WANTED Technologies Reports a 66% Revenue Increase with Record Revenues of $3.0 Million
"Big Data" solutions and data analytics for the Human Capital Market drive all-time highs in revenue and EBITDA
- Record revenues of $2,999,658, an increase of 66% or $1,197,503 compared to revenues of $1,802,155 in the third quarter of fiscal 2013. Excluding a significant non-recurring revenue of $703,414 derived from one agreement, revenues grew 27% over the prior year.
- Net income of $777,491 ($0,032 per share) compared to a net income of $372,442 ($0,016 per share) in the third quarter of fiscal 2013, an increase of $405,049.
- EBITDA of $1,275,793 or 43% of revenues, compared to an EBITDA of $495,356 in the third quarter of fiscal 2013, an increase of $780,437.
- Growth of 18% in the Company's recurring revenue base in US dollars, from an annualized value of US$6.2 million as of March 31, 2013 to US$7.3 million as of March 31, 2014.
- WANTED announced that it will be expanding its sales organization to focus on direct sales efforts in the market for "big data" analytics in the Human Capital Management sector.
- The Company, which sells its products through its direct sales force and through resellers, announced the termination of one of its reseller agreements, effective June 22, 2014.
QUEBEC CITY, May 21, 2014 /CNW Telbec/ - WANTED Technologies (TSXV: WAN), the leading source of data analytics for the talent marketplace, reported today revenues of $2,999,658 for the third quarter ending March 31, 2014, a 66% gain over the same quarter of the prior year. For the first nine months of fiscal 2014, revenues increased 44% to reach $7,347,927, compared to $5,105,925 for the first nine months of the previous fiscal year. Net income also rose to $777,491 in the third quarter compared to a net income of $372,442 for the same period last year, leading to a cumulative net income of $2,251,613 for the first nine months of the year, an improvement of $1,430,391 over the prior year. All amounts are in Canadian dollars, unless otherwise indicated.
"The positive results in this quarter reflect our ability to create products and solutions from our database of more than one billion talent records," said Bruce Murray, WANTED's President and CEO. "These products serve multiple markets that include workforce analytics, recruiting, staffing and financial and economic analysis."
During the third quarter of fiscal 2014, one significant, "big data" license agreement was responsible for non-recurring revenues of $703,414. This significant contract, which was signed during the second quarter, demonstrated how the Company's proprietary analytical processes can convert a sizeable data warehouse of information into compelling products. In this instance, the Company licensed a portion of its database of more than one billion records to enable a financial services client to make more informed analytical decisions about small and medium-sized businesses.
During the third quarter of fiscal 2014, the Company, which sells its products through its direct sales force and through resellers, also announced the termination of one of its reseller agreements, effective June 22, 2014. The reseller agreement represented revenues totalling $345,862 or 12% of total revenues for the most recent quarter and represented $921,286 for the nine-month period ended March 31, 2014.
Excluding any revenue from the terminating partnership ending in June 2004, quarterly revenues for the Corporate and Staffing segments were up 72% year-over-year. During the quarter, revenue from the Corporate and Staffing segments represented 22 % of total revenue, the same percentage as the prior year.
"We measure supply and demand for talent in the marketplace," said Murray. "From these basic measurements, we derive products that help multiple types of clients make more informed business decisions."
WANTED has been collecting and storing this category of data since 2005. The Company mines the historical data for trends and provides current data for real-time analysis.
"Different clients use our data in diverse ways," Murray said. "We offer a flexible user interface and multiple delivery options, which give our users the capabilities they need to operate their businesses more efficiently."
In addition to the gains in topline revenues, the Company continued to record strong gains in recurring revenues, EBITDA and net income.
As of March 31, 2014, and excluding any revenue from the terminating partnership, contracts in hand represented approximately US$ 7.3 million dollars in annualized recurring revenues. This compares with 6.2 million dollars (excluding any revenue from the terminating partnership agreement) as of March 31, 2013, an increase of 18 %. At the end of third quarter of fiscal 2014, 66 % of the recurring revenue base, in US dollars, was supported by contracts from the Staffing, Corporate and Government sectors. This compares to 64% at the end of the previous fiscal year.
|Three-month periods ended||Nine-month periods ended|
|March 31,||March 31,|
|Cost of sales||(110,383)||(103,087)||(260,412)||(289,263)|
|Research and development||(680,105)||(580,282)||(1,516,871)||(1,652,045)|
|Marketing and selling||(649,743)||(503,588)||(1,649,753)||(1,405,567)|
|Other financial expenses||(7,278)||(6,338)||(16,633)||(13,992)|
|Income before tax||1,166,107||391,356||2,738,224||870,205|
|Current tax expense||(156,789)||(38,483)||(229,605)||(107,690)|
|Deferred tax income (expense)||(231,827)||19,569||(257,006)||58,707|
|Net income and comprehensive income||777,491||372,442||2,251,613||821,222|
|Basic net income per share||0.032||0.016||0.093||0.034|
|Diluted net income per share||0.031||0.015||0.090||0.034|
Operating costs increased to $1,833,848 in the third quarter of fiscal 2014, up $494,325 from the $1,339,523 recorded in the third quarter of fiscal 2013. For the first nine months of fiscal 2014, excluding the recognition of one-time tax credits of $482,640 against the research and development in the second quarter of fiscal 2014, operating costs totalled $4,956,804, compared to $3,950,155 for the first nine months of the previous fiscal year, an increase of $1,006,649 or 25 %. The increase in operating costs is mostly due to deploying additional software development resources to accelerate the release of new features and product enhancements and, as WANTED is increasing its focus on its direct sales channel, the addition of new resources to the direct sales organisation. Increases in variable compensation resulting from higher sales and the strong performance of the company and consulting services related to targeted marketing initiatives also contributed to the increase in operating expenses. The Company expects to continue to increase the size of its research and development and sales team to accelerate its development and release of new products. It also expects to increase investments in sales and marketing to increase awareness of the Company's products.
