Mr. James Matthews reports
ARMADA RELEASES ANNUAL RESULTS
Armada Data Corp. has released its annual financial results for the year ended May 31, 2016, and the results have been filed on SEDAR and are available to view on SEDAR and the company's website.
SELECTED ANNUAL INFORMATION
Fiscal year ended
May 31, 2016 May 31, 2015 May 31, 2014 May 31, 2013
Total revenue $ 2,258,188 $ 2,008,772 $ 2,260,200 $ 2,587,922
Income (loss) before taxes 359,015 (640,434) (137,853) (424,721)
Income taxes 75,468 Nil (102,289) (122,504)
Comprehensive income (loss) after taxes 283,547 (640,434) (240,142) (547,225)
Comprehensive income (loss) per share 0.02 (0.04) (0.01) (0.03)
The company's total revenue increased by 12 per cent in 2016 from $2,008,772 to $2,258,188.
The company reported comprehensive income of $283,547, due to the following factors:
-
Management's decision to close the brewing facility of Mister Beer on Jan. 1, 2015 -- the combination of no expenses for this division and disposal of its remaining assets meant that Mister Beer no longer had a negative financial impact on the company;
- A subtenant was found for the brewing facility on Nov. 1, 2015, to offset the rent expense of the lease obligation for these premises, and the company is no longer responsible for utility, insurance and maintenance expenses for the same premises;
-
Insurance claims increased drastically in May, 2016, due to the Fort McMurray fires, and as a result, the insurance division revenue increased, which has carried over into June, 2016, for fiscal 2017.
SELECTED QUARTERLY INFORMATION
Quarter ended
May 31, Feb. 29, Nov. 30, Aug. 31, May 31, Feb. 28, Nov. 30, Aug. 31,
2016 2016 2015 2015 2015 2015 2014 2014
Total revenue $ 661,263 $ 522,663 $ 545,409 $ 528,853 $ 463,056 $ 466,797 $ 526,884 $ 552,035
Comprehensive income (loss) 97,589 81,419 34,364 70,175 (505,629) (52,028) (71,214) (11,563)
Comprehensive income (loss)
per share 0.02 0.00 0.00 0.00 (0.03) 0.00 0.00 0.00
The prior periods' comparative figures have been reclassified, where necessary, to conform to the current year's presentation.
Operations
The insurance services division experienced an increase in revenue, from $909,656 in 2015 to $1,108,745 in 2016, or by 22 per cent. The increase in revenue was the result of fires in Fort McMurray in May, 2016, which resulted in an unusually high number of claims processed.
The retail services division revenue was down 30 per cent to $227,038 from $323,012. The new CarCostCanada website and a new French language site devoted to the Quebec market were not effective enough to stop the steady decline of membership revenues due to a competitor providing a similar service. Membership over all remained steady as a result of regular promotions, and management decided to uphold a discounted membership fee to not lose further market share.
The dealer services division revenue decreased from $695,017 in 2015 to $660,540 in 2016. Despite the larger decrease in membership sales, which drive the dealer lead-generation program, and some manufacturer intervention on the part of an automaker that discourages its dealer body from participating in any type of third party lead-generation program, this division managed to keep the reduction in revenue to 5 per cent.
The advertising/marketing services division, which derives its revenue from the sale of on-line third party advertising on CarCostCanada and TheCarMagazine, increased from $12,251 to $74,624. Management was successful in its efforts to search out additional sources of revenue in this division.
The information technology division revenue decreased by 5 per cent to $121,289 in 2016 from $127,649 in 2015. IT continues to offer technical support and website hosting to hundreds of customers, and is developing new customer relationships on a regular basis, as well as offering new services for sale.
The Mister Beer division's revenues were down from $107,790 to $17,578, or 84 per cent. Direct product costs and labour decreased by 129 per cent, from $166,603 to $(48,374). The net revenue for Mister Beer Inc. went from $(58,813) in 2015 to $65,952 in 2016. Management made the decision to close this division and production facility, effective Jan. 1, 2015. On Aug. 31, 2015, the plant equipment was sold for $45,000, and on Nov. 1, 2015, a new subtenant took over the premises originally leased for the brewery.
