This press release replaces the one released yesterday August 25, 2014 at 17:59 ET, correcting information in the fourth bullet under financial highlights and adding a fifth bullet.
AcuityAds Holdings Inc. (“AcuityAds”) (TSXV:AT), a leading provider of targeted digital advertising solutions, today reported financial results of its wholly-owned subsidiary AcuityAds Inc. (“Acuity”) for the second quarter ended June 30, 2014. On July 16, 2014 Acuity became a wholly-owned subsidiary of AcuityAds (formerly Wildlaw Capital CPC 2 Inc. (“Wildlaw”)) pursuant to the previously announced closing of a qualifying transaction.
Financial highlights of AcuityAds for the Second Quarter of 2014
- Revenue of $3,190,037 increased 14% year-over-year
- Self-service technology revenue of $300,996 increased 225% year-over-year
- US revenue of $371,979 increased 73% year-over-year
- Adjusted EBITDA(1) of $(1,419,164), down from $56,930 for the prior year quarter due to accrued transaction costs of $225,000 and investments in senior management, sales, marketing, and technology development
- Carrying amount of investment tax credits reduced by $775,097
Business highlights of AcuityAds
- Key senior management additions
- Closed qualifying transaction with Wildlaw
- During July, we repaid related party notes of $616,657. In addition we received net proceeds from a private placement of $5 million, upon satisfaction of all escrow release conditions
- AcuityAds began trading on the TSX Venture Exchange (“TSXV”)
(1) Adjusted EBITDA is not a measure of performance under IFRS and should not be considered in isolation or as a substitute for net and comprehensive income or loss prepared in accordance with IFRS or as a measure of operating performance or profitability. Adjusted EBITDA does not have a standardized meaning prescribed by IFRS and is not necessarily comparable to similar measures presented by other companies. See reconciliation of adjusted EBITDA to net income at the end of this press release.
“AcuityAds has shown continued revenue growth in the second quarter of 2014, with significant increases in both the self-service and US markets,” commented Tal Hayek, CEO of AcuityAds. “With a relatively new presence in major US cities including New York, Los Angeles, Chicago and Dallas, US sales reached 12% of total revenue for the quarter. We anticipate continued growth in self-service technology and the US, while maintaining our leadership position in the Canadian market. During the quarter we also worked towards completing our transaction with Wildlaw, becoming a public company and enhancing our senior management team. We made significant investments in the quarter to put a strong foundation in place, and are now focused on leveraging these investments to deliver strong growth in future quarters.”
During the quarter we added the following key people to our senior management team: Cathy Steiner, Chief Financial Officer; Raymond Reid, President AdScience; Ashley Bast, Vice President Marketing; and Funke Fabunmi, Vice President, Ad Operations.
Subsequent to June 30, 2014, the Company received notification from the Canada Revenue Agency (“CRA”) that the investment tax credits that were claimed in respect of eligible scientific research and experimental development for fiscal years 2011 and 2012 were being disallowed. The Company expects a Notice of Assessment reflecting this disallowance to be forthcoming in due course. After consulting with its professional advisors, the Company disagrees with the position taken by CRA and intends to file an objection following receipt of the Notice of Assessment. There can be no assurance regarding the outcome of the objection, when a resolution may be reached, or the likelihood that similar claims for 2013 and 2014 will not be similarly challenged by CRA. The Company has reduced the carrying amount of investment tax credits by $775,097 during the period, which is included as a charge to employee compensation and benefits for the three and six months ended June 30, 2014. In the event that the Company’s objection for 2011 and 2012 is unsuccessful, no further charges against the Company’s profit or loss will be required in respect of claims for those years.
Acuity became a public company pursuant to the transaction with Wildlaw and accordingly, the Federal portion of any SREDs claimed on eligible expenses following the transaction will no longer be refundable but will be carried forward for up to 20 years to reduce future income taxes payable.
AcuityAds also announces that it has granted an aggregate of 460,769 stock options on August 25, 2014 to certain directors, officers and employees of the Company in accordance with the provisions of the Company’s Stock Option Plan, subject to approval of the TSXV. Each option entitles the holder to purchase one common share of AcuityAds at an exercise price of $1.59 for a period of five years. Options granted to directors vest immediately and options granted to officers and employees vest equally over three years from the date of grant.
About AcuityAds Holdings Inc.