|Reconciliation of EBITDA to Net Income|
|Q3-2014||Q3-2013||9 mts-2014||9 mts-2013|
|Net income for the period||777,491||372,442||2,251,613||821,222|
|Income tax expense||388,616||18,914||486,611||48,983|
|Finance income - net||(110,680)||(31,811)||(124,873)||(3,698)|
|Other financial expenses||7,278||6,338||16,633||13,992|
|Amortization of property, plant and equipment||70,120||57,535||209,364||177,438|
|Amortization of intangible assets||40,770||40,770||122,310||122,310|
|Gains on foreign exchange - net||102,198||31,168||112,824||1,103|
EBITDA of $1,275,793 for the three-month period ended March 31, 2014 represented a positive variation of $780,437 over the corresponding period of prior year. For the first nine months of fiscal 2014, EBITDA totalled $3,074,482, compared to an EBITDA of $1,181,350 in the first nine months of the previous year, an improvement of $ 1,893,132. As noted above, the EBITDA was positively affected by a non-recurring tax credits amounting to $482,640 recorded in the second quarter of fiscal 2014 and non-recurring revenues totalling $960,567 derived from one specific contract executed with a client from the financial sector. EBITDA represents the net income before net finance costs excluding gain or loss due to variation in foreign exchange, income taxes on net income, and amortization and impairment of property, plant and equipment and intangible assets. It is used by managers, analysts, investors and other financial stakeholders to assess the Corporation's performance and management from a financial and operational standpoint. As International Financial Reporting Standards do not provide a standardized definition for this measure, it may not be comparable to similar measures used by other companies.
The net income for the third quarter of fiscal 2014 was $777,491 or $0.032 per share. This compares to a net income of $372,442 or $0.016 per share for the third quarter of fiscal 2013. This improvement of $405,049 mostly results from an increase of $1,190,207 or 70% in gross margin, partially offset by an increase of $494,325, or 37%, in operating costs. Net income was also affected negatively by an increase of $369,702 in tax expense resulting from both an increased profitability and the fact that the Company used during the third quarter of fiscal 2014 the remaining balance of the eligible research and development costs available to reduce its income taxes in future years. Favourable variations in foreign exchange rate also contributed positively to the profitability by increasing net financing income by $78,869 in the third quarter of fiscal 2014 compared to the same period of prior year. Net income for the nine-month period ended March 31, 2014 totalled $2,251,613 or $0.093 per share, compared to a net income of $821,222 or $0.034 per share for the same period of fiscal 2013, a positive variation of $1,430,391.
As at March 31, 2014, WANTED had $4,896,470 in cash and investments, compared with $3,101,798 as at June 30, 2013, an increase of $1,794,672. This increase in the Company's liquidity is mostly the result of positive cash flows from operating activities of $2,018,199 driven by the increased profitability. The positive cash flows from operating activities were partially offset by cash flows used by investing activities of $156,150 and cash flows used by financing activities of $67,377 during the first nine months of the year.
As at March 31, 2014, total assets amounted to $10,674,138 compared with $7,658,548 as at June 30, 2013, an increase of $3,015,590 mostly resulting from increased cash and investments of $1,794,672 and tax credits receivable of $482,640 recorded in the second quarter ended December 31, 2013. Property, plant and equipment also increased by $192,909 over the last nine-month period.
Also, the Company has amended its stock option plan to provide for automatic extensions of the expiry date of stock options if that date falls during a blackout period, which amendment remains subject to the approval of the TSX Venture Exchange.
Those interested will be able to access the information on the March 31, 2014 unaudited interim consolidated financial statements, the notes thereto and the management discussion and analysis via the Internet at www.sedar.com and at the Company's website, www.wantedtech.com, as of Wednesday, May 21, 2014.
About WANTED Analytics™
WANTED Analytics™ helps recruiting organizations make better decisions faster with real-time data analytics on jobs, employers, and talent. Analytics™ brings together, for the first time, years of hiring demand and talent supply data to create a true talent intelligence platform for hard-to-fill positions.
Clients in the staffing, HR, RPO, media, and government sectors use WANTED Analytics™ to find sales leads, analyze employment trends, gather competitive intelligence, forecast economic conditions, and source hard-to-fill positions.
About WANTED Technologies Corporation
WANTED Technologies (TSX-V:WAN) provides real-time data analytics for the talent marketplace. Founded in 1999, the company's headquarters are in Quebec City, Canada, and it maintains a US-based subsidiary with primary offices in New York City. WANTED began collecting detailed Hiring Demand data in June 2005, and currently maintains a database of more than 1 billion unique job listings. For more information or to sample WANTED's services, visit www.wantedanalytics.com.
WANTED is also the exclusive data provider for The Conference Board's Help Wanted OnLine Data Series®, the monthly economic indicator of Hiring Demand in the United States.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. Any statement that appears prospective shall not be interpreted as such.
SOURCE WANTED Technologies Corp.For further information:
Mr. Bruce Murray, President and CEO
Tel: (212) 242-6140
Mr. Martin Auclair, VP Finance and CFO
Tel: (418) 523-6663, ext. 337