Serenic Reports Financial Results for Three and Six Months Ended August 31, 2013
EDMONTON, ALBERTA--(Marketwired - Oct 25, 2013) - Serenic Corporation (the "Company" or "Serenic") (TSX VENTURE:SER), an international software developer specializing in integrated financial management and human capital management ("HCM") solutions for Non- Profit organizations, government agencies and Microsoft Dynamics NAV users, announces its financial results for the three and six months ended August 31, 2013 .
Financial results are summarized as follows: | ||||||||||||||||
Three months ended August 31 | Six months ended August 31 | |||||||||||||||
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$ | $ | % | $ | $ | % | |||||||||||
Revenue | 2,956,131 | 2,808,814 | 5.2 | 5,559,502 | 5,756,082 | (3.4 | ) | |||||||||
Net loss | (188,728 | ) | (165,900 | ) | 13.8 | (505,780 | ) | (345,599 | ) | 46.3 | ||||||
Basic and diluted loss per share | (0.01 | ) | (0.01 | ) | 0.0 | (0.03 | ) | (0.02 | ) | 50.0 | ||||||
EBITDA (1) | (100,205 | ) | (60,138 | ) | (66.6 | ) | (338,642 | ) | (131,165 | ) | (158.2 | ) | ||||
EBITDA as a % of sales | (3.4 | ) | (2.1 | ) | (61.9 | ) | (6.1 | ) | (2.3 | ) | (165.2 | ) | ||||
Weighted average common shares outstanding - basic |
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Weighted average common shares outstanding - diluted |
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(1) | EBITDA represents earnings before interest, taxes, depreciation, amortization, and stock based compensation. Please review the Serenic Management Discussion and Analysis for the Three and Six months ended August 31, 2013 for more information. |
Quarter Highlights
Firstly, with respect to the historical on-premise license business, both the direct and partner channel sales teams focused on specific market segments to improve sales process and close ratios. The Company entered into an alliance with a new third party product which management believes will allow Serenic to present a more powerful solution into the ministry, faith-based market. The recent adoption of Serenic's Total Care Plan ("TCP") (whereby customers who were sold directly will pay a one-price fee for software maintenance, unlimited product support and software upgrades), has garnered interest, particularly by customers who have expressed interest in upgrading to the newer versions of Serenic Navigator. The Company continued its program to revitalize sales of its HCM products. Additional staff were hired during the past two quarters to round out the HCM team, and development efforts continue to integrate a highly functional and scalable advanced human resource management solution to the Company's payroll offerings for both Navigator and Dynamics NAV users. Initial interest for the advanced human resource solution appears to be strong as we progress development of the integration of this functionality to our other products. Expectations are to release these new advanced HR solutions by fiscal year end.
Secondly, with respect to the new cloud based solutions being developed to align with Microsoft's Global Road to Repeatability ("GR2R") volume strategies, we continued to make organizational changes to address the new volume markets that Serenic has not historically addressed. Webcasts with selected prospective clients to present, demonstrate and sell Serenic Navigator on-premise and cloud solutions continued during the quarter, which yielded good attendance and interest. Efforts to align Serenic's strategies with Microsoft's GR2R plan continued during the quarter, and included several specialized partner conferences hosted by Microsoft wherein they continued their mentorship and education regarding revised marketing and sales efforts that will drive the volume business model. The Company continued to work on a simplified version of Serenic Navigator which is expected to be released to market prior to the end of Fiscal 2014. Concurrently, our Client Services team continued to advance and integrate Microsoft's "RapidStart" processes into our software implementation methodologies, in order to better accommodate customers who more aptly fit the volume sales and deployment strategies, which in some cases may provide customers with reduced and/or fixed-price implementation costs.
Thirdly, we continued to explore strategic corporate alternatives, with the objective being to potentially increase shareholder value. This effort is ongoing and will continue until a suitable scenario can be identified and acted upon at a value proposition that is considered to be reasonable. Meanwhile, the Company renewed its Normal Course Issuer Bid during the quarter, which allows for purchase of up to 849,400 shares over the next year.
