AUSTIN, Texas--(BUSINESS WIRE)--Perk.com Inc. (TSX: PER) (“Perk” or “the Company”) (formerly Mira VI Acquisition Corp. (“Mira VI”)), a leading cloud-based mobile rewards platform provider, today reported operating and financial results of its wholly owned subsidiary Perk.com US Inc. (“Perk US”) for the second quarter and six month period ended June 30, 2015. Unless otherwise noted, all amounts are in US dollars. This press release and related financial statements report the operating results of Perk.com US Inc. for the second quarter and six month period ended June 30, 2015.
Corporate Activity
- In June 2015, Perk US raised a total of CDN $25 million (approximately US $20.0 million) in a private placement financing which funds were placed in escrow. Canaccord Genuity Corp. and Beacon Securities Limited served as lead agents in a syndicate including Cormark Securities and Haywood Securities in connection with the private placement.
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Subsequent to the end of the quarter, on July 10, 2015, the Company
completed a reverse takeover transaction which included the following:
- the merger of Mira VI SubCo Inc., into Perk.com Inc. (a Delaware corporation) (“Former Perk US”) which merged entity was renamed Perk.com US Inc. and became a wholly-owned subsidiary of Perk.
- the issuance of securities by Perk to holders of securities of Former Perk US
- the consolidation of Mira VI shares on a 41.6667 to 1 basis
- the release from escrow of the private placement funds
- Mira VI changing its name to Perk.com Inc.
A complete description of the reverse takeover transaction is found in the Filing Statement available at www.sedar.com.
- On July 15, 2015, the Company’s common shares commenced trading on the Toronto Stock Exchange under the symbol “PER”.
2015 Second Quarter Highlights (all comparisons to the same prior year period)
- Total revenue increased 263% to $12.4 million for the second quarter 2015
- Gross Profit was $5.8 million, or 46.3% of total revenue
- Net income was approximately $1.3 million
- Adjusted EBITDA of $2.1 million, compared to $0.3 million
- Acquired Tsavo Mobile Web to extend Perk US’s rewards platform
- Completed private placement transaction in escrow for total gross proceeds of $20.2 million
2015 Year-to-Date Highlights (all comparisons to the same prior year period)
- Total revenue increased 265% to $18.3 million for the six months ended June 30, 2015
- Gross Profit was $8.0 million, or 43.7% of total revenue
- Net income was approximately $0.8 million
- Adjusted EBITDA of $1.7 million, compared to a Adjusted EBITDA loss of $0.1 million
- As of June 30, 2015, there have been over 5 million installations of Perk apps and users have redeemed more than 13 billion points totaling more than $13 million in Perk Rewards paid.
Ted Hastings, Chief Executive Officer of Perk commented, “We were pleased to complete the merger and commence trading as a public company in July and equally pleased that during a period of intense administrative effort to complete the listing we were able to exceed our revenue and EBITDA expectations. This has been a landmark period for Perk, and we believe that the completion of our recent financing has our Company in an ideal position to accelerate our expansion. We believe this is the beginning of a strong period of growth for Perk, as we have implemented several key initiatives that have already begun widening our customer base and expanding the daily use of our mobile rewards platform. We offer a unique value proposition, as our customers are rewarded for their everyday mobile and internet use. In the months ahead, we will continue to focus efforts on growing the Company through the expansion of our Appsaholic and Perk apps customer base, development of new apps, expanding our rewards platform, as well as seeking opportunities for strategic partnerships and acquisitions. We are thrilled to begin the third quarter as a TSX listed company and are confident that the positive momentum started in the first half of the year will continue for the remainder of 2015.”
Acquisition Activity
- On April 17th, 2015, Perk US’s wholly owned subsidiary, Perk.com Canada Inc. acquired the active business assets and certain liabilities of Tsavo Mobile Web (“Tsavo”), a division of Orion Foundry (Canada) Inc. (“Orion”). As consideration for the acquisition, the Company is required to pay the Vendor 50% of the EBITDA generated from the Tsavo assets, on a quarterly basis, until April 17, 2018, subject to a minimum of $2 million in cumulative payments over the 3 year term.
- The acquisition includes a publishing and analysis platform, a suite of mobile apps targeting the new and expecting mom audience as well as provides access to infrastructure assets that can be integrated into Perk US’s rewards model and Appsaholic SDK.
