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Press release from Marketwire

Cyberplex Reports Third Quarter 2011 Results

Rebuilding Efforts and Platform Investments Yield Improved Financial Results

Thursday, November 10, 2011

Cyberplex Reports Third Quarter 2011 Results16:01 EST Thursday, November 10, 2011TORONTO, ONTARIO--(Marketwire - Nov. 10, 2011) - Cyberplex Inc. (TSX:CX) a leader in online publishing and customer acquisition strategies today announced its financial results for the third quarter ended September 30, 2011. Financial Results for the third quarter ended September 30, 2011The Company generated revenue of $16.6 million, a 15 % increase from the $14.4 million recorded in the previous quarter; Adjusted EBITDA for the quarter was $2 million, a 150% increase from the $0.8 million generated in the previous quarter; Net income for the quarter was $1.0 million compared to a net loss of $2.0 million in the previous quarter; and Cash flow from operations generated $3.6 million in cash for the nine months ended September 30, 2011, as compared to $4.6 million for the same period in 2010. "Our third quarter results indicate that our efforts to better align our structure and systems with the evolving market opportunities are starting to pay off" said Geoffrey Rotstein, Chief Executive Officer of Cyberplex. "Every division of Cyberplex demonstrated significant progress this past quarter, as we continued to focus as an organization on producing high quality results for our advertising clients and build upon our internal distribution capabilities to accommodate future growth. While the organization is smaller than it was last year, by making the right investments in our people and our systems, we are already producing results that demonstrate the leverage potential of our targeted traffic acquisition platforms." Third Quarter Operational Highlights Released the second version of the EQ Ads demand side platform with expanded targeting and optimization capabilities; Secured CX Interactive engagements with several key clients across diverse industries, including Brookfield Residential Property Services, Nippising University and Schulich School of Education, Zumbox and Dealuxe; Deployed several major enhancements to the Tsavo Media search platform, resulting in significant increases in traffic quality levels and revenues per click; and Restructured Tsavo Media's credit facility with American Capital, which included a reduction in principal and interest rates, an extension of the maturity date, and a new variable payment structure tied to Tsavo's earnings. "The third quarter was particularly important for expanding our distribution capabilities and diversifying our traffic sources." said Ted Hastings, President of Cyberplex. "The new foundation for our proprietary search platform within Tsavo, and the roll out of phase two for our EQ Ads display traffic platform have already provided for improved results. As we look forward, we expect to make additional investments to further our mobile and video distribution strategies."Non-IFRS Financial Measures This press release includes a discussion of "Adjusted EBITDA," which is a non-IFRS financial measure. The Company defines Adjusted EBITDA as net income (loss) before (a) Finance costs (income), net; (b) income tax expense (recovery); (c) depreciation of property and equipment and amortization of intangible assets; (d) stock-based compensation expense related to the Company's grant of stock options, (e) restructuring costs, and (f) transaction expenses.Management uses Adjusted EBITDA as a measurement of the Company's operating performance because it provides information related to the Company's ability to provide cash flows for acquisitions, capital expenditures and working capital requirements. The Company also believes that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in its industry. The non-IFRS financial measure is used in addition to and in conjunction with results presented in accordance with the Company's consolidated financial statements prepared in accordance with IFRS and should not be relied upon to the exclusion of IFRS financial measures. Management strongly encourages investors to review the Company's consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-IFRS financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-IFRS financial measures having the same or similar names. In addition, the Company expects to continue to incur expenses similar to the non-IFRS adjustments described above, and exclusion of these items from the Company's non-IFRS measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring. The table below reconciles net income (loss) and Adjusted EBITDA for the periods presented:Three months ended September 30Nine months ended September 30(In thousands of Canadian dollars)2011201020112010Net income (loss)$1,046$(81)$(4,579)$(2,471)Add:Depreciation of property and equipment3236121,041857Amortization of intangible assets2,1814,1896,5645,355Finance cost (income), net(1,474)650(237)587Restructuring expenses--263-Transaction expenses---1,510Stock based compensation29118276415Income tax recovery(130)(361)(390)(468)Adjusted EBITDA$1,975$5,127$2,938$5,785Conference Call DetailsIn conjunction with the release, Cyberplex will host a conference call on Thursday, November 10, 2011 at 4:30 p.m. EST to discuss the financial results. To access the call, please dial 1-888-892-3255. Please call five minutes prior to the call. A replay of the conference call will be available as of 12:00 a.m. the next day. To access the replay dial 1-800-937-6305 followed by the pass code 671239.About