Cyberplex Inc.
TSX : CX

Cyberplex Inc.

August 09, 2012 16:36 ET

Cyberplex Reports Second Quarter 2012 Results

TORONTO, ONTARIO--(Marketwire - Aug. 9, 2012) - Cyberplex Inc. (TSX:CX) a leader in audience targeting and customer acquisition strategies today announced its financial results for the second quarter ended June 30, 2012. Total revenue from continuing operations for the quarter was $3.9 million, an increase from the $2.8 million recorded in the same quarter of 2011, and adjusted EBITDA loss for the quarter was approximately $699,000 as compared to a loss of $822,000 in the same period of 2011. Net income for the quarter was $5.2 million as compared to a net loss of $2.0 million for the same quarter of 2011. Included in net income for the quarter ended June 30, 2012 is $6.3 million of income from discontinued operations (See 'Discontinued Operations' below), primarily related to the gain on the sale of Tsavo Media ("Tsavo"). The loss from continuing operations for the period was $1.1 million compared to a loss of $822,000 in the same period a year ago.

Results for the Second Quarter ended June 30, 2012

  • At June 30th the Company cash on hand of $6.2 million;
  • The Company generated revenue of $3.9 million from continuing operations, a 39% increase from the $2.8 million recorded in the previous quarter;
  • Adjusted EBITDA loss from continuing operations for the quarter was $699,000, as compared to $822,000 in the same period of 2011.

Discontinued operations:

On April 24, 2012, the Company sold Tsavo as part of a series of transactions valued at approximately $33 million. The Company reclassified the results of Tsavo to discontinued operations for financial reporting purposes, isolating the Tsavo operating results for the three and six month periods ended June 30, 2012 and 2011 from the remaining continuing operations of Cyberplex. Income for the quarter ended June 30 from discontinued operations of $6.3 million consisted of a gain on sale of Tsavo of $6.3 million and offset by a loss for the period of $25,000 from Tsavo. In connection with the sale, Jeffery Collins is expected to transition from his position as CFO of the Company on or about September 30, 2012.

"Although we still have a lot of work ahead of us, the results this quarter show that our strategic initiatives are beginning to gain traction. With the sale of Tsavo behind us, and top line growth both sequentially and relative to last year, we believe that we can now focus on building our business and delivering quality results to our clients," said Geoffrey Rotstein, President and CEO of Cyberplex.

Normal Course Issuer Bid:

On April 24, 2012, the Company announced a NCIB under which it could purchase up to 11,913,232 of its common shares, representing approximately 10% of the "public float" of common shares, commencing on May 14, 2012 for a period of one year. As of the date of filing the Company has repurchased and cancelled 165,442 of its common shares under the NCIB.

Non-IFRS Financial Measures

This press release includes a discussion of "Adjusted EBITDA," which is a non-IFRS financial measure. The Company defines Adjusted EBITDA as net loss from operations before; (a) depreciation of property and equipment and amortization of intangible assets; (b) stock-based compensation expense, (c) restructuring and acquisition costs, (d) Impairments of goodwill and intangible assets and other items, net. Management uses Adjusted EBITDA as a measure of the Company's operating performance because it provides information related to the Company's ability to provide operating cash flows for acquisitions, capital expenditures and working capital requirements. The Company also believes that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in its industry.

The non-IFRS financial measure is used in addition to and in conjunction with results presented in accordance with the Company's consolidated financial statements prepared in accordance with IFRS and should not be relied upon to the exclusion of IFRS financial measures. Management strongly encourages investors to review the Company's consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-IFRS financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-IFRS financial measures having the same or similar names. In addition, the Company expects to continue to incur expenses similar to the non-IFRS adjustments described above, and exclusion of these items from the Company's non-IFRS measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring.

The table below reconciles net loss from continuing operations and Adjusted EBITDA for the periods presented:

Three months ended June Six months ended June 30,
(In thousands of Canadian dollars) 2012 2011 2012 2011
Net loss from operations $ (1,041 ) $ (1,446 ) $ (2,214 ) $ (3,192 )
Add:
Depreciation of property and equipment 66 97 151 190
Amortization of intangible assets 278 499 554 1,001
Restructuring expenses - - - 50
Stock based compensation (2 ) 28 (15 ) 97
Adjusted EBITDA $ (699 ) $ (822 ) $ (1,524 ) $ (1,854 )

About Cyberplex

Cyberplex Inc. (www.cyberplex.com) is a North American leader in audience targeting and customer acquisition strategies. The Company, through its subsidiaries, connects advertisers to their most relevant online customers and prospects. Cyberplex delivers targeted, high quality results through online, mobile and social initiatives that improve advertiser ROI, monetize the value of online properties, and build loyal online audiences.

Forward-Looking Statements

This news release may contain forward-looking statements that are based on management's current expectations and are subject to known and unknown uncertainties and risks, which could cause actual results to differ materially from those contemplated or implied by such forward- looking statements. Cyberplex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.

