MARKHAM, ONTARIO--(Marketwire - Aug. 21, 2012) - VIQ Solutions Inc. ("VIQ Solutions" or the "Corporation") (TSX VENTURE:VQS), a world leader in computer-based digital audio and video capture and management, today reported its financial results for the three and six month periods ended June 30, 2012. Results are reported in Canadian dollars and are prepared in accordance with International Financial Reporting Standards ("IFRS").
"While revenue from computer products and services did not meet expectations this quarter, we continue to see a vibrant market for our products and services," said David Outhwaite, President and Chief Executive Officer of VIQ Solutions. "Market activity continues to grow on a global basis in the digital media capture and management industry and we are working to convert these market opportunities into sustainable revenue growth."
Financial Highlights
- Revenue was $3.7 million and $7.7 million for the three and six month periods ended June 30, 2012 as compared to $3.8 million and $8.2 million for the same periods in 2011, representing a decrease in revenue 3% and 6% respectively. The Corporation earned approximately $1.5 million of software revenue from one contract in the first quarter of 2011 in connection with the national rollout in the United Kingdom;
- Revenue from our transcription and recording services business unit was $3.3 million and $6.5 million for the three and six month periods ended June 30, 2012, as compared to $3.2 million and $5.9 million for the same periods in 2011 representing an increase of 3% and 11% respectively, due to an increase in business activity from both of our transcription businesses;
- Selling and administrative expenses were $1.4 million and $2.8 million for the three and six month periods ended June 30, 2012 as compared to $1.4 million and $2.7 million for the same periods in 2011 as the Corporation continues to focus its selling efforts on global enterprise software contracts;
- EBITDA loss for the three and six month periods ended June 30, 2012 was $189,218 and $15,699 as compared to $134,134 and an EBITDA gain of $910,143 for the same periods in 2011;
- Net loss for the three and six month periods ended June 30, 2012 was $246,414 and $132,511 as compared to $237,684 and a net income of $693,145 for the same periods in 2011; and
- Cash flow from operating activities was $115,078 and $4,822 for the three and six month periods ended June 30, 2012 as compared to $1,266,968 and $799,841 for the three and six month periods ended June 30, 2011.
Notes
1. EBITDA is a non-IFRS earnings measure which does not have any standardized meaning prescribed by IFRS and therefore may not be comparable to EBITDA presented by other companies. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. This measure is important to management since it is used by potential investors to evaluate the Corporation's operating performance and ability to incur and service debt, and as a valuation metric. Investors are cautioned that this non-IFRS financial measure should not be construed as an alternative to other measures of financial performance calculated in accordance with IFRS.
Additional Information
The unaudited second quarter 2012 interim consolidated financial statements and results of operations and Management's Discussion and Analysis of Results and Financial Condition for the three and six month periods ended June 30, 2012 will be posted on VIQ Solutions' website (under Investor Relations) at www.viqsolutions.com and on SEDAR's website at www.sedar.com. The financial information included in this release is qualified in its entirety and should be read together with the unaudited second quarter 2012 interim financial statements and the audited consolidated financial statements for the year ended December 31, 2011, including the notes thereto.
About VIQ Solutions Inc.
VIQ Solutions is a global leader in computer-based digital audio and video capture and management. We develop software solutions that capture, digitize, and compress audio and video data, which is securely stored in a multi-tiered server system where it is easily searchable and shareable. Our innovative media processor technology allows users to remotely control audio-video capture in multiple locations from a single satellite location, allowing large-scale and complex installations to be managed efficiently by fewer resources. VIQ Solutions' technologies are installed in courts, legislative assemblies, law enforcement and hearing rooms around the world.
Forward-looking Statements
This release contains forward-looking statements and other statements concerning the Corporation's objectives and strategies and management's beliefs, plans and intentions about our achievements, goals, performance and other future events. These statements involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this press release, the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "will," "would" and similar expressions are intended to identify forward-looking statements. Such statements reflect VIQ Solutions' current views with respect to future events and are subject to such risks and uncertainties. Many factors could cause our actual results to differ materially from the statements made due to a number of factors including risks related to our ability to successfully execute our business plan which includes our revenue growth, our liquidity, our operating results, our technology and products. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected. VIQ Solutions does not intend and does not assume any obligation to update these forward- looking statements.
