For the full consolidated financial statements and management discussion & analysis for the quarter and twelve months ended December 31, 2016, please see SEDAR at http://www.sedar.com. All Dollar amounts are in Canadian Dollars unless otherwise noted.
Fourth Quarter Highlights:
- Sales increased 3% to CAD $16,843,728 compared to Q4 2015. This was the highest fourth quarter revenue in Apivio’s history as a public company, in part, due to continued strong sales in Korea;
- Gross margins increased to 17.3% compared to 16.6% in Q4 2015, primarily due to better product mix;
- Adjusted EBITDA for the quarter, at $991,106, was the highest in Apivio’s history as a public company ($630,054 in Q4 2015);
- Net Income of $722,317 compared to $337,189 in Q4 2015 was the highest quarterly net income for any quarter in Apivio’s history as a public company. Adjusted EBITDA and Net Income were both higher despite higher R&D and SG&A expenses in the comparable quarter in 2015; and
- Earnings per share of $0.01 ($0.01 in Q4 2015).
Year-End 2016 Highlights:
- Sales decreased 3% to CAD $58,119,099 compared to $59,990,409 in 2015; a strong second half of the year was dragged down by a slow start in the first half;
- Gross margins decreased marginally from 17.6% in 2015 to 17.4% of revenues, primarily because of adverse foreign exchange rates in the first half of 2016;
- Adjusted EBITDA of $1,977,576 in 2016 compared to $2,119,783 in 2015;
- Net Income of $879,830 in 2016 compared to $981,504 in 2015;
- Earnings per share of $0.02 compared to $0.02 in 2015; and
- The Company sold more than one million phones in Korea during the year. Second consecutive year of one million plus phones sold in Korea.
|[expressed in thousands of CAD$ except percentages and EPS]||Three Months Ended
|Twelve Months Ended
|Gross Profit Margin||17.3||%||16.6||%||17.4||%||17.6||%|
|Basic and Diluted Weighted Average|
|Net Income per Share||$||0.01||$||0.01||$||0.02||$||0.02|
Apivio is pleased to announce its best fourth quarter results as a public company. The South Korean business continued to deliver strong results in 2016. Revenue was marginally lower than record results in 2015 that were fueled by unusually strong sales promotional activities that did not repeat at the same level in 2016. Despite lower sales promotions by major customers, sales in Korea were still consistently strong in 2016.
In North America, Apivio executed a world-wide distribution agreement with NEC Corporation in Japan in the fourth quarter. The Company also launched the next generation Wi-Fi phone and sold 2,000 units to its distributor, Teledynamics in the fourth quarter. Development of Apivio’s revolutionary cloud-based device management system “CLive” continued during the year. In addition, Apivio just announced that CLive is now ready for deployment and will contribute to recurring revenue in 2017.
Rob Bakshi, President and CEO said, “I am pleased with our results for the year ended December 31, 2016 and in particular, a very successful fourth quarter. We have spent considerable time and effort developing our next line of products during the year. Some of these product announcements are already public information and others will be announced in the coming months. We continue to focus on initiatives within the company that will not only drive top line growth but provide our customers with unique and innovative high margin products. I am very enthusiastic about the future of Apivio and would like to extend my thanks to our entire team for working hard to finish and deliver these great products to the market place. I look forward to communicating on our continued success in 2017.”
Update on the Nuri Offer
On January 17, 2017, Nuri Telecom Co. Ltd. (“Nuri“) announced that it was making an unsolicited offer to acquire all of the outstanding shares of the Company. On February 1, 2017, the Company mailed to its shareholders a Directors Circular setting out the recommendation of the Board of Directors of the Company that shareholders reject Nuri’s offer and that they not tender their shares. Since that time, a Special Committee of the Board comprised of three independent directors, has been working with Haywood Securities — the Company’s financial advisor — to solicit interest from alternative parties in proposing an alternative transaction that provides greater value for shareholders of the Company. To date, a number of strategic and financial parties have been contacted, of which a significant proportion have entered into confidentiality agreements and select parties that have expressed interest in undertaking a transaction have been granted access to a data room in order to formulate a proposal for a transaction. The Company intends to pursue any opportunities that may lead to greater value for shareholders of the Company and will report further on these efforts in due course. The Nuri offer expires on May 2, 2017.
About Apivio Systems Inc.
Apivio Systems Inc. (“Apivio” or the “Company”) (TSX VENTURE: APV) is a Canadian technology company principally engaged in the design, development, marketing, and sale of communications equipment and software. It has a wholly-owned Korean subsidiary with a history of supplying VoIP telephone equipment and other products to major Korean and international telecommunications carriers. For more information regarding Apivio, please refer to its respective public filings available at www.sedar.com.
This press release has been prepared by Apivio Systems Inc. Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Statements contained in this news release that are not historical facts are “forward-looking information” or “forward-looking statements” (collectively, “Forward-Looking Information”) within the meaning of applicable Canadian securities legislation. Forward Looking Information includes, but is not limited to, disclosure regarding possible events, anticipated revenue, conditions or financial performance that is based on assumptions about future economic conditions and courses of action. In certain cases, Forward-Looking Information can be identified by the use of words and phrases such as “plans”, “expects” or “does not expect”, “is expected”, budget”, “scheduled”, “suggest”, “optimize”, “estimates”, “forecasts”, “intends”, “anticipates”, “potential” or “does not anticipate”, believes”, “anomalous” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-Looking Information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the Forward-Looking Information. Although Apivio has attempted to identify important factors that could affect Apivio and may cause actual actions, events or results to differ materially from those described in Forward-Looking Information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that Forward-Looking Information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on Forward-Looking Information. Except as required by law, Apivio does not assume any obligation to release publicly any revisions to Forward-Looking Information contained in this news release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.