2013-09-30 21:54:19 -
Mississauga, Ontario CANADA, September 30, 2013 /FSC/ - Armada Data Corporation (ARD - TSX Venture), reports that its annual financial results for the year ended May 31, 2013 have now been filed on Sedar and are available to view on SEDAR at www.sedar.com and the company's web site www.armadadata.com.
Selected Annual Information
Fiscal Year Ended May 31, 2013 May 31, 2012 May 31, 2011 May 31, 2010
Total Revenue $2,587,922 $3,110,921 $3,061,762 $2,946,657
(Loss)Income before taxes $(373,042) $(621,774) $397,263 $345,717
Income Taxes $122,504 $14,906 $126,321 $56,997
Comprehensive (Loss) Income $(495,546) $(636,680) $270,842 $288,720
Comprehensive (Loss) Income $(0.03) $(0.04) $0.02
Total Assets $1,579,219 $1,703,555 $1,957,643 $1,564,061
Total Liabilities $627,932 $305,043 $280,842 $221,805
including Non-controlling $951,287 $1,398,512 $1,676,801 $1,342,256
Dividends NIL $81,796 $70,679 $67,994
The Company's total revenue decreased by 17% in 2013 from $3,110,921 to $2,587,922
The Company reported a comprehensive loss of $495,546, due to a combination of the following factors:
* The remaining Goodwill which resulted from the acquisition of The Big & Easy (TBE) and Mister Beer Inc (MB) was deemed to be impaired by $372,490. The new IFRS requirements state that Goodwill must be judged for Impairment on a regular & continual basis, and as such, the Goodwill was written down to nil by $372,490. When sales order commitments are ascertained and the division is sustaining monthly earnings, Goodwill Impairment will be re-evaluated and the Impairment may be adjusted at that time.
* The balance of the corporate losses was a result of the ongoing monthly operating losses incurred by the Mister Beer division. The losses amounted to an annualized amount of $516,792. Despite the significant monthly operating losses, the division continued its quest to develop distributor, wholesaler and retailer and consumer awareness - all the awareness initiatives continue to add and support the new bottle brew brand and category to all potential interested parties which management firmly believes will lead the division into sustained profitability.
NOTE: Armada Data Corporation's core "data" business earned a before tax profit of $464,737 which was allocated to absorb the ongoing operating losses sustained by Mister Beer Inc.
Armada's consolidated statement reflects a loss, before corporation taxes, of $(373,042); this is a decrease compared to the loss of $(621,774) in 2012. The majority of the loss was a result of a $372,490 Impairment of Goodwill write-down and a Mister Beer operating loss of $516,792. Management will re-evaluate this impairment during fiscal 2014, to see if adjustments are warranted.
Total expenses decreased to $2,539,630 compared to $3,213,839, a 21% decrease over last year. Management engaged in many cost-cutting measures to reduce expenses in 2013. The majority of the decreases in expenses were in the advertising and marketing of the CarCostCanada.com website's products and services. As management scaled back advertising and marketing expenses, the impact on sales revenues was far less than the additional expenses to generate additional website traffic to CarCost. The result of this scaling will enable CarCostCanada management to make better marketing decisions when a more efficient and updated website is launched in fiscal 2014.
Cash on hand decreased from $397,256 at May 31, 2012 to an overdraft of $(200,008) at May 31, 2013, attributed to the preparation and opening of the new Mister Beer Inc. brewery as well as subsidizing the monthly operating losses incurred by the Mister Beer division. Management expects that this trend to be reversed within a reasonable period of time once a major national retailer is signed on to sell the sell the MB Bottle Brew product or, in absence of the national retailers, a sizeable increase in the number of smaller retailers as well as our online purchasing portal. The new production facility is in full operation and production is fully capable of keeping up with an increase in sales orders. However, the new production facility comes with an increase in production costs, as well as an increase in overhead costs.
Accounts receivable increased to $398,540 as at May 31, 2013 from $397,256 last year. Related party accounts receivable decreased from $14,675 to $3,277; management believes that this downward trend in related party receivables will continue until there is virtually a zero balance.
