TORONTO, ONTARIO–(Marketwired – May 12, 2014) – EQ Inc. (TSX:EQ) (“EQ Works”) a leader in audience targeting for mobile, social, video and display advertising today announced its financial results for the first quarter-ended March 31, 2014. Total revenue from operations for the quarter was $2.0 million, an increase of 23% from the $1.6 million recorded in the first quarter of 2013. The adjusted EBITDA loss for the quarter was approximately $711,000, a 25% improvement as compared to a loss of $942,000 in the first quarter of 2013.
Highlights for the First Quarter ended March 31, 2014
- Mobile and video partnerships created to form exclusive audience segments
- 13 new agency partners were added in the quarter
- Redefined cross-device targeting in Canada using custom digital personas
- Launched several new rich media ad units across all devices
- Implemented an exclusive video offering that guarantees brand-appropriate content and messaging to further enhance Hercules™, the Company’s safe-advertising platform
“This past quarter we demonstrated continued growth while delivering innovative products that our clients need to be successful.” said Geoffrey Rotstein, President and CEO. “Industry attention has now shifted to quality, which remains one of our greatest strengths. Our focus on quality has enabled us to create extremely effective audience segments that perform better, and deliver insights that help our advertisers understand more about their audience at the end of every campaign.” added Rotstein. “By combining the most advanced mobile and video audience segmentation with rich media applications for our clients, we are able to offer even more innovative solutions than before.”
Non-IFRS Financial Measures
We measure the success of our strategies and performance based on Adjusted EBITDA, which is outlined and reconciled with net income (loss) in the section entitled “Reconciliation of Net Loss for the period to Adjusted EBITDA” in the MD&A. The Company defines Adjusted EBITDA as net income (loss) from operations before; (a) depreciation of property and equipment and amortization of domain properties and other intangible assets; (b) share-based payments, (c) restructuring, (d) impairment of goodwill and domain properties and other intangible assets, (e) Income tax expense and recovery, and (f) finance income and costs, net. Management uses Adjusted EBITDA as a measure of the Company’s operating performance because it provides information related to the Company’s ability to provide operating cash flows for working capital requirements, capital expenditures and potential acquisitions. 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 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 loss from operations and Adjusted EBITDA for the periods presented:
| Adjusted EBITDA for three months ended March 31, | ||||
| (In thousands of Canadian dollars) | 2014 | 2013 | ||
| Net loss | (1,159 | ) | (1,358 | ) |
| Add: | ||||
| Deferred Income tax recovery | – | (65 | ) | |
| Finance cost, net | 103 | 102 | ||
| Depreciation of property and equipment | 60 | 75 | ||
| Amortization of domain properties and other intangibles | 274 | 283 | ||
| Share-based payments | 11 | 21 | ||
| Adjusted EBITDA | (711 | ) | (942 | ) |
About EQ Works
EQ Works (www.eqworks.com) provides a smarter way to target customers. The Company uses its real-time technology and advanced analytics to detect the actionable data that boosts performance for all web, mobile, social and video initiatives. EQ Works balances the many components that comprise the complex advertising ecosystem and establishes equilibrium for reaching the right audience at the right time through any web or mobile device.
Forward-Looking Statements
This 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. EQ Inc. is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.