| VIQ Solutions Inc. | ||||||||
| Condensed Consolidated Interim Balance Sheets | ||||||||
| (Expressed in Canadian dollars) | ||||||||
| (Unaudited) | ||||||||
| June 30, 2012 | December 31, 2011 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 1,645,290 | $ | 1,646,138 | ||||
| Trade and other receivables | 1,528,381 | 1,330,474 | ||||||
| Inventories | 6,954 | 7,025 | ||||||
| Prepaid expenses | 133,242 | 123,228 | ||||||
| 3,313,867 | 3,106,865 | |||||||
| Non-current assets | ||||||||
| Restricted cash | 156,569 | 151,215 | ||||||
| Property and equipment | 700,838 | 754,397 | ||||||
| Goodwill | 1,621,981 | 1,621,395 | ||||||
| Deferred tax assets | 260,175 | 260,001 | ||||||
| $ | 6,053,430 | $ | 5,893,873 | |||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Trade and other payables | $ | 1,088,934 | $ | 951,687 | ||||
| Provisions | 586,875 | 584,870 | ||||||
| Short-term debt | 75,000 | 75,000 | ||||||
| Unearned revenue | 224,251 | 187,179 | ||||||
| Deferred lease incentives | 21,780 | 21,766 | ||||||
| Current portion of obligations under finance lease | 47,582 | 59,266 | ||||||
| Current portion of long-term debt | 22,692 | 22,692 | ||||||
| 2,067,114 | 1,902,460 | |||||||
| Non-current liabilities | ||||||||
| Provisions | 189,964 | 165,974 | ||||||
| Deferred lease incentives | 40,108 | 50,964 | ||||||
| Obligations under finance lease | 31,844 | 45,528 | ||||||
| Long-term debt | 59,408 | 70,754 | ||||||
| Total liabilities | 2,388,438 | 2,235,680 | ||||||
| Equity | ||||||||
| Capital stock | 11,578,213 | 11,438,947 | ||||||
| Contributed surplus | 1,783,704 | 1,781,433 | ||||||
| Accumulated other comprehensive income | 156,733 | 158,960 | ||||||
| Deficit | (9,853,658 | ) | (9,721,147 | ) | ||||
| 3,664,992 | 3,658,193 | |||||||
| Total equity and liabilities | $ | 6,053,430 | $ | 5,893,873 | ||||
| VIQ Solutions Inc. | |||||||||||||||||
| Condensed Consolidated Interim Statements of Comprehensive Income and Loss | |||||||||||||||||
| (Expressed in Canadian dollars) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Three months ended June 30 | Six months ended June 30 | ||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||
| Revenue | $ | 3,697,996 | $ | 3,809,156 | $ | 7,667,210 | $ | 8,183,877 | |||||||||
| Cost of sales | 2,316,915 | 2,413,944 | 4,603,504 | 4,270,107 | |||||||||||||
| Gross profit | 1,381,081 | 1,395,212 | 3,063,706 | 3,913,770 | |||||||||||||
| Expenses | |||||||||||||||||
| Selling, general and administrative expenses | 1,449,469 | 1,401,815 | 2,841,223 | 2,733,747 | |||||||||||||
| Research and development expenses | 178,987 | 184,700 | 361,515 | 390,235 | |||||||||||||
| 1,628,456 | 1,586,515 | 3,202,738 | 3,123,982 | ||||||||||||||
| Income (loss) from operations | (247,375 | ) | (191,303 | ) | (139,032 | ) | 789,788 | ||||||||||
| Interest income | 5,943 | 3,671 | 15,367 | 9,819 | |||||||||||||
| Interest expense | (6,557 | ) | (38,920 | ) | (15,123 | ) | (88,424 | ) | |||||||||
| Foreign exchange gain (loss) | 1,575 | (11,132 | ) | 6,277 | (18,038 | ) | |||||||||||
| Net finance income (loss) | $ | 961 | $ | (46,381 | ) | $ | 6,521 | $ | (96,643 | ) | |||||||
| Net income (loss) for the period | $ | (246,414 | ) | $ | (237,684 | ) | $ | (132,511 | ) | $ | 693,145 | ||||||
| Exchange differences on translating foreign operations | 13,773 | 66,230 | (2,227 | ) | 44,952 | ||||||||||||
