Cyberplex Reports Third Quarter 2012 Results

Marketwired

TORONTO, ONTARIO--(Marketwire - Nov 14, 2012) - Cyberplex Inc. (TSX:CX) a leader in data-driven advertising and targeted media platforms, today announced its financial results for the third quarter ended September 30, 2012. Total revenue from continuing operations for the quarter was $3.5 million, an increase from the $3.1 million recorded in the same quarter of 2011, and adjusted EBITDA loss for the quarter was approximately $332,000 as compared to a loss of $593,000 in the same period of 2011. The loss from continuing operations for the period was $522,000 as compared to a net loss of $596,000 for the same quarter of 2011.

Highlights for the Third Quarter ended September 30, 2012

  • At September 30, the Company had cash on hand of $5.4 million and no debt
  • Third quarter revenue from continuing operations increased by 12% as compared with the same period of 2011
  • Key investments were made in the core advertising platform, resulting in two large agency clients added in the quarter
  • Exclusive content and data partnerships were established to further the Company''s mobile and social media capabilities

"With a stronger balance sheet, we were able to make meaningful investments in the quarter that will help accelerate our growth," said Geoffrey Rotstein, President and CEO of Cyberplex. "Our experience in building and operating large scale advertising platforms that analyze and process massive amounts of data has made our core advertising platform among the most innovative and high performing in the industry," added Rotstein. "We are already winning key accounts away from some of the larger players, and with the investments we are making, we will continue to innovate and lead this market."  

Normal Course Issuer Bid and Automatic Share Purchase Plan:

On April 24, 2012, the Company announced a Normal Course Issuer Bid ("Issuer Bid") under which it could purchase up to 11,913,232 of its common shares, representing approximately 10% of the "public float" of common shares, commencing on May 14, 2012 for a period of one year. The daily limit for repurchases under the Issuer Bid is 40,721 shares, in accordance with Toronto Stock Exchange approval of the Issuer Bid. As of the date of filing, the Company has repurchased and cancelled 667,047 of its common shares under the Issuer Bid. 

Today, the Company also announced receipt of TSX approval with respect to its request to establish an automatic share purchase plan (the "Plan") for its common shares. The Plan was established to provide standard instructions regarding how the Company''s common shares are to be purchased under the Issuer Bid, subject to pre-established parameters. During the term of the Plan, the Company will not communicate any material undisclosed information to the trading staff of the broker appointed under the Plan; accordingly, the broker may make purchases regardless of whether a trading blackout period is in effect or whether there is material undisclosed information about the Company at the time that purchases are made under the Plan. Pursuant to the terms of the Plan, provided that the Company is neither in possession of material undisclosed information relating to the Company nor in a trading blackout period, the Company shall have the ability to authorize the broker to make purchases outside of the pre-established price limits. The Plan will commence on November 19, 2012 and terminate together with the Issuer Bid on May 13, 2013.

The Plan constitutes an automatic plan for the purposes of applicable Canadian securities legislation and has been reviewed and approved by the TSX. In the event that the Plan is materially varied, suspended or terminated, the Company will issue a press release advising of such variation, suspension or termination, as applicable.

Non-IFRS Financial Measures

This press release includes a discussion of "Adjusted EBITDA," which is a non-IFRS financial measure. The Company defines Adjusted EBITDA as net loss from operations before; (a) depreciation of property and equipment and amortization of intangible assets; (b) stock-based payments, (c) restructuring and acquisition costs, (d) impairments of goodwill and intangible assets and other items, net. Management uses Adjusted EBITDA as a measure of the Company''s operating performance because it provides information related to the Company''s ability to provide operating cash flows for acquisitions, capital expenditures and working capital requirements. The Company also believes that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in its industry.

The non-IFRS financial measure is used in addition to and in conjunction with results presented in accordance with the Company''s consolidated financial statements prepared in accordance with IFRS and should not be relied upon to the exclusion of IFRS financial measures. Management strongly encourages investors to review the Company''s consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-IFRS financial measures are not standardized, it may not be possible to compare these financial measures with other companies'' non-IFRS financial measures having the same or similar names. In addition, the Company expects to continue to incur expenses similar to the non-IFRS adjustments described above, and exclusion of these items from the Company''s non-IFRS measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring.

