Absolute Reports Fiscal 2019 Second Quarter Financial Results

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Feb 04, 2019 04:00 pm
VANCOUVER, British Columbia -- 

Absolute (TSX: ABT) (“Absolute” or the “Company”), the endpoint visibility and control company, today announced financial results for the three and six month periods ended December 31, 2018. All dollar figures are unaudited and stated in U.S. dollars, unless otherwise indicated.

“I am very pleased to have joined Absolute at such an exciting time for the company as well as in the broader endpoint security market,” said Christy Wyatt, Chief Executive Officer at Absolute. “Endpoint resilience is an enterprise requirement that Absolute is uniquely positioned to address together with our strategic OEM partners. Our platform enables our unique resilience and intelligence capabilities that span across vendors and platforms to hundreds of millions of devices. These capabilities position us well for continued innovation to deliver against this critical customer need through focused execution.”

Key Financial Metrics

  • Total revenue in Q2-F2019 was $24.4 million, representing a year-over-year increase of 5%. Year-to-date total revenue was $48.7 million, representing an increase of 5% over the prior year-to-date period.
  • Commercial recurring revenue in Q2-F2019 was $23.4 million, representing a year-over-year increase of 6%. Year-to-date commercial recurring revenue was $46.6 million, representing an increase of 6% over the prior year-to-date period.
  • The Annual Contract Value (“ACV”) Base at December 31, 2018, was $95.3 million, representing an increase of 6% year-over-year and 2% sequentially.
  • The Enterprise(2) sector portion of the ACV Base increased 12% year-over-year and was up 3% sequentially. Enterprise customers represented 53% of the ACV Base at December 31, 2018.
  • The Government(2) sector portion of the ACV Base increased 17% year-over-year and was up 4% sequentially. Government customers represented 12% of the ACV Base at December 31, 2018.
  • The Education(2) sector portion of the ACV Base decreased 4% from the prior year and increased 1% sequentially. Education customers represented 35% of the ACV Base at December 31, 2018.
  • Net ACV Retention from existing Absolute customers was 101% during Q2-F2019, compared with 100% in Q2-F2018.
  • Incremental ACV from New Customers was $1.0 million in Q2-F2019 compared to $1.1 million in Q2-F2018.
  • Adjusted EBITDA in Q2-F2019 was $4.5 million, or 18% of revenue, compared with $2.4 million, or 10% of revenue, in Q2-F2018. Year-to-date Adjusted EBITDA was $8.6 million, or 18% of revenue, compared with $3.7 million, or 8% of revenue, in the prior year-to-date period.
  • Cash generated from operating activities in Q2-F2019 was $1.9 million compared with $3.2 million in Q2-F2018. Year-to-date cash from operating activities was $5.9 million compared with $5.3 million in the prior year-to-date period.
  • Absolute paid a quarterly dividend of CAD$0.08 per common share during Q2-F2019.

Products and Organizational Developments

  • In November 2018, Christy Wyatt was appointed as Chief Executive Officer, and subsequently joined the Board of Directors. Ms. Wyatt has a long history of scaling high-growth technology companies. Ms. Wyatt began her career as a software engineer and rose through the executive leadership ranks at a number of globally recognized technology companies. She has been named one of Inc. magazine’s Top 50 Women Entrepreneurs in America, CEO of the Year by Information Security Global Excellence Awards, and one of Fierce Wireless’s Most Influential Women in Wireless.
  • In December 2018, we executed a site license agreement with one of the largest K-12 school districts in the U.S. to enforce safe and secure desktop, laptop and tablet usage amongst its students and staff.
  • In December 2018, we completed Application Persistence for Dell Data Guardian and Dell Endpoint Security Suite Enterprise (“ESSE”), enabling Dell endpoint applications for data protection, advanced threat prevention and encryption to remain present and resilient. Application Persistence, which uses Absolute’s patented Persistence technology, monitors the health of applications across a device ecosystem and remediates those that have been compromised.
  • In November 2018, we announced a new strategic partnership with VAIO Corporation to enhance endpoint security capabilities by integrating patented Absolute Persistence technology within the new VAIO Pro PA and VAIO A12 models. Together, VAIO and Absolute enable organizations to minimize risk and protect their data despite increasing mobility of remote workers and diminishing defense offered by the traditional network perimeter.
  • In December 2018, we completed a new GDPR Compliance report identifying sensitive GDPR endpoint data that automatically scans for identifiers from all 31 European Economic Area (“EEA”) countries – providing last mile assurance for any lost or stolen devices, where proving absence of a breach is critical in the first 72 hours.
  • In November 2018, the Absolute Reach Library was expanded with new query and remediation scripts, bringing the total number of scripts available to 44 at December 31, 2018. These scripts enable customers to further automate their endpoint management, hygiene, and vulnerability remediation across every endpoint, on and off the corporate network. The new scripts include automated workflows to conduct diagnostics across a fleet of endpoint devices, disable intrusive operating system processes, clear and restore tampered endpoint host files, reset administrative account passwords and modify administrative privileges.
  • During Q2-F2019, the Company’s Board of Directors was reduced in size to six members.

