VIQ Solutions Reports First Quarter 2014 Results
22 Mai 2014 - 11:30PM
Marketwired
VIQ Solutions Reports First Quarter 2014 Results
MARKHAM, ONTARIO--(Marketwired - May 22, 2014) - 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
month period ended March 31, 2014. Results are reported in Canadian
dollars and are prepared in accordance with International Financial
Reporting Standards ("IFRS").
"We have started to
see an increase in business activity in the global market for
digital recording and management for large-scale integrated
projects which capture, manage and store digital records," said
David Outhwaite, President and Chief Executive Officer of VIQ
Solutions. "Our pipeline of opportunities 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
significant contract wins."
Financial Highlights
for the Quarter
- Revenue was $3.0 million for the three month period ended March
31, 2014 as compared to $3.9 million for the same period in 2013,
representing a decrease in revenue of 22% primarily due to the loss
of a material contract in Western Australia for our Spark &
Cannon business in June 2013;
- Revenue from the computer products and services business unit
was $0.6 million for the three month period ended March 31, 2014 as
compared to $0.5 million for the same period in 2013, representing
an increase of 23%;
- Selling and administrative expenses were $1.1 million for the
three month period ended March 31, 2014 as compared to $1.4 million
from the three month period ended March 31, 2013 due to the
operational efficiencies that were implemented in 2013;
- Research and development expenses were $120,398 for the three
month period ended March 31, 2014 as compared to $183,624 for the
previous year representing a decrease of $63,226 or 35%;
- EBITDA1 loss for the three month period ended March 31, 2014
was $15,928 as compared to positive EBITDA of $171,176 for the same
period in 2013;
- Net loss for the three month period ended March 31, 2014 was
$81,081 as compared to net income of $113,483 for the same period
in 2013. Comprehensive income for the three month period ended
March 31, 2014 was $47,638 as compared to $159,916 for the same
period in 2013;
- Cash flow used in operating activities was $118,465 for the
three month period ended March 31, 2014 as compared to a cash
inflow of $447,757 for the same period in 2013. The decrease in
cash from operations relates primarily due to a decline in net
income and changes in our investment in working capital; and
- Subsequent to the period, the Corporation obtained a short-term
bridge loan with a face value of $700,000 bearing interest at a
rate of 13% per annum. The loan is repayable on the one-year
anniversary and is secured by a general security agreement covering
all assets of the Corporation. A portion of the proceeds were used
to retire the principal and interest owing on the existing $200,000
secured bridge loan.
Note
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 first
quarter 2014 condensed consolidated interim financial statements
and results of operations and Management's Discussion and Analysis
of Results and Financial Condition for the three month period ended
March 31, 2014 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 first quarter 2014 condensed consolidated
interim financial statements and the audited consolidated financial
statements for the year ended December 31, 2013, 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
Certain statements
included in this news release constitute forward looking statements
or forward looking information under applicable securities
legislation. Such forward looking statements or information are
provided for the purpose of providing information about
management's current expectations and plans relating to the future.
Readers are cautioned that reliance on such information may not be
appropriate for other purposes. Forward looking statements or
information typically contain statements with words such as
"anticipate", "believe", "expect", "plan", "intend", "estimate",
"propose", "project" or similar words suggesting future outcomes or
statements regarding an outlook. Forward looking statements or
information in this news release include, but are not limited to,
management's targets for the Corporation's growth in 2014.
Forward looking
statements or information is based on a number of factors and
assumptions which have been used to develop such statements and
information but which may prove to be incorrect. Although VIQ
Solutions believes that the expectations reflected in such forward
looking statements or information are reasonable, undue reliance
should not be placed on forward looking statements because VIQ
Solutions can give no assurance that such expectations will prove
to be correct. In addition to other factors and assumptions which
may be identified in this news release, assumptions have been made
regarding, among other things, the Corporation's recent
initiatives, and that sales and prospects may provide incremental
value for shareholders. Readers are cautioned that the foregoing
list is not exhaustive of all factors and assumptions which have
been used.
