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ARD.V - Armada Data Corporation

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By mrduediligence

Posted: Monday Feb 1 6:31:31AM 2016

Armada Data Corporation Q2 Results (Ending November 30th 2015)

Price: $0.04c
Common Shares: 17,670,265
Insider Holdings: 13,499,960(76.4% as per SEDI)

Cash: $196,813 (Cash in Q1: $115,573)
Accounts Receivable: $299,594
Related Receivable: $4,037
Prepaid Expenses: $53,955
Property & Equipment: $93,992
Goodwill: $180,000
Total Assets: $828,391 (Total Assets in Q1: $762,100)

Accounts Payable: $293,011
Related Payable: $4,538
Related Note Payable: $206,000
Corporate Income Tax: $68,592
Long Term Note: $81,000
Total Liabilities: $653,141 (Total Liabilities in Q1: $621,214)

Q2 Sales
Revenue: $545,409
Expenses: $500,984
Amortization: 10,061
Net Income: $34,364

Q1 & Q2 Combined Sales
Revenue: $1,074,262
Expenses: $948,897
Amortization: $20,826
Net Income: $104,539 or $0.006c EPS
MD&A Highlights

The Company’s operations consist of five main segments: Insurance Services, Retail Services, Dealer Services, Information Technology (IT) Services, and Advertising/Marketing Services.

Based on a cash position of $196,813 and accounts receivable of $299,594, 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 divisions (Retail and Dealer services) are not be void of the competition that has made significant advancements over the past three years; however, the divisions have now learned how to deal with our competition and overcome many of their tactics. 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 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
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.
The Company’s total sales decreased by 6% in the quarter ended November 30, 2015, from $580,517 in 2014, to $545,409. Comprehensive income increased from a loss of $(71,214) in the period ended November 30, 2014 to $34,364 in the period ended November 30, 2015.

The Insurance Services division experienced an 11% increase in revenue, from $252,525 in 2014 to $280,719 in 2015.

The Retail Services division revenue was down 22% to $64,727 in 2015 from $82,826 in 2014. The updated website, as well as the new Partners and Discounts program clearly helped the membership program maintain a strong presence in the marketplace, despite increasing competition.

The Dealer Services division revenue remained much the same, at $161,981 in 2014, and $162,013 in 2015. This division’s dealer development team has a plan to service the customers who find themselves without a dealer referral, although full implementation of this program has not been completed at the end of this period.

The Advertising/Marketing Services division, which derives its revenue from the sale of online third party advertising on and increased from $100 to $7,298.

The Information Technology division revenue increased 11% to $30,652 in 2015, up from $27,550 in 2014. IT continues to offer technical support and web site hosting to hundreds of customers, and to develop new customer relationships on a regular basis.

The Mister Beer division’s revenues are down from $55,535 to nil. Direct product costs and labour decreased from $53,633 to nil. The net income for Mister Beer Inc. went from $1,902 in 2014 to nil in 2015. Management made the decision to close the production facility on December 31, 2014, in order to explore options with respect to a sale or other disposition of the Bottle Brew business line. This division’s assets were disposed of during the period ended November 30, 2015.

Total expenses before amortization decreased to $500,984 compared to $561,314, a 11% decrease over last year. This is attributed to ceasing production at Mister Beer Inc. and continued cost-cutting measures implemented by management during the previous quarter.

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