DENVER, Jan. 31, 2019 /CNW/ - Intermap Technologies today
announced preliminary unaudited financial results for the year
ended December 31, 2018. In addition,
as described further below, the Company announced a process to
evaluate its strategic alternatives.
Preliminary Unaudited 2018 Financial Results
For the year ended December 31,
2018, the Company reported revenue of $15.8 million, compared with $19.3 million and $7.0
million for 2017 and 2016, respectively. While revenue from
software and data solutions products increased significantly in
2018, the increases were not enough to offset the impact of a delay
caused by an election at a single foreign government customer,
impacting our acquisition services revenue. As a result, the
Company completed no foreign government data acquisition in
2018.
2018 revenues reflect a favorable shift in business mix towards
shorter sales cycle, and higher-margin, software and data solutions
sales, which grew 61% to $7.1
million. Excluding corporate costs, these business segments
generated operating income of 58% and 61% of sales, respectively,
during 2018.
Although the Company's data acquisition pipeline grew
significantly in 2018, from a base of nil, this pipeline has
historically required at least 30 months before converting to
revenue. Improving the diversity of government revenue sources,
including upgrading our processing engine to ingest multi-source
data, and mitigating the impact of any future project delays, has
been a key focus of recent management restructuring, R&D and
sales force investment. Preliminary results from these efforts,
which have already contributed positively to our sales pipeline,
include the Company's recent selection by the National
Geospatial-Intelligence Agency (NGA, the world's largest geospatial
customer), as a member of the CACI International Inc. team (Team
CACI), to participate in NGA's Janus Geography contract, as
previously reported on July 12,
2018.
Adjusted EBITDA for 2018 was $3.0
million, compared with $3.5
million and negative $7.2
million in 2017 and 2016, respectively. The decline in
Adjusted EBITDA for 2018 was related to carrying costs associated
with the foreign government data acquisition customer, offset by
improving operating leverage and a favorable shift in revenue mix,
as described above.
Excluding non-operating corporate costs, each of the Company's
three business segments earned positive Adjusted EBITDA in 2018.
Software and data solutions contributed more than half of the
Company's Adjusted EBITDA for the first time in its history.
Adjusted EBITDA is not a recognized performance measure under
IFRS and does not have a standardized meaning prescribed by IFRS.
The term EBITDA consists of net income (loss) and excludes
interest, taxes, depreciation, and amortization. Adjusted EBITDA is
included as a supplemental disclosure because management believes
that such measurement provides a better assessment of the Company's
operations on a continuing basis by eliminating certain non-cash
charges and charges that are nonrecurring. The most directly
comparable measure to adjusted EBITDA calculated in accordance with
IFRS is net loss. A reconciliation of net loss to Adjusted EBITDA
is provided in the table below.
The Company continues to absorb high corporate level costs
relative to its small size. These costs are related to its current
capital structure, legal, accounting, public company compliance,
tax, consulting, and corporate facilities. Reflecting this
scalability, corporate costs have been reduced by more than 60% as
a percentage of revenue since 2016, and further reducing corporate
costs in conjunction with revenue and pipeline, without harming
business opportunities, continues to be an important operating
focus.
Working capital improved to $1.5
million in 2018, compared with $0.3
million in 2017, and negative $3.8
million in 2016. The Company's significant improvement in
working capital was offset by a decline in general purpose
liquidity. As of December 31, 2018,
cash totaled $1.3 million.
During 2018, the Company invested $1.2
million to upgrade its asset base, including obtaining three
patents, building its NEXTMap One global terrain model, developing
its IRIS data enrichment process, re-constituting its Federal
Services Department of Defense business, authoring over 94
terabytes of data to its new cloud architecture, and upgrading
InsitePro software. In addition, the Company is in the process of
adding 1.6 petabytes of 1-meter posted digital surface and terrain
models to its cloud architecture, which will be completed over the
next few months. Commercial products drawing on these technologies
and intellectual property service the insurance, aviation,
telecommunications, government, and defense industries.