AcuityAds Holdings is a technology company that has developed a programmatic marketing platform powered by proprietary machine learning technology that allows advertisers to target and connect intelligently with their audiences across online display, video, social and mobile campaigns. With operations in New York, Toronto, Los Angeles, Montreal, Chicago and Dallas, AcuityAds Holdings’ customers include both large Fortune 500 enterprises and small to mid-sized businesses. For more information, visit www.acuityads.com.
Cautionary statement regarding forward-looking statements
Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking statements are provided for the purposes of assisting the reader in understanding AcuityAds Holdings’s financial position and results of operations as at and for the periods ended on certain dates and to present information about management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information may relate to AcuityAds Holdings’s future outlook and anticipated events, including the anticipated growth in self-service and the US, and may include statements regarding the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes and plans and objectives of or involving AcuityAds Holdings. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for AcuityAds Holdings or the industry in which it operates are forward-looking statements. In some cases, forward-looking information can be identified by terms such as “may”, “might”, “will”, “could”, “should”, “would”, “occur”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “seek”, “aim”, “estimate”, “target”, “project”, “predict”, “forecast”, “potential”, “continue”, “likely”, “schedule”, or the negative thereof or other similar expressions concerning matters that are not historical facts.
Forward-looking statements necessarily involve known and unknown risks and uncertainties, that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, many of which are beyond AcuityAds Holdings’s control, affect the operations, performance and results of AcuityAds Holdings and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to, the risks discussed in AcuityAds Holdings’s materials filed with Canadian securities regulatory authorities from time to time on www.sedar.com. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements as there can be no assurance that actual results will be consistent with such forward-looking statements.
Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management’s perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.
The forward-looking statements made in this press release are dated, and relate only to events or information, as of the date of this press release. Except as specifically required by law, AcuityAds Holdings undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
For further information, please contact:
| Ali Mahdavi Investor Relations AcuityAds Holdings Inc. (416)962-3300 am@spinnakercmi.com |
Cathy Steiner Chief Financial Officer AcuityAds Holdings Inc. (416)218-9888 ext.305 |
AcuityAds Inc.
Condensed consolidated interim statements of financial position
(expressed in Canadian dollars)
(unaudited)
| June 30,2014 | December 31, 2013 | |
| Assets | ||
| Current assets: | ||
| Cash | $ 139,912 | $ 120,467 |
| Accounts receivable | 3,209,223 | 3,057,764 |
| Other current assets (note 13) | 552,061 | 178,105 |
| Investment tax credits receivable (note 12) | 450,000 | 1,091,764 |
| 4,351,196 | 4,448,100 | |
| Non-current assets: | ||
| Property and equipment | 652,717 | 436,232 |
| Total assets | $ 5,003,913 | $ 4,884,332 |
| Liabilities and Shareholders’ Deficiency | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities (note 13) | $ 3,720,350 | $ 2,359,827 |
| Promissory notes payable (note 6) | – | 2,913,133 |
| Due to related parties (notes 6 and 9) | 616,657 | – |
| Current portion of obligations undercapital lease (note 10) | 91,542 | – |
| 4,428,549 | 5,272,960 | |
| Non-current liabilities: | ||
| Promissory notes payable (note 6) | 3,925,255 | – |
| Due to related parties (notes 6 and 9) | – | 608,249 |
| Obligations under capital lease (note 10) | 155,407 | – |
| Repayable government grant (note 11) | 150,000 | – |
| 4,230,662 | 608,249 | |
| Total liabilities | 8,659,211 | 5,881,209 |
| Shareholders’ deficiency | (3,655,298) | (996,877) |
| Events after the balance sheet date (notes 9 and 13) | ||
| Going concern (note 2(a)) | ||
| Total liabilities and shareholders’ deficiency | 5,003,913 | $ 4,884,332 |
AcuityAds Inc.