The table below reconciles net loss from continuing operations and Adjusted EBITDA for the periods presented:

  Three months ended September 30,   Nine months ended September 30,  
(In thousands of Canadian dollars)  2012    2011    2012    2011  
                         
Net (loss) from operations $ (716 ) $ (1,210 ) $ (2,930 ) $ (4,402 )
Add:                        
Depreciation of property and equipment   62     105     213     295  
Amortization of intangible assets   285     491     839     1,492  
Restructuring expenses   -     -     -     50  
Stock based payments   37     21     39     118  
Adjusted EBITDA $ (332 ) $ (593 ) $ (1,839 ) $ (2,447 )

About Cyberplex

Cyberplex Inc. (www.cyberplex.com) is a leader in data-driven advertising and targeted media platforms that provide a smarter way to buy media and reach audiences. The Company, through its subsidiaries, empowers advertisers by combining powerful data with proprietary and best-of-breed technology to target and monetize their most relevant audiences. Cyberplex Engage leverages unique data sets and real-time advertising technology to identify and target relevant audiences across online, mobile and social media channels. Cyberplex Brand increases the value of online, mobile and video content by building loyal audiences and deploying leading strategies that turn media assets into brands. Cyberplex is a key partner for leading agencies, advertisers and networks across North America who are looking to get more value out of advertising and media initiatives.

Forward-Looking Statements

This news release may contain forward-looking statements that are based on management''s current expectations and are subject to known and unknown uncertainties and risks, which could cause actual results to differ materially from those contemplated or implied by such forward-looking statements. Cyberplex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.

Cyberplex Inc.
Unaudited Interim Condensed Consolidated Statements of Financial Position
(In thousands of Canadian dollars)
     
September 30, 2012 and December 31, 2011
 
  September 30, 2012 December 31, 2011
         
Assets        
         
Current assets:        
Cash and cash equivalents $ 5,358 $ 4,050
Accounts receivable   2,658   8,769
Income taxes recoverable   -   31
Other current assets   533   6,907
    8,549   19,757
         
Non-current assets:        
Restricted cash     -    2,357
Long-term investment   50   -
Property and equipment   525   1,998
Intangible assets   3,156   22,069
Goodwill   353   365
    4,084   26,789
         
Total assets $ 12,633 $ 46,546
         
         
Liabilities and Shareholders'' Equity        
         
Current liabilities:        
Accounts payable and accrued liabilities $ 2,616 $ 13,707
Current portion of loans and borrowings   -   4,634
Current portion of finance lease   126   63
Current portion of deferred lease inducements   63   71
Deferred revenue   425   498
Income taxes payable   -   348
    3,230   19,321
         
Non-current liabilities:        
Loans and borrowings   -   20,732
Finance Lease   252   104
Deferred lease inducements   2   114
Deferred tax liabilities   438   603
    692   21,553
         
Shareholders'' Equity   8,711   5,672
         
Total liabilities and Shareholders'' equity $ 12,633 $ 46,546
                 
                 
                 
Cyberplex Inc.  
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income (Loss)  
(In thousands of Canadian dollars, except per share amounts)  
Three and nine months ended September 30, 2012 and 2011  
   
  Three months ended   Nine months ended  
  September 30,   September 30,  
  2012   2011   2012   2011  
                 
Continued operations:
                         
Revenue $ 3,508   $ 3,123   $ 10,930   $ 9,317  
                         
Expenses:                        
  Publishing and advertising costs   1,939     1,557     6,276     5,091  
  Employee compensation and benefits   1,237     1,316     3,996     4,418  
  Other operating expenses   701     864     2,536     2,373  
  Depreciation of property and equipment   62     105     213     295  
  Amortization of intangible assets   285     491     839     1,492  
  Restructuring costs   -     -     -     50  
    4,224     4,333     13,860     13,719  
                         
Loss from operations   (716 )   (1,210 )   (2,930 )   (4,402 )
                         
