TORONTO, ONTARIO--(Marketwired - Oct. 28, 2014) - Advantex Marketing International Inc. (CNSX:ADX), a specialist in marketing loyalty-reward programs, today outlined numerous measures it has taken to renew its business and put it on course for improved financial performance.
In a letter to shareholders accompanying its financial results for the fiscal fourth quarter and year ended June 30, 2014, Kelly Ambrose, Advantex's president and CEO, said: "The past year has been a challenging one for our company. But we have responded vigorously to the challenges, and believe we are now well placed to reap the fruits of our efforts."
Mr. Ambrose added: "We have strengthened existing partnerships and forged valuable new ones. We have reorganized our internal structure to focus more sharply on each of our three main business groups - CIBC/TD, Aeroplan and Caesars Entertainment. And we have acted decisively to put our balance sheet on a secure footing that reflects the current realities of our business."
The fiscal 2014 performance reflects difficult business conditions for many of Advantex's roughly 1,700 merchants, resulting in a higher delinquency rate than expected on the company's Advance Purchase Marketing program. Under this program, Advantex buys merchants' future credit card receivables at a discount to face value. Write-offs for bad debts rose by 39.1% in fiscal 2014 to $1.27 million.
In another development, Canadian Imperial Bank of Commerce, one of Advantex's main partners, has acknowledged some erosion in its credit card business over the past year. As a result, more generous consumer rewards were required in the first half of the fiscal year to encourage merchant enrollment and retention.
The renewal of partnership agreement with Canadian Imperial Bank of Commerce.
New partnership with Toronto-Dominion Bank.
New partnership with Caesars Entertainment.
A refinancing, under which the company has lightened its debt burden, lowered interest costs and reduced the number of fully-diluted common shares outstanding by almost a quarter.
Extension of a $8.5 million credit facility by one year to December 2015. The facility supports the Advance Purchase Marketing program, and thus makes a valuable contribution to Advantex's business.
A more conservative approach towards identifying and accounting for delinquencies among merchants enrolled in the Advance Purchase Marketing program.
Enhanced services to merchants. New initiatives include substantial improvements to Advantex's website enabling shoppers to locate merchants more easily; expanded digital marketing resources; and measures to help merchants target their promotions at consumers in specific locations. "Improved merchant satisfaction and loyalty are among our key goals for the coming year." Mr. Ambrose said.
Mr. Ambrose said: "Advantex is now a stronger, more nimble company, and we look forward to an improved financial performance in 2015. The combination of a growing merchant base, a rising volume of transactions and wider geographical coverage should translate into sustainable growth in revenues in the year ahead. Loyalty marketing is a multi-billion dollar business in North America and Advantex is well positioned to gain a wider share of this market with our proprietary technology and our outstanding partners."
The financial results and their discussion are provided in the annual consolidated financial statements and management's discussion and analysis for year ended June 30, 2014. They are available under Advantex's profile on www.sedar.com.
Through our partnerships with Aeroplan, Canadian Imperial Bank of Commerce, Toronto-Dominion Bank and Caesars Entertainment, we have contractual access to millions of consumers with above-average personal and household income. We also have partnerships with about 1,700 merchants in Canada and the US.
This Press Release contains certain "forward-looking information". All information, other than information comprised of historical fact, that addresses activities, events or developments that Advantex believes, expects or anticipates will or may occur in the future constitutes forward-looking information. Forward-looking information is typically identified by words such as: anticipate, believe, expect, goal, intend, plan, will, may, should, could and other similar expressions. Such forward-looking information relates to, without limitation, information regarding Advantex's: belief in its ability to improve its future financial performance including the expected growth in revenue; belief in its ability to gain a wider share of the loyalty marketing business in North America; and other information regarding Advantex's financial and business prospects and financial outlook is forward-looking information.
Forward-looking information reflects the current expectations or beliefs of Advantex based on information currently available to Advantex.
Forward-looking information is subject to a number of risks, uncertainties and assumptions that may cause the actual results of Advantex 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 Advantex. Factors that could cause actual results or events to differ materially from current expectations include those listed under "General Risks and Uncertainties" and "Economic Dependence" in Advantex's Management's Discussion and Analysis for the twelve months ended June 30, 2014.
All forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, Advantex disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although Advantex believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.