Armada Announces Q2 2015 Results

Mississauga, Ontario (FSCwire) - Armada Data Corporation (TSX.V: ARD) reports its interim financial results for the quarter ended November 30, 2014 have now been filed on Sedar and are available to view on the Company’s website www.ArmadaData.com as well as on Sedar at www.Sedar.com .

Selected Quarterly Information

The prior periods’ comparative figures have been reclassified where necessary, to conform to the current period’s presentation.

Operations

The Company’s total sales decreased by 18% in the quarter ended November 30, 2014, from $704,626 in 2013 to $580,517.  Gross operating profit of $526,884 in 2014 is a decrease of 15% over $618,715 in 2013.

The Company reported a comprehensive loss of $(62,120) this quarter, compared to comprehensive loss of $(5,338) last year due to the ongoing monthly operating losses incurred by the Mister Beer division – for thisquarter $(90,944).

However, Armada Data Corporation’s core “data” business earned a before tax profit of $19,730, which was allocated to absorb the ongoing operating losses sustained by Mister Beer Inc.

The Insurance Services division experienced a 1% increase in revenue, from $250,805 in 2013 to $252,525 in 2014.   

The Retail Services division revenue was down 24% to $82,826 in 2014 from $108,876.  The updated CarCostCanada.com website, as well as the new Partners and Discounts program clearly helped the CarCostCanada.com membership program maintain a strong presence in the marketplace, despite increasing competition.  Management believes these improvements have assisted in slowing the downward trend that the membership sales have been on, and have formulated a plan to realize sustained growth, increased market share and new partnerships.  These improvements should start to be realized in fiscal 2015, and the Company will keep building on these strategies in future years.

The Dealer Services division revenue decreased by 9%, from $178,634 in 2013 to $161,981 in 2014, due to the past decreases in membership sales, which drive the dealer lead generation program, but also due to some manufacturer intervention on the part of an automaker that discourages their dealer-body from participating in any type of third-party lead generation program.  This division’s dealer development team has a plan to service the customers who find themselves without a dealer referral, although full implementation of this program will not be complete immediately.

The Advertising/Marketing Services division, which derives its revenue from the sale of online third party advertising on CarCostCanada.com and TheCarMagazine.com decreased from $2,320 to $100, or 96%.  This reduction was due to CarCostCanada’s decision to further secure the websites from ecommerce fraud, site hacking and online intruders; management continues to look into technology that will allow us to provide customers with a fully secure website while we deliver third party advertisements.

The Information Technology division revenue decreased 20% to $27,550, down from $34,571 in 2013.  This reduction is solely due to management’s decision to devote its resources to internal web development only. IT continues to offer technical support and web site hosting to hundreds of customers, and develop new customer relationships on a regular basis.

The Mister Beer division’s revenues are down from $129,420 to $55,535 or 57%.   Direct product costs and labour decreased by 38%, from $85,911 to $53,633. The net revenue for Mister Beer Inc. went from $43,509 in 2013 to $1,902 in 2014, a decrease of 96%.    Management made the decision, subsequent to this quarter, to close the production facility on Jan 1, 2015, in order to explore options with respect to a sale or other disposition of the Bottle Brew business line.

Total expenses before amortization decreased to $561,314 compared to $597,707, a 6% decrease over last year.

The bank indebtedness decreased from $(172,938) at November 30, 2013 to $(161,983) at November 30, 2014, attributed to acquiring addition financing from a company owned by a director of Armada.

Accounts receivable decreased to $303,080 as at November 30, 2014 from $512,199 last year.Related party accounts receivable increased from $4,994 to $6,770.

Accounts payable decreased to $212,765 as at November 30, 2014 from $267,149 a year earlier.Related parties accounts payable decreased to $8.243 as at November 30, 2014, from $38,196 last year.

The Company acquired additional financing in the form of a Note Payable from a company owned by a director of Armada Data Corporation.The principal amount of this Note is $100,000 and bears interest of 12% per year.Monthly payments of principal and interest will be made until Dec 31, 2016, and the Note matures at January 30, 2017, at which time the balance of $74,000 will be due.

As a result of the loss reported by the Company for this period, the Company’s deficit increased to $(1,172,993) as at November 30, 2014 compared to a deficit of $(773,144) last year. 

 Management does not plan on issuing any dividends until further notice.

Related Party Transactions

Salaries and expenses are paid to an officer of the Company, who is also 50% shareholder of Lease Busters Inc.   Legal fees are paid to a law firm, of which a partner is a (non-remunerated) director of the Company. Financing was acquired from a company owned by a director of the Company.   All of the actual costs noted in this section are paid at fair market value in the normal course of business.

Outlook

The Company’s outlook is to continue to increase sales, update and improve our data services products and services, and deliver significantly better results to our shareholders by way of the following:

1. Build on the historical success of the Company’s ongoing sales and marketing efforts focused on increasing sales at Retail Services, Dealer Services and Insurance Services.
2. 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 our underutilized online magazine TheCarMagazine.com
3. Continue to improve our 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.
4. Maintain operating expenses and achieve the economies of scales of an Internet based business.
5. Expand third-party fee-based online advertising, by developing improved and more secure advertising methods.
6. Sale of the Mister Beer business line.

About Armada Data Corp.

Armada Data is a Canadian publicly traded Information & Marketing Services Company providing accurate and real-time data to institutional and retail customers, through developing, owning and operating automotive pricing-related web sites and providing information technology and marketing services to its clients.  Armada’s information and marketing abilities have enabled the company to leverage that experience into the food and beverage industry by its acquisition of 90% of the issued and outstanding shares of The Big & Easy Bottle Brewing

Company Inc.  The Big & Easy Bottle Brewing Company Inc. owns 100% of Mister Beer Inc., which invented, produces and markets the unique “microbrewery in a bottle” beer-making kit.

Armada Data shares are listed on the TSX Venture exchange under the trading Symbol ARD. Armada currently has a total of 17,670,265 shares outstanding.

Additional information relating to Armada Data Corporation is filed on SEDAR, and can be viewed at www.sedar.com.

For further information, please contact:

Armada Data Corporation

Mr. R. James Matthews, President & CEO

Email: investors@armadadatacorp.ca

Neither 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.

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