Magor Announces Fiscal Q3 2013 Results
-Record orders driven by customer adoption-
OTTAWA, April 1, 2013 /CNW/ - Magor Corporation (TSXV:MCC), a global leader in visual collaboration solutions, today announced its financial results for the three and nine-month period ended January 31, 2013.
Q3 2013 Financial and Operational Highlights
- Revenue of $323,789 for Q3 2013, compared to $436,417 in Q3 2012.
- Sales backlog increased by $494,906 from $78,990 at the end of Q2 2013 to $583,896 at the end of Q3 2013.
- Software sales increased by 6.7% to $141,958 in Q3 2013, compared to $132,991 in Q3 2012.
- Gross profit margin for the quarter decreased from 52.2% to 27.1% due to an inventory write-down of legacy products recorded in the current year quarter. Excluding this write-down, gross margins increased by 4.9% to 57.1% from 52.2% for the corresponding period in 2012.
- Net loss for the quarter was $2,062,515, compared to $1,351,827 in the same period a year ago.
- Subsequent to quarter end, Magor announced the completion of its public offering of 10,000,514 common shares for aggregate gross proceeds of $5,900,303.
- Subsequent to the quarter and completion of its public offering, Magor announced the closing of its "Qualifying Transaction" and changed its name to Magor Corporation from Magor Communications Corp.
- Magor began trading on the TSX Venture exchange under the symbol "MCC" on March 15, 2013.
- Subsequent to the quarter, Magor announced its newly launched cloud-based Aerus platform.
"Q3 order volumes were very strong, having won mandates with a number of new high profile customers resulting in a record backlog position as we enter our fourth quarter." said Mike Pascoe, President and CEO of Magor Corporation. "With the significant milestone of the Qualifying Transaction and the IPO process now behind us, everyone's focus has shifted firmly to driving sales growth. With our new strategic shift towards offering our Aerus cloud-based software solutions for visual collaboration, we are well positioned to take advantage of a high margin software service with greater reach and more accessibility to customers around the world."
Financial Highlights
Revenue
Total revenue was $323,789 and $1,126,384, for the three-month and nine-month periods ended January 31, 2013, compared to $436,417 and $1,366,925 for the corresponding periods in 2012.
Revenue from hardware was $125,824 and $549,208, for the three-month and nine-month periods ended January 31, 2013, compared to $193,209 and $714,327 for the corresponding periods in 2012.
Revenue from software was $141,958 and $364,408, for the three-month and nine-month periods ended January 31, 2013, compared to $132,991 and $439,568 for the corresponding periods in 2012.
Revenue from support and other services was $56,007 and $212,768, for the three-month and nine-month periods ended January 31, 2013, compared to $110,217 and $213,030 for the corresponding periods in 2012.
The decrease in hardware and support services revenues for the quarter was largely attributed to the type of systems the Company delivered and the installations of such systems in the prior year compared to the current fiscal year which was largely represented by the new "All-in-One" units. A significant portion of the systems delivered and installed in fiscal 2012 were larger multi-screen units. The decrease in hardware sales in the nine-month period was primarily due to the Company's strategic decision to move away from reselling certain hardware components and have its resellers purchase and provide the hardware to the customers.
The increase in software revenue for the quarter was due to the Company receiving a customer order that only entailed software that was delivered. The decrease in software revenue in the nine-month period was primarily due to normal fluctuations that will generally occur in the timing of when the sales orders are actually received from the customers in a given quarter.
Gross Profit and Gross Profit Margin
Gross profit was $87,771 and $504,960, for the three-month and nine-month periods ended January 31, 2013, compared to $227,872 and $633,569 for the corresponding periods in 2012.
Gross margin for the three month period ended January 31, 2013 decreased as a result of an inventory write-down of $97,000 in the quarter. Excluding this write-down, gross margins increased by 4.9% to 57.1% from 52.2% for the corresponding period in 2012. Gross margin for the nine month period ended January 2013 decreased to 44.84% from 46.4% for the corresponding period in 2012. The decrease in gross margin was primarily attributed to the Company's inventory write-down in the quarter.
Operating Expenses
Operating expenses were $1,675,520 and $4,166,129, for the three-month and nine-month periods ended January 31, 2013, compared to $1,281,743 and $4,030,268 for the corresponding periods in 2012.
Sales and Marketing
Sales and marketing expenses were $722,524 and $1,939,371, for the three-month and nine-month periods ended January 31, 2013, compared to $563,408 and $1,726,437 for the corresponding periods in 2012. The increase was largely attributed to the increase in sales, marketing and promotional activities undertaken by the Company, as part of efforts to prepare the market for the launch of Aerus cloud services. Other sales and marketing expenses included market research, the hiring of sales consultants, the redesign of the Company's website and increased travel expenditures. Due to the cost constraint program that was implemented in the prior year, the Company had reduced its sales and marketing expenditures to preserve its financial resources.
General and Administrative
General and administrative expenses were $286,787 and $834,878, for the three-month and nine-month periods ended January 31, 2013, compared to $265,563 and $842,144 for the corresponding periods in 2012. The increase in general and administrative expenses during the quarter was largely attributed to costs incurred on consultants hired to assist the Company in preparing the proposed Qualifying Transaction with Biovest Corp. I. The decrease in general and administrative expenses for the nine month period was largely attributed to staff reductions that occurred during prior year in connection with the Company's cost containment plans implemented to conserve financial resources combined with a reduction in depreciation expenses.
Research and Development
Research and development expenses were $559,857 and $1,119,382, for the three-month and nine-month periods ended January 31, 2013, compared to $363,126 and $1,173,692 for the corresponding periods in 2012. The increase in research and development for the quarter was largely attributed to the additional expenses incurred in the current quarter on the development of the new cloud-based Aerus services. The decrease in research and development for the nine month period was largely due to the lower staff costs incurred in the first quarter of the current year due to the staff reductions that occurred during the prior year in connection with cost containment program, and government incentive recorded in the second quarter of the current year as a result of the non-interest bearing government loan.
Net Loss
Net loss and total comprehensive loss was $2,062,515 or $0.11 per share and $4,949,104 or $0.27 per share, for the three-month and nine-month periods ended January 31, 2013, compared to $1,351,827 or $0.07 per share and $4,232,264 or $0.23 per share for the corresponding periods in 2012. The increase in net loss during the quarter and nine month period was due to the Company experiencing increases in its operating expenses, particularly in the areas of sales and marketing, and research and development, as mentioned earlier. The total of the other income (expenses) for the quarter and nine month period also increased due to higher interest and accretion expenses as a result of increased borrowings in the current fiscal year from the issuance of secured convertible debenture, government loan and notes, which also resulted in increase in net loss during the period.
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.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Magor Corporation
Mike Pascoe
President and CEO
Magor Corporation
613-686-1731 ext 5510
[email protected]
Babak Pedram
Investor Relations
Sutton Compliance Communications
416-502-8607 ext. 240
[email protected]
Share this article