MARKHAM, ONTARIO -- (Marketwired) -- 08/19/13 -- VIQ Solutions Inc. ("VIQ Solutions" or the "Corporation") (TSX VENTURE: VQS), a world leader in computer-based digital audio and video capture and management, today reported its financial results for the three and six month periods ended June 30, 2013. Results are reported in Canadian dollars and are prepared in accordance with International Financial Reporting Standards ("IFRS").
"During the quarter, we successfully implemented significant cost efficiencies in our wholly-owned subsidiary Spark & Cannon by removing certain non-essential support infrastructure," said David Outhwaite, President and Chief Executive Officer of VIQ Solutions. "These changes will allow us to reduce our overhead expenses significantly while allowing us to continue to execute the strategic initiatives currently underway as we strive for continued growth."
Financial Highlights for the Quarter
-- Revenue was $3.4 million and $7.3 million for the three and six month periods ended June 30, 2013 as compared to $3.7 million and $7.7 million for the same periods in 2012, representing a decrease in revenue of 8% and 5% respectively;-- Gross margin from our transcription and reporting services business unit was 37% for the three and six month periods ended June 30, 2013 as compared to 34% for the same periods in 2012;-- Selling and administrative expenses were $1.4 million and $2.7 million for the three and six month periods ended June 30, 2013, as compared to $1.5 million and $2.8 million for the same periods in 2012;-- Restructuring charges relating to the implementation of certain cost efficiency initiatives in Spark & Cannon were approximately $221,200 for the three month period ended June 30, 2013. As a result of the restructuring, selling and administrative expenses are anticipated to decline substantially in subsequent quarters resulting in future savings of approximately AUS$900,000 annually;-- Research and development expenses were $173,273 and $356,897 for the three and six month periods ended June 30, 2013 as compared to $178,987 and $361,515 for the previous year as we continue to invest in new and existing products and services;-- Adjusted EBITDA loss for the three and six month periods ended June 30, 2013 was $217,466 and $46,290 as compared to $189,218 and $15,699 for the same periods in 2012; and-- Net loss for the three and six month periods ended June 30, 2013 was $496,572 and $383,089 as compared to $246,414 and $132,511 for the same periods in 2012.
Business Highlights for the Quarter
-- Spark & Cannon Australasia Pty Limited ("Spark & Cannon"), the Corporation's wholly-owned Australian subsidiary, was awarded a contract by the Victoria Police for the provision of secure transcription services with an estimated revenue to Spark & Cannon, assuming the options are extended, of AUS $8.9 million over the five year term based on the historical workflow supplied by the Victoria Police;-- Implemented cost efficiencies to reduce Spark & Cannon's general and administrative expenses by approximately 33%, through a combination of staff count reductions and decreasing the amount of office space to be leased by Spark & Cannon while preserving all of the strategic initiatives surrounding the company's core competencies; and-- Subsequent to the period, the Corporation obtained a short-term bridge loan with a face value of $200,000 bearing interest at a rate of 10% per annum, payable annually. Included with the loan was the issuance of 200,000 non-transferrable common share purchase warrants which have an exercise price of $0.18 per common share and are exercisable for a one year period. The loan is repayable on the one-year anniversary, being July 2014 and is secured by a general security agreement covering all assets of the Corporation.