Armada's consolidated statement reflects income this year, before corporation income taxes of $359,015, compared with a loss before corporation income taxes of $(640,434) in 2015. Corporation income tax expense is $75,468 in 2016, compared with zero in 2015.
Total expenses before amortization decreased to $1,857,802 compared with $2,137,421, a 13-per-cent decrease over last year. Management engaged in many cost-cutting measures to reduce expenses in 2016, including reductions in advertising, management salaries, computer consulting and rent.
Accounts receivable increased to $417,171 as at May 31, 2016, from $267,182 last year, a result of the increase in insurance services revenue. Related-party accounts receivable increased from $3,493 to $3,780.
Accounts payable decreased 2 per cent to $250,001 as at May 31, 2016, from $254,762 a year earlier. Related-party accounts payable decreased to $537 as at May 31, 2016, from $1,469 last year. Corporation income taxes payables are $42,955 as at May 31, 2016, compared with $110,623 as at May 31, 2015. For related-party notes payable, the current portion increased from $212,000 at May 31, 2015, to $281,000 at May 31, 2016, and the long-term portion went from $81,000 at May 31, 2015, to zero at May 31, 2016.
As a result of the income reported by the company in 2016, the company's deficit decreased to $(1,551,269) as at May 31, 2016, compared with $(1,834,816) the prior year. Earnings per share at May 31, 2016, are two cents, versus (four cents) per share at May 31, 2015.
No dividends were paid out to shareholders in fiscal 2016 or fiscal 2015. Management does not plan on issuing any dividends until further notice.
Segmented annual information
REVENUES EARNED BY DIVISIONS
2016 (%) 2015 (%)
Insurance services $ 1,108,745 49 $ 909,656 46
Retail services 227,038 10 323,012 16
Dealer services 660,540 29 695,017 35
IT services 121,289 6 127,649 6
Advertising/marketing services 74,624 3 12,251 -
Total revenue -- Armada Data Corp. 2,192,236 97 2,067,585 103
Revenue -- Mister Beer Inc. 17,578 - 107,790 -
Less direct product cost and wages 48,374 - (166,603) -
Total revenue -- Mister Beer Inc. 65,952 3 (58,813) (3)
Total consolidated revenue 2,258,188 100 2,008,772 100
Liquidity
Based on a year-end cash position of $231,242, accounts receivable of $417,171, accounts payable of $250,001 and current notes payable of $281,000, management believes that the company will remain in a debt position using private financing to assist in continuing operations of the company. By closing the Mister Beer division, management has reduced overall expenses and commitments. The other divisions of Armada are poised for revenue gains this fiscal year as a result of new project and feature launches, as well as more than one significant partnership that the insurance and retail service teams are working on. Management believes that the data divisions will not only remain very stable and profitable, but begin to make significant inroads in new verticals that will result from the company's partnerships, project releases and new revenue streams.
Outlook
The company's outlook is to continue to increase sales, update and improve its data services products and services, and deliver significantly better results to its shareholders by way of the following:
- Build on the historical success of the company's continuing sales and marketing efforts focused on increasing sales at retail services, dealer services and insurance services;
-
Exploit market awareness and demand for new vehicle pricing information and dealer referrals that result from the additional competition within that market space by putting more emphasis on outside partners, data outsourcing and the company's underused on-line magazine TheCarMagazine;
-
Continue to improve its relationships with some of the largest insurance companies in Canada, and partner with some of these organizations to produce new products and services for their vast client base;
-
Maintain operating expenses and achieve the economies of scales of an Internet-based business;
-
Expand third party fee-based on-line advertising by developing improved and more secure advertising.
© 2024 Canjex Publishing Ltd. All rights reserved.