Generated $2.0 million in Revenue, $534,000 in Adjusted EBITDA and a record 83% gross margin
TORONTO, ONTARIO – August 31, 2020 – Adcore Inc. (the “Company” or “Adcore”) (TSXV:ADCO) (FSE:ADQ), a leading provider of machine-learning (“ML” and “AI”) powered advertising technologies used by digital agencies and advertisers to leverage digital marketing in an effortless and accessible way (“Effortless Advertising”), announced today its financial results for the three and six months ended June 30, 2020.
Second Quarter 2020 Highlights (Unaudited)
- Total revenue was $2.0 million compared to $3.6 million for the same period in 2019, a decrease of 45%.
- Revenue less media costs (gross margin) was 83% compared to 58% for the same period in 2019, an increase of 43%.
- Adjusted EBITDA (see “Use of Non-IFRS Measures”) was $534,000 compared to $1.08 million for the same period in 2019, a decrease of 51%.
- As of June 30, 2020, total working capital was $6.4 million compared to $5.5 million for the year ended Dec 31, 2019, an increase of $948,000.
- As of June 30, 2020, the Company’s cash and cash equivalents were $5.6 million, compared to $4.9 million for the year ended Dec 31, 2019, an increase of $755,000.
- Continued to invest in its global sales and marketing team and industry-leading technology, including developing Adcore’s app for the Shopify app store.
Omri Brill, Chief Executive Officer commented on the results, “As we passed the eye of the storm during April and May 2020 and successfully navigated through a challenging global economic environment, we clearly see a continuous month over month improvement moving forward. Despite an estimated $2.4M impact to our revenues due to COVID-19 during Q2 2020, the Company managed to remain profitable, a clear indication of the strength and robustness of our business model and effectiveness of management’s cost saving measures. The $534,000 in Adjusted EBITDA tells this story best.
Mr. Brill continued, “We find ourselves at a historic moment in time as we see a tectonic shift in the way consumers interact and purchase, forcing businesses across all industries to move online and the acceleration of the stay-at-home economy. With its focus on online and eCommerce technology solutions, Adcore is perfectly positioned to take advantage of these dramatic changes. As the Company looks beyond Q2, 2020, we see a strong recovery in the business results for Q3, 2020 and expect this trend to continue and accelerate in Q4, 2020.”
“Despite an estimated $2.4M impact to our revenues due to COVID-19 during Q2 2020, the Company managed to remain profitable, a clear indication of the strength and robustness of our business model and effectiveness of management’s cost saving measures”
Conference Call and Webcast Information
Adcore will host a conference call at 9:00 AM ET on September 02, 2020 to answer questions about the financial and operational performance of the Company for the second quarter ended June 30, 2020. The conference call will include a brief statement by management and will focus on answering questions about Adcore’s results during the quarter, which can be sent in advance to [email protected].
Please register in advance for this conference call:
Meeting ID: 893 5642 9071
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USE OF NON-IFRS MEASURES
Management uses Adjusted earnings before interest, income taxes, depreciation, and amortization (“Adjusted EBITDA”) as a key financial metric to evaluate Adcore’s operating performance and for planning and forecasting future business operations. Adjusted EBITDA excludes significant items which are non-operating in nature in order to evaluate Adcore’s core operating performance against prior periods. Adjusted EBITDA is not a measure of financial performance under GAAP and should be considered in addition to, and not as a substitute for net earnings, overall change in cash or liquidity of the business as a whole. Management believes the use of Adjusted EBITDA allows investors and analysts to understand the results of the continuing operations of the Company and its subsidiary, by excluding certain items that have a disproportionate impact on Adcore’s results for a particular period. Management’s method of determining non-GAAP financial measures are evaluated periodically and may differ from other companies’ methods and therefore may not be comparable to those used by other companies.
The following table presents the Adjusted EBITDA for the periods ended:
|Three months ended June 30, 2020||Three months ended June 30, 2019|
CAD$ in thousands (Unaudited)
|Operating (loss) profit||264||(1,196)|
|Depreciation and Amortization||128||147|
|Global Expansion & Relocation Expenses||77||–|
Adcore’s second-quarter 2020 financial statements are available on the Company’s SEDAR profile at www.sedar.com. All amounts are in CAD and are based on ADCORE’s condensed consolidated interim financial statements for the three and six months ended June 30, 2020 and related notes prepared in accordance with International Financial Reporting Standards (IFRS), unless otherwise noted.
Amounts in this press release are in CAD based on the following USD to CAD average exchange rates for each of the relevant periods: For the three months ended June 30, 2020 and 2019, 0.734, and 0.748 respectively.
Adcore is a leading provider of machine-learning powered advertising technologies. Adcore’s suite of solutions empowers digital advertisers with automated solutions to enhance and maximize their Search Engine Marketing (“SEM”). Adcore’s technologies are designed for in-house marketing professionals, freelancers and advertising agencies to scale their SEM activity and maximize their ROI.
By combining extensive industry knowledge and experience with its proprietary artificial intelligence (“AI”) engine, Adcore offers a unique SEM platform. In addition to being named numerous times on Deloitte’s Fast 50 Technology list, Adcore is a certified Google Premier Partner and Microsoft Partner.
Adcore serves hundreds of clients worldwide including: Digital Marketing Agencies, e-Commerce Businesses, Travel, Financial Technology and Gaming Companies and its strength as an agile and leading player in the industry has led to winning the largest online tender to date in Israel, a co-managed 5-year $125 million contract with the Israel Government Advertising Agency.
Established in 2006 and majority-owned by its founder and CEO, Mr. Omri Brill, the Corporation and its subsidiaries employs over thirty people in its headquarters in Tel Aviv, Israel and satellite offices in Melbourne, Australia, Toronto, Ontario and Winnipeg, Manitoba.
For more information about Adcore, please visit Adcore’s Investor Relations website
This press release contains certain forward-looking statements, including statements about the Corporation. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Corporation cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Corporation assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.
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