Serenic Reports Financial Results for Three and Nine Months Ended
November 30, 2013 and Cantech Communications Inc. to Provide
Investor Relations Services
EDMONTON, ALBERTA--(Marketwired - Jan 24, 2014) - Serenic
Corporation (the "Company" or "Serenic") (TSX-VENTURE:SER), an
international software developer specializing in integrated
financial management and human capital management ("HCM") solutions
for Non-Profit organizations, government agencies and Microsoft
Dynamics NAV users, announces its financial results for the three
and nine months ended November 30, 2013.
Financial results are summarized as follows:
|
Three months ended November 30 |
Nine months ended November 30 |
|
2013 |
2012 |
Increase/ (Decrease) |
2013 |
2012 |
Increase/ (Decrease) |
|
$ |
$ |
% |
$ |
$ |
% |
Revenue |
2,914,908 |
2,410,529 |
20.9 |
8,474,365 |
8,166,610 |
3.8 |
Net loss |
(384,153) |
(191,186) |
100.9 |
(889,977) |
(536,526) |
65.9 |
Basic and diluted loss per share |
(0.03) |
(0.01) |
200.0 |
(0.06) |
(0.04) |
50.0 |
EBITDA (1) |
(291,091) |
(100,092) |
(190.8) |
(629,778) |
(230,998) |
(172.6) |
EBITDA as % of sales |
(10.0) |
(4.2) |
(140.5) |
(7.4) |
(2.8) |
(162.7) |
Weighted average common shares outstanding - basic |
14,415,280 |
14,817,260 |
|
14,527,437 |
14,804,713 |
|
Weighted average common shares outstanding - diluted |
14,415,280 |
14,817,260 |
|
14,527,437 |
14,804,713 |
|
(1) EBITDA represents earnings before interest, taxes,
depreciation, amortization, and stock based compensation. Please
review the Serenic Management Discussion and Analysis ("MD&A")
for the Three and Nine months ended November 30, 2013 for more
information |
Quarter Highlights
Revenues for the current quarter exceeded the revenue of Q3 in
the prior year by 20.9% and generated gross profits that exceeded
those of Q3 in fiscal 2013 by $282,669 or 16.8%. Expenses increased
by $474,278 or 25.3% resulting in the net loss in the quarter to be
$384,153 versus $191,186 in Q3 in the prior year.
With respect to on-premise sales of Serenic Navigator software
licenses, Serenic closed several direct sales to new clients who
are primarily faith based organizations. Sales also included the
successful referral of a new third party donor management product
targeted to that market. Our reseller partner channel sales for Q3
were on par with those recorded in Q3 last year. Sales of HCM
products included the sale of a new third party advanced human
resource information system ("HRIS") product, which contributed to
HCM revenues almost doubling Q3's of last year. Revenue from client
services declined in the quarter and year over year due, in part,
to the adoption of the Serenic Total Care Plan during the quarter,
as is more fully explained later in this report. Expenses exceeded
those of Q3 of the prior year due to the hiring of additional staff
and expending of resources to progress the HCM and Cloud
initiatives, which have not yet generated sufficient revenue and
gross profit to neutralize their impact on the net loss. One
initiative for HCM involved development to integrate the HRIS
solution with Serenic's payroll products for both Navigator and
Dynamics NAV users, pursuant to an OEM arrangement entered into
earlier in this fiscal year and which will be put into general
release in March, 2014.
With respect to the new Cloud based solutions being developed to
align with Microsoft's Global Road to Repeatability ("GR2R") volume
strategies, we continued to progress this initiative for new volume
markets that Serenic has not historically addressed. Webcasts to
sell Serenic Navigator on-premise and Cloud solutions continued
during the quarter and in management's opinion yielded good
attendance and interest. Our sales team was successful in
completing the first sale of a prescriptive version of Serenic
Navigator, which will utilize a fixed-price and streamlined
implementation methodology. This product/implementation combination
is necessary to support the volume sales strategy envisioned for
the future. As previously disclosed, Serenic Navigator Express was
released on December 5, 2013, which allows new customers to
initiate a new installation of the entry-level Navigator solution
on Microsoft's new Azure cloud platform, with no or very limited
assistance from Serenic personnel.
During the quarter, management continued to actively explore
strategic corporate alternatives, with the objective being to
potentially increase shareholder value. As well, the Company
purchased 275,000 of its shares for cancellation under its Normal
Course Issuer Bid.
Cash resources as at November 30, 2013 were $3,516,293, a
reduction of $357,191 from cash resources of $3,873,484 as at
August 31, 2013 due to the net loss and this quarter's sales not
being collected until after the period close. Management believes
the cash resources continue to be adequate for the Company to
operate in its anticipated manner.
Outlook
Serenic is progressing in accordance with its plan to become a
major solution provider within Microsoft's global eco-system of
accounting vendors who align with Microsoft's strategy to pursue
higher volume sales envisioned by Microsoft's Cloud and GR2R
initiatives. We will continue to promote our historical on-premise
license products to customers with expanded needs while
concurrently advancing new volume strategies to address the much
larger market of organizations that require less complex software
solutions.
Although much of our recent work involved investment and
innovative re-development of our products, we anticipate that
Serenic can ultimately realize significant future benefits by being
a pioneering provider of solutions that operate on Microsoft's
Cloud platforms. Serenic has enjoyed a close and beneficial working
relationship with Microsoft for more than ten years, and
expenditures to adopt Microsoft's Cloud strategies approximated
$1.5 million for the nine month period in Fiscal 2014. Management
believes this scenario is not easily repeatable by or feasible for
most small software companies to pursue, particularly by those who
had not committed to Cloud strategies a few years ago and are now
behind companies like Serenic from a technology perspective.