Summary of Key Financial Metrics

 

               
USD Millions, except per share data   Q2     YTD  
  F2019   F2018   Change   F2019   F2018   Change
Revenue    
Commercial recurring(3) $ 23.4 $ 22.1 6% $ 46.6 $ 43.8 6%
Other $ 1.0 $ 1.1 (8%) $ 2.1 $ 2.4 (9%)
Total $ 24.4 $ 23.2 5% $ 48.7 $ 46.2 5%
 
Adjusted EBITDA(1) $ 4.5 $ 2.4 88% $ 8.6 $ 3.7 135%
As a percentage of revenue 18% 10% 18% 8%
 
Net Income (Loss) $ 1.8 $ (0.3) 505% $ 3.0 $ (0.5) 613%
Per share (basic) $ 0.04 $ (0.01) $ 0.07 $ (0.01)
Per share (diluted) $ 0.04 $ (0.01) $ 0.07 $ (0.01)
 
Cash from operating activities $ 1.9 $ 3.2 (40%) $ 5.9 $ 5.3 13%
 
Dividends paid $ 2.4 $ 2.5 (3%) $ 4.9 $ 5.0 (2%)
Per share (CAD) $ 0.08 $ 0.08 - $ 0.16 $ 0.16 -
 
Cash, cash equivalents, and short-term investments $ 34.2 $ 33.4 2%
Total assets $ 90.2 $ 92.3 (2%)
Deferred revenue $ 131.7 $ 136.3 (3%)
 
Common shares outstanding     40.6     40.1   1%            
 

Notes:

  1. “Adjusted EBITDA” is used as a profitability measure. Please refer to the “Non-IFRS Measures” section of our Q2-F2019 MD&A for further discussion on this measure.
  2. In Q1-F2019, we modified the allocation of some customer accounts between industry verticals, primarily the allocation of some quasi-governmental organizations from the Enterprise vertical to the Government vertical, which was previously included in the Public vertical. This reallocation was applied retrospectively, and has resulted in a revision to previously reported ACV Base and ACV Base growth figures for those verticals in historical periods. Please refer to the “Annual Contract Value Base” section of our Q2-F2019 MD&A.
  3. Commercial recurring revenue represents revenue derived from Cloud Services (as defined in our Q2-F2019 MD&A) and recurring managed professional services, both of which are included as part of our ACV Base. Other revenue represents revenue derived from non-recurring professional services and ancillary product lines, including consumer products.

F2019 Corporate Outlook

The Company is updating its outlook for F2019 as follows:

  • The Company continues to expect revenue to be between $96.0 million and $99.0 million, representing 3% to 6% annual growth;
  • The Company is increasing its expectation for Adjusted EBITDA from between 14% and 17% of revenue to between 16% and 19% of revenue;
  • The Company continues to expect cash from operating activities to be between 10% and 14% of revenue; and
  • The Company continues to expect capital expenditures to be between $3.5 million and $4.0 million.

The foregoing expectations constitute forward-looking information and financial outlook and are qualified in their entirety by the cautionary statement below.

Quarterly Dividend

On January 21, 2019, the Company declared a quarterly dividend of CAD$0.08 per share on its common shares, payable in cash on February 27, 2019 to shareholders of record at the close of business on February 6, 2019.

Quarterly Filings

Management’s Discussion and Analysis (“MD&A”) and Interim Condensed Consolidated Financial Statements and the notes thereto for Q2-F2019 can be obtained today from Absolute’s corporate website at www.absolute.com. The documents will also be available at www.sedar.com.