- The results of the acquisition have been included in the Perk operating results since April 17th, 2015. Had the acquisition occurred on January 1, 2015, the Company’s proforma revenues for the three and six month ended June 30, 2015 would have been approximately $13.4 million and $23.7 million respectively.
2015 Second Quarter Financial and Operational Review
- Total revenue for the second quarter of 2015 was approximately $12.4 million, representing a 263% increase over total revenue of approximately $3.4 million for the prior year period. Excluding revenues from Tsavo, Perk’s advertising revenue increased 147% to $8.4 million, compared to $3.4 million for the second quarter 2014. The increase in advertising revenues was the result of several factors, which include an increase in users, an increase in the number of apps launched, and the use of those apps, an increase in the amount of advertising inventory available and an increase in monetization opportunities available from Perk US’s apps during the period.
- Perk US reported cost of sales, which is comprised of the costs of the rewards provided to users, platform fees, and revenue sharing commissions, for the three months ended June 30, 2015 of approximately $6.7 million, compared to $1.2 million in the second quarter of 2014. Excluding Tsavo’s results, cost of sales increased by $2.7 million to $3.9 million from the second quarter of 2014. The increase in costs is a result of increase in number of apps launched, an increase in overall app usage, which resulted in an increase in rewards paid out to users.
- Gross profit for the three months ended June 30, 2015 was approximately $5.8 million, compared to approximately $2.3 million for the second quarter 2014.
- Net income for the three months ended June 30, 2015 was approximately $1.3 million compared to a net income of approximately $0.2 million for same period of the prior year.
- Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) was approximately $2.1 million for the three months ended June 30, 2015, representing an increase of approximately $1.8 million, as compared to $0.3 million Adjusted EBITDA generated in the three months ended June 30, 2014. A table reconciling Adjusted EBITDA to net income can be found at the end of this release.
2015 Year-to-Date Financial and Operational Review
- Total revenue for the six months ended June 30, 2015 was approximately $18.3 million, representing a 265% increase over total revenue of approximately $5.0 million for the prior year period. Perk US’s revenue, excluding revenues generated by the Tsavo assets, increased 185.6% to $14.3 million.
- Perk US reported cost of sales for the six months ended June 30, 2015 of approximately $10.3 million compared to $1.4 million for the prior year period. Excluding results from Tsavo, cost of sales increased to $7.5 million for the six months ended June 30, 2015 from $1.4 million in the prior year period.
- Gross Profit for the six months ended June 30, 2015 was approximately $8.0 million, compared to approximately $3.6 million for the prior year period.
- Net income for the six months ended June 30, 2015 was approximately $0.8 million compared to a net loss of approximately $0.1 million for same period of the prior year.
- For the six months ended June 30, 2015, Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) was approximately $1.7 million, as compared to a loss of $54,000 Adjusted EBITDA in the same six months ended of the prior year.
- In January 2015, Perk US launched Appsaholic, its software development kit (“SDK”) platform. The SDK platform allows third party mobile apps and websites to utilize Perk rewards to attract new users and increase consumers’ engagement.
Balance Sheet Summary
- Perk US had cash of approximately $3.4 million at June 30, 2015 compared with approximately $2.3 million at December 31, 2014. At June 30, 2015, shareholders’ equity was approximately $6.3 million, compared to approximately $2.8 million, at December 31, 2014.
- Subsequent to June 30, 2015, Perk US received C$25 million (approximately US$20.2 million) in gross proceeds from its previously announced Private Placement.
Conference Call Details
Date/Time: Thursday, August 6, 2015, at 12 p.m. ET
Live Participant
Dial-In (Toll-Free US & Canada): 877-407-9711
Live Participant
Dial-In (International): 412-902-1014
Webcast
The call will also be simultaneously webcast over the Internet via the “Investor Relations” section of Perk’s website at ir.perk.com or by clicking on the conference call link: http://perk.equisolvewebcast.com/q2-2015
About Perk.com Inc.
Perk provides a rewards platform targeting consumers primarily by rewards for people's every day mobile and internet activities. Perk offers Perk Points, a digital reward, which can be redeemed for gift cards and cash. Members can earn Perk Points through a wide variety of activities including shopping, watching videos, and playing social games.
Perk currently owns and operates 12 mobile applications allowing members to earn Perk Points. Perk also operates numerous owned websites. In addition to offering Perk Points through its own mobile applications and websites, Perk launched its Appsaholic Software Development Kit which allows mobile and desktop publishers to reward their users with rewards, such as gift cards, for engaging with the publisher's applications and websites.