CyberplexCyberplex Inc. (www.cyberplex.com) is a North American leader in online publishing and customer acquisition strategies. The Company, through its subsidiaries, leverages over 300 proprietary web properties and its vast publisher network to efficiently connect advertisers to their most relevant online customers and prospects. By combining high quality publishing initiatives with efficient technology solutions and online marketing expertise, the Company is able to deliver the optimal targeted audience to online advertisers. Cyberplex delivers measurable results that improve advertiser ROI, monetize the value of online properties and build targeted, loyal online audiences.Forward-Looking StatementsThis news release may contain forward-looking statements that are based on management's current expectations and are subject to known and unknown uncertainties and risks, which could cause actual results to differ materially from those contemplated or implied by such forward-looking statements. Cyberplex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.Cyberplex Inc.Unaudited Interim Consolidated Statements of Financial Position(In thousands of Canadian dollars)September 30, 2011December 31, 2010AssetsCurrent assets:Cash and cash equivalents$2,243$5,192Restricted cash and short-term investments-2,310Short-term investments51,551Available-for-sale financial assets500140Accounts receivable11,17013,879Income taxes recoverable32632Prepaid expenses and other assets2,1772,321Total current assets16,12726,025Non-current assets:Restricted cash and short-term investments3,4481,749Property and equipment2,3402,921Intangible assets26,99932,504Goodwill2,4622,357Total non-current assets35,24939,531Total assets$51,376$65,556Liabilities and EquityCurrent liabilities:Accounts payable and accrued liabilities$8,118$10,177Current portion of provisions118590Current portion of loans and borrowings3,5879,402Deferred revenue565665Income taxes payable1,6991,729Current portion of deferred lease inducements115115Total current liabilities14,20222,678Non-current liabilities:Loans and borrowings21,88323,583Provisions3,2282,756Deferred tax liabilities1,6001,990Deferred lease inducements98185Total non-current liabilities26,80928,514Equity:Share capital65,45265,452Contributed surplus2,2201,944Accumulated other comprehensive loss(2,196)(2,500)Deficit(55,111)(50,532)Total equity10,36514,364Total liabilities and equity$51,376$65,556Cyberplex Inc.Unaudited Interim Consolidated Statements of Comprehensive Income (Loss)(In thousands of Canadian dollars, except per share amounts)Three months ended September 30,Nine months ended September 30,2011201020112010Revenue$16,619$44,720$45,645$75,230Expenses:Publishing and advertising costs9,69631,30727,03252,811Employee compensation and benefits3,2214,67410,6819,438Other operating expenses1,7563,7305,2707,61114,67339,71142,98369,860Income before the undernoted1,9465,0092,6625,370Depreciation of property and equipment3236121,041857Amortization of intangible assets2,1814,1896,5645,355Transaction expenses---1,510Restructuring expenses--263-Income (loss) from operations(558)208(5,206)(2,352)Finance cost (income), net(1,474)650(237)587Income (loss) before income taxes916(442)(4,969)(2,939)Income tax recovery130361390468Income (loss) for the period1,046(81)(4,579)(2,471)Other comprehensive income (loss):Net change in fair value of available-for-sale financial assets(21)(42)761(103)Amount reclassified to income(187)-(753)-Foreign currency translation adjustments to equity657(2,775)296(1,598)Other comprehensive income (loss) for the period, net of tax449(2,817)304(1,701)Total comprehensive Income (loss) for the period$1,495$(2,898)$(4,275)$(4,172)Loss per share:Basic$0.01(0.00)$(0.03)$(0.03)Diluted0.01(0.00)(0.03)(0.03)Cyberplex Inc.Unaudited Interim Consolidated Statements of Cash Flows (In thousands of Canadian dollars)Nine months ended September 30, 2011 and 201020112010Cash flows from operating activities:Loss for the period$(4,579)$(2,471)Adjustments to reconcile net loss to net cash flows from operating activities:Depreciation of property and equipment1,041857Amortization of intangible assets6,5645,355Amortization of deferred lease inducements(87)(83)Stock-based compensation276415Foreign exchange loss30102Finance (income) cost, net(939)587Income tax recovery(390)(468)Change in non-cash operating working capital1,2491,088Cash generated from operating activities3,1655,382Income taxes recovery (paid)389(789)Net cash from operating activities3,5544,593Cash flows from financing activities:Repayment of term loans(5,749)-Finance lease200-Repayment of finance lease(18)-Proceeds from exercise of stock options-37Proceeds from private placement, net of issuance costs-30,772Interest paid(3,155)(155)Net cash from (used in) financing activities(8,722)30,654Cash flows from investing activities:Sale of short-term investments1,5467,826Interest income received3053Net proceeds on sale of available-for-sale financial assets401-Acquisition of EQADS, net of cash acquired(100)-Acquisition of TSAVO, net of cash acquired-(46,486)Decrease in restricted cash734-Additions to property and equipment(341)(969)Additions to intangible assets(21)(520)Net cash from (used in) investing activities2,249(40,096)Decrease in cash and cash equivalents(2,919)(4,849)Cash and cash equivalents, beginning of period5,19210,222Foreign exchange (loss) on cash held in foreign currency(30)(102)Cash and cash equivalents, end of period$2,243$5,271FOR FURTHER INFORMATION PLEASE CONTACT: David KatzCyberplex Inc.EVP Corporate Development416.597.8889416.597.2345 (FAX)press@cyberplex.comwww.cyberplex.com