TORONTO, Oct. 15, 2012 /CNW/ - GuestLogix Inc. (GXI.T), the leading global provider of onboard retail and payment technology to airlines and the passenger travel industry, today announced its financial and operational results for the three- and nine-month periods ended August 31, 2012. All financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS") and reported in U.S. dollars. This is the Company's third quarter reporting in U.S. dollars and under IFRS.
"We continued to demonstrate progress on our growth strategies during and subsequent to quarter end, as evidenced by our contract renewal, new customer win, recent acquisition and milestone global partnership agreement with Panasonic Avionics," said Brett Proud President & CEO GuestLogix. "While revenue was up year-over-year and remained flat sequentially, we took some one-time charges primarily related to closing projects that placed downward pressure on our bottom line results for the quarter. Going forward, we are confident that our market leadership position, global talent and product portfolio, combined with a more focused approach, position us to better capitalize on the growth opportunities available to us."
Mr. Proud continued: "We recently announced that the Board of Directors has commenced a strategic review process to determine the best way to maximize value for our shareholders. In the meantime, we are focused on four key initiatives. These initiatives are: 1) Driving top line growth via core areas of the business, which includes rationalizing our product lines to best align them with near-term opportunities; 2) Streamlining our cost structure, as illustrated by initial steps we have already taken subsequent to quarter end that are expected to reduce our expense base by $1.5 million annually; 3) Successfully integrating the acquired Initium Onboard business and driving additional revenues from our 27 newly attained customers; and 4) Effectively leveraging our new channel partnership with Panasonic Avionics to further strengthen our revenue results in the coming quarters."
Q3 F2012 Financial Summary
- Revenue of $5.9 million, compared to $6.0 million in Q2 F2012.
- Operating Expenses of $8.2 million, or $6.6 million excluding $1.6 million in one-time expenses related to the discontinuation of certain non-revenue generating projects and M&A activity, compared to $6.6 million in Q2 F2012.
- EBITDA(1) of $(2.1) million, or $(0.5) million excluding the impact of one-time expense, compared to $(0.4) million in Q2 F2012.
- Net income of $(2.0) million, or $(0.4) million excluding the impact of one-time expense, compared to $(0.5) million in Q2 F2012.
- Cash and cash equivalents of $6.0 million, including restricted cash of $1.0 million, as at August 31, 2012, which includes $3.0 million in proceeds from the non-brokered private placement which the Company used to satisfy the cash portion of the Initium Onboard acquisition subsequent to quarter end.
Q3 F2012 Operational Highlights
- Subsequent to quarter end, Company acquired U.K.-based onboard retail technology provider, Initium Onboard for a total transaction value of GBP £3.3 million (60% cash and 40% common shares) adding 250 million annual passenger trips (188 million airline and 62 million rail).
- In conjunction with the acquisition, the Company completed a private placement with Advanced Inflight Alliance AG, a global leading provider of in-flight content and solutions.
- Signed multi-year contract renewal with U.S. Airways, including a fleet-wide Point-of-Sale device refresh and implementation of Global Payment Services.
- Signed multi-year contract with US-based airline Sun Country to deploy its retail technology platform including a fleet-wide deployment of its Point-of-Sale devices for the sale of food and beverages, duty free products and other items onboard.
- New Content: In addition to the Company's retail technology platform, Sun Country's also plans to deploy GuestLogix' merchandising platform to include OnTouch® destination-based products and services for sale onboard.
- Extending Access: Subsequent to quarter end, signed agreement with Panasonic Avionics to integrate Company's certified Payment Processing capabilities with Panasonic's In-Flight Entertainment solutions, with the integrated solution now available for deployment across 44 airlines.
- Appointed finance industry veteran, Jamie Halegoua, to Company's Board of Directors.
- Subsequent to quarter end, Company's Board of Directors named Brett Proud President & CEO.
- Subsequent to quarter end, Company's Board of Directors formed a special committee of independent directors and commenced a strategic review process
- As part of the strategic review process, the Company implemented organizational changes, primarily a reduction in headcount, expected to generate $1.5 million in annualized savings.
