Novra Technologies Inc Q1 Results (Ending March 31 2016). Financials + MD&A
NOTE: Keep in mind that NVI’s quarters fluctuate based upon received/executed orders. This means that one quarter might have incredible earnings, while other quarters are very poor. The key here is that NVI ends the current year in a more profitable/stable situation than it started. The MD&A’s are quite long due to multiple things going on. As well, the merger between IDC.V and NVI.V was approved today, so now there are three companies (IDC, Westport, Wegener) that will all be amalgamated into one large company that can dominate this sector.
Price: $0.09
Common Shares: 22.4 million
Insider/Institutional Holdings: 53.4%(pre NVI/IDC Merger)
Financials
Assets
Cash: $1,100,947
Accounts Receivable: $682,313
Notes Receivable: $129,670
Inventory: $596,100
Prepaid Expenses: $110,439
Options: $62
Equipment: $13,315
GIC: $200,000
Total Assets: $2,832,846
Liabilities
Line of credit: $495,000
Accounts Payable: $969,033
Deferred Income: $4,175
Due to related party: $743,888
Portion of long-term debt: $100,693
Long-Term Debt: $381,380
Contribution Agreement: $37,382
Total Liabilities: $2,731,551
Q1 Revenue: $315,701
Net Loss: $306,514 - $69,715 was from expired options and sold equipment
MD&A Highlights
NOTE: This is a very long MD&A and below is a highlight reel the company has already made. I would recommend that all shareholders look over the whole MD&A on Sedar.
The delay of a number of our client’s projects to the second half of 2016 had a negative impact on our financial results for this reporting period, Novra’s sales decreased by 72% to $315,701 (2015 $1,112,467) with gross margin equal to 29% (2015 49%) of sales. Our normal margins are in the range of 45% to 54% but for this reporting period we had some sales to Wegener with only a 5% margin. Loss from operations was $236,798 (2015 income of $482,267) and net income loss was $306,514 (2015 income of $619,898), which includes an unrealized foreign exchange gain of $NIL (2015 loss of $4,857). Our results also include an unrealized loss on the Wegener stock options of $55,218 (2015 gain of $142,506).
·In April 2016, a merger agreement between Novra and International Datacasting Corporation (IDC) was signed, where Novra will acquire all of IDC’s issued and outstanding common shares for total purchase consideration of approximately $1.9 Million. This merger is subject to IDC’s shareholders’ approval and a special shareholders meeting has been scheduled for May 30, 2016 with an expected closing date in early June.
· Term sheet for the acquisition of Wegener Communications is in place and the acquisition is expected to be completed in the next 6 months.
· A new acquisition term sheet is currently being negotiated and if successful it is then expected that the acquisition of Westport will be completed within 6 months following.
· In Q1 2016, a major US satellite operator has evaluated and recommended to their clients our receivers for two new projects. These opportunities require about 3,000 receivers each. We are now anticipating final approval from the end-clients by Q2/Q3 2016.
· We modified our S300 receiver for a pilot project integrating our S300 into a portable communications system for the US military. As a result of the success of this pilot project, our S300 is now used in a large military project. We have received an initial order for 15 monthly shipments starting January 2016, subsequently, in April 2016, we received an additional order which almost doubles the number of receivers to be shipped starting August 2016.
· In this reporting period another major US defense agency selected the S300 for a special project. The S300 has been proposed for additional projects by this agency, which are waiting for approval.
· Novra receivers were selected by system integrators in the US and Asian Pacific and proposed for several large networks. We are anticipating orders from these opportunities in Q3/Q4 of 2016.
· Continued expansion of an apartment IPTV network deployment in Japan. We currently have an order for 370 of our S200 receivers of which we shipped 70 units in Q1 with another 300 to be shipped in Q2 and Q3. We have been working for the past 9 months to secure a multi-milliondollar order for an upgrade to this network’s satellite receivers. We were notified in April that Novra was selected as the vendor for this upgrade and we expect the first order in Q4 and expect this upgrade span over 24 to 36 months.
· Our receivers were previously selected for two Digital Signage networks by our South African service provider. We are continuing to receive follow-on orders as these existing networks are expanded across Africa and new clients are added.
· Increased interest and on-going evaluations of our S300 family of receivers by international clients.
· Our S200FK (Fixed Key) receiver was selected as a replacement to a competitor’s receiver for an existing Japanese satellite network. We received an initial order in Q4 215 and we expect to ship additional receivers in Q3 2016. 5
· Our more powerful S300FK was also selected for another Japanese network. We shipped a small number for a pilot project in 2015 and we expect more orders as this network is expanded in 2016/17.
· For this reporting period we have and continue to receive orders for our S300 receivers by NOAA and its clients for existing and new weather related services. We expect these orders to continue through 2016.
· The European weather service switched from DVB-S to DVB-S2 on Jan 1, 2015 and Novra’s S300 is an approved receiver. For this reporting period we received orders from clients across Europe, Africa and Middle-East for this service and we expect these orders to continue (at a slower pace) for 2016.
· Japan Meteorological Agency (JMA) previously selected Novra’s receivers for the reception of their newly launched weather service called Himawaricast. For this reporting period we have received orders from clients who are signing onto this weather service across the Far East. We expect additional orders as this new Japanese weather service is fully launched in 2015/16.
· Novra’s S300 receivers are installed across China for news broadcasting applications and receiving the new JMA weather service. For this reporting period we have received follow-on orders for these applications and expect these orders to continue in 2016/17.
· JMA is the third global meteorological agency to have selected Novra’s products for their own installations and listed our S300 as an approved receiver for the reception of their weather related services to their clients. These agencies are NOAA (US), EUMETSAT (EU) and JMA (Japan). We are very proud of this achievement.
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