Forward looking
statements or information are based on current expectations,
estimates and projections that involve a number of risks and
uncertainties which could cause actual results to differ materially
from those anticipated by VIQ Solutions and described in the
forward looking statements or information. These risks and
uncertainties may cause actual results to differ materially from
the forward looking statements or information. Readers are
cautioned that the foregoing list is not exhaustive of all possible
risks and uncertainties.
The forward looking
statements or information contained in this news release are made
as of the date hereof and VIQ Solutions undertakes no obligation to
update publicly or revise any forward looking statements or
information, whether as a result of new information, future events
or otherwise unless required by applicable securities laws. The
forward looking statements or information contained in this news
release are expressly qualified by this cautionary statement.
VIQ Solutions Inc. |
Condensed Consolidated Interim Balance Sheets |
(Expressed in Canadian dollars) |
(Unaudited) |
|
March 31, |
|
December 31, |
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash |
$ |
696,670 |
|
$ |
789,197 |
|
|
Trade and other receivables |
|
1,632,147 |
|
|
1,166,612 |
|
|
Inventories |
|
3,697 |
|
|
4,880 |
|
|
Prepaid expenses |
|
56,601 |
|
|
73,913 |
|
|
|
2,389,115 |
|
|
2,034,602 |
|
Non-current assets |
|
|
|
|
|
|
|
Restricted cash |
|
113,870 |
|
|
146,753 |
|
|
Property and equipment |
|
674,557 |
|
|
668,832 |
|
|
Goodwill |
|
1,606,826 |
|
|
1,543,695 |
|
|
Deferred tax assets |
|
305,465 |
|
|
282,993 |
|
|
$ |
5,089,833 |
|
$ |
4,676,875 |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Trade and other payables |
$ |
1,307,274 |
|
$ |
983,364 |
|
|
Short-term debt |
|
198,875 |
|
|
197,994 |
|
|
Provisions |
|
426,753 |
|
|
434,108 |
|
|
Unearned revenue |
|
252,428 |
|
|
219,769 |
|
|
Deferred lease incentives |
|
19,552 |
|
|
18,685 |
|
|
Current portion of obligations under finance lease |
|
102,620 |
|
|
98,396 |
|
|
Current portion of long-term debt |
|
22,692 |
|
|
22,692 |
|
|
|
2,330,194 |
|
|
1,975,008 |
|
Non-current liabilities |
|
|
|
|
|
|
|
Provisions |
|
127,391 |
|
|
106,752 |
|
|
Deferred lease incentives |
|
4,888 |
|
|
8,485 |
|
|
Obligations under finance lease |
|
138,716 |
|
|
157,502 |
|
|
Long-term debt |
|
19,697 |
|
|
25,370 |
|
Total liabilities |
|
2,620,886 |
|
|
2,273,117 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital stock |
|
11,578,213 |
|
|
11,578,213 |
|
Contributed surplus |
|
1,883,246 |
|
|
1,865,695 |
|
Accumulated other comprehensive income (loss) |
|
120,558 |
|
|
(8,161 |
) |
Deficit |
|
(11,113,070 |
) |
|
(11,031,989 |
) |
|
|
2,468,947 |
|
|
2,403,758 |
|
Total equity and liabilities |
$ |
5,089,833 |
|
$ |
4,676,875 |
|
|
|
|
|
|
|
|
VIQ Solutions Inc. |
Condensed Consolidated Interim Statements of
Comprehensive Income |
(Expressed in Canadian dollars) |
(Unaudited) |
|
Three months ended March 31 |
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
Revenue |
$ |
3,049,774 |
|
$ |
3,906,662 |
|
|
|
|
|
|
|
|
Cost of sales |
|
1,856,796 |
|
|
2,246,161 |
