-Traction on Aerus service offering significantly exceeds
expectations-
OTTAWA,
Sept. 27, 2013 /CNW/ - Magor
Corporation (TSX-V:MCC), a global leader in visual collaboration
solutions, today announced its first quarter (Q1) financial results
for the three month period ended July 31,
2013, an update on the progress of Aerus adoption by service
providers and solutions integrators and a Joint Venture to sale and
market its products in the Chinese market.
Financial and Operational Highlights
- Revenue of $196,537 in Q1 2014,
compared to $394,194 in Q1 2013.
- Q1 was adversely impacted by a $500,000 shipment that will not be recognized
until Q2.
- Order backlog of $242,305 as at
July 31, 2013, compared to
$436,179 as at April 30, 2013.
- More than 20 carriers and solutions integrators across the
globe are currently in or planning trials with Magor to deploy
Aerus within their relative markets to their enterprise and
government clients.
- Subsequent to the quarter Magor entered into a joint venture
agreement with three Chinese parties, Harbin Venture Capital
Management Co. Ltd., Harbin Aobo Venture Capital Management Co.
Ltd., and Harbin Kaifu Investment Consulting Co. Ltd.
- On September 12th,
Magor announced that it intends to raise up to $2,000,000 by way of a brokered private placement
offering up to 6,666,666 units at a price of $0.30 per unit. Each unit will consist of one
common share and one common share purchase warrant exercisable at
$0.60 for a period of three years
following the closing date of the offering.
- On September 26th,
Magor announced that the pricing of the private placement was
amended from the previous terms. The Company will issue units a
price of $0.25 per unit with each
unit consisting of one common share and one-half common share
purchase warrant. Each full warrant entitles the holder to purchase
one common share at a price of $0.40
for a period of three years following the closing date of the
offering.
"We are encouraged by the activity shown by
carriers around the globe towards our Aerus services," said
Mike Pascoe, President and CEO of
Magor Corporation. "With the full launch of our Aerus cloud-based
visual collaboration solutions in the next couple of weeks, we have
been successful at securing service trials from more than 20
carriers and solutions integrators across the globe aimed towards
deploying Aerus into their markets. Approximately half of these
opportunities are large Tier 1 and Tier 2 carriers and we expect
more to be added over the next quarter. These contracts will
transition us into a recurring revenue model that will bring
significant predictability into our cash flow going forward. While
excited about our Aerus progress, it is important to note the
continued progress in our existing transaction business as this
will continue to be a key part of revenue this year and beyond. Our
efforts during the quarter have been focused toward building a
solid foundation for Magor to grow on, and with the initiatives
that were taken, we expect accelerated growth for the Company in
the upcoming quarters."
Financial Highlights
Revenue
Total revenue was $196,537 for the three-month period ended
July 31, 2013, compared to
$394,194 for the corresponding period
in 2012.
Revenue from hardware was $103,845 for the three-month period ended
July 31, 2013, compared to
$208,654 for the corresponding
periods in 2012.
Revenue from software was $20,008 for the three-month period ended
July 31, 2013, compared to
$87,304 for the corresponding period
in 2012.
Revenue from support and other services was
$72,684 for the three-month period
ended July 31, 2013, compared to
$98,236 for the corresponding period
in 2012.
The decreases in hardware and software revenues
for the quarter were due to the timing in the fulfillment of an
order that was delayed until a future quarter.
The decrease in support services revenue for the
quarter was due to a decline in customer renewals of their support
agreements on previous software installations, combined with a
reduction in installation revenues in the current year compared the
prior year due to lower hardware sales.
Gross Profit and Gross Profit Margin
Gross profit was $52,283 for the three-month period ended
July 31, 2013, compared to
$207,890 for the corresponding period
in 2012.
Gross profit margin was 26.6% for the
three-month period ended July 31,
2013, compared to 52.7% for the corresponding periods in
2012.
The decrease in gross margins in the current
quarter was due to reduction in higher margin software revenue, and
the amount of fixed overhead expenses included in the cost of
sales.
Operating Expenses
Operating expenses were $1,644,149 for the three-month period ended
July 31, 2013, compared to
$1,154,831 for the corresponding
period in 2012.
Sales and Marketing
Sales and marketing expenses were $731,267 for the three-month period ended
July 31, 2013, compared to
$543,961 for the corresponding
periods in 2012. The increase in Sales and Marketing
for the quarter was largely attributed to higher staffing and
consulting expenses incurred with the recruitment of additional
sales professionals in Canada,
United States and Europe. The Company also incurred additional
costs on promotional presentations and website materials relating
to the launch of Aerus cloud-based services.
General and Administrative
General and administrative expenses were $350,361 for the three-month period ended
July 31, 2013, compared to
$255,368 for the corresponding
periods in 2012. The increase in general and administrative
expenses during the quarter was largely attributable to the
additional costs incurred by the Company as a result of becoming a
publicly listed company and additional staff costs relating to the
recruitment of a Chief Financial Officer.
Research and Development
Research and development expenses were $363,854 for the three-month period ended
July 31, 2013, compared to
$271,211 for the corresponding
periods in 2012. The increase in research and development for
the quarter was due to a reduction of $72,000 in investment tax credits recorded in the
current year over the prior year, and higher staffing costs
incurred in the current year due to an increase in headcount.
Net Loss
Net loss and total comprehensive loss was
$1,668,547 or $0.04 per share for the three-month period ended
July 31, 2013, compared to
$1,301,526 or $0.07 per share for the corresponding periods in
2012.
Cash and Working Capital
As at July 31,
2013, the Company had cash on hand of $1,175,977 compared to $2,792,075 as at April 30,
2013.
As at July 31,
2013, the Company's working capital was $1,555,301 compared to a working capital of
$3,154,028 as at April 30, 2012.
Issuance of Options
Magor announces that it has granted an aggregate
of 287,500 options to directors, employees and consultants of the
Corporation. Each option entitles the holder to acquire one
common share in capital of the Corporation at an exercise price of
$0.59. These options will
expire on September 27, 2018.
About Magor Corporation:
Magor enables people to engage in high-quality visual conversations
while simultaneously sharing, viewing and editing relevant
collaborative material on desktops, laptops, tablets, smartphone
applications, whiteboards and other devices. Magor fits any
workflow so that users have the freedom to work together naturally
anytime, regardless of location, network or device. To find out
more about Magor Corporation (TSX-V: MCC), visit our website at
http://www.magorcorp.com.
This news release may contain
"forward-looking information" within the meaning of applicable
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actual results may differ materially from those expressed or
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to vary include those identified in the Corporation's filings with
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applicability of patents and proprietary technology; the outcome of
pending corporate transactions; possible patent ligation;
regulatory approval of products in development; changes in
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and third party reimbursement; dependence on strategic
partnerships; intensifying competition; rapid technological change
in the industry; anticipated future losses; the ability to access
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SOURCE Magor Corporation
