WANTED Technologies' Q3 Recurring Revenue Increases 7% As Diversification Strategy Gains Momentum

WANTED Technologies, Named "Cool Vendor in Human Capital Technology" Market

  • Improvement of 7% in the Company's recurring revenue base in US dollars, from an annualized value of US$4.4 million as of March 31, 2010 to US$4.7 million as of March 31, 2011.
  • New Analytics 3.0TM platform successfully deployed by initial clients in Corporate HR and Staffing Recruiter divisions.
  • WANTED Technologies named "Cool Vendor" by global industry analyst, Gartner, Inc.
  • Revenue of $1,264,699 for the third quarter, compared to $1,285,865 in the third quarter of prior year, a 2% decrease.
  • Negative EBITDA of $132,979, compared to negative EBITDA of $18,541 in third quarter of fiscal 2010.
  • Net loss of $270,298, compared to a net loss of $147,413 in the third quarter of prior year.

QUEBEC CITY, May 25, 2011 /CNW Telbec/ - WANTED Technologies (TSXV: WAN), the leading source of business intelligence for the talent marketplace, reported a gain in its recurring revenue base of 7 percent, a sign that the Company's diversification strategy is gaining momentum. WANTED has been investing in new products and services, enabling the Company to enter new markets, and show revenue growth outside the traditional media sector where the Company had previously focused its services.

WANTED reported a net loss of $270,298 and revenues of $1,264,699 for the third quarter of fiscal 2011 ended March 31, 2011. Total revenues were down 2% compared to the prior year. The weakness of the American dollar, compared to the prior year was responsible for a currency-related negative variance of approximately $65,000. Had exchanged remained constant with the prior year, WANTED would have shown a revenue increase of 3%. All amounts are in Canadian dollars, unless otherwise indicated.

"We showed growth in an important business metric, which is our recurring revenue base," said Bruce Murray, President and CEO. "We have also begun to increase our investments in new products and services, as well as in sales and marketing."

"The employment sector is beginning to recover slowly, and we believe the timing is appropriate to begin investing more heavily in growth in new markets," said Murray.

In December, 2010, the Company launched a new product platform designed to meet the needs of recruiters in the Corporate HR and Staffing sector. This new product contains information and analysis to help employers and staffing firms identify potential candidates faster and reduce both the time-to-hire and cost-per-hire for skilled and managerial positions.

WANTED's launch of the new AnalyticsTM 3.0 platform has enabled the Company to enter the much larger market for corporate human capital services. As the economy recovers and demand for employees picks up, WANTED expects to see the majority of its revenue growth among Corporate HR clients.

"We signed several new Corporate HR clients during the recent quarter and are working with them to build out a robust suite of business intelligence services," said Murray. "The feedback we are getting is positive and allowing us to accelerate our product development efforts in a very focused way."

WANTED's revenues for the quarter ended March 31, 2011 decreased by 2 percent to $1,264,699 compared to $1,285,865 for the corresponding quarter of the previous year. For the nine-month period ended March 31, 2011, revenue totalled $3,890,884, compared to $3,565,067 for the same period in the previous fiscal year, an increase of 9%. The majority of WANTED's clients subscribe on an annual basis to the Company's online platform, AnalyticsTM. Recurring revenue contracts with these clients represent approximately 93 percent of WANTED's total revenues for the third quarter of fiscal 2011, compared to 91 percent for the third quarter of fiscal 2010.

As at March 31, 2011, contracts in hand, in Canadian dollars, represented approximately 4.6 million dollars in annualized recurring revenues. This compares with contracts in hand totalling approximately 4.5 million dollars as of March 31, 2010, an increase of 2 percent. The majority of WANTED's clients are in the US and when viewed in US dollars, the level of recurring revenues as of March 31, 2011 is up 7 percent from 4.4 million dollars as of March 31, 2010.

WANTED's decision to diversify its client base beyond Media clients has succeeded in replacing some of the lost recurring revenue. Gains have come from the Staffing and Government sectors leading to a more stable recurring revenue base. These two sectors, Staffing and Government, represented together, at the end of the third quarter of fiscal 2011, approximately 45% of the total recurring revenue base compared to 26% a year ago. The Company's partnership with The Conference Board, positively contributed to this diversification.