Total revenue in the quarter was $2,956,131 as compared to $2,808,184 recorded in Q2 of last year, an increase of $147,317 or 5.2%. Expenses increased by $104,223 on a comparative basis and a net loss of $188,728 was recorded for the quarter, as compared to a net loss of $165,900 in this period last year. Cash resources on August 31, 2013 were $3,873,484, a reduction of $239,397 from cash resources of $4,112,881 as at May 31, 2013. Management believes the cash resources continue to be adequate for the Company to operate in its anticipated manner.
Outlook
Whereas the traditional on-premise, higher end license business is expected to continue to operate status quo for the foreseeable future, management believes that incorporation of the volume strategies to address the NFP organizations who operate in less complex environments will ultimately generate higher sales volumes from this relatively large segment of the NFP marketplace. As a result, we continue to refine our traditional sales methodologies that utilize highly consultative approaches for those organizations who wish to use on-premise, customizable and more complex solutions, while implementing new volume business strategies to address new markets.
As has been reported, Serenic released a new version of Serenic DonorVision as well as three profiles of Serenic Navigator to address new segments of the markets that have previously not been viable for Serenic to address. These new Navigator versions correlate with the volume based development, sales and marketing strategies that align with Microsoft's GR2R volume strategies. Now that Serenic Navigator functionality has been re-configured into Express, Essentials and Enterprise versions (all of which are deployable as traditional on-premise and/or cloud applications), management believes that Serenic's addressable market potential has increased significantly. The lower end NFP markets that were not previously viable can now be efficiently addressed utilizing a highly prescriptive, "low-touch" customer experience. This includes cost-effective and predictive offerings for software and implementation services at price levels that are conducive to what smaller and less complex organizations expect and are able to afford. We continue to work closely with Microsoft to advance these volume strategies, including adoption of Microsoft's Azure cloud based platform in order to provide very cost-effective hosted software solutions to the vast majority of the NFP organizations who operate world-wide. By focusing on niche NFP segments, management believes that Serenic is fully aligned with Microsoft's objective to grow global ERP market share.
Complementing the above efforts, the Company is also continuing to evolve its human capital management solutions, including the upcoming roll-out of a highly functional advanced human resource management solution that will be tightly integrated to Serenic's payroll and Navigator solutions. As with other Serenic products, the new HCM solutions will be deployable as on-premise license versions and/or as cloud versions, and configured optimally with respect to functionality to address multiple market segments. While investment in this HCM growth project has increased costs in this fiscal year, we expect to start experiencing payback commencing next fiscal year.
The corporate development objectives remain unchanged - that is, to optimize shareholder value through a capital structure change, new strategic ventures, and/or merger and acquisition scenarios. Management continues to strongly believe that the market capitalization and share price of the Company does not adequately reflect Serenic's fair value. We will take appropriate action in this regard when a suitable scenario can be presented that would best serve the interests of all shareholders.
We believe the Company remains adequately financed to operate as anticipated. Management remains confident that our course of action will ultimately generate greater value for our shareholders over the longer term.
About Serenic Corporation
Serenic Corporation publishes mission-critical software products for not-for-profits (NFP), educational institutions and governments. The Company's products are based on leading application and technology platforms from Microsoft, including Dynamics NAV, SQL Server, and .NET, and are distributed in North America and internationally through value-added resellers and a direct sales organization. Serenic Corporation is the exclusive developer of human resource management and payroll products for Microsoft Dynamics NAV ERP users in North America. Serenic has offices in Edmonton, Alberta and Denver, Colorado and staff located in Canada, England, Africa and throughout the USA.
ON BEHALF OF THE BOARD OF DIRECTORS
SERENIC CORPORATION
Dwayne Kushniruk, Chairman
Forward Looking Statements
This release contains forward-looking information within the meaning of applicable securities laws ("forward-looking statements") that relate to Serenic's products and potential benefits derived therefrom; and other matters. Such forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements to differ materially from the anticipated results, performance or achievements or developments expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the factors and assumptions discussed in the section entitled, "Risks and Uncertainties" in Managements' Discussion and Analysis filed with the Alberta and British Columbia Securities Commissions. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
