Posera-HDX Announces 28% Revenue Growth for the Third Quarter of 2013

TORONTO, Nov. 14, 2013 /CNW/ - Posera-HDX Ltd. (TSX: HDX) (the "Company" or "Posera-HDX") announced today its financial results for the three and nine-months ended September 30th, 2013.  Posera-HDX is listed on the TSX under the symbol "HDX".

Paul Howell, Chief Executive Officer, reports:

The Company's strong performance continued and accelerated in the third quarter. New sales of restaurant management solutions, existing client site upgrades, software license revenues, and growing recurring contract revenues contributed to the Company achieving its' best quarter on record.

The Company achieved quarterly revenue of $5,171,555 for the three-months ended September 30, 2013, an increase of $1,138,981 (28.2%) from $4,032,574 for the three-months ended September 30, 2012. This resulted in the Company realizing an EBITDA profit for the three-months ended September 30, 2013 of $556,855, an increase of $784,264 from a ($227,409) loss for the three-months ended September 30, 2012, and an increase of $727,965 from a ($171,110) loss for the three-months ended June 30, 2013. Net Income was $410,839 excluding a non-cash write-down of $331,059 for certain processing assets, non-cash amortization of intangible assets property plant and equipment of $477,100 and non-cash stock-based compensation of $4,178.

The Company continues to pursue strategic acquisitions within the Point-of-Sale ("POS") and Payment Processing industries and has recently announced a letter-of-intent to acquire Zomaron Inc., operating as Zomaron Merchant Services ("Zomaron"), which the Company anticipates will close during the fiscal year 2013.

Founded in 2008, Zomaron provides debit and credit 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. Zomaron's exponential growth led it to be included on PROFIT magazine's 14th and 13th annual PROFIT HOT 50 ranking released in its October, 2013 and 2012 issue. Zomaron's solutions and services can also be marketed and deployed in the United States.

Today, Zomaron provides payments processing services to approximately 2,300 merchants. The opportunity to integrate payments processing services with Posera-HDX Ltd.'s solutions which are installed in the Company's existing merchant / user base of over 25,000 restaurants is very compelling.

In keeping with the Company's long-term goal of reducing un-necessary monthly expenditures, the Company's reduced its annual team member costs by approximately $220,000 per year. Furthermore, the ATM Sales and Processing division, HDX Payment Processing Ltd. ("HDXPP"), has finalized a Shared Cash Dispensing ("SCD") agreement, to outsource the processing of ATM transactions. As a result of this Agreement, which the Company expects to be fully implemented during the first quarter of 2014, the Company expects non-team member expenditure reductions and profitability improvements in the range of $300,000 to $400,000 annually.  Further, as a result of the Company's decision to outsource, the Company incurred a non-cash write-down of $331,059 for certain processing assets during the three and nine-months ended September 30, 2013.

HDXPP experienced an EBITDA profit (loss) for the three-months ended September 30, 2013 of ($157,176), an increase of $15,431 from ($172,607) for the three-months ended September 30, 2012, and a decrease of $4,162 from ($153,014) for the three-months ended June 30, 2013. As a result of the outsourcing agreement, the Company expects to reduce HDXPP's EBITDA loss in the range of $75,000 to $100,000 quarterly.

Quarterly Highlights and Summary

  • Total revenue was $5,171,555 for the three-months ended September 30, 2013, up $1,138,981 (28.2%) from $4,032,574 for the three-months ended September 30, 2012 and up $866,026 (20.1%) from $4,305,530 for the three-months ended June 30, 2013;

  • EBITDA profit for the three-months ended September 30, 2013, was $556,855, an increase of $784,264 from a loss of $227,409 for the three-months ended September 30, 2012, and an increase of $727,965 from $171,110 for the three-months ended June 30, 2013;

  • Net Income was $410,839 excluding a non-cash write-down of $331,059 for certain processing assets, non-cash amortization of intangible assets property plant and equipment of $477,100 and non-cash stock-based compensation of $4,178.

  • Including a non-cash write-down of $331,059 for certain processing assets, non-cash amortization of intangible assets property plant and equipment of $477,100. Net loss for the three-months ended September 30, 2013 was a loss of $401,498, a decrease of $278,494 from a loss of $679,992 for the three-months ended September 30, 2012, and an increase of $50,508 from a loss of $350,989 for the three-months ended June 30, 2013;

  • Gross profit was $2,047,024 for the three-months ended September 30, 2013, up $543,664 (36.2%) from $1,503,360 for the three-months ended September 30, 2012, and up $362,037 (21.5%) from $1,684,988 for the three-months ended June 30, 2013;

  • Operating expenses were $2,298,328 for the three-months ended September 30, 2013, up $202,089 (9.6%) from $2,096,239 for the three-months ended September 30, 2012, and up  $192,413 (9.1%) from $2,105,915 for the three-months ended June 30, 2013;

  • Included in cost of sales and operating expenses for the three-months ended September 30, 2013, September 30, 2012 and June 30, 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 $513,143, $195,203 and $326,714 respectively;

  • The Company incurred non-cash amortization of intangible assets property plant and equipment of $477,100 and $354,972 for the three months ended September 30, 2013 and 2012 respectively.

Non-IFRS Reporting Measures:  Management reports on certain Non-IFRS ("International Financial Reporting Standards") measures to evaluate performance of the Company. Non-IFRS measures are also used to determine compliance with debt covenants and manage the capital structure. Because non-IFRS measures do not generally have a standardized meaning, securities regulations require that non-IFRS measures be clearly defined and qualified, and reconciled with their nearest IFRS measure. The Canadian Institute of Chartered Accountants (CICA) Canadian Performance Reporting Board has issued guidelines that define standardized earnings before interest, taxes, depreciation and amortization (EBITDA). For definitions of Non-IFRS measures, refer to the Company's quarterly management discussion and analysis for the three-months ended September 30, 2013.

Additional information on Posera- HDX's third quarter 2013 financial results will be available in the financial reports filed by the Company with Sedar at www.sedar.com and posted to the Investor Relations section of the Company's website at www.hdxsolutions.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 POS 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.

Posera-HDX Limited develops, deploys, and supports a restaurant POS software known 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 96 value added reseller partners in 25 countries with approximately 550 representatives selling, supporting & installing its software.  Posera-HDX employs approximately 135 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 Posera-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 filed on March 28th, 2013 with the regulatory authorities.  Posera-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 Limited (HDX)
350 Bay Street, Suite 700
Toronto, Ontario M5H 2S6
(416) 703-6462 ext. 2263

Organization Profile

Posera-HDX

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