| EQ Inc. | ||||
| Unaudited Condensed Consolidated Interim Statements of Financial Position | ||||
| (In thousands of Canadian dollars) | ||||
| March 31, 2014 | December 31, 2013 | |||
| Assets | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 2,285 | $ | 2,797 |
| Accounts receivable | 1,417 | 2,231 | ||
| Other current assets | 295 | 222 | ||
| 3,997 | 5,250 | |||
| Non-current assets: | ||||
| Investment | 50 | 50 | ||
| Property and equipment | 234 | 281 | ||
| Domain properties and other intangible assets | 1,399 | 1,610 | ||
| 1,683 | 1,941 | |||
| Total assets | $ | 5,680 | $ | 7,191 |
| Liabilities and Shareholders’ Equity | ||||
| Current liabilities: | ||||
| Accounts payable and accrued liabilities | $ | 2,044 | $ | 2,316 |
| Deferred lease inducement | 3 | 14 | ||
| Finance leases | 103 | 122 | ||
| Deferred revenue | 406 | 602 | ||
| 2,556 | 3,054 | |||
| Non-current liabilities: | ||||
| Finance leases | 42 | 64 | ||
| 42 | 64 | |||
| Shareholders’ Equity | 3,082 | 4,073 | ||
| Total liabilities and Shareholders’ equity | $ | 5,680 | $ | 7,191 |
| EQ Inc. | |||||||
| Unaudited Condensed Consolidated Interim Statements of Comprehensive Income (Loss) | |||||||
| (In thousands of Canadian dollars, except per share amounts) | |||||||
| Three months ended March 31, 2014 and 2013 | |||||||
| 2014 | 2013 | ||||||
| Revenue | $ | 2,015 | $ | 1,637 | |||
| Expenses: | |||||||
| Publishing and advertising costs | 1,054 | 836 | |||||
| Employee compensation and benefits | 989 | 1,036 | |||||
| Other operating expenses | 694 | 728 | |||||
| Depreciation of property and equipment | 60 | 75 | |||||
| Amortization of domain properties and other intangible assets | 274 | 283 | |||||
| 3,071 | 2,958 | ||||||
| Loss from operations | (1,056 | ) | (1,321 | ) | |||
| Finance income | 6 | 15 | |||||
| Finance cost | (109 | ) | (117 | ) | |||
| Loss before income taxes | (1,159 | ) | (1,423 | ) | |||
| Deferred income tax recovery | – | 65 | |||||
| Loss for the period | (1,159 | ) | (1,358 | ) | |||
| Other comprehensive income: | |||||||
| Foreign currency translation adjustments to equity | 157 | 181 | |||||
| Other comprehensive income for the period, net of tax | 157 | 181 | |||||
| Total comprehensive loss for the period | (1,002 | ) | (1,177 | ) | |||
| Loss per share: | |||||||
| Basic | (0.07 | ) | (0.09 | ) | |||
| Diluted | (0.07 | ) | (0.09 | ) | |||
| EQ Inc. | ||||||||
| Unaudited Condensed Consolidated Interim Statements of Cash Flows | ||||||||
| (In thousands of Canadian dollars) | ||||||||
| Three months ended March 31, 2014 and 2013 | ||||||||
| 2014 | 2013 | |||||||
| Cash flows from operating activities: | ||||||||
| Loss for the period | (1,159 | ) | (1,358 | ) | ||||
| Adjustments to reconcile net loss to net cash flows from operating activities: | ||||||||
| Depreciation of property and equipment | 60 | 75 | ||||||
| Amortization of domain properties and other intangible assets | 274 | 283 | ||||||
| Amortization of deferred lease inducement | (10 | ) | (11 | ) | ||||
| Share-based payment | 11 | 21 | ||||||
| Foreign exchange loss | 103 | 96 | ||||||
| Finance income, net | (2 | ) | (7 | ) | ||||
| Deferred income tax recovery | – | (65 | ) | |||||
| Change in non-cash operating working capital | 353 | 408 | ||||||
| Cash used in operating activities | (370 | ) | (558 | ) | ||||
| Net cash used in operating activities | (370 | ) | (558 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Repayment of finance leases | (41 | ) | (37 | ) | ||||
| Interest paid | (4 | ) | (8 | ) | ||||
| Net cash used in financing activities | (45 | ) | (45 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Interest income received | 6 | 15 | ||||||
| Additions to domain properties and other intangible assets | – | (51 | ) | |||||
| Net cash from (used in) investing activities | 6 | (36 | ) | |||||
| Foreign exchange loss on cash held in foreign currency | (103 | ) | (96 | ) | ||||
| Decrease in cash and cash equivalents | (512 | ) | (735 | ) | ||||
| Cash and cash equivalents, beginning of period | 2,797 | 5,419 | ||||||
| Cash and cash equivalents, for the period | $ | 2,285 | $ | 4,684 | ||||
David Katz
EVP Corporate Development
416.597.8889
416.597.2345 (FAX)
EQ Inc.
1255 Bay Street, Suite 400
Toronto, Ontario
M5R 2A9
press@eqworks.com
www.eqworks.com
Support InfoStride News' Credible Journalism: Only credible journalism can guarantee a fair, accountable and transparent society, including democracy and government. It involves a lot of efforts and money. We need your support. Click here to Donate