Cyberplex Inc.
Unaudited Interim Condensed Consolidated Statements of Financial Position
(In thousands of Canadian dollars)
June 30, 2012 and December 31, 2011
June 30, 2012 December 31, 2011
Assets
Current assets:
Cash and cash equivalents $ 6,196 $ 4,050
Accounts receivable 2,849 8,769
Income taxes recoverable - 31
Other current assets 555 6,907
9,600 19,757
Non-current assets:
Restricted cash - 2,357
Property and equipment 317 1,998
Intangible assets 3,558 22,069
Goodwill 365 365
4,240 26,789
Total assets $ 13,840 $ 46,546
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 2,996 $ 13,707
Current portion of loans and borrowings 67 4,697
Current portion of deferred lease inducements 63 71
Deferred revenue 572 498
Income taxes payable - 348
3,698 19,321
Non-current liabilities:
Loans and borrowings 95 20,836
Deferred lease inducements 12 114
Deferred tax liabilities 493 603
600 21,553
Shareholders' Equity 9,542 5,672
Total liabilities and Shareholders' equity $ 13,840 $ 46,546
Cyberplex Inc.
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands of Canadian dollars, except per share amounts)
Three and six months ended June 30, 2012 and 2011

Three months ended
June 30,
Six months ended
June 30,
2012 2011 2012 2011
Continued operations:
Revenue $ 3,890 $ 2,797 $ 7,422 $ 6,194
Expenses:
Publishing and advertising costs 2,357 1,509 4,337 3,534
Employee compensation and benefits 1,301 1,390 2,759 3,102
Other operating expenses 929 748 1,835 1,509
Depreciation of property and equipment 66 97 151 190
Amortization of intangible assets 278 499 554 1,001
Restructuring costs - - - 50
4,931 4,243 9,636 9,386
Loss from operations (1,041 ) (1,446 ) (2,214 ) (3,192 )
Finance income (27 ) (567 ) (27 ) (571 )
Finance cost 214 8 246 74
Loss before income taxes (1,228 ) (887 ) (2,433 ) (2,695 )
Income tax recovery:
Current (52 ) - (52 ) -
Deferred (54 ) (130 ) (109 ) (260 )
Loss for the period from continuing operations (1,122 ) (757 ) (2,272 ) (2,435 )
Discontinued Operations:
Income (loss) for the period from
discontinued operations, net of tax of nil 6,324 (1,274 ) 4,076 (3,190 )
Income (loss) for the period 5,202 (2,031 ) 1,804 (5,625 )
Other comprehensive income (loss):
Net change in fair value of
available-for-sale financial assets - 774 - 782
Amount reclassified to income - (566 ) - (566 )
Foreign currency translation
adjustments to equity 1,314 (62 ) 1,213 (361 )
Other comprehensive income (loss)
for the period, net of tax 1,314 146 1,213 (145 )
Total comprehensive income (loss)
for the period $ 6,516 $ (1,885 ) $ 3,017 $ (5,770 )
Income (loss) per share:
Basic $ 0.04 $ (0.02 ) $ 0.01 $ (0.04 )
Diluted 0.04 (0.02 ) 0.01 (0.04 )
Loss per share from continuing
operations:
Basic (0.01 ) (0.01 ) (0.02 ) (0.02 )
Diluted (0.01 ) (0.01 ) (0.02 ) (0.02 )
Cyberplex Inc.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
Six months ended June 30, 2012 and 2011
2012 2011
Cash flows from operating activities:
Income (loss) for the periods $ 1,804 $ (5,625 )
Adjustments to reconcile net loss to net cash flows from operating activities:




Depreciation of property and equipment 418 718
Amortization of intangible assets 2,727 4,383
Amortization of deferred lease inducements (45 ) (58 )
Share-based payments (2 ) 246
Foreign exchange gain (34 ) (176 )
Finance cost, net 237 1,237
Deferred income tax recovery (109 ) (260 )
Gain on sale of Tsavo (6,349 ) -
Restructuring costs 221 -
Change in non-cash operating working capital (2,961 ) 2,003
Cash generated from operating activities (4,093 ) 2,468
Income taxes received (paid) 31 (196 )
Net cash from (used in) operating activities (4,062 ) 2,272
Cash flows from financing activities:
Proceeds from bank operating facility, net - 200
Repurchase of common shares under NCIB (10 ) -
Repayment of promissory note (100 ) -
Repayment of term loans - (2,176 )
Repayment of finance lease (30 ) (5 )
Interest paid (272 ) (818 )
Net cash used in financing activities (412 ) (2,799 )
Cash flows from investing activities:
Sale of short-term investments - 1,392
Interest income received - 24
Proceeds from sale of available-for-sale investments 300 676
Acquisition of EQADS, net of cash acquired - (100 )
Decrease in restricted cash and short-term investments 201 741
Proceeds on sale of Tsavo, net of cash disposed of 6,293 -
Additions to property and equipment (208 ) (319 )
Additions to intangible assets - (17 )
Net cash from investing activities 6,586 2,397
Foreign exchange gain on cash held in foreign currency 34 176
Increase in cash and cash equivalents 2,146 2,046
Cash and cash equivalents, beginning of period 4,050 5,192
Cash and cash equivalents, end of period $ 6,196 $ 7,238

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