Posera-HDX Announces Financial Results for the First Quarter of 2014

TORONTO, May 14, 2014 /CNW/ - Posera-HDX Ltd. (TSX: HDX) (the "Company" or "Posera-HDX") announced today its financial results for the three-months ended March 31st, 2014.  Posera-HDX is listed on the TSX under the symbol "HDX".

Paul Howell, Chief Executive Officer, reports:  

Although inclement weather and slow economic activity hampered the Company's efforts, Posera-HDX Ltd. achieved improved levels of revenue and EBITDA for the three-months ended March 31, 2013, when compared to the three-months ended March 31, 2013. On December 9th, 2013 the Company completed the acquisition of Zomaron Inc. ("Zomaron"). The acquisition of Zomaron, a rapidly growing company with a successful management team with now over 160 sales agents, will be instrumental in the Company's growth strategy and lays the groundwork for significant sales growth for the remainder of 2014 and beyond.

Despite the fact that the first quarter is traditionally a slow period for new system sales in the hospitality industry, Company revenue was strong at $4,721,624 for the three-months ended March 31, 2014, an increase of $628,038 (15.3%) from $4,093,586 for the three-months ended March 31, 2013.

The Company's merchant base processed debit and credit card transactions totalling $172,962,789 ($691,851,156 on an annualized basis) during the three-months ended March 31, 2014 compared to $41,816,054 ($707,071,464 on an annualized basis) for the twenty-two days post the December 9th, 2013 acquisition to the Company's December 31, 2013 year-end. The first quarter typically is the slowest processing period for debit and credit card transactions, as compared to the fourth quarter, which is typically the strongest period for payment processing. As at March 31, 2014 Zomaron has 2,426 active merchants which compares to 1,420 (an increase of 70.8%) and 2,209 (an increase of 9.82%) active merchants as at March 31, 2013 and December 31, 2013 respectively.  The processed debit and credit card transactions are somewhat seasonal based on the sales of Zomaron's merchants, where the three-months ended March 31st tends to be the slowest, and the three-months ended December 31st tends to be the most robust.

The Company has experienced a Normalized EBITDA loss for the three-months ended March 31, 2014 of $119,580, an improvement of $156,822 (56.7%) from a Normalized EBITDA loss of $276,402 for the three-months ended March 31, 2013. The Company incurred amortization of acquired intangible assets of $260,924 (2013 - $326,065), amortization of property plant and equipment was $22,722 (2013 - $36,921), one-time expenses of $31,912 (2013 - $8,319) and stock-based compensation of $2,578 (2013 - $12,199) for the three-months ended March 31, 2014 and 2013 respectively.  

Quarterly Highlights and Summary

  • Total revenue was $4,721,624 for the three-months ended March 31, 2014, up $628,038 (15.3%) from $4,093,586 for the three-months ended March 31, 2013 and down ($1,219,117) (20.5%) from $5,940,741 for the three-months ended December 31, 2013;

  • Total point-of-sale revenue was $4,348,770 for the three-months ended March 31, 2014, up $257,485 (6.3%) from $4,091,285 for the three-months ended March 31, 2013 and down $1,438,286 (24.9%) from $5,787,056 for the three-months ended December 31, 2013;

  • Total payment processing revenue was $372,854 for the three-months ended March 31, 2014, up $370,553 (16,104.0%) from $2,301 for the three-months ended March 31, 2013 and up $219,169 (142.6%) from $153,685 for the three-months ended December 31, 2013;

  • Total gross payment processing fees was $2,739,876 for the three-months ended March 31, 2014, up $2,736,970 (941.8%) from $2,906 for the three-months ended March 31, 2013 and up $2,026,071 (283.8%) from $713,805 for the three-months ended December 31, 2013;

  • Net loss for the three-months ended March 31, 2014 was a loss of $438,985, an increase of $161,739 from a loss of $600,724 for the three-months ended March 31, 2013, and a decrease of $799,758 from income of $360,773 for the three-months ended December 31, 2013;

  • EBITDA loss for the three-months ended March 31, 2014, was $154,340, an improvement of $142,580 from an EBITDA loss of $296,920 for the three-months ended March 31, 2013, and a decrease of $1,009,111 from an EBITDA profit of $854,771 for the three-months ended December 31, 2013;