Notice of Conference Call

Absolute will hold a conference call to discuss the Company’s Q2-F2019 results on Monday, February 4, 2019, at 5:00 p.m. ET. All interested parties can join the call by dialing 647-427-7450 or 888-231-8191. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until Monday, February 11, 2019, at midnight ET. To access the archived conference call, please dial 416-849-0833 or 1-855-859-2056 and enter the reservation code 7889928.

A live audio webcast of the conference call will be available at www.absolute.com and https://bit.ly/2RDIhBq. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. An archived replay of the webcast will be available on the Company’s website for 90 days.

Non-IFRS Measures and Definitions

Throughout this press release, the Company refers to a number of measures that the Company believes are meaningful in the assessment of the Company’s performance. All these metrics are nonstandard measures under International Financial Reporting Standards (“IFRS“), and are unlikely to be comparable to similarly titled measures reported by other companies. Readers are cautioned that the disclosure of these items is meant to add to, and not replace, the discussion of financial results or cash flows from operations as determined in accordance with IFRS. For a discussion of the purpose of these non-IFRS measures, please refer to the Company’s Q2-F2019 MD&A on SEDAR at www.sedar.com.

These measures, as well as their method of calculation or reconciliation to IFRS measures, are as follows:

1) ACV Base, Net ACV Retention and ACV from New Customers
As the majority of the Company’s customer contracts are sold under multiyear term licenses, there is a significant lag between the timing of the billing and the associated revenue recognition. As a result, the Company focuses on the aggregate annualized value of its subscriptions under contract, measured by Annual Contract Value, as an indicator of its future revenues.

The ACV Base measures the amount of recurring annual revenue Absolute will receive from its commercial customers under contract at a point in time, and therefore is an indicator of the Company’s future revenue streams. Net ACV Retention measures the percentage increase or decrease in the Commercial ACV Base at the end of a period for the customers that made up the Commercial ACV Base at the beginning of the same period. This metric provides insight into the effectiveness of Absolute’s customer retention and expansion functions. ACV from New Customers measures the addition to the Commercial ACV Base from sales to new commercial customers during the quarter.

We believe that increases in the amount of ACV from New Customers, and improvement in the Company’s Net ACV Retention, will grow our Commercial ACV Base and, in turn, our future revenues.

2) Adjusted EBITDA
Management believes that analyzing operating results exclusive of significant noncash items or items not controllable in the period provides a useful measure of the Company’s performance. The term “Adjusted EBITDA” refers to earnings before deducting interest and investment gains (losses), income taxes, amortization of intangible assets and property and equipment, foreign exchange gain or loss, share-based compensation, and restructuring and reorganization charges and post-retirement benefits. The items excluded in the determination of Adjusted EBITDA are share-based compensation, amortization of intangibles, amortization of property and equipment, and restructuring and reorganization charges and certain post-retirement benefits.

3) Adjusted Operating Expenses
A number of significant noncash or nonrecurring expenses are reported in the Company’s Cost of Revenue and Operating Expenses. Management believes that analyzing these expenses exclusive of these noncash or nonrecurring items provides a useful measure of the cash invested in the operations of its business. The items excluded in the determination of Adjusted Operating Expenses are share-based compensation, amortization of intangible assets, amortization of property and equipment, and restructuring and reorganization charges and certain post-retirement benefits. For a description of the reasons these items are adjusted, please refer to the “Non-IFRS Measures” section of the Q2-F2019 MD&A.

About Absolute

Absolute empowers more than 12,000 customers worldwide to protect devices, data, applications and users against theft or attack—both on and off the corporate network. With the industry’s only tamper-proof endpoint visibility and control solution, Absolute allows IT to enforce asset management, security hygiene, and data compliance for today’s remote digital workforces. Patented Absolute Persistence™ is embedded in the firmware of Dell, HP, Lenovo, and 24 other manufacturers’ devices for vendor-agnostic coverage, tamper-proof resilience, and ease of deployment. See how it works at www.absolute.com and follow us at @absolutecorp.

©2019 Absolute Software Corporation. All rights reserved. Absolute and Persistence are registered trademarks of Absolute Software Corporation. Other names or logos mentioned herein may be trademarks of Absolute or their respective owners. For patent information, visit www.absolute.com/patents. The Toronto Stock Exchange has neither approved nor disapproved of the information contained in this news release.