Key Operating Metrics
|Q3 F2012||Q2 F2012||Q3 F2011|| 9 months
| 9 months
| Gross Transaction Value (GTV)
processed in the period
|Total revenue as a percentage of GTV||4.0%||4.0%||3.6%||4.0%||3.9%|
GuestLogix' Q3 F2012 results are the Company's third set of consolidated financial statements prepared in U.S. dollars and under IFRS. For more detailed information regarding the Company's transition to IFRS, including a reconciliation of the Company's Q3 fiscal 2011 results and fiscal 2011 annual results as originally reported in Canadian Generally Accepted Accounting Principles ("CGAAP") to IFRS, please refer to the Company's financial statements and MD&A filings on SEDAR at www.sedar.com. Note, the Company has not provided CGAAP to IFRS reconciliations for its quarterly or annual results prior to fiscal 2011. Therefore, historical numbers reported under CGAAP should not be directly compared to the Company's fiscal 2011 or fiscal 2012 quarterly or annual results as reported under IFRS.
|Q3 F2012||Q2 F2012||Q3 F2011|| 9 months
| 9 months
|Operating Expenses (2)||$8.2M||$6.6M||$5.0M||$20.5M||$15.3M|
|Net Income (Loss)||$(2.0)M||$(0.5)M||$0.5M||$(2.4)M||$1.4M|
|Net Income (Loss) Per Share||$(0.03)||$(0.01)||$0.01||$(0.04)||$0.02|
Transition to IFRS
Effective December 1, 2010, the Company changed its functional and presentation currency from the Canadian dollar to the U.S. dollar as a result of the adoption of IFRS and the significant role of the U.S. dollar in the business operations of the Company. In addition, as required under IFRS, the Company must now recognize revenue attributed to the hardware components contained in a multiple-element agreement as if it were an upfront sale at the inception of the arrangement. The effect of applying this change at December 1, 2010 was the elimination of deferred cost of equipment sales and capital assets deployed accounts, as well as a significant reduction in deferred revenue to reflect the upfront sale, while the Company restated net finance receivable to reflect the fair value of the delivered elements of the arrangement. Accordingly, revenue under IFRS, including what the Company has reported for Q3 2012 and Q3 2011, is reduced by an amount equal to the fair value of the hardware components of the arrangement recognized in past periods. While the changes to the Company's accounting policies under IFRS are significant, the underlying business model and cash inflows remain the same as they were under CGAAP.
Q3 F2012 Conference Call Details
GuestLogix will host a conference call on Monday, October 15, 2012 at 4:30 p.m. Eastern Time to discuss its fiscal 2012 third quarter financial and operational results as well as the Company's outlook for the remainder of the fiscal year. To access the conference call, please dial 647-427-7450, or 1-888-231-8191. A replay of the call will be available at http://www.guestlogix.com/events.html.
|A complete set of financial statements and Management's Discussion and Analysis for the three- and nine-month month periods ended August 31, 2012 will be available at www.sedar.com and www.guestlogix.com|
|(1) Defined as Earnings Before, Interest, Taxes, Depreciation and Amortization|
|(2) Includes depreciation and stock based compensation, but excludes interest and F/X gains or losses|
GuestLogix Inc. (GXI: TSX), the leading global provider of onboard store technology and merchandising solutions, helps airlines and other travel operators create, manage, and control onboard retail environments tailored to their needs and their passengers. GuestLogix brings a decade of expertise as a trusted onboard transaction processing partner to airlines around the world. The Company's global headquarters and centre for product innovation is located in Toronto, Canada with regional head offices located in Dallas, Texas (serving Americas) London, UK (serving EMEA), and Hong Kong (serving Asia-Pacific). A sales and support office is located in Singapore and Shanghai. Logistics centres are situated in Toronto, Dallas, London and Seoul with a software development centre located in India. In September 2012, GuestLogix acquired U.K.-based onboard retail technology provider Initium Onboard with clients in Europe, South America, Asia-Pacific and the Middle East. More information is available at www.guestlogix.com
© 2012 GuestLogix. All Rights Reserved. ®OnTouch is a trademark of GuestLogix Inc. and is registered in the United States and may be pending or registered in other countries. All other trademarks and trade names are the property of their respective owners.
This news release includes certain forward-looking statements that are based upon current expectations including the anticipated benefits to GuestLogix of the acquisition of Initium Onboard, which involve risks and uncertainties associated with GuestLogix' 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 GuestLogix' 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 that GuestLogix may not realize all of the anticipated benefits from the acquisition of Initium Onboard as well as the matters discussed under "Risks and Uncertainties" in the GuestLogix management's discussion and analysis filed October 15, 2012 with the regulatory authorities. GuestLogix 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, other than as required by applicable laws.
SOURCE: GuestLogix Inc.
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