Condensed consolidated interim statements of comprehensive income (loss)
(expressed in Canadian dollars)
(unaudited)
| Three months ended June 30 | Six months ended June 30 | |||
| 2014 | 2013 | 2014 | 2013 | |
| Revenue | ||||
| Managed services | $ 2,889,041 | $ 2,695,218 | $ 5,508,149 | $ 4,909,083 |
| Self-service technology | 300,996 | 92,526 | 458,705 | 92,526 |
| 3,190,037 | 2,787,744 | 5,966,854 | 5,001,609 | |
| Operating expenses: | ||||
| Media costs | 1,655,606 | 1,228,371 | 2,970,700 | 2,090,244 |
| Employee compensation and benefits (note 12) | 2,460,455 | 778,881 | 3,738,591 | 1,428,484 |
| General and administrative (note 13) | 1,266,056 | 534,012 | 1,856,107 | 971,083 |
| Depreciation of property and equipment | 52,569 | 21,823 | 88,862 | 35,293 |
| 5,434,686 | 2,563,087 | 8,654,260 | 4,525,104 | |
| Income (loss) from operations | (2,244,649) | 224,657 | (2,687,406) | 476,505 |
| Finance costs (note 4) | 180,316 | 83,898 | 394,449 | 163,355 |
| Foreign exchange (gain) loss | (35,725) | (8,662) | 33,035 | 7,862 |
| 144,591 | 75,236 | 427,484 | 171,217 | |
| Income (loss) before income taxes | (2,389,240) | 149,421 | (3,114,890) | 305,288 |
| Income taxes | 2,885 | – | 11,271 | – |
| Net income (loss) and comprehensive income (loss) for the period | $ (2,392,125) | $ 149,421 | $ (3,126,161) | $ 305,288 |
| Net loss per share (note 5): | ||||
| Basic and diluted | $ (0.02) | $ 0.00 | $ (0.03) | $ 0.00 |
AcuityAds Inc.
Condensed consolidated interim statements of cash flows
(expressed in Canadian dollars)
(unaudited)
| Six months ended June 30, | ||
| 2014 | 2013 | |
| Cash flows from (used in) operating activities: | ||
| Net income (loss) for the period | $ (3,126,161) | $ 305,288 |
| Adjustments to reconcile net income (loss) to net cash flows: | ||
| Depreciation of property and equipment | 88,862 | 35,293 |
| Finance costs | 394,449 | 163,355 |
| Share-based compensation (note 7(a)) | 54,040 | 59,652 |
| Change in non-cash operating working capital: | ||
| Accounts receivable | (151,459) | (1,073,794) |
| Other current assets | (373,956) | (21,011) |
| Investment tax credits receivable | 641,764 | (235,803) |
| Accounts payable and accrued liabilities | 1,358,094 | 1,196,477 |
| Interest paid | (355,097) | (6,123) |
| (1,469,464) | 423,334 | |
| Cash used in investing activities: | ||
| Additions to property and equipment | (41,523) | (370,177) |
| Cash flows from (used in) financing activities: | ||
| Net proceeds from promissory notes, net of issuance costs (note 6) | 984,009 | – |
| Repayments of amounts due to related parties, net | (400) | (302,237) |
| Repayments of capital leases | (16,877) | – |
| Proceeds from the issuance of common shares and warrants | – | 250,000 |
| Proceeds from the exercise of stock options | 163,700 | 16,000 |
| Proceeds from the exercise of warrants | 250,000 | – |
| Proceeds related to repayable government grant | 150,000 | – |
| 1,530,432 | (36,237) | |
| Increase in cash | 19,445 | 16,920 |
| Cash, beginning of period | 120,467 | 60,498 |
| Cash, end of period | $ 139,912 | $ 77,418 |
| Supplemental disclosure of non-cash transactions: | ||
| Additions to property and equipment under capital lease | $ 263,826 | $ – |
AcuityAds Inc.
Reconciliation of Adjusted EBITDA to Net Income
(expressed in Canadian dollars)
| Three months ended June 30 | Six months ended June 30 | |||
| 2014 | 2013 | 2014 | 2013 | |
| Net income (loss) | $ (2,392,125) | $ 149,421 | $ (3,126,161) | $ 305,288 |
| Adjustments: | ||||
| Finance costs | 180,316 | 83,898 | 394,449 | 163,355 |
| Foreign exchange loss | (35,725) | (8,662) | 33,035 | 7,862 |
| Depreciation of property and equipment | 52,569 | 21,823 | 88,862 | 35,293 |
| Income taxes | 2,885 | – | 11,271 | – |
| Share-based compensation | 31,152 | 29,826 | 54,040 | 59,652 |
| Net (addition) reduction in carrying value of ITC receivable | 741,764 | (219,376) | 641,764 | (393,167) |
| Total adjustments | 972,961 | (92,491) | 1,233,421 | (127,005) |
| Adjusted EBITDA | $ (1,419,164) | $ 56,930 | $ (1,902,740) | $ 178,283 |
