ProntoForms Corporation
TSX VENTURE : PFM

August 06, 2013 08:55 ET

ProntoForms Corporation Announces Q2 2013 Results

Highlights:

- Q2'13 recurring subscription revenue growth of 80% over Q2'12

- Liquidity strengthened through sale of non-core patents for net proceeds of $575,000

- Positive net income arising from one-time other income items

OTTAWA, ONTARIO--(Marketwired - Aug. 6, 2013) - ProntoForms Corporation (TSX VENTURE:PFM) ("ProntoForms" or "the Company"), (formerly, TrueContext Mobile Solutions Corporation) a mobile data solutions company, today announced results for its three and six months ended June 30, 2013. All amounts are stated in Canadian dollars unless otherwise noted.

Operating Results for the Three Months Ended June 30, 2013

The Company had Q2 2013 net income of $535,485 compared to a Q1 2013 net loss of $356,453 and a comparable Q2 2012 net loss of $564,897.

  • The shift to profitability arose primarily from other income of approximately $875,000 realized through the sale of certain patents and a reduction in deferred revenue due to the reversal of the underlying obligation. The other income items are one-time events and will not impact future periods. Excluding the one-time other income items, the Company would have presented a net loss of $339,585 in the three month period ended June 30, 2013, reflecting a pro forma quarter over quarter improvement of $16,868 from the Q12013 net loss of $356,453 and a year over year improvement of $225,312 from the comparable Q22012 net loss of $564,897.

Total revenue for the second quarter of 2013 represented an increase of approximately 7% over the 2013 first quarter and 61% growth over the comparable second quarter of 2012.

Revenue details are as follows:

Three months ended
June 30, 2013 March 31, 2013 June 30, 2012 Increase
over Q1'13
Increase
over Q2'12
Subscription revenue $ 750,140 $ 735,838 $ 416,931 1.9 % 79.9 %
Services revenue $ 204,912 $ 157,175 $ 176,715 30.4 % 16.0 %
Total revenue $ 955,052 $ 893,013 $ 593,646 6.9 % 60.9 %
  • Subscription revenue growth for the first quarter of 2013 was unusually high as the Company realized approximately $90,000 related to subscription usage that occurred in prior periods for which agreement was received from a large reseller in the first quarter of 2013. See below table for a comparison of sequential growth rates for the last six quarters showing actual growth and adjusted growth excluding the Q1 2013 $90,000 revenue related to past usage:
2012 2013
Quarter over Quarter Growth Rates - actual Q1 Q2 Q3 Q4 Q1 Q2
Total revenue 10.5 % 6.3 % 6.4 % 11.7 % 26.7 % 6.9 %
Subscription revenue 6.8 % 16.2 % 18.7 % 18.2 % 25.8 % 1.9 %
Operator subscription revenue 15.3 % 11.9 % 18.9 % 26.9 % 33.4 % -6.9 %
Quarter over Quarter Growth Rates - adjusted
Total revenue 10.5 % 6.3 % 6.4 % 11.7 % 13.9 % 18.9 %
Subscription revenue 6.8 % 16.2 % 18.7 % 18.2 % 10.4 % 16.1 %
Operator subscription revenue 15.3 % 11.9 % 18.9 % 26.9 % 9.0 % 14.0 %
  • Services revenue was $204,912 for the 2013 second quarter compared to $157,175 in the first quarter of 2013 and $176,715 for the comparable second quarter of 2012. The 2013 second quarter professional services revenue included approximately $131,000 from large contracts with major operators and smartphone vendors compared to approximately $128,000 in the 2013 first quarter and $135,000 in the second quarter of 2012. Revenue from these larger contracts is recognized as the services are performed and is subject to variability from the availability of contracts from customers and availability of resources to perform the work.

As at June 30, 2013, the Company had cash and cash equivalents of $1,034,176 and net working capital of $1,027,877.

