WANTED Technologies Reports Positive FY10 Cash Flows from Operations and
Increased Recurring Revenues (in US$)
WANTED Continues Successful Diversification Into New Market Segments
- New agreements signed with ten US States and local governmental
agencies and twenty-four new clients in the staffing sector.
- New WANTED Analytics(TM) platform launched to support broader services
in the Human Capital marketplace.
- Increase of 18% in the recurring revenue base on a US dollar basis from
beginning of fiscal 2010.
- Revenue of $4,868,243 for fiscal 2010, compared to $6,115,427 for the
prior year, a 20% decrease.
- Net loss of $412,804, compared to net earnings of $568,808 in fiscal
2009.
- EBITDA of $48,907 for fiscal 2010, compared to $1,226,931 for fiscal
2009.
- Both revenue and profitability negatively affected by a strong Canadian
dollar against the US dollar.
QUEBEC, Oct. 7 /CNW Telbec/ - WANTED Technologies (TSX-V: WAN), the leading source of business intelligence for the talent marketplace, reported today a net loss of $412,804 and revenues of $4,868,243 for fiscal 2010. This loss reflects the effect the recession has had on WANTED clients in the employment services sector. In addition, the Company's results reflect WANTED's continued investment in new products to diversify its customer base beyond the Media sector, which has felt the acute impact of the recession. All amounts are in Canadian dollars, unless otherwise indicated.
"WANTED has been pursuing a product development program to diversify its customer base," said Bruce Murray, President and CEO of WANTED. "This has enabled us to show very positive growth in the Staffing and Government sectors, in spite of negative external market conditions."
"On an even more positive note, our base of recurring revenues at the end of the fourth quarter of FY2010, was up 18 percent from the end of the same quarter in FY2009, when measured on a constant US dollar basis," said Murray. "Our key clients are also reporting year-over-year revenue gains, which is significant when considering they experienced revenue losses of 35 percent to 50 percent during the depths of the recession."
WANTED's investments in its Analytics(TM) platform are designed to enable the Company to enter the much larger market for corporate human capital services. As the economy recovers and demand for employees picks up, WANTED expects to begin licensing its Analytics(TM) platform services to corporate clients to improve the efficiency of their recruiting efforts.
WANTED's revenues for the fiscal year ended June 30, 2010 decreased by 20 percent to $4,868,243 compared to $6,115,427 for the previous year. The majority of WANTED's clients subscribe on an annual basis to the Company's online platform, Analytics(TM). Recurring revenue contracts with these clients remain stable at 89 percent of WANTED's total revenues compared to fiscal 2009.
As of June 30, 2010, contracts in hand, in Canadian dollars, represented approximately $4.8 million dollars in annualized recurring revenues while contracts in hand represented, as of June 30, 2009, approximately $4.4 million dollars in annualized revenues, an increase of 9 percent. This 9 percent increase directly results from the signature of new contracts in the Government and Staffing sectors.
The majority of WANTED's clients are in the US and when viewed in US dollars, the level of recurring revenues as of the end of fiscal 2010 is up 18 percent from its low point of 3.9 million dollars at the end of fiscal 2009, during the depth of the financial crisis.
WANTED's decision to diversify its client base beyond Media clients has succeeded in replacing some of the lost recurring revenue. Gains have come from the Staffing and Government sectors leading to a more stable recurring revenue base. These two sectors, Staffing and Government, represented together, at the end of fiscal 2010, approximately 32% of the total recurring revenue base compared to 8% a year ago. The Company's partnership with The Conference Board, positively contributed to this diversification.
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2010 2009
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$ $
Revenues 4,868,243 6,115,427
Cost of goods sold 140,254 221,800
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Gross margin 4,727,989 5,893,627
Expenses
Research and development expenses,
net of tax credits 1,544,519 1,451,396
Marketing and selling expenses 2,132,866 2,231,157
Administrative expenses 1,102,073 1,280,127
Amortization of intangible assets 163,080 255,412
Financial expenses, net amount 52,336 51,595
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4,994,874 5,269,687
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Earnings (loss) before other revenue
(expenses) and income taxes (266,885) 623,940
Other revenue (expenses):
Exchange gain (loss) (82,234) 122,795
Gain on disposal of property, plant
and equipement 211 175
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Earnings (loss) before income taxes (348,908) 746,910
Income taxes 63,896 178,102
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Net earnings (loss) and comprehensive income (412,804) 568,808
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Basic and diluted net earnings (loss) per share (0.017) 0.024
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Operating costs went from $5,269,687 in fiscal 2009 to $4,994,874 in fiscal 2010, a decrease of $274,813, or 5 percent. This decrease mostly results from decreases in sales and marketing expenses and in administrative expenses. Also contributing to the decrease in operating expenses was a decrease of $92,332 in amortization of intangible assets in fiscal 2010 resulting from the non-competition agreements being fully amortized as of June 30, 2009.
