Acquity Group Limited Reports Results for First Quarter 2013

- Three Months Revenues of $33.8 Million -

- Three Months IFRS Operating Profit of $1.5 Million -

News provided by

Acquity Group Ltd.

May 29, 2013, 04:45 ET

CHICAGO, May 29, 2013 /PRNewswire/ -- Acquity Group Limited ("Acquity Group" or the "Company") (NYSE MKT: AQ) today reported the following unaudited financial results for the first quarter 2013.

Financial highlights for the three month period ended March 31, 2013, compared to the three month period ended March 31, 2012

  • Revenues of $33.8 million compared to $34.5 million for the three month period ended March 31, 2012. 
  • IFRS operating profit was $1.5 million compared to $7.1 million for the three month period ended March 31, 2012.
  • IFRS operating profit, excluding amortization of purchased intangible assets and share based payment expense was $2.7 million compared to $7.9 million for the three month period ended March 31, 2012.  Refer to the "Reconciliation of Non-IFRS Financial Measures to IFRS Profit" in the tables that follow for additional details of all non-IFRS financial measures. 
  • IFRS profit attributable to equity holders of the Company was $0.8 million, or $0.04 per American depositary share ("ADS"), compared to $3.8 million, or $0.21 per ADS, for the three month period ended March 31, 2012.
  • Non-IFRS adjusted profit attributable to equity holders of the Company was $1.6 million, or $0.07 per ADS, compared to $4.3 million, or $0.23 per ADS, for the three month period ended March 31, 2012.
  • Non-IFRS adjusted EBITDA was $3.4 million for the three month period ended March 31, 2013, compared to $8.4 million for the three month period ended March 31, 2012.
  • As of March 31, 2013, the Company had unrestricted cash and cash equivalents of $31.4 million.

Non-IFRS Financial Measures

Acquity Group provides non-IFRS financial measures to complement reported IFRS results. Management believes these measures help illustrate underlying trends in the Company's business and uses the measures to establish budgets and operational goals, communicated internally and externally, for managing the Company's business and evaluating its performance.  The Company anticipates that it will continue to report both IFRS and certain non-IFRS financial measures in its financial results, including non-IFRS results that exclude interest, income tax provisions, depreciation and amortization, IPO costs, equity in losses of its associates, acquisition costs and other related charges, and share based payment expenses among other costs.  Consequently, Acquity Group's non-IFRS financial measures should not be evaluated in isolation or as a substitute for IFRS measures; but, should be considered together with its consolidated financial statements, which are prepared according to IFRS.

Special Note Regarding Forward-Looking Statements

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "aim," "anticipate," "believe," "confident," "continue," "estimate," "expect," "future," "intend," "is currently reviewing," "it is possible," "likely," "may," "plan," "potential," "will," or other similar expressions or the negative of these words or expressions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy, and financial needs. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements and are subject to change, and such change may be material and may have a material adverse effect on the Company's financial condition and results of operations for one or more periods. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any of the forward-looking statements in this announcement. Potential risks and uncertainties include, but are not limited to, the risks outlined in the Company's Registration Statement on Form F-1 and other documents filed with the U.S. Securities and Exchange Commission. Unless otherwise specified, all information provided in this announcement and in the attachments is as of the date of this announcement, and the Company does not undertake any obligation to update any such information, except as required under applicable law.

About Acquity Group

Acquity Group is a leading Brand eCommerce™ and Digital Marketing company that leverages the Internet, mobile devices, and social media to enhance its clients' brands and e-commerce performance. It is the digital agency of record for a number of well-known global brands in multiple industries. Acquity Group has served more than 600 companies and their global brands through thirteen offices in North America. For more information about Acquity Group, visit acquitygroup.com.

Investor Relations Contact

Jessica Barist Cohen
Ogilvy Financial, New York
Phone: (646) 460-9989
E-mail: [email protected]  

Acquity Group Limited

Consolidated Statements of Comprehensive Income - Unaudited

(Amounts in thousands, except per share data)










Three Month Periods Ended




March 31, 2013

March 31, 2012









Revenues

$      33,763

100.0%

$     34,493

100.0%

Cost of revenues

20,563

60.9%

18,458

53.5%

Gross profit

13,200

39.1%

16,035

46.5%









Selling and marketing expenses

2,919

8.6%

2,110

6.1%

Administrative expenses 

8,829

26.1%

6,707

19.4%

Costs associated with initial public offering

-

0.0%

116

0.3%

Operating profit

1,452

4.3%

7,102

20.6%









Other non-operating expense, net

(5)

0.0%

-

0.0%

Finance income/(costs), net

19

0.1%

(15)

(0.0%)

Equity in losses of associates

-

0.0%

(442)

(1.3%)

