Posera Announces Fourth Quarter and Annual 2018 Financial Results
Toronto, ON – April 1st, 2019 – Posera Ltd. (TSX : PAY) (“Posera” or the “Company”), a leading provider of hospitality software and payment solutions, today announced its financial results for the three-months and year-ended December 31st, 2018.
During the year-ended December 31, 2018, Posera reported total revenues of $9.98 million compared to total revenues of $10.67 million for the year-ended December 31, 2017. The $0.7 million reduction was mainly driven by the divestiture of negative margin businesses, Biz Pro and A&A Point of Sales Solutions, both of which took place in the third quarter of 2017.
Posera increased its recurring revenue to $3.18 million, compared to the $3.07 million of recurring revenue during 2017, primarily as a result of the annual support and maintenance contracts on its KDS sales. The Company achieved increases in both the Kitchen Display System (“KDS”) and SecureTablePay (“STP”) product lines during 2018 and continues to focus on its recurring revenue model of stable, predictable recurring revenue streams.
Posera incurred a normalized EBITDA loss of $1.58 million for the year ended December 31, 2018 compared to a normalized EBITDA loss of $1.35 million for the year-ended December 31, 2017. Although the Company continued to reduce operating costs in technology, support, sales and marketing related expenses, the increase in the normalized EBITDA loss during 2018 was driven by a decrease in revenue and the one-time event of a loss allowance incurred by the Company on the outstanding note payable.
Key Annual Achievements
• STP announced a rollout with its first major US corporate customer during 2018 and the Company recorded additional STP sales from new customers in the United States, providing further confidence in the viability of its pay-at-the-table solution for the U.S. market;
• In 2018, Posera launched its DataBoard–Advanced Reporting service product, a web-reporting tool that provides real-time, cloud-hosted, sales and management data. This represents a significant enhancement to its platform offerings and addresses customers’ requirement for cloud-based products.
• KDS revenues increased by just over 20% in 2018 compared to 2017 on successful deployments with a major US customer; and
• Management continued to focus on reducing its controllable costs which resulted in the exit of the higher-cost, long-term lease for its corporate office location in London, Ontario, in favour of a smaller, cost-effective and flexible office space arrangement. As a result, the on-going facility costs for the Company’s corporate office employees have been reduced by more than 50% during the third and fourth quarters of 2018, however the Company incurred a break-fee of approximately $190,000 to end the lease early .
In 2018 the Company provided a $2,200,000 secured credit facility loan to DLT Labs Inc. The note receivable currently remains outstanding and as a result management has recorded a loss allowance of $592,158 based on a probability weighted default model as of Dec. 31, 2018. The full balance of $2,295,349 (including interest) remains owing and is secured by core assets of the borrower.
Strategic and Financial Review
During 2018 the Company received unsolicited third-party offers for all or parts of Posera. To assess the merits of these offers the Company has hired a strategic financial advisor to engage with the parties interested in Posera as well as explore other potential strategic opportunities to maximize shareholder value. Exploring these offers as well as engaging financial advisors resulted in significant legal and professional fees to review incurred by the Company in 2018. There can be no assurances that a transaction will be consummated.
Conference Call Information
The Company will hold a conference call at 2:00 PM Eastern Standard Time on Monday, April 8th, 2019 to discuss the financial results for the three -months and year-ended December 31st, 2018. The call will be hosted by Dan Poirier, Chief Executive Officer and Kevin Mills, Chief Financial Officer. A question and answer session will follow the corporate update.
CONFERENCE CALL DETAILS
Date: Monday, April 8th, 2019
Time: 2:00 PM Eastern Standard Time
Participant Dial-in Numbers:
Local – Toronto (+1) 647-427-7450
Toll Free – North America (+1) 888-231-8191
Conference ID: 6889179
Please connect at least 10 minutes prior to the conference call to ensure time for any software download that may be needed to hear the webcast.
• Total revenue for the three-months ended December 31, 2018 was $2,554,085;
• Recurring revenue(2) for the three-months ended December 31, 2018 was $767,729; and
• Normalized EBITDA(1) adjusted for discontinued operations profit (loss) for the three-months ended December 31, 2018 was a loss of $187,015.
• Total revenue was $9,984,120 for the year-ended December 31, 2018;
• Recurring revenue(2) adjusted for discontinued operations for the year-ended December 31, 2018 was $3,176,128; and
• Normalized EBITDA(1) adjusted for discontinued operations for the year-ended December 31, 2018 was a loss of $1,582,271.
(1) Amount presented applies the retrospective presentation to exclude discontinued operations for the FingerPrints transaction as discussed in the Company’s Annual MD&A on Pages #10-11.
(2) See the Recurring Revenues section of this MD&A which highlights the difference between the historical and new method for recording recurring revenues.
Posera has been a leading provider of hospitality technology for more than 20 years. It manages merchant transactions with consumers and facilitates all aspects of the payment transaction.
Posera’s full service solutions include: Maitre’D, a point-of-sale system which offers a robust and
comprehensive solution including hardware integration services, merchant staff training, system installation services, post-sale software and hardware customer support; KDS, a Kitchen Display System that is now available as a standalone product; and SecureTablePay, an EMV compliant pay-at-the-table solution.
Posera’s solutions are deployed globally across the full spectrum of restaurants, from large chains and
independent table service restaurants to international quick service chains, and its products have been translated into eight languages.
Posera Ltd.’s shares are traded on the Toronto Stock Exchange under the symbol “PAY”.
More information about Posera can be found on the Company’s website at www.posera.com or under the Company’s profile on SEDAR at www.sedar.com.
This discussion includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with our business and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions “anticipate”, “believe”, “plan”, “estimate”, “expect”, “intend”, and similar expressions to the extent they relate to the Company or its management. The forward-looking statements are not historical facts, but reflect Posera’s current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under “Risks and Uncertainties” in the Annual Information Form to be filed on April 1st, 2019 with the regulatory authorities. Posera assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements, unless required by law.
For more information:
Kevin Mills, Chief Financial Officer