|
Gross profit |
|
1,192,978 |
|
|
1,660,501 |
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
1,140,148 |
|
|
1,354,314 |
|
|
Research and development expenses |
|
120,398 |
|
|
183,624 |
|
|
|
1,260,546 |
|
|
1,537,938 |
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
(67,568 |
) |
|
122,563 |
|
|
|
|
|
|
|
|
Finance loss |
|
|
|
|
|
|
|
Interest income |
|
2,879 |
|
|
7,484 |
|
|
Interest expense |
|
(15,459 |
) |
|
(7,699 |
) |
|
Foreign exchange loss |
|
(933 |
) |
|
(8,865 |
) |
Net finance loss |
|
(13,513 |
) |
|
(9,080 |
) |
|
|
|
|
|
|
|
Net income (loss) for the period |
$ |
(81,081 |
) |
$ |
113,483 |
|
|
|
|
|
|
|
|
Item that may be reclassified to profit or loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating foreign operations |
|
128,719 |
|
|
46,433 |
|
Comprehensive income for the period |
$ |
47,638 |
|
$ |
159,916 |
|
|
|
|
|
|
|
|
Net income (loss) per share |
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.00 |
) |
$ |
0.00 |
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding -
basic |
|
90,957,000 |
|
|
90,638,538 |
|
Weighted average number of common shares outstanding -
diluted |
|
90,957,000 |
|
|
90,707,886 |
|
|
|
|
|
|
|
|
VIQ Solutions Inc. |
Condensed Consolidated Interim Statements of Cash
Flows |
(Expressed in Canadian dollars) |
(Unaudited) |
|
Three months ended March 31 |
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
Cash provided by (used in): |
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
|
Net income (loss) for the period |
$ |
(81,081 |
) |
$ |
113,483 |
|
Items not affecting cash: |
|
|
|
|
|
|
|
Depreciation |
|
49,694 |
|
|
49,994 |
|
|
Stock-based compensation |
|
17,551 |
|
|
21,655 |
|
|
Provisions |
|
20,639 |
|
|
13,659 |
|
|
Interest accretion on bridge loan |
|
881 |
|
|
- |
|
|
Amortization of deferred lease incentive |
|
(2,730 |
) |
|
(4,305 |
) |
|
Unrealized foreign exchange gain |
|
(25,594 |
) |
|
(819 |
) |
|
Changes in non-cash operating working capital |
|
(97,825 |
) |
|
254,090 |
|
|
|
|
|
|
|
|
Cash from (used in) operating activities |
|
(118,465 |
) |
|
447,757 |
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
Purchase of property and equipment |
|
(14,162 |
) |
|
(16,257 |
) |
|
Change in restricted cash |
|
44,300 |
|
|
- |
|
|
|
|
|
|
|
|
Cash from (used in) investing activities |
|
30,138 |
|
|
(16,257 |
) |
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
Repayment of long-term debt |
|
(5,673 |
) |
|
(5,673 |
) |
|
Finance lease payments |
|
(31,521 |
) |
|
(15,958 |
) |
|
|
|
|
|
|
|
Cash used for financing activities |
|
(37,194 |
) |
|
(21,631 |
) |
|
|
|
|
|
|
|
Net increase (decrease) in cash during the period |
|
(125,521 |
) |
|
409,869 |
|
|
|
|
|
|
|
|
Cash, beginning of period |
|
789,197 |
|
|
1,129,107 |
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
32,994 |
|
|
13,679 |
|
|
|
|
|
|
|
|
Cash, end of period |
$ |
696,670 |
|
$ |
1,552,655 |
|
VIQ SolutionsDavid OuthwaitePresident & CEO(905) 948-8266
ext. 250douthwaite@viqsolutions.comVIQ SolutionsKaren HershChief
Financial Officer(905) 948-8266 ext.
240khersh@viqsolutions.comwww.viqsolutions.com
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