Management believes that much of this development project is
behind us and that Serenic has the competitive ability to generate
improved operational results and value for shareholders going
forward. While research and development will be continually
ongoing, the foundational work to transition to Cloud-deployed
products has essentially been completed. As we transition through
the final quarter of Fiscal 2014 and into Fiscal 2015, work will be
driven by prospects' response to Cloud marketing and our sales
experience, as the strategies and products are configured to
optimize results and efficiencies. We will review our product line
on an on-going basis and will write-down the value of intangible
assets and adjust our cost profile as necessary to reflect new
market realities.
Looking forward to Fiscal 2015, we expect to operate with three
conceptualized business units - those are: Enterprise Not for
Profit ("NFP"), HCM, and Software as a Service ("SaaS") Solutions.
The Enterprise NFP division is essentially our legacy NFP operation
that will continue to cater to larger non-profit organizations by
providing Serenic Navigator in both on-premise and SaaS
configurations. HCM is also a legacy operational division that will
be expanded to include the provision of Cloud-deployed solutions,
and greatly enhanced HRIS functionality. These two business
divisions will commence Fiscal 2015 with more than $6 million in
recurring revenues derived from stable client bases, and we believe
they can deliver profitability on a go-forward basis.
The SaaS Solutions component is still developing, and our
marketing and sales methodologies will evolve in response to
customer demand and sales successes. While Serenic is substantially
ready to address these new volume markets from a technology
perspective, success of this initiative will ultimately depend upon
many factors, including the rate at which organizations in our
markets are prepared to embrace cloud based accounting solutions.
While the Fiscal 2015 consolidated strategic plan contemplates
positive EBITDA and earnings overall, the actual adoption rate by
new customers of Serenic's new Cloud products in Fiscal 2015 and
beyond will be a significant factor in determining future organic
revenue and earnings growth.
Concurrent to conducting the Cloud initiatives, Serenic is also
expanding its product offerings through collaboration with other
software vendors, including an alliance with a U.S. based
organization that focuses on donor management for faith based
organizations and an advanced HR offering that is in the process of
being integrated to Serenic's payroll products, pursuant to an OEM
arrangement. Both of these offerings have yielded initial success
in Fiscal 2014 and management believes they bode well for future
opportunity to increase revenues and profits.
The corporate development objectives of optimizing shareholder
value remain unchanged. Management continues to strongly believe
that the market capitalization and share price of the Company does
not adequately reflect Serenic's fair value. Management remains
confident that our course of action regarding the investment to
develop our Cloud strategy and products will ultimately assist in
generating greater revenue growth and value for our shareholders
over the longer term.
CanTech Communications Inc. to continue to provide for Investor
Relations services
Serenic also announced today the continued engagement of Cantech
Communications ("Cantech") to provide certain investor relation and
corporate communication services for the Corporation. Cantech
specializes in assisting private and public Canadian companies with
an array of investor relations services. During the 12-month term
of the agreement, Cantech will be compensated with a monthly
retainer fee of $2,400 (two thousand four hundred dollars), plus a
grant of 50,000 (fifty thousand) options to purchase Serenic
shares. The options shall have an exercise price of $0.30 and shall
vest as to one-fourth on each of April 21, 2014, July 21, 2014,
October 21, 2014 and January 21, 2015. Pursuant to the terms of the
agreement, either party may terminate the agreement, or
alternatively change the scope of services to be provided by
Cantech, upon 30 days' notice. Options shall expire thirty (30)
days following termination of the agreement if not exercised by
Cantech, and shares acquired on exercise shall be subject to a 4
month hold period. Unexercised options which have vested shall
expire 30 days after the agreement has been terminated. The stock
options issued are in accordance with policies of the Corporation's
stock option plan and the TSX Venture Exchange.
About Serenic Corporation
Serenic Corporation publishes mission-critical software products
for not-for-profits, 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 in Canada, England, Africa
and throughout the USA.
ON BEHALF OF THE BOARD OF DIRECTORS
SERENIC CORPORATION
Dwayne Kushniruk, Chairman
Forward-Looking Statements
This release contains forward-looking information within the
meaning of applicable securities laws ("forward-looking
statements") that relate to Serenic's products and potential
benefits derived therefrom; and other matters. Such forward-looking
statements involve known and unknown risks, uncertainties,
assumptions and other factors that may cause the actual results,
performance or achievements to differ materially from the
anticipated results, performance or achievements or developments
expressed or implied by such forward-looking statements. Such
factors include, but are not limited to, the factors and
assumptions discussed in the section entitled, "Risks and
Uncertainties" in Managements' Discussion and Analysis filed with
the Alberta and British Columbia Securities Commissions. Readers
are cautioned not to place undue reliance upon any such
forward-looking statements, which speak only as of the date made.
We do not undertake or accept any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statements to reflect any change in our expectations or any change
in events, conditions or circumstances on which any such statement
is based.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Serenic CorporationDwayne
KushnirukChairmandkushniruk@serenic.comSerenic CorporationPaul
JohnstonCFO1-877-426-5385 x 509Cantech CommunicationsNick
WaddellInvestor RelationsToll free: (877) 737-3642
x144ir@serenic.com