehensive
loss
Deficit Total
$ $ $ $ $ $
Balance - July 1, 2015 $ 3,815 $ 24,526,740 $ 4,090,382 $ (47,383 ) $ (33,039,219 ) $ (4,465,665 )
Net loss and comprehensive loss - - - - (107,672 ) (107,672 )
Balance - September 30, 2015 $ 3,815 $ 24,526,740 $ 4,090,382 $ (47,383 ) $ (33,146,891 ) $ (4,573,337 )
Balance - July 1, 2016 $ 3,815 $ 24,526,740 $ 4,090,382 $ (47,383 ) $ (33,946,662 ) $ (5,373,108 )
Net loss and comprehensive loss - - - - (149,405 ) (149,405 )
Balance - September 30, 2016 $ 3,815 $ 24,526,740 $ 4,090,382 $ (47,383 ) $ (34,096,067 ) $ (5,522,513 )

The accompanying notes are an integral part of these consolidated financial statements.

Advantex Marketing International Inc.
Consolidated Statements of Cash Flow (unaudited)
For the three months ended September 30, 2016 and 2015
(expressed in Canadian dollars)
Note 2016 2015
$ $
Operational activities
Net loss for the period $ (149,405 ) $ (107,672 )
Adjustments for:
Depreciation of property, plant and equipment, and amortization of intangible assets 78,845 131,107
Accretion charge for debentures 8 60,227 57,466
(10,333 ) 80,901
Changes in items of working capital
Accounts receivable 212,268 32,057
Transaction credits 1,099,515 (887,519 )
Inventory 563 75,562
Prepaid expenses and sundry assets (16,084 ) (72,034 )
Accounts payable and accrued liabilities (121,716 ) (170,631 )
1,174,546 (1,022,565 )
Net cash provided by (used in) operating activities $ 1,164,213 $ (941,664 )
Investing activities
Purchase of property, plant and equipment, and intangible assets $ - $ (18,026 )
Net cash (used in) investing activities $ - $ (18,026 )
Financing activities
Utilization (Repayment) of loan payable 7 $ (724,974 ) $ 696,586
Net cash generated (used in) financing activities $ (724,974 ) $ 696,586
Increase (Decrease) in cash and cash equivalents during the period $ 439,239 $ (263,104 )
Cash and cash equivalents at beginning of the period 658,678 1,162,609
Cash and cash equivalents at end of the period $ 1,097,917 $ 899,505
Additional information
Interest paid $ 183,378 $ 227,429
For purposes of the cash flow statement, cash comprises
Cash $ 1,092,917 $ 894,505
Term deposits 5,000 5,000
$ 1,097,917 $ 899,505

The accompanying notes are an integral part of these consolidated financial statements.

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