VIQ Solutions Inc. ("VIQ Solutions" or the "Corporation") (TSX VENTURE:VQS), a
world leader in computer-based digital audio and video capture and management,
today reported its financial results for the three and twelve month periods
ended December 31, 2012. Results are reported in Canadian dollars and are
prepared in accordance with International Financial Reporting Standards
("IFRS").
"We have started to see a resurgence in business activity in the global market
for the computer products and services after a quiet second half in 2012. We are
now seeing increased market demand for digital recording solutions that address
the necessity to manage large volumes of digital data," said David Outhwaite,
President and Chief Executive Officer of VIQ Solutions. "We believe that VIQ's
Infinit suite directly addresses governments' imperative to decrease operational
costs and increase efficiencies across the justice system by offering a solution
that provides secure remote processing control and seamless integration with
third-party digital video and content management providers."
Annual Results
Revenue was $15.8 million for the year ended December 31, 2012 as compared to
$15.3 million for the previous year, representing an increase of 4%. Gross
profit for 2012 was $6.3 million as compared to $6.5 million in 2011,
representing a decrease of 2%. Gross profit expressed as a percentage of
revenues was 40% in 2012 as compared to 42% in 2011. Net loss was $246,445 for
the year or $0.00 per share as compared to a net income of $75,094 or $0.00 per
share for the previous year. EBITDA(1) was $157,750 for the year ended December
31, 2012 as compared to an EBITDA $487,309 for the same period in 2011. Cash
flow used in operations was $347,911 for the year ended December 31, 2012 as
compared to a cash inflow of $614,033 for the same period in 2011.
Fourth Quarter Results
Revenues increased from $3.4 million in the fourth quarter of 2011 to $4.2
million in the fourth quarter of 2012 or 24% due to an increase in business
activity for both our computer products and services and transcription
businesses. Gross margin for the quarter was 40%, up from 35% for the same
period in 2011 primarily due to the improved margins from our Spark and Cannon
division. Selling and administrative expenses increased from $1.4 million for
the fourth quarter of 2011 to $1.5 million for the fourth quarter of 2012 due to
increased business activity in the quarter. EBITDA for the fourth quarter ended
December 31, 2012 was $105,902 as compared to an EBITDA loss of $424,673 for the
same period in 2011 due to stronger performance by both of our business units.
Net loss was $89,652 for the three month period ended December 31, 2012 as
compared to $528,280 for the three month period ended December 31, 2011. Cash
used in operations was $299,494 for the fourth quarter of 2012 as compared to a
cash inflow of $69,013 for the same period in 2011 as we invested in working
capital in support of higher revenue in the fourth quarter of 2012.
2012 Financial Highlights
-- Increased revenue in 2012 with strong revenue growth from our
transcription and recording business units;
-- Achieved positive EBITDA for the year;
-- Successfully completed the national roll-out of 536 installations of our
multi-year digital audio recording and storage project in the United
Kingdom with Atos. The Corporation continues to earn on-going revenue
from the project from related software support, installation and
professional development services;
-- Awarded a contract for digital audio and video capture in Mexico with
local reseller Dyntra, S.A de C.V. to provide Encompass RPC software and
Cisco hardware to the federal courthouse in Merida in the Mexican state
of Yucatan and successfully installed a pilot system; and
-- Awarded a Canadian contract for digital audio capture and management by
the Courts Administration Service to supply bilingual digital audio
recording software and hardware for 48 fixed and mobile recording
workstations for the Federal Court and Tax Court of Canada across the
country.
Note
1. EBITDA is a non-IFRS earnings measure which does not have any standardized
meaning prescribed by IFRS and therefore may not be comparable to EBITDA
presented by other companies. EBITDA is defined as earnings before interest
expense, income taxes, depreciation and amortization. This measure is important
to management since it is used by potential investors to evaluate the
Corporation's operating performance and ability to incur and service debt, and
as a valuation metric. Please refer to VIQ Solutions' 2012 Management's
Discussion and Analysis for a reconciliation and definition of non-IFRS
measures.
Additional Information
Detailed financial information and Management's Discussion and Analysis of
Results and Financial Condition for the year ended December 31, 2012 will be
posted on VIQ Solution's website (under Investor Relations) at
www.viqsolutions.com and on SEDAR's website at www.sedar.com. The financial
information included in this release is qualified in its entirety and should be
read together with the audited consolidated financial statements for the year
ended December 31, 2012, including the notes thereto.
About VIQ Solutions Inc.
VIQ Solutions is a global leader in computer-based digital audio and video
capture and management. We develop software solutions that capture, digitize,
and compress audio and video data, which is securely stored in a multi-tiered
server system where it is easily searchable and shareable. Our innovative media
processor technology allows users to remotely control audio-video capture in
multiple locations from a single satellite location, allowing large-scale and
complex installations to be managed efficiently by fewer resources. VIQ
Solutions' technologies are installed in courts, legislative assemblies, law
enforcement and hearing rooms around the world.
Forward-looking Statements
This release contains forward-looking statements and other statements concerning
the Corporation's objectives and strategies and management's beliefs, plans and
intentions about our achievements, goals, performance and other future events.
These statements involve risks and uncertainties, which may cause actual results
to differ materially from the statements made. When used in this press release,
the words "anticipate," "believe," "could," "estimate," "expect," "intend,"
"may," "plan," "will," "would" and similar expressions are intended to identify
forward-looking statements. Such statements reflect VIQ Solutions' current views
with respect to future events and are subject to such risks and uncertainties.