During the year, the Company added over 17.8 million square
kilometers of high-resolution terrain models to its proprietary
NEXTMap data archive. It announced a new certified data product in
partnership with Lufthansa Systems that will dramatically improve
commercial and government aviation safety and efficiency. The
Company also added to its sales efforts targeting admitted
insurance carriers and flood insurance providers, and now counts
several dozen large global insurance companies and their affiliates
among its InsitePro (US) and Aquarius (Europe) customer base.
Strategic Alternatives Review Process
Intermap Technologies has announced a process to explore
strategic alternatives. Such strategic alternatives could include,
among other options, a sale of the Company, a business combination,
or continuing as a standalone entity. The Company has retained
Teneo Capital as their financial advisor and Quilty Analytics as a
strategic consultant to assist the Company in evaluating its
alternatives and prudently determining the optimal course of action
for the Company.
The Board of Directors has been informed by Vertex One Asset
Management ("Vertex"), the Company's only first lien secured
creditor and its largest shareholder, of its general preference for
liquidity at this time. Vertex has provided financial support to
Intermap for the past six years. The Company derives most of its
revenues from government contracting, characterized by long sales
cycles, changing political priorities, evolving government
requirements, large well-funded competitors, and uncertain pursuit
costs. To qualify for projects, it is critical that the Company is
adequately capitalized, or is supported by a committed and
well-capitalized investor. There can be no assurance that the
consideration of strategic alternatives will result in the
completion of any transaction or any other alternative to replace
the financial support provided by Vertex. The Company has not set a
timetable for completion of the review process, and it does not
intend to comment further unless a specific transaction or
alternative is approved by the Board of Directors, the review
process is concluded, or it is otherwise determined that other
disclosure is appropriate.
Trading Update
The Company's common shares have traded below the minimum levels
required to maintain a market capitalization and public float of
$3 million and $2 million, respectively over the past 29
consecutive days. As a result, it is possible that the Company may
become subject to remedial listing review by the Toronto Stock
Exchange (TSX). If the Company becomes subject to a remedial
listing review, it will have an opportunity to resolve the
deficiencies that led to such review.
Selected Annual Information
|
|
Unaudited
|
|
|
U.S. $ millions,
except per share data
|
|
2018
|
2017
|
2016
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Acquisition
services
|
|
$
|
8.7
|
$
|
14.9
|
$
|
3.5
|
Value-added
data
|
|
|
4.7
|
|
2.8
|
|
2.2
|
Software and
solutions
|
|
|
2.4
|
|
1.6
|
|
1.3
|
Total
revenue
|
|
$
|
15.8
|
$
|
19.3
|
$
|
7.0
|
Operating income
(loss)
|
|
$
|
0.8
|
$
|
1.3
|
$
|
(9.5)
|
Change in fair value
of derivative instruments
|
|
$
|
-
|
$
|
0.1
|
$
|
1.9
|
Financing
costs
|
|
$
|
(2.7)
|
$
|
(2.5)
|
$
|
(10.1)
|
Net loss
|
|
$
|
(1.9)
|
$
|
(1.2)
|
$
|
(15.3)
|
Adjusted
EBITDA
|
|
$
|
3.0
|
$
|
3.5
|
$
|
(7.2)
|
Assets:
|
|
|
|
|
|
|
|
Cash
|
|
$
|
1.3
|
$
|
6.4
|
$
|
6.5
|
Total
assets
|
|
$
|
9.8
|
$
|
11.8
|
$
|
9.0
|
Liabilities:
|
|
|
|
|
|
|
|
Long-term liabilities
(including finance lease obligations)
|
|
$
|
29.3
|
$
|
26.8
|
$
|
22.2
|
Total
liabilities
|
|
$
|
33.3
|
$
|
33.8
|
$
|
33.6
|
Working
Capital
|
|
$
|
1.5
|
$
|
0.3
|
$
|
(3.8)
|
Reconciliation of Adjusted EBITDA
|
|
Unaudited
|
|
|
U.S. $
millions
|
|
2018
|
2017
|
2016
|
Net Loss
|
|
$
|
(1.9)
|
$
|
(1.2)
|
$
|
(15.3)
|
Financing
costs
|
|
|
2.7
|
|
2.5
|
|
10.1
|
Income tax
recovery
