Record Profits follow year of heavy re-investment by Ivrnet

 

Record Profits follow year of heavy re-investment by Ivrnet

 

 CALGARY, May 02 – Ivrnet Inc., (TSX-V: IVI), is pleased to report its financial results for the first quarter of 2013.   Following a re-investment in the company of nearly $1M in 2012, Ivrnet posted a record profit of $154,559 in the first quarter of 2013.

“2012 was primarily about the continued integration of ITSportsNet into Ivrnet, a process that took longer than anticipated at acquisition, but looks to reap larger than anticipated rewards long term”, said David Snell, CEO of Ivrnet.  “At the same time, a lot of effort was spent rationalizing the traditional Ivrnet business, ensuring we are only engaged with profitable clients” he continued.

With the integration mostly complete, staff rationalizations and process improvements have reduced combined operating costs by nearly $60,000 per month from their peak in 2012.   Revenues increased slightly, despite the company parting ways with a number of unprofitable clients.  “Ivrnet appreciates our relationships with all our clients, but at the end of the day these relationships need to be mutually beneficial”, expressed Chris Topolniski, Vice President of Corporate Finance.  “Hard decisions have to be made sometimes.”

Top line revenues would have further increased had a major client not taken over a large portion of their telecom costs directly, rather than have them purchased and passed through at cost by Ivrnet.   The value added work with this client continues to grow.

In addition to a stronger financial performance a number of new products were released by Ivrnet by the end of Q1, including Community Central, Quicknotes, and a new version of Safeteam.  Additional products have been released in Q2, and further information on all these products will be provided in subsequent releases by the company.  Finally, two major enhancements were made to the ITSN software, one at the end of 2012, and another subsequent to closing Q1 2013.   These enhancements fundamentally improved the speed and stability of the ITSN platform.

Revenues for the first quarter of 2013 were up 2.6% to $1,149,149 compared to $1,119,679 for the same quarter in 2012. Included in the first quarter of 2013 was $205,920 in revenues from the new community central product.  The Company had net income of $154,559 versus a net income of $20,676 in 2012. A new accounting policy adopted by Ivrnet for 2012, consistent with the introduction of IFRS, has increased the amortization of past acquisitions by $15,500 per quarter, which is already reflected in the Q1 numbers.  This new policy does not impact cash flow. 

 

Summary of Operating Results

 

                                                                                                                                                                           

                                                                                                                               2013                                                      2012       

                                                                                           

 

Revenue:

 

Professional services                                                       $                     133,836                                  $           241,600

 

Network services                                                                                     197,597                                               197,143

 

Hosted services                                                                                       468,707                                               285,617

 

Hosted applications                                                                               109,948                                                 73,906

 

Telephony applications                                                                         239,061                                               318,701

 

Agency fees                                                                                                                                                                2,712

 

                                                                                                                1,149,149                                            1,119,679

 

 

 

Cost of Sales                                                                                                   216,448                                               251,541

 

 

 

Gross Margin                                                                                                   932,701                                               868,138

 

Expenses:

 

General and administrative                                                                  638,164                                               723,318

 

Marketing and sales                                                                                    3,931                                                  20,413

 

Research development                                                                               3,300                                                    3,300

 

Interest                                                                                                       37,430                                                 12,332

 

Interest on capital lease                                                                           10,608                                                 12,684

 

Depreciation of property and

 

  equipment                                                                                                43,033                                                 56,458

 

Depreciation of intangible assets                                                           41,676                                                 18,957

 

                                                                                                                   778,142                                               847,462

 

 

 

 

Net comprehensive income                                             $                            154,559                     $                          20,676

 

 

A more complete analysis of the Company’s Q1 financial results can be found by visiting www.sedar.ca.

 

 Ivrnet expects subsequent quarters in 2013 to be stronger than their counterparts in 2012, though Q1 is likely to remain the strongest of the quarters. New customer growth is expected in all future quarters of 2013. 

 

 

 


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