-Record Revenues in November-
OTTAWA, Dec. 27, 2013 /CNW/ - Magor Corporation
(TSX-V:MCC), a global leader in visual collaboration solutions,
today announced its second quarter (Q2) financial results for the
three and six-month period ended October 31,
2013.
Financial and Operational Highlights
- Revenue of $343,263 for Q2 2014,
compared to $408,401 in Q2 2013.
- Order backlog of $401,955 as at
October 31, 2013, compared to
$242,305 as at July 31, 2013, an increase of 65.9% over the
previous quarter.
- Customer interest continues to grow for our Aerus cloud-based
services. We have initiated several trials with select carriers and
solution integrators who are interested in offering Aerus to their
enterprise and government customers.
- During the quarter, the Company announced that it closed its
brokered private placement for the aggregate gross proceeds of
$1,452,325 through the issuance of
5,809,300 units at a price of $0.25
per unit. Each unit consists of one common share and one-half
common share purchase warrant, exercisable at a price of
$0.40 for a period of three years
following the closing date.
- Subsequent to the quarter, the Company announced that it closed
the first tranche of a brokered private placement of subordinated
secured debentures in the aggregate amount of $1,200,000 through issuance of 1,200 units. Each
unit was issued at $1,000 and
consisted of a $1,000 par value
senior secured debenture and 1,000 common share purchase warrants.
The debentures mature four years from the date of issuance and bear
interest at an annual rate of 12% of par value, payable
semi-annually in cash. The warrants are exercisable at a price of
$0.40 per share for a period of four
years from date of issuance.
"We continued to see a delay in timing of some
of our larger contract wins, resulting in revenues that could not
be recognized during the second quarter. However, we are very
encouraged by our order book for the upcoming third quarter" said
Mike Pascoe, the President and CEO
of Magor Corporation. "We had the largest monthly start to any
quarter in the history of our company during the month of November
with revenues exceeding the full quarter of most previous quarters.
We brought in a number of very high profile clients, and new orders
continue to grow strongly. We are also encouraged by the positive
feedback we have been receiving from a number of service providers
with whom we are currently in service trials. Contracts with
service providers will give us access to their enterprise clients,
and will also transition us into a recurring revenue model with
greater cash flow predictability."
Financial Highlights
Revenue
Total revenue was $343,263 and $539,799, for the three-month and six-month
periods ended October 31, 2013,
compared to $408,401 and $802,595 for the corresponding periods in
2012.
Revenue from hardware was $171,473 and $275,317, for the three-month and six-month
periods ended October 31, 2013,
compared to $214,730 and $423,384 for the corresponding periods in
2012.
Revenue from software was $109,318 and $129,326, for the three-month and six-month
periods ended October 31, 2013,
compared to $135,146 and $222,450 for the corresponding periods in
2012.
Revenue from support and other services was
$62,472 and $135,156, for the three-month and six-month
periods ended October 31, 2013,
compared to $58,525 and $156,761 for the corresponding periods in
2012.
The decrease in hardware and software revenues
for the quarter and the six-month period were primarily due to
reduction in the number of systems sold and delivered in the
current fiscal quarter and fiscal year over the prior year, as well
as timing in the fulfillment of an order that was delayed.
Gross Profit and Gross Profit Margin
Gross profit was $174,222 and $226,505, for the three-month and six-month
periods ended October 31, 2013,
compared to $209,299 and $417,189 for the corresponding periods in
2012.
Gross profit margin was 50.8% and 42% for the
three-month and six-month periods ended October 31, 2013, compared to 51% and 51.3% for
the corresponding periods in 2012.
The decrease in gross profit margin for the
quarter and six-month period was primarily due to reduction in
revenues, particularly in software, and the amount of fixed
overhead expenses included in cost of sales.
Operating Expenses
Operating expenses were $1,602,744 and $3,246,893 for the three-month and six-month
periods ended October 31, 2013,
compared to $1,335,778 and
$2,490,609 for the corresponding
periods in 2012.
Sales and Marketing
Sales and marketing expenses were $765,425 and $1,496,692, for the three-month and six-month
periods ended October 31, 2013,
compared to $672,886 and $1,216,847 for the corresponding periods in
2012.
The increase in Sales and Marketing for the
quarter and the six-month period was largely attributed to higher
staffing and consulting expenses 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 $355,032 and $705,393, for the three-month and six-month
periods ended October 31, 2013,
compared to $292,723 and $548,091 for the corresponding periods in
2012.
The increase in general and administrative
expenses during the quarter and the six-month period 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 $288,712 and $652,566, for the three-month and six-month
periods ended October 31, 2013,
compared to $288,314 and $559,525 for the corresponding periods in
2012.
The research and development expenses remained
unchanged for the quarter over the comparable period in the prior
year. During the quarter, the Company recorded tax incentives of
$86,971 as a reduction in reduction
of research and development expenses compared to $72,000 in the comparable period in the prior
year. Offsetting the increase in tax incentives was an increase in
staffing costs over the prior year.
The increase in research and development
expenses for the six-month period was due to reduction in
investment tax credits recorded in the current year over the prior
year in the amount of $57,029 and
higher staffing costs resulting from an increase in headcount in
the current year.
Net Loss
Net loss and total comprehensive loss was
$1,486,958 or $0.03 per share and $3,155,505 or $0.07
per share, for the three-month and six-month periods ended
October 31, 2013, compared to
$1,585,063 or $0.09 per share and $2,886,589 or $0.16
per share for the corresponding periods in 2012.
Cash and Working Capital
As at October 31,
2013, the Company had cash on hand of $1,482,224 compared to $2,792,075 as at April 30,
2013.
As at October 31,
2013, the Company's working capital was $1,359,645 compared to a working capital of
$3,154,028 as at April 30, 2012.
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 Canadian securities
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those concerning historical financial information, may be
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"would", "suspect", "outlook", "believe", "plan", "anticipate",
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implied in making forward-looking statements and actual results may
differ materially from those expressed or implied in such
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securities regulatory authorities, as well as the applicability of
patents and proprietary technology; the outcome of pending
corporate transactions; possible patent ligation; regulatory
approval of products in development; changes in government
regulation or regulatory approval processes; government and third
party reimbursement; dependence on strategic partnerships;
intensifying competition; rapid technological change in the
industry; anticipated future losses; the ability to access capital;
and the ability to attract and retain key personnel. All
forward-looking information presented herein should be considered
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as of the date made.
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SOURCE Magor Corporation
