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Armada Data earns $283,547 in fiscal 2016
Armada Data Corp (C:ARD)
Shares Issued 17,670,265
Last Close 9/26/2016 $0.09
Wednesday September 28 2016 - News Release
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, 2016May 31, 2015May 31, 2014May 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% 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 January 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 sub-tenant was found for the brewing facility on November 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
Fiscal Year 2016 2016 2016 2016 2015 2015 2015 2015 Quarter May-31 Feb-29 Nov-30 Aug-31 May-31 Feb-28 Nov-30 Aug-31 Ended 2016 2016 2015 2015 2015 2015 2014 2014 Total Revenue 661,263522,663545,409528,853463,056 466,797 526,884 552,035 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%. The increase in revenue was the result of fires in Fort McMurray, Alberta in May 2016, which resulted in an unusually high number of claims processed.
The Retail Services division revenue was down 30% to $227,038 from $323,012. The new CarCostCanada.com 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 overall 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 their dealer-body from participating in any type of third-party lead generation program, this division managed to keep the reduction in revenue to 5%.
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 $12,251 to $74,624. Management was successful in their efforts to search out additional sources of revenue in this division.
The Information Technology division revenue decreased by 5% to $121,289 in 2016, from $127,649 in 2015. IT continues to offer technical support and web site 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%. Direct product costs and labour decreased by 129%, 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 January 1, 2015. On August 31, 2015, the plant equipment was sold for $45,000, and on November 1, 2015, a new sub-tenant 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 to the loss before corporation income taxes of $(640,434) in 2015. Corporation income tax expense is $75,468 in 2016, compared to nil in 2015.
Total expenses before amortization decreased to $1,857,802 compared to $2,137,421, a 13% 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%, to $250,001 as at May 31, 2016 from $254,762 a year earlier.Related parties 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 to $110,623 as at May 31, 2015. Related Party Notes Payable-current portion increased from 212,000 at May 31, 2015 to $281,000 at May 31, 2016, and Related Party Notes Payable - long term portion went from $81,000 at May 31, 2015 to nil 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 to $(1,834,816) the prior year. Earnings per share at May 31, 2016 are $0.02 versus $(0.04) 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 were as follows:
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 Corporation$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 $ 2,258,188100$ 2,008,772100
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 utilizing private financing to assist in ongoing 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 our partnerships, project releases and new revenue streams.
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
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