|Dexit reported $521,400 in revenue for the three months ending June 30, 2004, of which $500,000 was a licensing fee from Bell Canada.|
Dexit Announces Second-Quarter 2004 Results
Tuesday August 10, 7:02 am ET
- Granted two significant licences to Bell Canada and completed IPO creating solid foundation for domestic and international growth - Results reflect the significant costs of the initial launch of Dexit(R) service in Toronto, offset by a portion of the licence fees received from Bell Canada - Now expanding in Greater Toronto Area and increasing efforts in select international markets - Conference call/webcast scheduled for 8:30 a.m. (Eastern) today
TORONTO, Aug. 10 /CNW/ - Dexit Inc. (TSX: DXT - News), a leading provider of a new "instead of cash"(TM) electronic payment facilitation service for small transactions, today announced its financial results for the three and six months ended June 30, 2004.
"The second quarter was another period of accomplishments in Dexit's development," said Renah Persofsky, President and Chief Executive Officer. "Dexit is now ready to expand from our initial focus in downtown Toronto to the Greater Toronto Area and other urban centres in Canada. We are also increasing our efforts in select international markets.
"As at June 30, 2004, we had signed up more than 32,000 consumers and deployed to more than 250 merchant locations, including stores represented by major brands such as A&W, Burger King, Mr. Sub, Imperial Parking, Pharma Plus Drugmarts, Petro-Canada, and Mac's Convenience Stores. Our business plan, growth strategies, and proprietary technology also enabled us to attract a very strong partner in Bell Canada. We signed two licence agreements with Bell Canada in April. Under the first agreement, Bell Canada is Dexit's exclusive representative to merchants in Canada. Under the second agreement, Bell Canada will be marketing the Dexit(R) service directly to consumers on a non-exclusive basis.
"We believe this relationship with Bell Canada allows the Dexit service to expand across the Greater Toronto Area and other urban centres in Canada in a very cost-effective manner. Bell Canada has business relationships with more than 500,000 merchants across the country. We anticipate an accelerated deployment with our Bell Canada relationship and that Dexit will be able to leverage Bell Canada's large marketing, sales, and service organization," Ms. Persofsky stated.
"Dexit's plan is to support Bell Canada's efforts to sign up more merchants and actively seek other organizations to be consumer licensees. We then intend to make a major push with Bell Canada and our other consumer licensees, including TELUS Mobility, TD Canada Trust, and National Bank of Canada, to sign up their consumers. With the addition of Bell Canada as a consumer licensee, we believe we have the right partners to make Dexit a household name within Canada.
"We are having discussions with interested international parties which could possibly lead to the introduction of our innovative service in various international markets. We believe the Dexit service offers a compelling alternative to the use of cash for smaller transactions within Canada and internationally. Many consumers seek speed and convenience in their daily lives, and the advantages offered to merchants are numerous," said Ms. Persofsky.
Since the company is in the initial stages of expanding the Dexit service across Canada, Dexit's revenue remains modest and well below expenses.
Revenue was $521,400 in the three-month period ended June 30, 2004 and $524,771 for the six-month period ended June 30, 2004, compared with nil in the same periods in 2003 (all figures expressed in Canadian dollars).
In April 2004, the company signed an exclusive merchant licence agreement with Bell Canada and received a payment of $2 million in licence fees, of which $500,000 was recognized as revenue in the second quarter and $1.5 million as deferred revenue. The remainder of the revenue came from merchant transaction fees, consumer refill fees, RFID tag sales, and miscellaneous fees.
Sales, marketing, operations, technology, customer support, and administration expenses mainly related to the launch of the Dexit service in downtown Toronto that began in September 2003 resulted in a net loss for the three month period ended June 30, 2004 of $2.91 million or $0.49 per share, compared with a net loss of $0.73 million or $0.31 per share a year earlier. Per-share calculations are based on weighted average shares outstanding of 5,967,000 in the second quarter of 2004 and 2,342,000 a year earlier. Net loss for the six month period rose to $5.81 million or $0.98 per share in 2004 from $1.17 million or $0.57 per share in 2003 (based on 5,921,000 weighted average shares outstanding for the 2004 period and 2,072,000 for the prior-year period).
Dexit's initial public offering in June raised $22.69 million, net of financing-related costs. Dexit also received initial licence fees of $2 million paid by Bell Canada. On June 30, 2004, Dexit had cash and cash equivalents of $25.39 million compared with $4.45 million at the end of 2003. Post IPO, the number of shares outstanding as at June 30, 2004 was 10,046,667.
Additional information on the interim results is available in the full Second Quarter 2004 Financial Report filed with Sedar and posted in the Investor Relations section of Dexit's website at www.dexit.com.
Dexit will hold a conference call for analysts and investors to discuss its business and second quarter 2004 financial results at 8:30 a.m. (Eastern) today.
To participate in the conference call, please dial 416-640-4127 or 1-800-814-4859.
A live audio webcast of the conference call will be available at www.newswire.ca and www.dexit.com.
An archived recording of the call will be available at 416-640-1917 or 1-877-289-8525 (Passcode 21081418 followed by the number sign) from 10:30 a.m. on August 10 to midnight August 17. An archived recording of the webcast will also be available at Dexit's website.
Dexit Inc., based in Toronto, has pioneered a new, "instead of cash"(TM) electronic payment facilitation service for small transactions (generally under $25). The Dexit(R) service enables consumers to pay for coffee, muffins, lunch and other low-cost items quickly and conveniently with the tap of a RFID (radio frequency identification) tag linked to a pre-paid account. Founded in 2001, and funded in part by CANARIE Inc., Dexit launched its service in September 2003, initially in downtown Toronto. More than 32,000 consumers have registered for the Dexit service, which is currently available in more than 250 merchant locations. A comprehensive list of Dexit merchants is available on our web site.
Dexit recently completed its initial public offering (IPO) of common shares. To find out more about Dexit Inc. (DXT) visit our website at www.dexit.com.