Serenic Reports Financial Results for First Quarter Ended May 31, 2013
EDMONTON, Alberta, Canada (July 24, 2013) – Serenic Corporation (TSX-V: SER), an international software developer specializing in integrated financial management and human capital management (“HCM”) solutions for Non-Profit organizations, government agencies, and Microsoft Dynamics NAV announces its financial results for the three months and year-to-date ended May 31, 2013.
Financial results are summarized as follows:
(1) EBITDA represents earnings before interest, taxes, depreciation, amortization, and stock based compensation. Please review the Serenic Management Discussion and Analysis for the three months ended May 31, 2013 for more information.
(2) All calculations based on actual unrounded numbers.
First Quarter Highlights
Several organizational changes were made during the quarter to support and progress the Cloud/volume strategies. The marketing department was re-organized to enable direct engagement with selected prospective clients to more efficiently demonstrate our solutions and close business. While these changes have not yet resulted in immediate financial success, webcasts of new Serenic Navigator products have, in management’s opinion, been well attended, which is indicative that interest from potential clients in selected target markets is being generated. Our direct and reseller partner sales teams have continued to advance certain sales campaigns that had not closed by current quarter-end. Initiatives related to Microsoft’s Global Road to Repeatability program (“GR2R”) continued during the quarter, along with certain re-vamped marketing programs and planned upgrades to the Company website that will support the new marketing and sales strategies. Deployment of Serenic applications for several existing and new customers on the new Microsoft Azure Cloud platform was also conducted. In conjunction with the release of Serenic Navigator 2013, Serenic unveiled its new Total Care Plan (“TCP”) for Company-direct clients, who will pay an increased fee for their software maintenance in exchange for unlimited product support and a free upgrade to the subsequent versions of Serenic Navigator, subject to certain conditions. Management believes these clients will find TCP to be highly advantageous, and the program is expected to further enhance loyalty in our client base.
The Company continued its program to revitalize sales of its HCM products. An internal reorganization was initiated during the quarter to make the HCM division a more independent and growth business unit within the Company. A new product manager has been hired for HCM products and the division will be guided by a senior person with extensive experience in the HCM markets. As part of the HCM growth plan, the Company entered into an arrangement with an independent California-based company whereby advanced human resource management (“HR”) functionality is being integrated with Serenic’s payroll solution, as a richly functional payroll and HR solution that will be scalable for use by small to large organizations.
The financial results for the quarter continued to be reflective of the transition phase that the Company is currently operating within. Total revenue in the current quarter was $2,603,370 vs. $2,947,267 in the same quarter last year, expenses reduced by $97,377 and the net loss was $317,052 as compared to $179,699 for the comparable quarter last year. Cash resources at the end of the quarter were $4,112,881, as compared to $4,332,578 as at February 28, 2013.
The Company continued to investigate alternatives to potentially increase shareholder value during the quarter, which process is still high priority and ongoing.
As previously stated, the Company has progressed its Cloud/volume strategies with the release to market of its new versions of Serenic DonorVision and Serenic Navigator, and initiated the new Total Care Plan as previously described. In addition to maintaining its historic sales model that requires a highly consultative approach to prospective customers who prefer on-premise and/or customized solutions, efforts are being conducted to address potential market segments that have previously been unattainable with legacy product offerings. This involves incorporating a highly prescriptive, “low-touch” customer experience, in conjunction with other aspects of Microsoft’s GR2R volume sales strategies. Management continues to believe that this dual approach will preserve the historical enterprise-level opportunities of the legacy business model, while also ultimately delivering higher sales volumes from the significantly larger lower-end market segments that the Company had not previously been able to address with its products. We will also continue to work with Microsoft to deploy Serenic solutions on the new Microsoft Azure cloud based platform, as a cost-effective and highly attractive alternative for the growing segment of our existing and prospective customers who prefer hosted software solutions. Additionally, management also plans to continue to evolve and grow its human capital management business segment, including provision of an on-premise and Cloud based HR offering to be integrated with our payroll applications, scheduled for commercial release in Q3 of this fiscal year.
The corporate development objective of optimizing shareholder value remains to be a high priority. Alternatives that are being investigated include a capital structure change, new strategic ventures, and/or merger and acquisition scenarios. Management continues to strongly believe that the market capitalization and share price of the Company does not adequately reflect Serenic’s fair value, and intends to take appropriate action in this regard that would best serve the interests of all shareholders.
Grant of Share Appreciation Rights (“SARS”)
On July 23, 2013, following the annual general meeting of the shareholders, the Company granted a total of 250,000 SARs pursuant to the Directors and Officers Compensation Plan which provides for an annual allotment upon re-election or appointment as a director or officer of the Company. 50,000 SARs were granted to each of Dwayne Kushniruk, Randy Keith, Ron Odynski and Doug Thomson, and 25,000 SARs were granted to each of David Tam and Paul Johnston. All SARs were granted with an Issue Price of $0.20.