TIO reports Q3 FY2017 financial results

Generated $3.4M in *Cashflow From Operating Activities,
representing growth of 6.4% QoQ and 65.7% YoY

VANCOUVER, June 29, 2017 /CNW/ - TIO NETWORKS CORP. (TSX-V: TNC, the "Company" or "TIO") today announced third quarter financial results for the period ended April 30, 2017.

Third quarter financial & business highlights (all figures in Canadian dollars except where noted):

  • Revenue increased 32.3% to $23.8M from Q3 2016.
  • Gross profit increased 27.7% to $11.4M from Q3 2016.
  • Adjusted EBITDA** for Q3 2017 increased year over year ("YoY") to $2.92M from $2.88M.
  • *Cashflow from operating activities increased by 65.7% YoY and by 6.4% quarter over quarter ("QoQ").
  • Invested and fully expensed $2M in research and development initiatives to drive growth an increase of 52.3% YoY and 17.8% QoQ.
  • TIO's gross transaction processing volume ("TPV") was US$2.2B in Q3 2017 an increase of 21.2% YoY and 2.9% QoQ.
  • TIO's direct-to-consumer membership grew to 1.38M members.
  • TIO's overall activated location count grew sequentially to 62,932 and the number of kiosks activated on the network increased 13.5% from 928 to 1,053.
  • Finished the period with $100.9M in cash and cash equivalents and restricted cash (including cash held to fulfil bill payment obligations).
  • Net cash available for use in operations increased to $19.5M which represents a 113% increase YoY.
  • One-time costs of $0.99M in the form of M&A costs largely related to the PayPal transaction are included in G&A expenses.
  • FX related revaluation of the Silicon Valley Bank's ("SVB") loan resulted in an unrealized loss of $0.38M and is included in foreign exchange loss. The total foreign exchange loss included in Q3 2017 was $0.51M as compared to a $0.32M foreign exchange gain in Q2 2017 representing a $0.83M change QoQ. It is important to note that these FX changes, outside of SVB loan, also impacted Adj EBITDA as the company does not adjust for FX fluctuations in its adj EBITDA figures.

Q3 2017 comparison to Q3 2016

Three months ended Apr. 30

Nine months ended Apr. 30


2017

2016

2017

2016

Revenue

$

23,763

$

17,967

$

72,518

$

49,641

Gross Profit

$

11,392

$

8,919

$

35,285

$

24,771

Adjusted EBITDA**

$

2,922

$

2,880

$

10,677

$

7,543

Operating Cash Flow before non-
cash working capital items and
one-time M&A costs*

$

3,397

$

2,050

$

10,460

$

5,865

Net Income

$

78

$

1,605

$

3,825

$

4,670

Q3 2017 sequential comparison
to Q2 2017

Quarter ended


Apr. 30, 2017

Jan. 31, 2017

Revenue

$

23,763

$

24,537

Gross Profit

$

11,392

$

12,064

Adjusted EBITDA**

$

2,922

$

4,160

Operating Cash Flow before non-
cash working capital items and
one-time M&A costs*

$

3,397

$

3,192

Net Income

$

78

$

2,110

"We had a solid quarter and continued to improve in our all-important *cashflow metric which has been a key focus for management" said Hamed Shahbazi, Chairman and CEO of TIO.  "We thank the shareholders for their support of the PayPal transaction as we had over 99.7% support as part of our shareholder approval process.  We are making good progress towards finalizing the transaction and are excited about joining the PayPal family."

The Company expects the acquisition of TIO Networks by Paypal to be completed in 2017 subject to certain closing conditions.

There will be no conference call.

* Cashflow from operating activities specifically relates to the Company's cashflow generation capabilities.  This metric adds back one-time costs related to the Company's M&A activity.  In Q3 2017, cashflow from operating activities was $3,397 (in '000's) comprised of operating cashflow from operating activities of $2,403 plus $994 in one-time M&A costs.  In Q2 2017, cashflow from operating activities was $3,192 (in '000's) (operating cashflow from operating activities of $2,576 plus $616 in one-time M&A costs)

** EBITDA is a non-IFRS measure - earnings before interest, tax, depreciation and amortization. Adjusted EBITDA is EBITDA plus stock-based compensation, non-recurring transaction and restructuring expenses. EBITDA is not a defined term under IFRS nor does it have a standard, agreed upon meaning. Accordingly, TIO's EBITDA may not be directly comparable to EBITDA reported by other issuers. TIO management had determined EBITDA is a useful supplemental measure in evaluating TIO'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 TIO's performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

About TIO

TIO is a cloud-based multi-channel bill payment processing and receivables management company, serving the largest telecom, wireless, cable, and utility bill issuers in North America. TIO integrates with the back office of billing systems to accept, validate, and accept payments outside of the traditional bank channel, via self-service kiosk, retail walk-in, mobile, and web solutions. TIO symbolizes fast, convenient, and secure access to expedited bill payment services.

Visit: www.tionetworks.com.

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Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

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 does not intend and does not assume any obligation to update these forward-looking statements.

SOURCE TIO Networks Corp.

For further information: Richard Cheung, CFO, Tel: 604.298.4636, Ext. 265, Email: richard.cheung@tio.com; John Lewis, Business Development, Tel: 416-523-7086, Email: jrlewis@tio.com

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