Armada Data Corporation Q3 Results (Ending February 29th 2016)
My note: ARD.V has turned around it’s performance significantly by showing three profitable quarters back to back and earning over $0.01c per share after 9 months. Below are the financial results and MD&A highlights.
Stock Price: $0.04
Common Shares: 17,670,265
Insider/Institutional Holdings: 13,499,960(76.4% as per SEDI)
Assets
Cash: $209,181
Receivables: $324,529
Party Receivable: $8,763
Prepaid Expenses: $47,156
Property & Equipment: $84,041
Goodwill: $180,000
Total Assets: $853,670
Liabilities
Accounts Payable: $305,619
Party Payable: $1,537
Income Tax: $8,845
Long Term Loan: $281,000 (recently extended to end of 2016)
Sales Breakdown. First 9 months, then Q1,Q2,Q3
9 Month Sales
Revenue: $1,596,926
Expenses: $1,380,081
Net Income: $185,958 - $0.0105c earnings per share
Q1 Results
Revenue: $528,853
Net Income: $70,175
Q2 Results
Revenue: $545,409
Net Income: $34,364
Q3 Results
Revenue: $522,663
Net Income: $81,419
MD&A Highlights
The Company’s operations consist of five main segments: Insurance Services, Retail Services, Dealer Services, Information Technology (IT) Services, and Advertising/Marketing Services.
Operations
The Company’s total sales increased by 10% in the quarter ended February 29, 2016, from $474,293 in 2015, to $522,663. Comprehensive income increased from a loss of $(52,028) in the period ended February 28, 2015 to $81,419 in the period ended February 29, 2016.
The Insurance Services division experienced a 14% increase in revenue, from $241,433 in 2015 to $276,217 in 2016.
The Retail Services division revenue was down 29% to $44,060 in 2016 from $56,798 in 2015.
The Dealer Services division revenue increased 9%, from $142,129 in 2015, to $155,525 in 2016.
The Advertising/Marketing Services division, which derives its revenue from the sale of online third party advertising on CarCostCanada.com and TheCarMagazine.com, increased from $200 to $18,425.
The Information Technology division revenue increased 5% to $28,436 in 2016, up from $27,129 in 2015. IT continues to offer technical support and web site hosting to hundreds of customers, and to develop new customer relationships on a regular basis.
Total expenses before amortization decreased to $431,183 compared to $482,042, a 10.5% decrease over last year. This is attributed to ceasing production at Mister Beer Inc. and continued cost-cutting measures implemented by management.
Liquidity
Based on a cash position of $209,181 and accounts receivable of $324,529, management feels that the Company is in a good position to meet all current and foreseeable financial obligations. With the closing of the Mister Beer production facility, expenses have been reduced. 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 our partnerships, project releases and new revenue streams.
The CarCostCanada.com divisions (Retail and Dealer services) are not void of the competition that has made significant advancements over the past three years; however, the divisions have now learned how to deal with our competition and overcome many of their tactics. The Retail and Dealer services division were competition-free for many years and had to re-group and re-strategize in order to prevent further erosion caused by an overly aggressive new competitor. Management expects CarCostCanada.com to start realizing market gains this fiscal year and with the overall new car market remaining poised for more growth nationally (and more specifically in the web-rich Canadian urban centres), the division plans to earn more members to enhance the new car buying process for the Canadian new car buying marketplace.
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.
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