Serenic Corporation (the "Company" or "Serenic") (TSX VENTURE:
SER), an international software developer specializing in
integrated financial management and human capital management
solutions for Non-Profit organizations, government agencies, and
Microsoft Dynamics NAV users, announces its financial results for
the three months ended May 31,2011 ("Q1").
Financial results are summarized as follows:
(Unaudited) Increase
Three months ended May 31 (decrease)
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2011 2010
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$ $ %
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Revenue 2,578,317 3,120,281 (17.4)
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(Loss) income for the period less than
(177,375) 8,888 (100)
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Basic and diluted loss per share (0.01) - (100.0)
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EBITDA (1) (60,960) 134,917 (145.2)
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EBITDA as a % of sales (2.4)% 4.3% (155.8)
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Weighted average common shares
outstanding 15,190,458 15,190,241
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1. EBITDA represents earnings before interest, taxes, depreciation,
amortization, and stock based compensation. Please review the Serenic
Management Discussion and Analysis for the quarter ended May 31, 2011
for more information.
Quarter Highlights
-- Following a very strong fourth quarter to end its fiscal 2011 year,
revenue declined 17.4% in this quarter compared to the first quarter of
2010, due primarily to delayed buying decisions by new customers. The
sales pipeline remains strong in management's opinion and management
believe that sales anticipated to complete in the quarter have only been
delayed and not lost.
-- Despite the sales decline of 17.4%, gross profit only declined 11.9%,
from $2,035,753 or 65.2% of sales in Q1 last year to $1,793,053 or 69.5%
of sales this quarter. A shift in the sales mix to the more profitable
elements of client services and maintenance contracts partially offset
the negative impact on profitability from the software license revenue
decline.
-- Expenses were marginally lower in the current quarter by 2.9%, declining
from $2,030,750 to $1,971,181. Certain expenses associated with the
strategic initiative to increase value for shareholders were incurred
last year but not required to be repeated this year. As Serenic costs
are relatively fixed in the short term, the reduced top line sales and
gross profit created the net loss of $177,375 in the current quarter.
-- Serenic continues to be negatively impacted by the declining foreign
exchange rate, which decreased from an average of $1.0226 Cdn to U.S. in
Q1 of 2011 to $0.9679 Cdn to U.S. in Q1 of 2012. Revenues are primarily
billed in U.S. dollars while expenses are paid in both U.S. and Canadian
dollars. The result of the declining U.S. dollar is that revenue is
therefore affected more than expenses which also contributed to the net
loss.
Q1 2012 Corporate Highlights
-- Management continued to focus on two primary objectives during the
quarter - to increase the value of the Company by strengthening its
position as a global leader in its niche markets and to continue
investigation of alternatives to maximize that value for all
stakeholders of the Company.
-- Serenic continued to progress from marketing and operational
perspectives with Q1 having established solid momentum for the upcoming
year. The Company announced the addition of the Habanero Consulting
Group as a new reseller partner in Western Canada and the Advancement
Group as a new distributor for South Africa. Several new customers were
added during Q1 including the Human Rights Watch organization which
conducts its operations to assist victims of human rights abuses in more
than 90 countries.
-- In Q1 the Company issued its first quarterly report in accordance with
International Financial Reporting Standards ("IFRS"). Conversion from
Canadian GAAP to IFRS convention has been a time consuming and expensive
project over the past 3 years and this Q1 report represents the
successful changeover as is required by all Canadian public companies as
of January 1, 2011.
-- Subsequent to the quarter end, the Company announced a Normal Course
Issuer Bid program commencing June 23, 2011, wherein the Company may
repurchase (for cancellation) up to 938,249 of its outstanding common
shares. This program was instituted in support of management's belief
that the current share price does not adequately reflect the real value
of the Company and that repurchase of common shares at current price
levels is an appropriate use of corporate funds.
-- On June 13, 2011 Serenic was again appointed to Microsoft's Inner Circle
and President's Clubs for strong business growth and for outstanding
dedication to customer service through the delivery of innovative
business solutions.
Please refer to the latest financial statements and MD&A
filed on www.sedar.com for full financial analysis and details.
Outlook
Serenic's management continues to believe the outlook remains
positive. The strategy for Fiscal 2012 is to continue organic
growth of core operations, to maintain EBITDA positive results as
we grow our business and to continue to explore and pursue
scenarios to maximize value for our shareholders beyond what
organic growth would produce.
From an operational perspective, this will entail continued
pursuit of new business through our traditional reseller and direct
channel business models, accelerating activities that pertain to
international markets and executing aggressive new campaigns to
market our software as a service ("SaaS") product, Navigator
On-line. We have also enacted an internal initiative termed "The
Year of the Customer", which involves revamping current processes
and systems throughout the Company in an effort to support and
serve our customers and partners even better and to ensure their
ongoing satisfaction and loyalty.
From a corporate development focus, we will continue exploration
and pursuit of various strategic opportunities to maximize
shareholder value, including but not limited to: a capital
structure review, strategic partnerships, and/or merger and
acquisition scenarios. Management strongly believes that the
current market capitalization of the Company does not adequately
reflect Serenic's fair value and is determined to take judicious
action that would best serve the interests of shareholders to
rectify this situation, as soon as practical.
With $4 million of cash on hand at quarter-end and no long term
debt, the Company is adequately financed to operate as anticipated.
The management team is excited and committed to achieve the
objectives as stated and we anticipate another fruitful year of
advancement for the Company.
About Serenic Corporation
Serenic Corporation publishes mission-critical software products
for not-for-profits (NFP), educational institutions and
governments. The Company's products are based on leading
application and technology platforms from Microsoft, including
Dynamics NAV, SQL Server, and .NET, and are distributed in North
America and internationally through value-added resellers and a
direct sales organization. Serenic Corporation is the exclusive
developer of human resource management and payroll products for
Microsoft Dynamics NAV ERP users in North America. Serenic has
offices in Edmonton, Alberta and Denver, Colorado and staff located
throughout the USA, and in Europe and Africa.
ON BEHALF OF THE BOARD OF DIRECTORS
Dwayne Kushniruk, Chairman
SERENIC CORPORATION
Forward Looking Statements
Certain statements contained in this press release, including
statements which may contain words such as "could", "should",
"expect", "anticipate", "believe", "will", and similar expressions
and statements relating to matters that are not historical facts,
are forward looking statements. Such forward looking statements
involve known and unknown risks and uncertainties which may cause
the actual results, performances or achievements of Serenic
Corporation to be materially different from any future results,
performances or achievements expressed or implied by such forward
looking statements. Such factors include, but are not limited to,
software industry risks, general business risks, foreign currency
risks, economic dependence risks, and credit risks.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Contacts: Serenic Corporation Dwayne Kushniruk Chairman
1-877-426-5385 x509 dkushniruk@serenic.com Serenic Corporation Paul
Johnston CFO 1-877-426-5385 x509 pjohnston@serenic.com Cantech
Communications Investor Relations Nick Waddell Toll free: (877)
737-3642 x144 ir@serenic.com
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