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Memex Inc

Exchange: TSXV Exchange | Sep 25, 2018, 7:45 PM EDT

OEE
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Memex Inc. Releases Q2-2018 Financial Results

BURLINGTON, ON / ACCESSWIRE / May 24, 2018 / Memex Inc. ("Memex" or the "Company") (TSX-V: OEE), a global leader in Industrial Internet of Things (IIoT) manufacturing productivity software, today released its financial highlights for the second quarter ending March 31, 2018. All results are reported in Canadian dollars. A complete set of the March 31, 2018 Consolidated Financial Statements and Management's Discussion & Analysis has been filed at www.sedar.com.

Summary Financial Highlights for the Three-months Ended March 31, 2018:

  • Memex reported $764 thousand in revenue during the second quarter, up 120% from the $348 thousand in the year-ago quarter and up 111% from last quarter;
  • Gross margin was 71% during the quarter compared to 32% in the year-ago quarter and 43% last quarter, the significant improvement in margins this quarter was due to the increase in sales and flat direct labour cost;
  • Net and comprehensive loss was $511 thousand ($0.004 per share) compared to a $1.26 million loss ($0.011 per share) in the year-ago quarter, and $985 thousand ($0.007 per share) last quarter;
  • Bookingsi for the quarter were $633 thousand versus $573 thousand during Q2-2017 and $660 thousand last quarter;
  • Cash consumed from operating activities (before changes in working capital balances) was $416 thousand for the current period, an improvement of $756 thousand from the same period a year ago and better than the $901 thousand consumed last quarter, and;
  • The Company had $1.43 million in working capital including $1.78 million in cash at March 31, 2018, as compared with $1.87 million in working capital and $2.46 million in cash at December 31, 2017.

Summary Financial Highlights for the Six-months Ended March 31, 2018:

  • Memex reported $1.13 million in revenue for the six-months ended March 31, 2018 compared to $853 thousand in total revenue in the same period a year ago (a 32% increase);
  • Gross margin was 62% for the period compared to 47% for the year-ago period, primarily due to higher sales volume;
  • Bookingsi for the period totalled $1.29 million versus $966 thousand in the same period a year ago, a 34% increase;
  • Net and comprehensive loss for the period was $1.50 million ($0.011), compared to $2.03 million ($0.018) for the same period a year ago.

Management Commentary:

"I am pleased with both the sequential and year-over-year improvement in revenue and bookings in Q2, but we still have more work to do," said Memex President and CEO David McPhail. "Following a few challenging quarters, we are starting to see a strong reversal in sales opportunities with more motivated prospects than ever before. While we continue to invest in targeted customer market outreach and will be showcasing our technology at IMTS 2018 in Chicago this coming September, we are now focusing on closing advanced sales opportunities."

Selected Financial Information:


Three-months period ended
March 31
Six-months period ended
March 31
(Canadian dollars - in thousands except per share and margin%)
2018
2017
Change
2018
2017
Change
Revenue
764 348 + 120 % 1,126 853 + 32 %
Bookingsi
633 573 + 10 % 1,292 966 + 34 %
Gross margin %
71.1 32.1 + 121 % 62.0 46.7 + 33 %
Operating expenses
1,041 1,362 - 24 % 2,168 2,435 - 11 %
Cash utilized in operating activities1
416 1,172 - 65 % 1,317 1,904 - 31 %
Net and comprehensive loss for the period
(511 ) (1,263 ) - 60 % (1,497 ) (2,025 ) - 26 %
Basic and diluted loss per share - period
(0.004 ) (0.011 ) - 64 % (0.011 ) (0.018 ) - 37 %

1. Before changes in non-cash working capital balances.


As at
(Canadian dollars - in thousands except WC ratio)
March 31,
2018
September 30,
2017
Cash on hand
1,775 3,458
Current assets
2,632 4,104
Total assets
3,004 4,522
Current liabilities
1,206 1,313
Working capital*
1,426 2,791
Working capital ratio**
2.18 to 1
3.13 to 1
Backlogii
1,388 1,311

* Working Capital = current assets - current liabilities
** Working Capital ratio = current assets / current liabilities

Outlook:

Strategic cost saving initiatives implemented in March 2018, which included reducing Senior Management salaries as well as corporate overhead, are already yielding benefits. This is evident in the Company's second quarter results and should help to produce better financial results in future quarters.