Many factors could cause our actual results to differ materially from the
statements made due to a number of factors including risks related to our
ability to successfully execute our business plan which includes our revenue
growth, our liquidity, our operating results, our technology and products.
Should one or more of these risks or uncertainties materialize, or should
assumptions underlying the forward-looking statements prove incorrect, actual
results may vary materially from those described herein as intended, planned,
anticipated or expected. VIQ Solutions does not intend and does not assume any
obligation to update these forward-looking statements.
VIQ Solutions Inc.
Consolidated Balance Sheets
(Expressed in Canadian dollars)
(Audited)
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December 31, December 31,
2012 2011
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Assets
Current assets
Cash $ 1,129,107 $ 1,646,138
Trade and other receivables 1,989,208 1,330,474
Inventories 6,287 7,025
Prepaid expenses 112,980 123,228
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3,237,582 3,106,865
Non-current assets
Restricted cash 155,190 151,215
Property and equipment 700,110 754,397
Goodwill 1,614,278 1,621,395
Deferred tax assets 225,877 260,001
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Total assets $ 5,933,037 $ 5,893,873
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Liabilities
Current liabilities
Trade and other payables $ 1,078,996 $ 951,687
Income taxes payable 128,995 -
Provisions 622,727 584,870
Short-term debt - 75,000
Unearned revenue 147,291 187,179
Deferred lease incentives 20,966 21,766
Current portion of obligations under finance
lease 60,103 59,266
Current portion of long-term debt 22,692 22,692
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2,081,770 1,902,460
Non-current liabilities
Provisions 131,615 165,974
Deferred lease incentives 29,582 50,964
Obligations under finance lease 70,929 45,528
Long-term debt 48,062 70,754
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Total liabilities 2,361,958 2,235,680
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Equity
Capital stock 11,578,213 11,438,947
Contributed surplus 1,818,206 1,781,433
Accumulated other comprehensive income 142,252 158,960
Deficit (9,967,592) (9,721,147)
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3,571,079 3,658,193
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Total equity and liabilities $ 5,933,037 $ 5,893,873
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VIQ Solutions Inc.
Consolidated Statements of Comprehensive Income and Loss
(Expressed in Canadian dollars)
(Audited)
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2012 2011
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Revenue $ 15,840,411 $ 15,288,417
Cost of sales 9,496,968 8,810,326
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Gross profit 6,343,443 6,478,091
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Expenses
Selling, general and administrative expenses 5,797,216 5,575,740
Research and development expenses 666,815 725,651
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6,464,031 6,301,391
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Income (loss) from operations (120,588) 176,700
Interest income 31,664 21,394
Interest expense (37,770) (133,724)
Foreign exchange gain 416 41,197
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Net finance loss (5,690) (71,133)
Net income (loss) before income taxes (126,278) 105,567
Provision for income taxes 120,167 30,473
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Net income (loss) $ (246,445) $ 75,094
Exchange differences on translating foreign
operations (16,708) 44,588
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Comprehensive income (loss) $ (263,153) $ 119,682
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Net income (loss) per share
Basic and diluted $ 0.00 $ 0.00
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Weighted average number of common shares
outstanding - basic 90,877,820 89,048,501
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Weighted average number of common shares
outstanding - diluted 90,877,820 90,786,137
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VIQ Solutions Inc.
Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
(Audited)
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2012 2011
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Cash provided by (used in):
Operating activities
Net income (loss) for the year $ (246,445) $ 75,094
Items not affecting cash:
Depreciation 219,500 248,018
Stock-based compensation 95,039 223,198
Provisions (34,359) 19,543
Loss (gain) on sale of property and equipment 2,341 (4,826)
Interest accretion on bridge loans - 6,875
Amortization of deferred lease incentive (20,992) (21,765)
Deferred income tax benefits 28,966 7,085
Unrealized foreign exchange loss (gain) (14,119) 6,462
Changes in non-cash operating working capital (377,842) 54,349
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Cash from (used in) operating activities (347,911) 614,033
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Investing activities
Purchase of property and equipment (76,466) (99,590)
Proceeds from disposal of property and
equipment 600 7,119
Change in restricted cash (5,212) 15,212
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Cash used in investing activities (81,078) (77,259)
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Financing activities
Advances in short-term debt - 575,000
Repayment of short-term debt (75,000) (1,690,000)
Repayment of long-term debt (22,692) (522,692)
Proceeds from stock options exercised for cash 81,000 420,589
Proceeds from private placement, net of
issuance costs - 1,989,198
Finance lease payments (67,016) (58,258)
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Cash provided by (used in) financing activities (83,708) 713,837
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Net increase (decrease) in cash during the year (512,697) 1,250,611
Cash, beginning of year 1,646,138 381,543
Effect of exchange rate changes on cash (4,334) 13,984
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Cash, end of year $ 1,129,107 $ 1,646,138
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FOR FURTHER INFORMATION PLEASE CONTACT:
VIQ Solutions Inc.
David Outhwaite
President & CEO
(905) 948-8266 ext. 250
douthwaite@viqsolutions.com
VIQ Solutions Inc.
Karen Hersh
Chief Financial Officer
(905) 948-8266 ext. 240
khersh@viqsolutions.com
www.viqsolutions.com
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