|ARD.V Q2 Financial + MD&A Highlights|
Common Shares: 17,670,265
Insider Holdings: 50% (As per information circular)
Accounts Receivable: $334,324
Related Party Receivable: $4,166
Corporate Tax Receivable: $30,400
Prepaid Expenses: $48,085
Property & Equipment: $54,998
Total Assets: $1,109,696 (November 2015 - $828,391)
Accounts Payable: $160,961
Related Party: $1,894
Deferred Revenue: $55,000
Notes Payable: $275,000 (owed to the CEO)
Total Liabilities: $492,845
Asset/Debt Ratio: 2.25:1
Sales (6 Months)
Revenue: $1,211,348 ($1,074,262 – 2015)
Net Income: $262,593 ($104,539 – 2015)
Earnings per share: $0.015 ( $0.005 – 2015)
The Company’s total sales increased by 14% in the quarter ended November 30, 2016, from $545,409 in 2015, to $624,214. Comprehensive income increased from $34,364 in the period ended November 30, 2015 to $117,740 in the period ended November 30, 2016.
The Insurance Services division experienced a 25% increase in revenue, from $280,719 in 2015 to $352,176 in 2016. This is a continuing result of expanding upon existing customer relationships, mergers and acquisitions within the Canadian insurance company landscape and policy-driven mandates within insurance companies to use the Armada Insurance Services replacement value settlement protocol.
The Retail Services division revenue was down 15% to $55,260 in 2016 from $64,727 in 2015.
The Dealer Services division revenue decreased 4%, from $162,013 in 2015, to $155,775 in 2016.
The Advertising/Marketing Services division, which derives its revenue from the sale of online third party advertising on CarCostCanada.com and TheCarMagazine.com, increased from $7,298 to $26,700.
The Information Technology division revenue increased 12% to $34,303 in 2016, up from $30,652 in 2015. IT continues to offer technical support and web site hosting to hundreds of customers, and to develop new customer relationships on a regular basis.
Total expenses before amortization decreased to $496,696, compared to $500,984, a 1% decrease over last year. Cash on hand increased from $196,813 as at November 30, 2015 to $457,723 as at November 30, 2016. Accounts receivable increased by 46%, $334,324 as at November 30, 2016, compared to $229,594 last year. Related party accounts receivable increased from $4,037 to $4,166. Accounts payable decreased to $160,951 as at November 30, 2016 from $293,011 a year earlier. Related party accounts payable decreased to $1,894 as at November 30, 2016, from $4,538 last year.
Salaries and expenses are paid to an officer of the Company, who is also 50% shareholder of Lease Busters Inc. Office space is rented from Lease Busters Inc. Legal fees are paid to a law firm, of which a partner is a (non-remunerated) director of the Company. Financing was acquired from a company owned by a director of Armada Data Corporation, and interest is paid to this company on a monthly basis. All of the actual costs noted in this section are paid at fair market value in the normal course of business.
Based on a cash position of $457,723, accounts receivable of $334,324, accounts payable of $160,951, and current notes payable of $275,000, management feels that the Company is in a good position to meet all current and foreseeable financial obligations. With the closing of the Mister
Beer production facility, expenses have been reduced. The other divisions of Armada are poised for revenue gains this fiscal year as a result of new project and feature launches as well as more than one significant partnership that the Insurance and Retail Service teams are working on.
Management believes that the data divisions will not only remain very stable and profitable but begin to make significant inroads in new verticals that will result from our partnerships, project releases and new revenue streams.
The Retail and Dealer services division were competition-free for many years and had to re-group and re-strategize in order to prevent further erosion caused by an overly aggressive new competitor. Management expects CarCostCanada.com to start realizing market gains this fiscal year and with the overall new car market remaining poised for more growth nationally (and more specifically in the web-rich Canadian urban centres), the division plans to earn more members to enhance the new car buying process for the Canadian new car buying marketplace.
The Company’s outlook is to continue to increase sales, update and improve our data services products and services, and deliver significantly better results to our shareholders by way of the following:
1. Build on the historical success of the Company’s ongoing sales and marketing efforts focused on increasing sales at Retail Services, Dealer Services and Insurance Services.
2. Exploit market awareness and demand for new vehicle pricing information and dealer referrals that result from the additional competition within that market space; by putting more emphasis on outside partners, data outsourcing and our underutilized online magazine TheCarMagazine.com
3. Continue to improve our relationships with some of the largest insurance companies in Canada and partner with some of these organizations to produce new products and services for their vast client base.
4. Maintain operating expenses and achieve the economies of scales of an Internet based business.
5. Expand third-party fee-based online advertising, by developing improved and more secure advertising methods.