Forward-Looking Statements

This press release contains certain forward-looking statements and forward-looking information (collectively, “forward-looking statements”) which relate to future events or Absolute’s future business, operations, and financial performance and condition. Forward-looking statements normally contain words like “will”, “intend”, “anticipate”, “could”, “should”, “may”, “might”, “expect”, “estimate”, “forecast”, “plan”, “potential”, “project”, “assume”, “contemplate”, “believe”, “shall”, “scheduled”, and similar terms and, within this press release, include, without limitation, the information under the heading “F2019 Corporate Outlook” and any statements (express or implied) respecting: Absolute’s future plans, strategies, and objectives; projected growth, revenues, margins, Adjusted EBITDA, profitability, expenses, cash from operating activities, capital expenditures, and earnings; existing and new product functionality and suitability; and Absolute’s product and research and development strategies and plans. Forward-looking statements, including the F2019 Corporate Outlook, are provided for the purpose of presenting information about management’s current expectations and plans relating to the future and allowing investors and others to get a better understanding of our anticipated financial position, results of operations, and operating environment. Readers are cautioned that such information may not be appropriate for other purposes.

Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable, and appropriate in the circumstances. The material expectations, assumptions, and other factors used in developing the forward-looking statements set out herein include or relate to the following, without limitation: Absolute will be able to successfully execute its plans, strategies, and objectives; Absolute will be able to successfully manage cash flow, operating expenses, interest expenses, capital expenditures, and working capital and credit, liquidity, and market risks; Absolute will be able to leverage its past investments to support growth and increase profitability; Absolute will maintain and enhance its competitive advantages within its industry and certain markets; Absolute will keep pace with or outpace the growth, direction, and technological advancement in its industry; Absolute will be able to maintain and develop its partner and reseller network; Absolute’s current and future OEM partners (if any) will continue to provide embedded firmware and distribution and resale support; Absolute’s existing and new products will function as intended and will be suitable for the intended end users; Absolute will be able to design, develop, and release new products, features, and services and enhance its existing products and services; Absolute will be able to protect against the improper disclosure of data we may process, store, and/or manage; Absolute’s revenues will not become subject to increased seasonality; future financing will be available to Absolute on favourable terms when and if required; Absolute will be in a financial position to buy back some of its shares and/or issue dividends in the future; fluctuations in applicable tax rates, foreign exchange rates, and interest rates will not have a material impact on Absolute; certain tax credits will remain or become available to Absolute; Absolute will be able to attract and retain key personnel; Absolute will be successful in its brand awareness and other marketing initiatives; Absolute will be able to successfully integrate businesses, intellectual property, products, personnel, and/or technologies that it may acquire (if any); Absolute will be able to maintain and enhance its intellectual property portfolio; Absolute’s protection of its intellectual property is sufficient and its technology does not and will not materially infringe third party intellectual property rights; Absolute will be able to obtain any necessary third party licenses on favourable terms; Absolute will not become involved in material litigation; Absolute will not face any material unexpected costs related to product liability or warranties; foreign jurisdictions will not impose unexpected risks; and Absolute will maintain or enhance its accounting policies and standards and internal controls and over financial reporting.

Although management believes that the forward-looking statements herein are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Absolute’s business, as more particularly described in the “Risk Factors” sections of Absolute’s most recently filed Management’s Discussion and Analysis and Annual Information Form, both of which are available at www.absolute.com and under Absolute’s profile on www.sedar.com. Additional material risks and uncertainties applicable to the forward-looking statements herein include, without limitation, unforeseen events, developments, or factors causing any of the aforesaid expectations, assumptions, and other factors ultimately being inaccurate or irrelevant. Many of these factors are beyond the control of Absolute.

All forward-looking statements included in this press release are expressly qualified in their entirety by these cautionary statements. The forward-looking statements contained in this press release are made as at the date hereof and Absolute undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable securities laws.

 

ABSOLUTE SOFTWARE CORPORATION

Condensed Consolidated Statements of Financial Position

(Expressed in United States dollars) (Unaudited)

  December 31, 2018   June 30, 2018
 
ASSETS
 
CURRENT
Cash and cash equivalents $ 33,838,701 $ 33,956,988
Short-term investments 372,316 372,316
Trade and other receivables 11,277,046 17,302,871
Income tax receivable 338,294 345,228
Prepaid expenses and other 2,235,465 2,455,977
Contract acquisition assets – current   6,940,422       6,810,142  
55,002,244 61,243,522
PROPERTY AND EQUIPMENT 5,161,887 5,962,829
DEFERRED INCOME TAX ASSETS 23,610,605 23,318,605
CONTRACT ACQUISITION ASSETS 5,370,862 5,405,987
GOODWILL   1,100,000       1,100,000  
$ 90,245,598     $ 97,030,943  
 
