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Advantex Announces Fiscal 2009 Third Quarter Results 5/15/2009 12:00:00 AM
NEWS RELEASE ADX: TSX Advantex Announces Fiscal 2009 Third Quarter Results Toronto, May 15, 2009 – Advantex Marketing International Inc. (TSX:ADX), a leading specialist in loyalty marketing programs and merchant funding, today announced its results for the Fiscal 2009 third quarter ended March 31, 2009. All references to quarters or years are for the fiscal periods and all currency amounts are in Canadian dollars unless otherwise noted.
“The Company’s third quarter results were impacted by soft consumer spend in a weak economy, and seasonality during our historically weak third quarter that is reflective of decline in consumer spend, following the holiday period, in the CIBC Advantex programs, and Online business,” said Kelly E. Ambrose, President and Chief Executive Officer.
“The business model is sound, and the Company continues to experience strong demand for its Advance Purchase Marketing (APM) product offering. The Company is committed to achieving a profit before non cash items for Fiscal, 2009. In order to do so in difficult economic times, the Company is working on two fronts: increasing the number of establishments participating in its programs to offset the decline in the consumer spend, and cutting costs, ”Mr. Ambrose said.
A detailed look at the results for the three and nine months ended March 31, 2009 is set out: Results of Operations
* The presentation above is not set out in accordance with Canadian generally accepted accounting principles (GAAP), but has been included to provide additional analysis for the reader. Some numbers in the above presentation above may not add due to rounding. Third quarter results reflect:
1. A substantially weakened economy. The decline in consumer spend at establishments participating in our programs has ranged between 11 % - 25 % in the October 2008 to March 2009 period compared with corresponding period in the previous year 2. Costs were high given the new market realities. Although well intentioned as we geared up for expansion, we could not support the cost structure going forward, and to address this the Company implemented both a salary reduction, and a headcount reduction program in mid March / early April, 2009
Additional details on the Company’s Q3 performance and its financial position at March 31, 2009 are available in the unaudited consolidated financial statements, and management’s discussion and analysis for the three and nine months ended March 31, 2009.
About Advantex Marketing International Inc. Advantex is a specialist in the marketing services industry, managing white-labeled rewards accelerator programs for major affinity groups through which their members earn bonus frequent flyer miles and/or other rewards on purchases at participating merchants. Under the umbrella of each program, Advantex provides merchants with marketing, customer incentives, and secured future sales through its Advance Purchase Marketing model. Advantex partners include more than 700 restaurants, online retailers, golf courses, small inns and resorts, and major organizations, including CIBC, United Airlines, Alaska Airlines, and Lufthansa Airlines. Advantex is traded on the Toronto Stock Exchange under the symbol "ADX". For additional information on Advantex, please visit www.advantex.com.
Forward-Looking Information This Press Release contains certain “forward-looking information”. All information, other than information comprised of historical fact, addresses activities, events or developments that the Company believes, expects or anticipates will or may occur in the future. Such forward looking information includes, without limitation, information regarding the Company’s belief that Transaction Credits are likely indicators of future revenue; the Company’s expectation that its cost saving measures, implemented mid March, 2009 / early April, 2009, will be realized during the remainder of Fiscal 2009 and beyond ; management’s expectations with respect to reaching an agreement with CIBC / potential partners to expand its’s Advance Purchase Marketing (APM) program into retail fashion establishments in remainder of Fiscal 2009 and beyond, and its ability to continue to access financing under its existing line of credit facility with respect to expanding the APM program in both the current categories (dining, golf, small inns and spa) allowed under the current CIBC agreement, and in the retail fashion category ; the Company’s anticipated increase in the number of Merchant Partners with which it will do business; the Company’s anticipated revenues from the ‘Infinite Hotel’ program, the anticipated strong demand for the APM program offered by the Company; the Company’s continued investment in information technology systems required to keep pace with partner and marketplace standards; the number of retailers the Company expects to target for its programs, including the regional markets in which the Company intends to focus on; the impact on the Company’s revenues that increased merchant participation would have; the Company’s expectation that increase in merchants participating in its programs will offset impact from decline in consumer spend on the Company’s revenues; the Company’s expectation that it will be able to work out a payment plan with the CRA such that it will not diminish its ability to maintain and or increase its Transaction Credits; the Company’s intentions with respect to retaining future earnings in the foreseeable future; and other information regarding financial and business prospects and financial outlook is forward-looking information. Forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking information is subject to a number of risks, uncertainties and assumptions that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things, changes in general economic and market conditions, changes to regulations affecting the Company's activities, uncertainties relating to the availability and costs of financing needed in the future, delays in finalizing the retail contract, continuation of listing on the TSX, and other factors, including without limitation, those listed under “Risks and Uncertainties” and “Economic Dependence” in the Company’s interim and year end filings. All forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein. - 30 -
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