"I am pleased to be reporting the financial results under our new name of ProntoForms Corporation. While there was a shift to positive earnings, I should explain that it was mainly driven by the one-time sale of company owned noncore patents. Despite the earnings anomaly, we are moving towards sustainable profitability by balancing spending with strong subscriber and revenue growth. This has become an established and steady trend for the last several quarters, particularly for sales through our operator partners, while at the same time we have reduced our operating loss. The sale of patents provides us with the liquidity to continue our plan and enhance our opportunities for business growth," said Alvaro Pombo, Chief Executive Officer, ProntoForms.

Mr. Pombo added: "ProntoForms® continues to be a leading product in the marketplace and our relationships with top carriers and device vendors demonstrate the strategic value of the application within the carrier ecosystem. The ProntoForms product is deployed with more than 2,500 companies and the knowledge gained from helping these leading companies with their field business processes provides a real advantage in taking our business to the next level."

About ProntoForms® and ProntoForms Corporation

ProntoForms is a mobile workflow solution used by over 2,500 business customers to collect, receive and submit data in the field. Available for smartphones and tablets, the ProntoForms solution incorporates a mobile device App, a Web management portal to manage teams and data flow, and provides the ability to export or connect data to the back office or to popular cloud services.

ProntoForms Corporation, formerly TrueContext Mobile Solutions Corporation, has a powerful and proprietary patent portfolio, from which the ProntoForms mobile App and Web reporting portal have been developed. The company trades on the TSXV under the symbol PFM. ProntoForms is the registered trademark of ProntoForms Inc., a wholly-owned subsidiary of ProntoForms Corporation.

Certain information in this press release may constitute forward-looking information. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

There are a number of risk factors that could cause future results to differ materially from those described herein, including but not limited to the following: (i) there can be no assurance that the Company will earn any profits in the future or that profitability, if achieved, will be sustained; (ii) if the Company is not able to achieve profitability, it will require additional equity or debt financing, and there can be no assurances that the Company will be able to obtain additional financial resources on favourable commercial terms or at all; (iii) the Company's quarterly revenues and operating results may fluctuate, which may harm its results of operations; (iv) the loss of business from a major customer, operator or other reseller could reduce the Company's sales and harm its business and prospects; (v) a portion of the Company's sales are through operators and other resellers, and an adverse change in the Company's relationship with any of such operators or other resellers may result in decreased sales; (vi) the market for software as a service is at a relatively early stage of development, and if it does not develop or develops more slowly than expected, the Company's business will be harmed; (vii) the Company faces competition from other software solution providers, which may reduce its market share or limit the prices it can charge for its software solutions; (viii) a global economic downturn or market volatility may adversely affect our business and/or our ability to complete new financings; (ix) the business of the Company may be harmed if it does not continue to penetrate markets; (x) the success of the business depends on the Company's ability to develop new products and enhance its existing products; (xi) the Company's growth depends in part on the success of its strategic relationships with third parties;
(xii) the financial condition of third parties may adversely affect the Company; (xiii) the US dollar may fluctuate significantly compared to the Canadian dollar, causing reduced revenue and cash flow as most of our revenues are received in US dollars while most of our expenses are payable in Canadian dollars; (xiv) subscription services which produce the majority of the Company's revenue are hosted by a third party service for the Company and any interruption in service could harm its results of operations; (xv) the Company may be liable to its customers or third parties if it is unable to collect data or it otherwise loses data; (xvi) the Company may be liable for the handling of personal information; (xvii) intellectual property claims against the Company may be time consuming, costly to defend, and disruptive to the business; (xviii) the Company uses open source software in connection with its products which exposes it to uncertainty and potential liability; (xix) economic uncertainty and downturns in the software market may lead to decreases in the Company's revenue and margins; (xx) any significant changes in the technological paradigm utilized for building or delivering applications in Smartphone devices could harm the Company's business and prospects; and (xxi) if the Company loses any of its key personnel, its operations and business may suffer.
Please see "Risk Factors Affecting Future Results" in the Company's annual management discussion and analysis dated April 2, 2013 found at www.sedar.com for a more complete discussion of these and other risks. Readers are cautioned not to place undue reliance on forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

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