Finance income   (220 )   (491 )   (54 )   (991 )
Finance cost   10     7     63     10  
                         
Loss before income taxes   (506 )   (726 )   (2,939 )   (3,421 )
                         
Income tax expense (recovery):                        
  Current   70     -     18     -  
  Deferred   (54 )   (130 )   (163 )   (390 )
                         
Loss for the period from continuing operations   (522 )   (596 )   (2,794 )   (3,031 )
                         
Discontinued Operations:                        
Income (loss) for the period from                        
  discontinued operations, net of tax of nil   -     1,642     4,076     (1,548 )
                         
                         
Income (loss) for the period   (522 )   1,046     1,282     (4,579 )
                         
Other comprehensive income (loss):                        
  Net change in fair value of                        
  available-for-sale financial assets   -     (21 )   -     761  
  Amount reclassified to income   -     (187 )   -     (753 )
  Foreign currency translation                        
    adjustments to equity   (327 )   657     886     296  
  Other comprehensive income (loss)                        
  for the period, net of tax   (327 )   449     886     304  
                         
                         
Total comprehensive income (loss) for the period $ (849 ) $ 1,495   $ 2,168   $ (4,275 )
                         
Income (loss) per share:                        
  Basic $ 0.00   $ 0.01   $ 0.01   $ (0.03 )
  Diluted   0.00     0.01     0.01     (0.03 )
                         
Loss per share from continuing                        
  operations:                        
  Basic   0.00     0.00     (0.02 )   (0.02 )
  Diluted   0.00     0.00     (0.02 )   (0.02 )
                         
         
         
         
Cyberplex Inc.  
Unaudited Interim Condensed Consolidated Statements of Cash Flows  
(In thousands of Canadian dollars)  
Nine months ended September 30, 2012 and 2011  
         
         
  2012   2011  
         
Cash flows from operating activities:            
    Income (loss) for the periods $ 1,282   $ (4,579 )
    Adjustments to reconcile net loss to net cash flows            
    from operating activities:            
          Depreciation of property and equipment   481     1,041  
          Amortization of intangible assets   3,012     6,564  
          Amortization of deferred lease inducements   (56 )   (87 )
          Share-based payments   39     276  
          Foreign exchange loss   83     30  
          Finance cost, net   496     (939 )
          Deferred income tax recovery   (164 )   (390 )
          Gain on sale of Tsavo   (6,349 )   -  
          Restructuring costs   221     263  
    Change in non-cash operating working capital   (3,540 )   986  
    Cash generated from operating activities   (4,495 )   3,165  
    Income taxes received (paid)   (57 )   389  
    Net cash from (used in) operating activities   (4,552 )   3,554  
             
Cash flows from financing activities:            
    Finance lease   264     200  
    Repurchase of common shares under NCIB (note 11(a))   (29 )   -  
    Repayment of promissory note   (100 )   -  
    Repayment of term loans   -     (5,749 )
    Repayment of finance lease   (53 )   (18 )
    Interest paid   (272 )   (3,155 )
    Net cash used in financing activities   (190 )   (8,722 )
             
Cash flows from investing activities:            
    Purchase of Long-term investment   (50 )   -  
    Sale of short-term investments   -     1,546  
    Interest income received   34     30  
    Net proceeds from sale of available-for-sale investments   300     401  
    Acquisition of EQADS, net of cash acquired   -     (100 )
    Decrease in restricted cash and short-term investments   201     734  
    Proceeds on sale of Tsavo, net of cash disposed of   6,293     -  
    Additions to property and equipment   (492 )   (341 )
    Additions to intangible assets   (153 )   (21 )
    Net cash from investing activities   6,133     2,249  
             
Foreign exchange gain on cash held in foreign currency   (83 )   (30 )
             
Increase in cash and cash equivalents   1,308     (2,949 )
             
Cash and cash equivalents, beginning of period   4,050     5,192  
             
Cash and cash equivalents, end of period $ 5,358   $ 2,243  
Contact:
Cyberplex Inc.
David Katz
EVP Corporate Development
416.597.8889
416.597.2345
press@cyberplex.com
www.cyberplex.com

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