  • Normalized EBITDA loss for the three-months ended March 31, 2014 was $119,850, an improvement of $156,552 from a Normalized EBITDA loss of $276,402 for the three-months ended March 31, 2013, and a decrease of $1,049,552 from a Normalized EBITDA income of $929,703 for the three-months ended December 31, 2013

  • Gross profit was $2,152,662 for the three-months ended March 31, 2014, up $636,706 (42.0%) from $1,515,956 for the three-months ended March 31, 2013, and down $532,922 (19.8%) from $2,685,584 for the three-months ended December 31, 2013;

  • Operating expenses were $2,590,648 for the three-months ended March 31, 2014, up $549,628 (26.9%) from $2,041,056 for the three-months ended March 31, 2013, and up  $369,919 (16.7%) from $2,220,765 for the three-months ended December 31, 2013;

  • Included in cost of sales and operating expenses for the three-months ended March 31, 2014, March 31, 2013 and December 31, 2013 were certain one-time non-recurring expenditures, non-cash amortization of intangible assets and property plant and equipment, non-cash stock-based compensation expense and non-cash impairment to assets totaling $318,136, $383,505 and $260,795 respectively;

Non-GAAP Reporting Measures: 

Management reports on certain non-GAAP measures to evaluate performance of the Company. EBITDA is a measure commonly reported and widely used by investors as an indicator of a company's operating performance and ability to incur and service debt, and as a valuation metric. While EBITDA has been disclosed herein to permit a more complete comparative analysis of the Company's operating performance and debt servicing ability relative to other companies, investors are cautioned that EBITDA as reported by Posera-HDX may not be comparable in all instances to EBITDA as reported by other companies.  For definitions of Non-GAAP measures, refer to the Company's annual management discussion and analysis for the three-months ended March 31, 2014.

Additional information on HDX first quarter 2014 financial results will be available in the financial reports filed by the Company with Sedar at www.sedar.com.

About the Company

Posera-HDX is in the business of managing merchant transactions with consumers and facilitating payment. The company develops and deploys touch screen POS system software and associated enterprise management tools and has developed and deployed numerous POS applications. Posera-HDX also provides system hardware integration services, merchant staff training, system installation services, and post sale software and hardware support services.

Posera-HDX leading edge technology also includes prepaid stored value payments solutions, customer self serve kiosks and "line buster" mobile point of sale terminals. These products have been designed to dramatically enhance customer throughput and drastically reduce customer queues. These technologies are especially effective in high foot traffic environments that have limited cash register counter space, limited retail square footage, and the absence of a drive through.

Founded in 2008, Zomaron provides credit and debit card processing solutions to Canadian merchants nationwide. Based in London, Ontario, Zomaron has offices in Edmonton AB, Toronto ON, and Montreal QC. Through its nation-wide network of sales representatives and strategic partnerships, Zomaron has experienced rapid growth, doubling its sales annually. Zomaron's exponential growth led it to be ranked on PROFIT magazine's 13th and 14th annual PROFIT HOT 50 issues in October 2012 and 2013 respectively. Zomaron's solutions and services can also be marketed and deployed in the United States.

Posera-HDX Ltd. develops, deploys, and supports a restaurant point-of-sale software know as "Maitre'D" which has been deployed in over 20,000 locations worldwide in eight different languages.  The Company sells and services its clients directly, as well as through a network of approximately 93 value added reseller partners in 25 countries with approximately 550 representatives selling, supporting & installing its software. Posera-HDX employs approximately 139 people in offices in Toronto, London, Brantford, Mississauga, Seattle, Montreal, Glasgow (U.K.), Paris (France) and Singapore. 

Forward-Looking Statements 

This discussion includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with our business and the environment in which the business operates.  Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", and similar expressions to the extent they relate to the Company or its management.  The forward-looking statements are not historical facts, but reflect HDX's current expectations regarding future results or events.  These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risks and Uncertainties" in the Annual Information Form to be filed on March 27th 2014 with the regulatory authorities.  HDX assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements. 

SOURCE: Posera-HDX

For further information: Paul Howell, Chief Executive Officer, Posera-HDX Ltd. (HDX), 350 Bay Street, Suite 700, Toronto, Ontario M5H 2S6, (416) 703-6462 ext. 2263

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