Magor Announces Fiscal 2016 Results and Changes in Senior Management
OTTAWA, Aug. 29, 2016 /CNW/ - Magor Corporation (TSX-V: MCC), a technology leader in visual collaboration solutions, today announced financial results for the three and twelve month periods ended April 30, 2016 and the retirement of the CEO.
"Q4 revenues of $896,465 were largely driven by orders received in the quarter from law enforcement organizations for the deployment of boardroom and desktop systems. A growing portion of the Magor software business with this sector and others is shifting from perpetual licenses to recurring software revenue. This has the effect of reducing the initial overall revenues and margins, however, it provides more predictable revenue growth in addition to increased future margins. As evidenced by our 60% year over year growth in recurring revenue, the company is actively working towards driving the recurring revenue model," said Terry Matthews, Chairman of Magor Corporation. "Revenues from the Middle East business in fiscal 2016 were disappointing due to economic conditions resulting from the decline in oil prices. While this significantly impacted Magor's revenues and margins for the year, many of the regional projects are expected to recover in the new fiscal year."
- Total revenues for the three month period ended April 30, 2016 grew 28% to $896,465 compared to $700,443 for the three months ended April 30, 2015. Full year revenue for the twelve months ended April 30, 2016 was$1,765,029, a decline of 22% when compared to $2,253,532 for the twelve month period ended April 30, 2015.
- Recurring revenues grew by 70% to $241,730 for the three month period ended April 30, 2016, compared to $142,391 for the three months ended April 30, 2015. Recurring revenues grew 60% to $630,085 for the twelve months ended April 30, 2016 compared to $394,220 for the twelve months ended April 30, 2015.
- Software revenue for the three month period ended April 30, 2016 of $80,728 compared to $293,582 for the three months ended April 30, 2015. Software revenue for the twelve month period ended April 30, 2016of $229,744 compared to $1,085,593 for the twelve months ended April 30, 2015. The decrease was primarily due to a large order received in the fourth quarter of fiscal 2015 for perpetual licenses that was not repeated in the current fiscal year. Furthermore, there is a decline in sale of software licenses being sold as customers' transition to SAAS contracts.
- Hardware revenue increased by 143% to $516,370 for the three month period ended April 30, 2016, compared to $212,729 for the three months ended April 30, 2015. Hardware revenue increased by 20% to $805,234for the twelve months ended April 30, 2016, compared to $669,708 for the twelve months ended April 30, 2015.
- Gross margin percentages for the three and twelve month periods ended April 30, 2016 were 39% and 44% respectively, compared to 60% and 65% in the prior year. The decrease was primarily due to the higher mix of lower margin hardware sales in fiscal 2016 as well as the delays in software revenue associated with shifting to a recurring revenue business.
- Operating expenses for the three month period ended April 30, 2016decreased by 22% to $1,068,299 compared to $1,366,588 for the three month period ended April 30, 2015. For the twelve month period ended April 30, 2016 operating expenses decreased by 20% to $4,749,547compared to $5,952,298 for the twelve months ended April 30, 2015.
- Net loss and total comprehensive loss for the three month period ended April 30, 2016 of $998,954 or loss of $0.02 per share, compared to a net loss of $1,318,402 or loss of $0.03 per share for the same period in the prior year, a decrease in loss of 24%. Net loss and total comprehensive loss for the twelve month period ended April 30, 2016 of 5,763,312, compared to $5,415,894 for the twelve month period ended April 30, 2015, an increase in the loss of 6%.
- Order backlog as at April 30, 2016 was $378,965 compared to $713,069as at January 31, 2016.
- As at April 30, 2016, the Company had cash on hand of $95,738compared to $82,062 as at January 31, 2016.
Operational and Financial Highlights
During the Quarter
- The Company announced $718,000 of additional orders from law enforcement organization.
- Discussions continue with the holders of promissory notes that matured on January 28, 2016 and February 15, 2016, in the principal amount of $1,500,000 plus accrued and unpaid interest owing.
Subsequent to Year End
- The Company entered into agreements, with a company controlled by the Chairman of the Company, to borrow $975,000 by way of promissory notes bearing interest at 12% per annum.
Changes in Senior Management
Mr. Mike Pascoe has decided to step down as Chief Executive Officer and a member of the Board on August 31, 2016. The Board has appointed Mr. Brian Baker, Magor's current Chief Financial Officer, as interim President and Chief Executive Officer and he will be joining the Board of Directors. A search has been initiated for a permanent CEO. Mr. Pascoe has agreed to continue working with the Company as a senior advisor focused on sales and channel development.
Terry Matthews, Chairman said, "On behalf of the entire Board, I want to thank Mike for his contributions to the development of Magor over the past eight years. He played an important role in establishing Magor as a leading player in the next generation cloud based video collaboration market. Furthermore, we are pleased that Mike has agreed to continue working with the sales team to drive sales growth in key markets."
About Magor Corporation:
Magor enables people to engage in high-quality visual conversations while simultaneously sharing, viewing and editing relevant collaborative material on desktops, laptops, tablets, smartphone applications, whiteboards and other devices. Magor fits any workflow so that users have the freedom to work together naturally anytime, regardless of location, network or device. To find out more about Magor Corporation (TSX-V: MCC), visit our website at www.magorcorp.com.
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