TIO reports Q1 fiscal 2014 financial results

LOWER CUSTOMER CONCENTRATION, NEW BUSINESS AND STRATEGIC ACCRETIVE ACQUISITION POSITION TIO FOR SUCCESS IN 2014

VANCOUVER, Dec. 17, 2013 /CNW/ - TIO Networks Corp. (TSX-V: TNC) today announced fiscal first quarter 2014 financial results for the period ended October 31, 2013.

Quarterly financial & business highlights

• A quarter over quarter sequential adjusted EBITDA improvement to $72,000 compared to an EBITDA loss of $122,000 in Q4 2013.
• Transaction to acquire Globex Financial Services, Inc. ("Globex"), a leader in bill payments and other walk-up financial services, remains in progress and on track to close in calendar Q1 2014.  The transaction is expected to be strategically and financially accretive.
• Revenue from mobile/web payments business unit increased 40% to approximately $397,000 in Q1FY14 from approximately $284,000 a year ago for the quarter, with 11 web and mobile programs active.
• Revenue ramping up for new bill payment partner AIO Wireless, now a top 5 billing partner
• The Company reduced operating expenses by $201,320 compared to Q1FY13 as the Company's initiative to reduce annual expenses by $1,250,000 has been fully implemented
• TIO surpassed the 1.5M transactions processed milestone across all TIO Wallet member programs since inception in January 2011 worth over $250M in bill payments.
• A policy change by one of TIO's largest billing partners on the control of convenience fees caused the company to no longer recognize full convenience fee revenue as part of its revenue recognition practices in a key business segment.  While this reduced top-line revenue, total margins from the customer remained strong and well positioned for growth.

	Three months ended October 31
	2013	2012
Revenue	$8,261,332	$10,481,213
Adjusted EBITDA*	$72,000	$ 286,000
Operating Cash Flow	$900,638	$737,255
Net Income (loss)**	$(205,421)	$30,580

*EBITDA is a non-IFRS measure - earnings before interest, tax, depreciation and amortization, and stock-based compensation. Adjusted EBITDA is EBITDA excluding non-recurring transaction and restructuring expenses
** Net loss of $205,421 for Q1 2014 included $18,000 of one-time expenses associated with due diligence expenses of Globex

The Company finished the quarter with $8,478,968 in cash and cash equivalents and restricted cash (including cash held to fulfill bill payment obligations). This amount includes a $3 million cash held in escrow related to the acquisition of Globex.

"We had a strong quarter where we returned our core business to profitability with the help of our expense reduction program and the ramp up of key billers such as AIO Wireless" said Hamed Shahbazi, Chairman and CEO of TIO Networks.  "We also made significant progress towards completing our pending acquisition of Globex which will significantly boost our utility payments business and give us a national footprint.  Earlier today, we also announced the onboarding of Gulf Power Company for a material multi-channel payments engagement.  We are excited about the organic and inorganic growth levers that are now positioning the company for sustained growth in calendar 2014".

A conference call to discuss the results will be held on Tuesday December 17, 2013 at 1:30 p.m. EST. To participate please dial, [phone] in Toronto or Toll free, 1-800-731-5319 and request the TIO Networks Conference.

TIO NETWORKS CORP.

TIO is a cloud based multi-channel bill payment processor serving the largest telecom, wireless, cable and utility network operators in North America.  With more than 59,000 physical location endpoints to its bill payment processing network, TIO symbolizes fast, convenient and secure access to high quality bill payment services.  Please visit www.tionetworks.com

The TSX Venture Exchange has not reviewed this news release and does not accept responsibility for its adequacy and accuracy.

This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made.  Potentially, many factors could cause our actual results to vary materially from those described herein as intended, planned, anticipated or expected.  TIO Networks Corp. does not intend and does not assume any obligation to update these forward-looking statements.

* EBITDA is a non-IFRS measure - earnings before interest, tax, depreciation and amortization, and stock-based compensation. Adjusted EBITDA  is EBITDA excluding non-recurring transaction and restructuring expenses.  EBITDA is not a defined term under IFRS nor does it have a standard, agreed upon meaning.  Accordingly, the Company's EBITDA may not be directly comparable to EBITDA reported by other issuers.  Management had determined EBITDA is a useful supplemental measure in evaluating the Company's performance as it provides investors with an indication of cash available for debt service, working capital needs and capital expenditures.  This non-IFRS measure is intended to provide additional information on the Company's performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

 

SOURCE: TIO Networks Corp.

Derek Lai - Acting CFO - TIO Networks
Tel:  [phone], Ext. 269
Email:  [email protected]

Brett Maas, Hayden IR
Tel:  [phone]
Email:  [email protected]