| Comprehensive income (loss) for the period | $ | (232,641 | ) | $ | (171,454 | ) | $ | (134,738 | ) | $ | 738,097 | ||||||
| Net income (loss) per share | |||||||||||||||||
| Basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | 0.01 | ||||||
| Weighted average number of common shares outstanding - basic | 90,957,000 | 88,168,626 | 90,797,769 | 87,851,671 | |||||||||||||
| Weighted average number of common shares outstanding - diluted | 90,957,000 | 88,168,626 | 90,797,769 | 91,597,250 | |||||||||||||
| VIQ Solutions Inc. | |||||||||||||||||
| Condensed Consolidated Interim Statements of Cash Flows | |||||||||||||||||
| (Expressed in Canadian dollars) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Three months ended June 30 | Six months ended June 30 | ||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||
| Cash provided by (used in): | |||||||||||||||||
| Operating activities | |||||||||||||||||
| Net income (loss) for the period | $ | (246,414 | ) | $ | (237,684 | ) | $ | (132,511 | ) | $ | 693,145 | ||||||
| Items not affecting cash: | |||||||||||||||||
| Depreciation | 50,639 | 64,630 | 101,689 | 128,574 | |||||||||||||
| Stock-based compensation | 17,251 | 36,128 | 60,537 | 150,942 | |||||||||||||
| Provisions | 15,426 | (10,802 | ) | 23,990 | 3,848 | ||||||||||||
| Interest accretion on bridge loans | - | 2,106 | - | 4,190 | |||||||||||||
| Amortization of deferred lease incentive | (4,974 | ) | (2,984 | ) | (10,842 | ) | (9,280 | ) | |||||||||
| Unrealized foreign exchange loss (gain) | (1,999 | ) | 37,285 | (6,515 | ) | 42,564 | |||||||||||
| Gain on sale of property and equipment | - | (4,773 | ) | - | (4,773 | ) | |||||||||||
| Changes in non-cash operating working capital | 285,149 | 1,383,062 | (31,526 | ) | (209,369 | ) | |||||||||||
| Cash from operating activities | 115,078 | 1,266,968 | 4,822 | 799,841 | |||||||||||||
| Investing activities | |||||||||||||||||
| Purchase of property and equipment | (25,005 | ) | (18,416 | ) | (40,442 | ) | (53,959 | ) | |||||||||
| Increase in restricted cash | (5,250 | ) | (5,089 | ) | (5,250 | ) | (5,089 | ) | |||||||||
| Cash used in investing activities | (30,255 | ) | (23,505 | ) | (45,692 | ) | (59,048 | ) | |||||||||
| Financing activities | |||||||||||||||||
| Advances in short-term debt | - | - | - | 575,000 | |||||||||||||
| Repayment of short-term debt | - | - | - | (1,115,000 | ) | ||||||||||||
| Repayment of long-term debt | (5,673 | ) | (5,673 | ) | (11,346 | ) | (11,346 | ) | |||||||||
| Proceeds from stock options exercised for cash | - | 2,000 | 81,000 | 2,827 | |||||||||||||
| Proceeds from private placement, net of issuance costs | - | - | - | 1,989,198 | |||||||||||||
| Finance lease payments | (15,997 | ) | (19,685 | ) | (33,152 | ) | (39,852 | ) | |||||||||
| Cash provided by (used in) financing activities | (21,670 | ) | (23,358 | ) | 36,502 | 1,400,827 | |||||||||||
| Net increase (decrease) in cash during the period | 63,153 | 1,220,105 | (4,368 | ) | 2,141,620 | ||||||||||||
| Cash, beginning of period | 1,577,303 | 1,295,167 | 1,646,138 | 381,544 | |||||||||||||
| Effect of exchange rate changes on cash | 4,834 | 15,577 | 3,520 | 7,685 | |||||||||||||
| Cash, end of period | $ | 1,645,290 | $ | 2,530,849 | $ | 1,645,290 | $ | 2,530,849 | |||||||||
Contact Information:
David Outhwaite
President & CEO
(905) 948-8266 ext. 250
douthwaite@viqsolutions.com
VIQ Solutions Inc.
Karen Hersh
Chief Financial Officer
(905) 948- 8266 ext. 240
khersh@viqsolutions.com
www.viqsolutions.com