Accounts payable increased to $311,291 as at May 31, 2013 from $217,403 a year earlier. Related parties accounts payable decreased to $7,983 as at May 31, 2013, from $16,807 last year. The Note Payable related to the Mister Beer acquisition is NIL compared to $70,833 last year. Corporation income taxes recoverable are NIL as at May 31, 2013 as compared to $76,177 last year. Corporation income taxes payable are $108,650 as at May 31, 2013 compared to NIL as at May 31, 2012.
As a result of the loss reported by the Company in 2013, the Company's retained earnings decreased to a deficit of $(922,748) as at May 31, 2013 compared to a deficit of $(427,202) last year.
No dividends were paid out to shareholders in fiscal 2013 compared to $81,796 last year. Management does not plan on issuing any dividends until further notice.
Armada has committed to financing capital investments for the Mister Beer business of $700,000 over a 36 month period and contributing $100,000 towards marketing and business development costs for the Mister Beer business. All of these commitments were fulfilled in fiscal 2013 as the all new Mississauga production facility was commissioned and is now producing the bottle brew product. The new MB brewery can produce 10 times more product in a single shift than the original Woodbridge, Ontario facility and management is prepared to add additional shifts when the demand for the product increases.
The Mister Beer acquisition continues to provide an excellent opportunity for the company to expand its revenue base while using the marketing strategies and captive website traffic generated by CarCostCanada and partner websites. Management is disappointed with the sales and distribution results thus far. However the MB sales team remains very confident that a national distributor signing is imminent, as early as Q1 or Q2 in fiscal 2014. The MB team secured some very significant retail chains in fiscal 2013 but the number of retailers carrying the product is still not enough to launch additional regional advertising campaigns; the team continues to work on this distribution network initiative and is confident that the network will be better developed in fiscal 2014.
Segmented Annual Information
Revenues earned by divisions were as follows:
2013 % 2012 %
Insurance Services $ 833,259 32 $1,128,767 36
Retail Services 467,197 18 581,371 19
Dealer Services 828,228 32 $943,179 30
IT Services 235,168 9 $214,294 7
Advertising/Marketing Services 67,004 3 $94,615 3
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Total Revenue - Armada Data Corporation $2,431,126 94 $2,962,226 95
Revenue - Mister Beer Inc. 515,093 - 326,171 -
Less: Direct product cost and wages (358,297) - (177,479) -
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Total Revenue - Mister Beer Inc. 156,796 6 148,695 5
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Total Consolidated Revenue $ 2,587,922 100 $ 3,110,921 100
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The Company's outlook is to continue to increase sales, update and improve our data services products and services, and deliver significantly better results to our shareholders by way of the following:
1. Build on the historical success of the Company's ongoing sales and marketing efforts focused on increasing sales at Retail Services, Dealer Services and Advertising/Marketing Services divisions.
2. Exploit the new market awareness and demand for new vehicle pricing information and dealer referrals that result from the additional competition within that market space.
3. Continue to improve our relationships with some of the largest insurance companies in Canada and partner with some of these organizations to produce new products and services for their vast client base.
4. Maintain operating expenses and achieve the economies of scales of an Internet based business.
5. Continue the expansion of third-party fee-based online advertising.
About Armada Data Corp.
Armada Data is a Canadian publicly traded Information & Marketing Services Company providing accurate and real-time data to institutional and retail customers, through developing, owning and operating automotive pricing-related web sites and providing information technology and marketing services to its clients. Armada's information and marketing abilities have enabled the company to leverage that experience into the food and beverage industry by its acquisition of 90% of the issued and outstanding shares of The Big & Easy Bottle Brewing Company Inc. The Big & Easy Bottle Brewing Company Inc. owns 100% of Mister Beer Inc., which invented, produces and markets the unique "microbrewery in a bottle" beer-making kit.
Armada Data shares are listed on the TSX Venture exchange under the trading Symbol ARD. Armada currently has a total of 17,670,265 shares outstanding.
Additional information relating to Armada Data Corporation is filed on SEDAR, and can be viewed at www.sedar.com.
For further information, please contact:
Armada Data Corporation
Mr. R. James Matthews, President & CEO
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the Policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
5710 Timberlea Blvd, Suite 201
to view the press release as a PDF file, please click on the following link:
Source: Armada Data Corporation (ARD - TSX-V) www.armadadatacorp.ca
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