LIABILITIES
 
CURRENT
Trade and other payables $ 13,682,691 $ 13,676,397
Income taxes payable 24,100 407,226
Accrued warranty 190,000 270,000
Deferred revenue – current   74,329,344       75,325,574  
88,226,135 89,679,197
DEFERRED REVENUE   57,326,556       63,861,112  
145,552,691 153,540,309
CONTINGENCIES
 
SHAREHOLDERS’ DEFICIENCY
Share capital 70,725,845 68,362,445
Equity reserve 37,701,562 36,972,197
Treasury shares (359,973 ) (359,973 )
Deficit   (163,374,527 )     (161,484,035 )
  (55,307,093 )     (56,509,366 )
$ 90,245,598     $ 97,030,943  
 
 

ABSOLUTE SOFTWARE CORPORATION

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

Three and six months ended December 31, 2018 and 2017

(Expressed in United States dollars) (Unaudited)

 

Three months ended
December 31,

 

Six months ended
December 31,

  2018       2017       2018       2017  
     
 
REVENUE $ 24,446,301 $ 23,212,319 $ 48,749,866 $ 46,210,009
 
COST OF REVENUE   3,179,779       3,652,728       6,468,183       7,215,495  
 
GROSS MARGIN 21,266,522 19,559,591 42,281,683 38,994,514
 
OPERATING EXPENSES
Sales and marketing 9,103,064 10,058,197 18,728,264 20,448,778
Research and development 4,466,077 4,915,532 9,492,483 10,331,785
General and administration 4,096,060 3,000,526 7,207,063 6,123,976
Share-based compensation   1,189,284       375,641       2,508,809       1,203,000  
  18,854,485       18,349,896       37,936,619       38,107,539  
 
OPERATING INCOME 2,412,037 1,209,695 4,345,064 886,975
 
OTHER (EXPENSE) INCOME
Interest income, net 71,646 14,299 147,328 20,632
Foreign exchange loss   (74,725 )     (24,216 )     (113,763 )     (110,246 )
  (3,079 )     (9,917 )     33,565       (89,614 )
 
NET INCOME BEFORE INCOME TAXES 2,408,958 1,199,778 4,378,629 797,361
 
INCOME TAX EXPENSE   (646,000 )     (1,549,000 )     (1,352,000 )     (1,291,000 )
 
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) $ 1,762,958     $ (349,222 )   $ 3,026,629     $ (493,639 )
 
BASIC AND DILUTED INCOME (LOSS) PER SHARE $ 0.04     $ (0.01 )   $ 0.07     $ (0.01 )
 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC   40,483,250       39,993,620       40,394,608       39,888,593  
 
 

ABSOLUTE SOFTWARE CORPORATION

Condensed Consolidated Statement of Changes in Shareholders’ Deficiency

(Expressed in United States dollars) (Unaudited)

  Share Capital        

Number of
Common
shares

  Amount  

Equity reserve

 