Based upon current backlogii of $1.39 million at March 31, 2018, Memex anticipates recognizing between $500 to $750 thousand in revenue for its third quarter of fiscal 2018, in addition to several larger projects moving towards completion but not anticipated to be completed in Q3. Management is still targeting a cash flow break-even run rate in the fourth quarter of fiscal 2018.

About Memex Inc.:

Memex was founded with a vision to improve the way automated machine and production equipment work and connect on the factory floor. Since its inception Memex has proved itself a pioneer in IIoT time and again. The company is committed to its mission of "successfully transforming factories of today into factories of the future" and envisions converting every machine into a node on the corporate network, creating visibility from shop-floor-to-top-floor. Memex is the developer of MERLIN, an award-winning IIoT technology platform that delivers tangible increases in manufacturing productivity in Real-Time. Memex's software and hardware IIoT solution enables customers to achieve tangible IIoT-centric business outcomes. The MERLIN software suite and connectivity products have enabled manufacturers to achieve upwards of a 50% increase in productivity and a 20%-plus increase in profit, on average. Additionally, customers have secured payback in less than four months, which equates to an Internal Rate of Return greater than 300 per cent. For more information, please visit: www.MemexOEE.com

Forward-Looking Statements:

The statements "…Memex anticipates recognizing between $500 and $750 thousand in revenue for its fiscal Q3-2018…" and "Management is still targeting a cash flow break-even run rate in the fourth quarter of fiscal 2018" are forward-looking statements. The intention was to communicate management's interpretation of the Company's backlog and the effect that their cost cutting initiatives will have on future financial results. These forward-looking statements are based upon bookings the Company has already received from its Customers that are supported by purchase orders, as well as from management's best estimate of future bookings to be generated and converted into revenue beyond the end of the third quarter of fiscal 2018. These statements also consider internally prepared future forecasts of Company performance and take into account the spending reductions implemented since the end of December 2017. However, there is no guarantee that revenues will fall within management's projections or if actual cost cutting initiatives can or will be maintained or will have the anticipated effect, or if other factors may prevent the Company from achieving revenue growth, a cash flow break even run rate or profitability at any point in the future. These forward-looking statements are subject to material risk factors such as anticipated future bookings not materializing, bookings not converting into revenue as quickly as management anticipates, or at all, and that unforeseen costs may be incurred delaying profitability beyond management's expectations or achieving profitability at all. In addition, these forward-looking statements are subject to various unknown material risks and uncertainties, many of which are beyond the ability of the Company to control or predict. Such forward-looking information represents Management's reasonable judgment based on information currently available. No forward-looking statement can be guaranteed, and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information. The aforementioned forward-looking statements are made as of the date of this press release and, except as required by applicable securities legislation, MEMEX assumes no obligation to update publicly or revise these forward-looking statements to reflect subsequent information, events, or circumstances.

For investor inquiries please contact:

Ed Crymble, Chief Financial Officer
905-635-1540
investor.relations@memexOEE.com

David McPhail, President & CEO
905-635-1540
investor.relations@memexOEE.com

Sean Peasgood, Investor Relations
647-977-9264
sean@sophiccapital.com

Neither the TSX Venture Exchange nor itsRegulation services provider (as that term is defined in the policies of theTSX Venture Exchange) accepts responsibility for the adequacy or accuracy ofthis release.

i & ii These non-IFRS financial measures are identified, defined and reconciled to their closest IFRS measures, revenue and unearned revenue, within our Management's Discussion and Analysis for the periods ended March 31, 2018 and 2017, in the section "Other Financial Measures." That MD&A is available atwww.sedar.com under our company profile.

SOURCE: Memex Inc.

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