MARKHAM, ONTARIO -- (Marketwire) -- 11/21/12 -- VIQ Solutions Inc. ("VIQ Solutions" or the "Corporation") (TSX VENTURE:VQS), a world leader in computer-based digital audio and video capture and management, today reported its financial results for the three and nine month periods ended September 30, 2012. Results are reported in Canadian dollars and are prepared in accordance with International Financial Reporting Standards ("IFRS").
"After two relatively slow quarters for the computer products and services industry, we have started to see a resurgence in business activity in the global market due to the increased market demand for digital recording in various market verticals including the medical, insurance, law enforcement, military and transportation industries," said David Outhwaite, President and Chief Executive Officer of VIQ Solutions. "Our pipeline of opportunities continues to grow on a global basis in the digital media capture and management industry and we are working to convert these market opportunities into significant contract wins."
Financial Highlights
-- Revenue was $4.0 million and $11.6 million for the three and nine month
periods ended September 30, 2012 as compared to $3.7 million and $11.9
million for the same periods in 2011;
-- Revenue from our transcription and recording services business unit was
$3.5 million and $10.0 million for the three and nine month periods
ended September 30, 2012, as compared to $3.0 million and $8.9 million
for the same periods in 2011 representing an increase of 17% and 13%
respectively, due to an increase in business activity from both of our
transcription businesses;
-- Selling and administrative expenses were $1.4 million and $4.3 million
for the three and nine month periods ended September 30, 2012 as
compared to $1.4 million and $4.1 million for the same periods in 2011
as the Corporation continues to focus its selling efforts on global
enterprise software contracts;
-- EBITDA(1) for the three and nine month periods ended September 30, 2012
was $40,789 and $25,090 as compared to $1,839 and $911,982 for the same
periods in 2011;
-- Net loss for the three and nine month periods ended September 30, 2012
was $24,282 and $156,793 as compared to $89,771 and a net income of
$603,374 for the same periods in 2011; and
-- Cash flow used in operating activities was $53,238 and $48,416 for the
three and nine month periods ended September 30, 2012 as compared to
$254,825 and an inflow of $545,016 for the three and nine month periods
ended September 30, 2011.
Notes
1. EBITDA is a non-IFRS earnings measure which does not have any standardized meaning prescribed by IFRS and therefore may not be comparable to EBITDA presented by other companies. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. This measure is important to management since it is used by potential investors to evaluate the Corporation's operating performance and ability to incur and service debt, and as a valuation metric. Investors are cautioned that this non-IFRS financial measure should not be construed as an alternative to other measures of financial performance calculated in accordance with IFRS.
Additional Information
The unaudited third quarter 2012 condensed consolidated interim financial statements and results of operations and Management's Discussion and Analysis of Results and Financial Condition for the three and nine month periods ended September 30, 2012 will be posted on VIQ Solutions' website (under Investor Relations) at www.viqsolutions.com and on SEDAR's website at www.sedar.com. The financial information included in this release is qualified in its entirety and should be read together with the unaudited third quarter 2012 consolidated interim financial statements and the audited consolidated financial statements for the year ended December 31, 2011, including the notes thereto.
About VIQ Solutions Inc.
VIQ Solutions is a global leader in computer-based digital audio and video capture and management. We develop software solutions that capture, digitize, and compress audio and video data, which is securely stored in a multi-tiered server system where it is easily searchable and shareable. Our innovative media processor technology allows users to remotely control audio-video capture in multiple locations from a single satellite location, allowing large-scale and complex installations to be managed efficiently by fewer resources. VIQ Solutions' technologies are installed in courts, legislative assemblies, law enforcement and hearing rooms around the world.
Forward-looking Statements
This release contains forward-looking statements and other statements concerning the Corporation's objectives and strategies and management's beliefs, plans and intentions about our achievements, goals, performance and other future events. These statements involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this press release, the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "will," "would" and similar expressions are intended to identify forward-looking statements. Such statements reflect VIQ Solutions' current views with respect to future events and are subject to such risks and uncertainties. Many factors could cause our actual results to differ materially from the statements made due to a number of factors including risks related to our ability to successfully execute our business plan which includes our revenue growth, our liquidity, our operating results, our technology and products. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected. VIQ Solutions does not intend and does not assume any obligation to update these forward- looking statements.
VIQ Solutions Inc.
