The Futura Loyalty Group Inc. (TSX VENTURE:FUT) ("Futura" or the "Company") has
released its financial results for the fiscal year ending December 31, 2011.
Financial Overview
Futura's revenue for the year ending December 31, 2011 grew to $2,002,874 from
$1,654,326 in 2010. Revenues, excluding breakage, for the same periods were
$1,798,616 and $1,369,626 respectively, representing an annual increase of 31%.
This 31% increase in revenue was almost entirely the result of increased third
party loyalty currency sales which rose to $1,637,963 in 2011, compared to
$1,260,851 in 2010.
Gross margins, excluding breakage revenue and expense, for the years ended
December 31, 2011 and 2010 were $833,430 and $624,209, representing 46.3% and
45.6% of sales respectively.
Operating expenses for the years ended December 31, 2011 and 2010 were
$2,072,094 and $2,287,434 respectively. The decrease in operating expenses was
primarily the result of a write off of certain accounts payable from prior
years. Without these accounts payable write-offs, operating expenses in 2011
were similar to 2010 despite the fact that the Company commenced operations in
the US in 2011.
Loss before financial activities for the year ended December 31, 2011 was
$1,060,267 compared to $1,378,525 for 2010. Excluding breakage, the loss before
financial activities was $1,238,664 and $1,663,225 respectively for 2011 and
2010.
The net loss for fiscal 2011 was $2,206,523 in comparison to a net loss of
$2,210,457 for 2010. Net loss per share was $0.01 per share in 2011 and 2010.
There were 184,915,651 shares outstanding at year end.
Business Overview
-- Over the past three years, Futura has built a strong recurring revenue
business in Canada with its core revenue base being from selling branded
loyalty currencies to mid size retailers, leveraging its loyalty
marketing expertise in combination with its proprietary technology
platform.
-- The Company provides loyalty reward solutions to various business
sectors. In 2011, it focused on the auto services retail market, the
second largest consumer segment to launch 79 auto dealers in Canada
through the course of 2011.
-- The Company developed strategic channel partnerships to accelerate
market entry for Futura loyalty services through co-marketing agreements
with the Toronto Area Dealers Association, Ontario Automobile Dealers
Association and Co-Auto (East) and Western Co-Auto, two co-operative
buying groups which focus on the auto dealer segment.
-- In June 2011, the Company entered into the US market in partnership with
AirIncentives to sell three of the largest frequent flyer currencies in
the US to retail merchants. These frequent flyer loyalty programs have
over 100 million members and represent a tremendous new growth
opportunity for the Company.
-- As of the end of March 2012, Futura promoted David Campbell from CFO to
President & CEO to lead the Company into its next growth phase.
"In addition to other sectors, the auto dealer market was a great source of
growth for Futura in 2011 and we are excited about the prospects for significant
additional growth in this market, both in Canada and the US in 2012. I see many
opportunities to partner with established industry players to really accelerate
our growth and timeline to profitability," said David Campbell, CEO of Futura.
Other Business
The Company also announced that it will not renew its agreement with Spinnaker
Capital Markets Inc. which ends on May 14, 2012 and the Company will assume
those functions internally. The Company thanks Spinnaker for its sound strategic
guidance and execution throughout the year.
Financial Summary
----------------------------------------------------------------------------
3 months 3 months 12 months 12 months
ending ending ending ending
Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
----------------------------------------------------------------------------
Revenue $ 530,167 $ 513,833 $ 2,002,874 $ 1,654,326
----------------------------------------------------------------------------
Gross Margin 208,093 269,166 1,011,827 908,909
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Expenses 516,709 517,135 2,072,094 2,287,434
----------------------------------------------------------------------------
Loss Before
Financial
Activities (308,616) (247,969) (1,060,267) (1,378,525)
----------------------------------------------------------------------------
Net Loss $ (1,091,233) $ (639,095) $ (2,206,523) $ (2,210,457)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Performance Excluding Breakage
----------------------------------------------------------------------------
Revenue $ 618,575 $ 454,633 $ 1,798,616 $ 1,369,626
----------------------------------------------------------------------------
Gross Margin 322,362 209,966 833,430 624,209
----------------------------------------------------------------------------
Expenses 516,709 517,135 2,072,094 2,287,434
----------------------------------------------------------------------------
Loss Before
Financial
Activities (194,347) (307,169) (1,238,664) (1,663,225)
----------------------------------------------------------------------------
Net Loss $ (976,964) $ (698,295) $ (2,384,920) $ (2,495,157)
----------------------------------------------------------------------------
The Company has defined the term "Loss Before Financial Activities" in its
consolidated financial statements as this is an effective measure of the
operating business, independent of how the business is financed. The Company has
also chosen to break out its results herein by showing the numbers independent
of breakage revenue and expense, as breakage can randomly and significantly vary
from quarter to quarter, thereby making it difficult for readers of the
consolidated financial statements to get a clear picture of the business,
independent of breakage. Breakage revenue is recorded when a Futura Rewards
member has not experienced an eligible transaction for a period of 24
consecutive months.
To see the Company's full financial statements, please go to www.tflg.ca or
www.sedar.com.
About Futura Loyalty Group
The Futura Loyalty Group Inc. is an industry-leading provider of integrated and
stand-alone loyalty solutions for Canadian and American businesses. The company
offers a comprehensive suite of loyalty products and services including access
to two existing branded loyalty currencies in Canada and three in the United
States. Futura also develops custom loyalty marketing and administration
programs for companies wishing to develop proprietary loyalty solutions.
Futura's loyalty services include member account set up, management and reward
redemption platform, a web-based program transaction reporting interface for
merchants, a robust offer management system, retail POS Integration for card
swipe issuance, customer loyalty analytics and a proprietary web based reward
issuance solution. For more information regarding The Futura Loyalty Group,
visit www.futuraloyaltygroup.com or www.tflg.ca.
Forward-Looking Information
This news release includes certain forward-looking information that is based
upon current expectations, which involve risks and uncertainties associated with
our business and the environment in which the business operates. Any statements
contained herein that are not statements of historical facts may be deemed to be
forward-looking information, including those identified by the expressions
"anticipate", "believe", "plan", "estimate", "expect", "intend", "will", "may",
"should", "could", and similar expressions to the extent they relate to the
Company or its management. The forward looking information is not historical
facts, but reflects the Company's current expectations regarding future results
or events. Forward-looking information is subject to a number of risks,
uncertainties and assumptions that may cause the actual results of the Company
to differ materially from those discussed in the forward-looking information,
and even if such actual results are realized or substantially realized, there
can be no assurance that they will have the expected consequences to, or effects
on the Company. Factors that could cause actual results or events to differ
materially from current expectations include, among other things, changes in
general economic and market conditions; changes to regulations affecting the
Company's activities; level of merchant participation in the Company's programs;
uncertainties relating to the availability and costs of financing needed in the
future; and other factors, including without limitation, those listed under
"Economic Dependence" and "Risks and Uncertainties" in MD&A for the three and
twelve month periods ended December 31, 2011.
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