Additional information about Perk.com Inc. can be found at the Company’s corporate website: www.ir.perk.com.
Financial Information
A copy of Perk’s Quarterly Report which includes the Company’s consolidated financial statements and Management’s Discussion & Analysis, will be available upon filing via the Canadian Securities Administrators’ website at www.sedar.com under the Document Type “Financial Statements of RTO Acquirer” or through the Company’s website at www.ir.perk.com.
Non-IFRS Measures
The Company defines Adjusted EBITDA as net income (loss) from operations before: (a) depreciation of property and equipment and amortization of intangible assets; (b) share-based compensation, and (c) other charges, net. Management uses Adjusted EBITDA as a measure of the Company's operating performance because it provides information related to the Company's ability to provide operating cash flows for acquisitions, capital expenditures and working capital requirements. The Company also believes that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in its industry. Adjusted EBITDA should be used in addition to and in conjunction with the results presented in the Company’s consolidated financial statements prepared in accordance with IFRS. Management strongly encourages investors to review the Company's financial statements in their entirety and to not rely on any single financial measure. Because non-IFRS financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-IFRS financial measures having the same or similar names.
Cautionary Statement Regarding Forward Looking Statements
This press release contains forward-looking statements, including with respect to Perk’s business, Perk’s ability to grow its active consumer base; the proposed used of proceeds with respect to the funds raised from the private placement; user and advertiser engagement; Perk’s ability to establish new marketing partnerships; Perk’s ability to expand into new markets; and Perk’s ability to acquire and integrate new businesses and technologies. Such forward-looking statements reflect Perk’s expectations about its future operating results, performance and opportunities that involve substantial risks and uncertainties. These statements include but are not limited to statements regarding the intended terms of the offering and the closing of the offering. When used herein, the words "anticipate", "believe", "estimate", "upcoming", "plan", "target", "intend" and "expect" and similar expressions, as they relate to Perk or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to Perk and are subject to a number of risks, uncertainties, and other factors that could cause Perk’s actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements, including, but not limited to: maintenance by Perk of relationships with advertising network providers; maintenance by Perk of its agreement with Yahoo!; successful development of the “Perk” brand; Perk’s ability to keep up with rapid technological developments in Perk’s markets; Perk’s ability to avoid defects in products and services delivered by Perk; Perk’s ability to attract app and website developers to its Appsaholic SDK; Perk’s ability to successfully enter new business areas and geographic markets; success of new products developed by Perk and Perk’s ability to retain key members of its management team.
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Perk.com US Inc. |
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| Condensed Consolidated Statements Of Operations | ||||||||||||||||
| And Comprehensive Income (Loss) | ||||||||||||||||
| Three and Six Months Ended June 30, 2015 and 2014 | ||||||||||||||||
| (In thousands of US Dollars, except for share data) | ||||||||||||||||
|
Three Months ended June 30 |
Six Months ended June 30 |
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|
2015 |
2014 |
2015 |
2014 |
|||||||||||||
| Revenue |
$ |
12,429 |
$ |
3,423 |
$ |
18,324 |
$ |
5,020 |
||||||||
| Cost of sales | 6,673 | 1,166 | 10,315 | 1,398 | ||||||||||||
| Gross profit | 5,756 | 2,257 | 8,009 | 3,622 | ||||||||||||
| Expenses | ||||||||||||||||
| Employee compensation and benefits | 2,016 | 628 | 3,163 | 1,167 | ||||||||||||