Treasury
Shares

  Deficit   Total
 
BALANCE, JUNE 30, 2017 39,681,749 $ 64,875,130 $ 36,254,893 $ (499,443 ) $ (154,354,741 ) $ (53,724,161 )
Shares issued on options exercised 261,125 1,727,195 (380,068 ) - - 1,347,127
Shares issued under Employee Share Purchase Plan 47,616 198,875 - - - 198,875
Shares issued under Phantom Share Unit Plan 37,846 218,604 (218,604 ) - - -
Shares issued under Performance and Restricted Share Unit plan 29,443 162,819 (162,819 ) - - -
Share-based compensation - - 1,078,325 - - 1,078,325
Dividends paid - - - - (5,022,853 ) (5,022,853 )
Net loss and total comprehensive loss -       -       -       -       (493,639 )     (493,639 )
BALANCE, DECEMBER 31, 2017 40,057,779     $ 67,182,623     $ 36,571,727     $ (499,443 )   $ (159,871,233 )   $ (56,616,326 )
Shares issued on options exercised 73,625 491,979 (188,438 ) - - 303,541
Shares issued under Employee Share Purchase Plan 51,861 241,839 - - - 241,839
Shares issued under Phantom Share Unit Plan 12,966 79,182 (79,182 ) - - -
Shares issued under Performance and Restricted Share Unit plan 77,800 440,003 (588,655 ) 139,470 - (9,182 )
Shares repurchased and cancelled under the Normal Course Issuer Bid (49,800 ) (73,181 ) - - - (245,423 )
Share-based compensation - - 1,256,745 - - 1,256,745
Dividends paid - - - - (5,045,052 ) (5,045,052 )
Net income and total comprehensive income -       -       -       -       3,604,492       3,604,492  
BALANCE, JUNE 30, 2018 40,224,231     $ 68,362,445     $ 36,972,197     $ (359,973 )   $ (161,484,035 )   $ (56,509,366 )
Shares issued on options exercised 145,475 974,560 (240,190 ) - - 734,370
Shares issued under Employee Share Purchase Plan 45,616 202,653 - - - 202,653
Shares issued under Phantom Share Unit Plan 7,872 43,646 (43,646 ) - - -
Shares issued under Performance and Restricted Share Unit plan 210,903 1,142,541 (1,142,541 ) - - -
Share-based compensation - - 2,155,742 - - 2,155,742
Dividends paid - - - - (4,917,121 ) (4,917,121 )
Net income and total comprehensive income -       -       -       -       3,026,629       3,026,629  
BALANCE, DECEMBER 31, 2018 40,634,097     $ 70,725,845     $ 37,701,562     $ (359,973 )   $ (163,374,527 )   $ (55,307,093 )
 
 

ABSOLUTE SOFTWARE CORPORATION

Condensed Consolidated Statements of Cash Flows

Three and six months ended December 31, 2018 and 2017

(Expressed in United States dollars) (Unaudited)

 

Three months ended
December 31,

 

Six months ended
December 31,

  2018       2017       2018       2017  
     
OPERATING ACTIVITIES
Net income (loss) $ 1,762,958 $ (349,222 ) $ 3,026,629 $ (493,639 )
Items not involving cash
Amortization of property and equipment 884,013 793,455 1,770,459 1,540,151
Amortization of intangible assets - 11,250 - 47,500
Amortization of contract acquisition assets 2,296,762 2,294,491 4,524,565 4,562,765
Share-based compensation 1,189,284 338,035 2,508,809 1,003,112
Deferred income taxes (207,000 ) 925,000 (292,000 ) (67,000 )
Change in non-cash working capital
Trade and other receivables 922,692 737,414 6,025,825 5,220,650
Income tax receivable (40,105 ) 88,281 6,934 155,775
Prepaid expenses and other 249,902 479,158 220,512 296,465
Contract acquisition assets incurred (2,944,771 ) (1,990,064 ) (4,619,720 ) (4,024,510 )
Trade and other payables 2,273,672 90,409 737,630 (713,974 )
Income tax payable (15,262 ) - (383,126 ) -
Accrued warranty (10,000 ) 10,000 (80,000 ) (210,000 )
Deferred revenue   (4,435,474 )     (232,958 )     (7,530,786 )     (2,060,647 )
 
CASH FROM OPERATING ACTIVITIES 1,926,671 3,195,249 5,915,731 5,256,648
INVESTING ACTIVITIES
Purchase of property and equipment   (459,705 )     (348,902 )     (1,880,572 )     (1,265,290 )
 
CASH USED IN INVESTING ACTIVITIES (459,705 ) (348,902 ) (1,880,572 ) (1,265,290 )
FINANCING ACTIVITIES
Dividends paid (2,443,723 ) (2,506,999 ) (4,917,121 ) (5,022,852 )
Issuance of common shares   676,724       331,525       871,179       1,603,820  
 
CASH USED IN FINANCING ACTIVITIES (1,766,999 ) (2,175,474 ) (4,045,942 ) (3,419,032 )
 
FOREIGN EXCHANGE EFFECT ON CASH   (104,485 )     (5,900 )     (107,504 )     (15,939 )
 
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (404,518 ) 664,973 (118,287 ) 556,387
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   34,243,219       32,402,507       33,956,988       32,511,093  
 
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 33,838,701     $ 33,067,480     $ 33,838,701     $ 33,067,480  

Media Relations
Jill Rosenthal, InkHouse
absolute@inkhouse.com 781.966.4167

Investor Relations
Joo-Hun Kim
MKR Group
joohunkim@mkrir.com 212.868.6760

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