                   
      Three-month periods   Nine-month periods
      ended March 31,   ended March 31,
      2011   2010   2011   2010
      (unaudited)   (unaudited)   (unaudited)   (unaudited)
      $   $   $   $
Revenues     1,264,699   1,285,865   3,890,884   3,565,067
Cost of sales     2,662   28,697   53,801   30,725
Gross margin     1,262,037   1,257,168   3,837,083   3,534,342
                   
Expenses                  
  Research and development, net of tax credits   481,002   400,791   1,308,699   1,133,869
  Marketing and selling   648,707   599,862   1,800,412   1,570,958
  Administrative   300,207   292,049   872,849   817,625
  Amortization of intangible assets   40,770   40,770   122,310   122,310
  Financial expenses, net amount   11,381   19,283   17,581   43,340
      1,482,067   1,352,755   4,121,851   3,688,102
Loss before other revenue (expenses)
and income taxes
    (220,030)     (95,587)     (284,768)   (153,760)
Other revenue (expenses):                  
  Exchange loss   (30,446)   (37,548)   (87,751)   (120,203)
  Gain (loss) on disposal of property, plant and
equipment
      211   (2,297)   211
Loss before income taxes     (250,476)   (132,924)   (374,816)   (273,752)
Income taxes     19,822   14,489   57,315   45,812
Loss and comprensive income     (270,298)   (147,413)   (432,131)   (319,564)
Basic and diluted net loss per share     (0.011)   (0.006)   (0.018)   (0.013)
                 
           

Operating costs went from $1,352,755 in the third quarter of fiscal 2010 to $1,482,067 for the third quarter of fiscal 2011, an increase of 10 percent. For the first nine months of fiscal 2011, operating costs totalled $4,121,851, compared to $3,688,102 for the first nine months of the previous fiscal year, an increase of $433,749 or 12 percent. These increases mostly result from increases in research and development, in sales and marketing and in administrative expenses.

Negative EBITDA for the third quarter of fiscal 2011 totalled $132,979, compared to a negative EBITDA of $18,541 for the third quarter of fiscal 2010, a variation of $114,438. For the first nine months of fiscal 2011, negative EBITDA totalled $49,142, compared to EBITDA of $39,254 for the first nine months of the previous fiscal year, a decrease of $88,396. EBITDA represents the net earnings before net financial expense, income taxes, depreciation and amortization on property, plant and equipment and intangible assets. As generally accepted accounting principles in Canada do not provide a standardized definition for this measure, it may not be comparable to similar measures used by other companies.

Net loss for the quarter ended March 31, 2011 amounted to $270,298 (loss of $0.011 per share) compared to a net loss of $147,413 ($0.006 per share) for the corresponding quarter of the previous year, a negative variation of $122,885. For the first nine months of fiscal 2011, net loss reached $432,131, compared to a net loss of $319,564 for the first nine months of the previous fiscal year, a variation of $112,567. These negative variations result from the combination of increases in loss before other revenue and expenses, partially offset by decreases in losses recorded on foreign exchange. When compared to the same period for the previous year, loss before other revenue and expenses increased $124,443 and $131,008 for the respective three-month and nine-month periods ended March 31, 2011. As for foreign exchange, the unfavourable prevailing exchange rates caused the Company to record currency exchange losses of $30,446 and $87,751 for the third quarter and the nine-month period ended March 31, 2011, representing respective positive variations of $7,102 and $32,452 over the corresponding period of prior year.

Higher provisions for income taxes also contributed to the variation in net losses for the three-month and nine-month periods ended March 31, 2011. The Company recorded provisions of $19,822 and $57,315 for the third quarter and the nine-month periods ended March 31, 2011, compared to provisions of $14,489 and $45,812 recorded in the corresponding period of prior year, representing negative variations of $5,333 and $11,503 respectively.

Financial position

As at March 31, 2011, WANTED had a cash position (cash and temporary investments) of $1,555,493 and a working capital of $1,368,781. This compares with a cash position of $2,430,913 and a working capital of $1,801,720 as at June 30, 2010, representing decreases of $875,420 and $432,939 respectively. This decrease of $875,420 in the Company's liquidity is mainly the result of negative cash flows of $165,048, $151,175 and $559,197 used for operating, investing and financing activities respectively.

Total assets stood at $5,695,488 at March 31, 2011, down $147,171 from $5,842,659 at June 30, 2010. The decrease in total assets is mainly due to decreases of $371,929 in short-term assets and $122,310 in intangible assets, partially offset by an increase of $347,068 in property, plant and equipment. This increase in property, plant and equipment mostly results from investments in leasehold improvements as well as the purchase of computer equipments required to maintain adequate user response time within new and more complex user functionalities as well as to support new product development.

Those interested will be able to access the information on the March 31, 2011 unaudited 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 25th, 2011.

About WANTED Technologies Corporation

WANTED provides real-time business intelligence for the talent marketplace. 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.

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.

WANTED Technologies (TSX-V:WAN) was 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. The company began collecting detailed Hiring Demand data in June 2005, and currently maintains a database of more than 600 million unique job listings. To sample WANTED's services, visit www.wantedanalytics.com. For more information about how WANTED helps organizations make better decisions and improve sales results, visit www.wantedtech.com.

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 INC.

For further information:

Source:  WANTED Technologies Corporation
Contact: 
Mr. Bruce Murray, President and CEO
Tel: (418) 523-6663, ext. 222

Mr. Martin Auclair, VP Finance and CFO
Tel: (418) 523-6663, ext. 337

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WANTED TECHNOLOGIES INC.

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