| Marketing and user acquisition | 565 | 919 | 1,267 | 1,819 | ||||||||||||
| General and administrative | 1,098 | 397 | 1,964 | 700 | ||||||||||||
| Depreciation of property and equipment | 53 | 13 | 69 | 24 | ||||||||||||
| Amortization of intangible assets | 285 | - | 288 | - | ||||||||||||
| 4,017 | 1,957 | 6,751 | 3,710 | |||||||||||||
| Income (loss) from operations | 1,739 | 300 | 1,258 | (88 | ) | |||||||||||
| Foreign exchange loss | 3 | - | 2 | - | ||||||||||||
| Other income | - | (10 | ) | (3 | ) | (14 | ) | |||||||||
| Gain on revaluation of forward exchange contract | (213 | ) | - | (213 | ) | - | ||||||||||
| Finance cost | 258 | - | 325 | - | ||||||||||||
| Income before income taxes | 1,691 | 310 | 1,147 | (74 | ) | |||||||||||
| Income tax expense (recovery) | ||||||||||||||||
| Current | 92 | 129 | 92 | (2 | ) | |||||||||||
| Deferred | 296 | - | 296 | - | ||||||||||||
| 388 | 129 | 388 | (2 | ) | ||||||||||||
| Net income (loss) from continuing operations | 1,303 | 181 | 759 | (72 | ) | |||||||||||
| Discontinued operation | ||||||||||||||||
|
Income (loss) for the period from discontinued operation
net of tax |
- | 15 | - | (30 | ) | |||||||||||
| Net income (loss) for the period | 1,303 | 196 | 759 | (102 | ) | |||||||||||
| Net income (loss) attributable to non-controlling interest | - | 5 | 3 | 6 | ||||||||||||
| Net income (loss) attributable to the shareholders of the Company | 1,303 | 191 | 756 | (108 | ) | |||||||||||
|
Other comprehensive income (loss) for items to be reclassified
to net |
||||||||||||||||
| Foreign currency translation adjustment | (14 | ) | 63 | (18 | ) | 8 | ||||||||||
| Total comprehensive income (loss) for the period |
$ |
1,289 |
$ |
254 |
$ |
738 |
$ |
(100 |
) |
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| Perk.com US Inc. | |||||||
| Unaudited Condensed Consolidated Balance Sheets | |||||||
| June 30, 2015 and December 31, 2014 | |||||||
| (In thousands of US Dollars) | |||||||
| Assets | June 30, 2015 | December 31, 2014 | |||||
| Current assets | |||||||
| Cash | $ | 3,438 | $ | 2,273 | |||
| Trade receivables | 11,062 | 6,423 | |||||
| Prepaid expenses and other current assets | 1,185 | 246 | |||||
| Income tax receivable | 579 | 533 | |||||
| Forward exchange contract | 213 | - | |||||
| 16,477 | 9,475 | ||||||
| Non-current assets | |||||||
| Restricted marketable securities | 881 | - | |||||
| Property and equipment | 632 | 164 | |||||
| Intangible assets | 4,715 | 100 | |||||
| Goodwill | 1,067 | - | |||||
| $ | 23,772 | $ | 9,739 | ||||
| Liabilities | |||||||
| Current liabilities | |||||||
| Bank credit facility | 3,205 | 2,696 | |||||
| Trade and other payables | 6,582 | 788 | |||||
| Unredeemed rewards liability | 484 | 240 | |||||
| Current portion of loans and borrowings | 2,340 | 2,298 | |||||
| Current portion of deferred lease inducements | 7 | - | |||||
| Income taxes payable | 143 | 90 | |||||
| 12,761 | 6,112 | ||||||
| Non-current liabilities | |||||||
| Loans and borrowings | 311 | - | |||||
| Provisions | 2,873 | - | |||||
| Deferred tax liabilities | 1,424 | 805 | |||||
| Deferred lease inducements | 54 | 33 | |||||
| 17,423 | 6,950 | ||||||
| Shareholders’ equity | |||||||
| Share capital | 4,215 | 1,357 | |||||
| Contributed surplus | 91 | 32 | |||||
| Accumulated other comprehensive income (loss) | (9 | ) | 9 | ||||
| Retained earnings | 2,052 | 1,365 | |||||
| 6,349 | 2,763 | ||||||
| Non-controlling interest | - | 26 | |||||
| $ |
23,772 |
|
$ | 9,739 | |||
| Perk.com US Inc. | |||||||||||||
| Reconciliation of Net Income to Adjusted EBITDA | |||||||||||||
| Three and Six Months Ended June 30, 2015 and 2014 | |||||||||||||
| (In thousands of US Dollars) | |||||||||||||
|
Three months ended |
Six months ended |
||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| Income (loss) from operations |
$ |
1,739 |
300 |
$ |
1,258 |
(88 | ) | ||||||
| Share-based compensation | 57 | 5 | 63 | 10 | |||||||||
| Depreciation of property and equipment | 53 | 13 | 69 | 24 | |||||||||
| Amortization of intangible assets | 285 | - | 288 | - | |||||||||
| Adjusted EBITDA |
$ |
2,134 |
$ |
318 |
$ |
1,678 |
$ |
(54 |
) |
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