Memex Inc. Releases Q1-2018 Financial Results

BURLINGTON, ON / ACCESSWIRE / March 1, 2018 / Memex Inc. ("Memex" or the "Company") (OEE.V), a global leader in Industrial Internet of Things (IIoT) manufacturing productivity software, today released its financial highlights and future outlook for the first quarter of its 2018 fiscal year ending December 31, 2017. All results are reported in Canadian dollars.

Summary Financial Highlights & Future Outlook:

• Memex reported $362 thousand in revenue for the three-months ended December 31, 2017 compared to $505 thousand in total revenue for the year-ago quarter, while disappointing, the company attributes the result primarily to customer implementation delays and does not believe this is reflective of the business' trajectory or customer adoption;

• Bookingsⁱ for the period totalled $660 thousand versus $393 thousand in the same period a year ago, a 68% increase from a year ago and 81% from Q4-2017;

• Based upon current backlog, Memex anticipates recognizing between $700 and $900 thousand in revenue for its fiscal Q2-2018 and a cash flow break-even run rate in the fourth quarter of fiscal 2018;

• Strategic cost saving initiatives have been implemented since December 31, 2017 reducing corporate overhead by 20%, and accelerating the Company's path to profitability;

• Memex reported a $985 thousand net and comprehensive loss for the three-months ended December 31, 2017, equating to a $0.007 loss per share. This compares with a $763 thousand net and comprehensive loss and a similar $0.007 loss per share for the year-ago quarter;

• Gross margin percentage for Q1-2018 was 42.8%, down from the 56.7% in Q1-2017, due to lower sales volume;

• Cash consumed from operating activities (before changes in working capital balances) was $901 thousand for the period, up 23% from the same period a year ago; and

• The Company had $1.87 million in working capital including $2.46 million in cash at December 31, 2017, relative to $2.79 million in working capital and $3.46 million in cash at September 30, 2017.

Management Commentary:

"Growth in our backlog and sales pipeline, combined with the interest and enquiries we continue seeing keep us very confident over future bookings and revenue growth," said President and CEO David McPhail. "And the steps we have taken to reduce our spending, including rollbacks to all Senior Management compensation, have significantly shortened our timeline to profitability without marginalizing our ability to drive future sales or to deliver on them."

Selected Financial Information:

		Three-months period ended December 31
(Canadian dollars - in thousands except per share and margin%)		2017				2016				Change
Revenue			362				505				- 28	%
Bookingsi			660				393				+ 68	%
Gross margin %			42.8				56.7
Operating expenses			1,127				1,073				+ 5	%
Cash utilized in operating activities1			901				733				+ 23	%
Net and comprehensive loss for the period			(985	)			(763	)			+ 29	%
Basic and diluted loss per share - period			(0.007	)			(0.007	)

1. Before changes in non-cash working capital balances.

As at (Canadian dollars - in thousands except WC ratio)		December 31, 2017				September 30, 2017
Cash on hand			2,461				3,458
Current assets			3,256				4,104
Total assets			3,651				4,522
Current liabilities			1,390				1,313
Working capital*			1,866				2,791
Working capital ratio**		2.34 to 1				3.13 to 1
Backlogii			1,601				1,311

* Working Capital = current assets - current liabilities
** Working Capital ratio = current assets / current liabilities

About Memex Inc.:

Memex was founded with a vision to improve the way automated machine and production equipment work and connect on the factory floor. Since then Memex has proved itself a pioneer in IIoT time and again. The company is committed to its mission of "successfully transforming factories of today into factories of the future" and envisions converting every machine into a node on the corporate network, creating visibility from shop-floor-to-top-floor. Memex is the developer of MERLIN, an award-winning IIoT technology platform that delivers tangible increases in manufacturing productivity in Real-Time. Memex's software and hardware IIoT solution enable customers to achieve tangible IIoT-centric business outcomes. The MERLIN software suite and connectivity products have enabled manufacturers to achieve upwards of a 50% increase in productivity and a 20%-plus increase in profit, on average. Additionally, customers have secured payback in less than four months, which equates to an Internal Rate of Return greater than 300 percent. For more information, please visit: www.MemexOEE.com

Forward-Looking Statements

The statements "Based upon current backlog, Memex anticipates recognizing between $700 and $900 thousand in revenue for its fiscal Q2-2018 and a cash flow break-even run rate in the fourth quarter of fiscal 2018", "…reducing corporate overhead by more than 20%, and accelerating the Company's path to profitability", "… future bookings and revenue growth" and "…have significantly shortened our timeline to profitability" are forward-looking statements. The intention was to communicate management's interpretation of the Company's backlog and the effect that their cost cutting initiatives will have on future financial results. These forward-looking statements are based upon bookings the Company has already received from its Customers that are supported by purchase orders, as well as from management's best estimate of future bookings to be generated and converted into revenue beyond the end of the second quarter of fiscal 2018. These statements also consider internally prepared future forecasts of Company performance and take into account the spending reductions implemented since the end of December 2017. However, there is no guarantee that revenues will fall within management's projections or if actual cost cutting initiatives can or will be maintained or will have the anticipated effect, or if other factors may prevent the Company from achieving revenue growth, a cash flow break even run rate or profitability at any point in the future. These forward-looking statements are subject to material risk factors such as anticipated future bookings not materializing, bookings not converting into revenue as quickly as management anticipates, or at all, and that unforeseen costs may be incurred delaying profitability beyond management's expectations or achieving profitability at all. In addition, these forward-looking statements are subject to various unknown material risks and uncertainties, many of which are beyond the ability of the Company to control or predict. Such forward-looking information represents Management's reasonable judgment based on information currently available. No forward-looking statement can be guaranteed, and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information. The aforementioned forward-looking statements are made as of the date of this press release and, except as required by applicable securities legislation, MEMEX assumes no obligation to update publicly or revise these forward-looking statements to reflect subsequent information, events, or circumstances.

For investor inquiries please contact:

Ed Crymble, Chief Financial Officer
905-331-4343
ed.crymble@MemexOEE.com

David McPhail, President & CEO
519-993-1114
david.mcphail@MemexOEE.com

Sean Peasgood, Investor Relations
416-565-2801
sean@sophiccapital.com

Neither the 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.

i & ii These non-IFRS financial measures are identified, defined and reconciled to their closest IFRS measures, revenue and unearned revenue, within our Management's Discussion and Analysis for the periods ended December 31, 2017 and 2016, in the section "Other Financial Measures." That MD&A is available at www.sedar.com under our company profile.

SOURCE: Memex Inc.