EBITDA for the fiscal year ended June 30, 2010 totalled $48,907, down $1,178,024 from an EBITDA of $1,226,931 for the fiscal year ended June 30, 2009. EBITDA represents the net earnings before net financial expense, income taxes, depreciation and amortization on property, plant and equipment and intangible assets. As generally accepted accounting principles in Canada do not provide a standardized definition for this measure, it may not be comparable to similar measures used by other companies.
Net loss for the year ended June 30, 2010 amounted to $412,804 (loss of $0.017 per share), compared to net earnings of $568,808 ($0.024 per share) for the year ended June 30, 2009, a decrease of $981,612. This negative variation results from the combined effect of the decrease in earnings before other revenue and expenses and income taxes, and an exchange loss recorded. When compared to the previous year, earnings before other revenue and expenses and income taxes decreased $890,825 for fiscal 2010. As for foreign exchange, the unfavourable prevailing exchange rates caused the Company to record a currency exchange loss of $82,234 for the year ended June 30, 2010, representing a negative variation of $205,029 over the prior year.
Net loss for fiscal 2010 was however partially offset by a lower provision for income taxes. The Company recorded a provision of $63,896 for the year ended June 30, 2010, compared to a provision of $178,102 recorded the prior year, representing a positive variation of $114,206.
Summary of financial results for the fourth quarter of 2010
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In the fourth quarter of 2010, WANTED posted revenues of $1,303,176, a decrease of ten percent over revenues of $1,452,660 recorded in the same quarter of last fiscal year. Net loss for the fourth quarter of 2010 was $93,240 ($0.004 per share), a negative variation of $233,614 from net earnings of $140,374 ($0.006 per share) for the same quarter in 2009.
Financial position
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As at June 30, 2010, WANTED had a cash position (cash and temporary investments) of $2,430,913 and a working capital of $1,801,720. This compares with a cash position of $2,262,835 and a working capital of $2,365,848 as at June 30, 2009, representing an increase of $168,078 and a decrease of $564,128 respectively. This increase of $168,078 in the Company's liquidity is mainly the result of cash flows of $471,348 generated by the operating activities. This increase was however partially offset by negative cash flows of $45,468 and $257,802 used for investing and financing activities respectively. The classification, in short term liabilities, of the term loan of $343,094 due in July 2010 contributed to the decrease in working capital.
Total assets stood at $5,842,659 at June 30, 2010, down $227,790 from $6,070,449 at June 30, 2009. The decrease in total assets is mainly due to decreases of $120,937 in short-term assets and $163,080 in intangible assets, partially offset by an increase of $56,227 in property, plant and equipment.
Note that WANTED terminated the agreement with investor relations firm Paradox Public Relations Inc.
Those interested will be able to access the information on the 2010 audited consolidated financial statements, the notes thereto and the management discussion and analysis via the Internet at www.sedar.com and at the Company's website, www.wantedtech.com, as of Thursday, October 7th, 2010.
About WANTED Technologies Corporation
WANTED is the leading source of real-time employment market information. The Company provides insight and intelligence via its family of WANTED Analytics(TM) Apps found at www.wantedanalytics.com. Clients in the Media, HR/Staffing and Government sectors use WANTED Analytics(TM) Apps to prioritize sales opportunities, identify economic trends, and analyze competitive market conditions.
WANTED is also the exclusive data provider for The Conference Board's Help-Wanted OnLine Data Series(TM), the monthly economic indicator of Hiring Demand in the United States.
WANTED Technologies (TSX-V:WAN) was founded in 1999. The Company's headquarters are in Quebec City, Canada, and it maintains a US-based subsidiary with primary offices in New York City. The Company began collecting detailed Hiring Demand data in October 2002, and currently maintains a database of more than 500 million unique job listings. To sample WANTED's services, visit www.wantedanalytics.com.
For more information about how WANTED helps organizations make better decisions and improve sales results, visit www.wantedtech.com.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. Any statement that appears prospective shall not be interpreted as such.
For further information: Mr. Bruce Murray, President and CEO, Tel: (418) 523-6663, ext. 222; Mr. Martin Auclair, VP Finance and CFO, Tel: (418) 523-6663, ext. 337; Source: WANTED Technologies Corporation
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