NamSys Inc. (CTZ – TSX-V) today reports the results of operations for the first six months and the second quarter of fiscal 2018 ended April 30th. All amounts referenced herein are in Canadian dollars. Revenue for the second quarter was $808,305 as compared to $751,963 for the same period last year. Net income before tax for the quarter of $406,366 ($0.01 per share) was recorded as compared to $387,038 ($0.01per share) for the three months ended April 30th, 2017.
Revenue for the first six months of fiscal 2018 was $1,550,793 as compared to revenue in the same period last year of $1,443,219. The Company recorded net income before tax of $691,726 ($0.025 per share) in the six months ended April 30th, 2018 as compared to $675,951 ($0.025 per share) in the same period last year.
The Company has chosen to compare year over year Comprehensive Income before taxes because the Company is not yet fully taxable due to losses in previous years. As the bulk of the Company’s sales are in US dollars, fluctuations in the exchange rate between Canadian and US dollars impact reported income. Revenues are converted to Canadian dollars when sales are completed and booked. Foreign exchange adjustments are then required when payments are actually received. This foreign exchange adjustment positively impacted stated Comprehensive Income in the Quarter ended April 30, 2018 by $42,458. However, for the six month fiscal period foreign exchange losses totalled $11,375. This compares to fiscal 2017 foreign exchange losses of $1,364 for the half-year and a gain of $46,542 for the three months ended April 30, 2017. The consolidated financial statements and Management’s Discussion and Analysis for the fiscal quarter ended April 30th, 2018 are available under the Company’s profile on SEDAR at www.sedar.com.
K. Barry Sparks, the Chief Executive of the Company stated: “The Company is continuing to make progress in moving new product sales opportunities forward, particularly with respect to its Cirreon SaaS and related software offerings. New customers are continuing to request products be offered on a “software as a service” basis (SaaS), as opposed to purchasing a term licence for such software from the Company. While as noted previously, this reduces the recording of one time larger licence sales completions, the Company is completing more deals on a contracted ‘pay as you go’ usage basis. Total recurring contracted software revenue accounted for in excess of 81.6% of total sales in the quarter ended April 30, 2018.
The Company also announces that at the Annual Meeting of Shareholders (the “Meeting”) held on April 23, 2018, all of the nominees for election as Directors of NamSys referred to in its Management Proxy Circular for the Meeting ,were elected by way of a show of hands.
At the Annual Meeting, the President, Jason Siemens presented NamSys’ vision for the future, as summarized below.
“The NamSys Cirreon product that has generated the bulk of the “SaaS” sales in the last two years is the “Smart Safe” solution. A smart safe is a device that accepts bank notes, detects the authenticity and denomination of each note and stores them securely in a removable cassette within the safe. Smart safes may also be equipped with advanced options for high-speed note acceptance and note/coin dispensing capabilities. Smart safes are typically installed in the back office of retailers and collect the cash sales generated by the store. The smart safes communicate with the NamSys Cirreon Cloud which enables each device to upload transaction data as well as be remotely managed.
Most smart safes are distributed and serviced by cash-in-transit providers in coordination with a financial institution such that only the cash-in-transit provider can open the device and retrieve the cash. In this arrangement, the financial institution immediately credits the retailer’s bank account for the cash deposited as only the trusted cash-in-transit provider has access to the cash inside the safe. This accelerated credit is facilitated by the NamSys Cirreon software. The retailer no longer must wait several days for the funds to appear in their bank account. NamSys charges each of our Distributors a monthly fee for each smart safe that is connected to the system.
Mr. Siemens also noted that the “Smart Safe” solution is only one of many initiatives that NamSys is taking to streamline the processing of currency. The present “Cirreon” initiatives include:
1. Web and mobile applications for commercial/online banking
2. Logistics management for cash-in-transit providers
3. Exploring industries with similar high-security logistics challenges
As you can appreciate, these changes to traditional practices take time for the parties to understand and internalize. While we are spending considerable time to move the above initiatives forward, the operating results will only reflect the fruits of our labour starting late this fiscal year and into the future. It remains our belief that we will continue to grow and achieve greater revenue and profitability in 2018 and beyond.”