|
|
|
-
|
|
(0.1)
|
|
(2.4)
|
Depreciation of
property and equipment
|
|
|
1.3
|
|
0.9
|
|
0.8
|
EBITDA
|
|
$
|
2.1
|
$
|
2.1
|
$
|
(6.8)
|
Non-recurring
payments
|
|
|
-
|
|
0.8
|
|
0.2
|
Change in value of
derivative instruments
|
|
|
-
|
|
(0.1)
|
|
(1.9)
|
Restructuring
costs
|
|
|
0.5
|
|
0.2
|
|
0.9
|
Share-based
compensation
|
|
|
0.4
|
|
0.3
|
|
0.3
|
Loss on foreign
currency translation
|
|
|
-
|
|
0.2
|
|
0.1
|
Adjusted
EBITDA
|
|
$
|
3.0
|
$
|
3.5
|
$
|
(7.2)
|
About Intermap Technologies
Headquartered in Denver,
Colorado, Intermap (TSX: IMP) (ITMSF: BB) is an industry
leader in geospatial intelligence solutions. These geospatial
solutions can be used in a wide range of applications including,
but not limited to, location-based information, risk assessment,
geographic information systems, engineering, utilities, global
positioning systems maps, oil and gas, renewable energy, hydrology,
environmental planning, land management, wireless communications,
transportation, advertising, and 3D visualization. Intermap has
three core sources of revenue: multi-sensor data acquisition and
collection, enriched data products, and commercial applications,
software and solutions. The Company is a world leader in data
fusion, analytics, and orthorectification, and has decades of
experience aggregating, enriching, and managing 3-D data derived
from a number of different sensor technologies and data sources.
For more information please visit www.intermap.com.
Intermap Reader Advisory
Certain information provided in this news release, including
statements in relation to the Company's review of strategic
alternatives, future business plans, product development and
revenue-generating activities, and possible remedial listing review
by the TSX constitutes forward-looking statements. The words
"anticipate", "expect", "project", "estimate", "forecast", "will
be" and similar expressions are intended to identify such
forward-looking statements. Although Intermap believes that these
statements are based on information and assumptions which are
current, reasonable and complete, these statements are necessarily
subject to a variety of known and unknown risks and uncertainties.
Intermap's forward-looking statements are subject to risks and
uncertainties pertaining to, among other things, cash available to
fund operations, availability of capital, revenue fluctuations,
nature of government contracts, economic conditions, loss of key
customers, retention and availability of executive talent,
competing technologies, common share price volatility, loss of
proprietary information, software functionality, internet and
system infrastructure functionality, information technology
security, breakdown of strategic alliances, and international and
political considerations, as well as those risks and uncertainties
discussed Intermap's Annual Information Form and other securities
filings. While the Company makes these forward-looking statements
in good faith, should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary significantly from those expected.
Accordingly, no assurances can be given that any of the events
anticipated by the forward-looking statements will transpire or
occur, or if any of them do so, what benefits that the Company will
derive therefrom. All subsequent forward-looking statements,
whether written or oral, attributable to Intermap or persons acting
on its behalf are expressly qualified in their entirety by these
cautionary statements. The forward-looking statements contained in
this news release are made as at the date of this news release and
the Company does not undertake any obligation to update publicly or
to revise any of the forward-looking statements made herein,
whether as a result of new information, future events or otherwise,
except as may be required by applicable securities law.
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SOURCE Intermap Technologies Corporation