Condensed Consolidated Interim Balance Sheets
(Expressed in Canadian dollars)
(Unaudited)
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September 30, December 31,
2012 2011
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(Audited)
Assets
Current assets
Cash $ 1,538,219 $ 1,646,138
Trade and other receivables 1,700,381 1,330,474
Inventories 7,672 7,025
Prepaid expenses 143,831 123,228
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3,390,103 3,106,865
Non-current assets
Restricted cash 153,389 151,215
Property and equipment 706,585 754,397
Goodwill 1,604,230 1,621,395
Deferred tax assets 254,888 260,001
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$ 6,109,195 $ 5,893,873
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Liabilities
Current liabilities
Trade and other payables $ 1,149,992 $ 951,687
Provisions 595,456 584,870
Short-term debt 75,000 75,000
Unearned revenue 230,700 187,179
Deferred lease incentives 21,338 21,766
Current portion of obligations under finance
lease 55,823 59,266
Current portion of long-term debt 22,692 22,692
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2,151,001 1,902,460
Non-current liabilities
Provisions 184,504 165,974
Deferred lease incentives 33,958 50,964
Obligations under finance lease 66,392 45,528
Long-term debt 53,735 70,754
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Total liabilities 2,489,590 2,235,680
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Equity
Capital stock 11,578,213 11,438,947
Contributed surplus 1,800,955 1,781,433
Accumulated other comprehensive income 118,377 158,960
Deficit (9,877,940) (9,721,147)
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3,619,605 3,658,193
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Total equity and liabilities $ 6,109,195 $ 5,893,873
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VIQ Solutions Inc.
Condensed Consolidated Interim Statements of Comprehensive Income and Loss
(Expressed in Canadian dollars)
(Unaudited)
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Three months ended Nine months ended
Sept. 30 Sept. 30
2012 2011 2012 2011
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Revenue $ 3,963,228 $ 3,667,248 $11,630,438 $11,851,125
Cost of sales 2,383,505 2,289,592 6,987,009 6,559,699
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Gross profit 1,579,723 1,377,656 4,643,429 5,291,426
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Expenses
Selling, general and
administrative
expenses 1,420,900 1,402,707 4,262,123 4,136,454
Research and
development expenses 176,132 131,070 537,647 521,305
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1,597,032 1,533,777 4,799,770 4,657,759
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Income (loss) from
operations (17,309) (156,121) (156,341) 633,667
Interest income 9,631 5,595 24,998 15,414
Interest expense (8,827) (34,556) (23,950) (122,980)
Foreign exchange gain
(loss) (7,777) 95,311 (1,500) 77,273
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Net finance income
(loss) (6,973) 66,350 (452) (30,293)
Net income (loss) for
the period $ (24,282) $ (89,771) $ (156,793) $ 603,374
Exchange differences on
translating foreign
operations (38,356) (69,639) (40,583) (24,687)
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Comprehensive income
(loss) for the period $ (62,638) $ (159,410) $ (197,376) $ 578,687
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Net income (loss) per
share
Basic and diluted $ (0.00) $ (0.00) $ (0.00) $ 0.01
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Weighted average number
of common shares
outstanding - basic 90,957,000 90,155,533 90,851,234 88,628,064
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Weighted average number
of common shares
outstanding - diluted 90,957,000 90,155,533 90,851,234 90,814,242
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VIQ Solutions Inc.
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in Canadian dollars)
(Unaudited)
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Three months ended Nine months ended
Sept. 30 Sept. 30
2012 2011 2012 2011
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Cash provided by (used
in):
Operating activities
Net income (loss) for
the period $ (24,282) $ (89,771) $ (156,793) $ 603,374
Items not affecting
cash:
Depreciation 56,244 57,054 157,933 185,628
Stock-based
compensation 17,251 36,128 77,788 187,070
Provisions (5,460) 12,917 18,530 16,765
Interest accretion
on bridge loans - 2,130 - 6,320
Amortization of
deferred lease
incentive (5,161) (7,089) (16,003) (16,369)
Unrealized foreign
exchange loss
(gain) 13,049 (28,198) 6,534 14,365
Gain on sale of
property and
equipment 2,341 (30) 2,341 (4,803)
Changes in non-cash
operating working
capital (107,220) (237,966) (138,746) (447,334)
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Cash from operating
activities (53,238) (254,825) (48,416) 545,016
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Investing activities
Purchase of property
and equipment (8,573) (24,904) (49,015) (78,863)
Decrease (increase)
in restricted cash 102 106 (5,148) (4,983)
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Cash used in investing
activities (8,471) (24,798) (54,162) (83,846)
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Financing activities
Advances in short-
term debt - - - 575,000
Repayment of short-
term debt - (575,000) - (1,690,000)
Repayment of long-
term debt (5,673) (205,673) (17,019) (217,019)
Proceeds from stock
options exercised
for cash - 394,250 81,000 397,075
Proceeds from
private placement,
net of issuance
costs - - - 1,989,200
Finance lease
payments (17,849) (16,348) (51,001) (56,200)
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Cash provided by (used
in) financing
activities (23,522) (402,771) 12,980 998,056
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Net increase
(decrease) in cash
during the period (85,231) (682,394) (89,598) 1,459,226
Cash, beginning of
period 1,645,290 2,530,849 1,646,138 381,544
Effect of exchange
rate changes on cash (21,840) (4,561) (18,321) 3,124
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Cash, end of period $1,538,219 $1,843,894 $1,538,219 $ 1,843,894
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