Profit before tax

1,466

4.3%

6,645

19.3%









Income tax expense

642

1.9%

2,864

8.3%

Profit

$            824

2.4%

$       3,781

11.0%









Profit/(loss) attributable to:





Equity holders of the Company

$            824

2.4%

$       3,845

11.1%

Non-controlling interests

-

0.0%

(64)

(0.2%)


Profit

$            824

2.4%

$       3,781

11.0%









Other comprehensive profit:





Profit

$            824

2.4%

$       3,781

11.0%

Currency translation differences

(2)

0.0%

(2)

(0.0%)


Comprehensive profit

$            822

2.4%

$       3,779

11.0%









Comprehensive profit attributable to:





Equity holders of the Company

$            822

2.4%

$       3,843

11.1%

Non-controlling interests

-

0.0%

(64)

(0.2%)


Comprehensive profit

$            822

2.4%

$       3,779

11.0%









Profit per share attributable to equity holders of the Company:





American depositary shares (1)

$          0.04

$         0.21

Ordinary shares

$          0.02

$         0.10









Shares used in computing profit per share:





American depositary shares (1)

23,516.4

18,738.6

Ordinary shares

47,032.8

37,477.3







(1)

On May 2, 2012, the Company completed the IPO of its American depositary shares representing ordinary shares and is now listed on NYSE MKT under the stock symbol "AQ." Pursuant to our registration statement filed with the U.S. Securities and Exchange Commission, each American depositary share presented in the consolidated statement of comprehensive income represents two ordinary shares outstanding.

Acquity Group Limited

Consolidated Balance Sheets - Unaudited

(Amounts in thousands)









March 31, 2013

December 31, 2012

Assets



Non-current assets:




Property and equipment, net

$            5,571

$               5,872


Intangible assets

23,204

23,849


Other non-current assets

87

87


Investment in associates

189

189


Deferred tax assets

6,043

5,985




35,094

35,982

Current assets:




Trade receivables, net

27,483

26,641


Unbilled receivables

10,779

9,865


Due from customers under fixed-price contracts

479

62


Prepayments and other receivables

1,945

1,852


Cash and cash equivalents

31,387

36,454




72,073

74,874



Total assets

$        107,167

$           110,856







Equity and Liabilities



Equity:




Issued capital

$                   5

$                      5


Capital reserve

96,577

96,577


Additional paid in capital

622

-


Other comprehensive profit

(2)

-


Retained loss

(3,335)

(4,159)



Equity attributable to equity holders of the Company

93,867

92,423








Non-current liabilities:




Other

6,856

6,590




6,856

6,590

Current liabilities:




Trade payables

1,971

2,343


Other payables and accruals

4,314

8,508


Due to customers under fixed-price contracts

159

154


Accrued income taxes

-

838




6,444

11,843



Total liabilities

13,300

18,433



Total equity and liabilities

$        107,167

$           110,856

Acquity Group Limited

Consolidated Statements of Changes in Equity - Unaudited

(Amounts in thousands)























Issued

Capital

Capital

Reserve

Additional
Paid in
Capital

Other
Comprehensive
Income

Retained
Profit/(Loss)

Equity Attributable
To Equity Holders
Of The Company

Non-Controlling
Interests

Total Equity



















As of 1 January 2012

$        4

$   71,030

$             -

$                68

$       (7,413)

$            63,689

$                745

$      64,434


Profit/(loss) for the period

-

-

-

-

3,845

3,845

(64)

3,781


Other comprehensive profit

-

-

-

2

-

2

-

2

Total for the period

-

-

-

2

3,845

3,847

(64)

3,783

As of 31 March 2012

$        4

$   71,030

$             -

$                70

$       (3,568)

$            67,536

$                681

$      68,217


Profit/(loss) for the period

-

-

-

-

1,154

1,154

(40)

1,114


Other comprehensive profit

-

-

-

(69)

-

(69)

-

(69)


Issuance of American depositary shares (1)

1

28,666

-

-

-

28,667

-

28,667


American depositary shares offering costs (1)

-

(3,119)

-

-

-

(3,119)

-

(3,119)

Total for the period

1

25,547

-

(69)

1,154

26,633

(40)

26,593

As of 30 June 2012

$        5

$   96,577

$            -

$                  1

$        (2,414)

$           94,169

$                641

$       94,810


Profit/(loss) for the period

-

-

-

-

3,177

3,177

(42)

3,135


Other comprehensive profit

-

-

-

(44)

-

(44)

-

(44)

Total for the period

-

-

-

(44)

3,177

3,133

(42)

3,091

As of 30 September 2012

$        5

$   96,577

$             -

$              (43)

$             763

$           97,302

$                 599

$       97,901


Loss for the period

-

-

-

-

(4,922)

(4,922)

(571)

(5,493)


Other comprehensive profit

-

-

-

43

-

43

(28)

15

Total for the period

-

-

-

43

(4,922)

(4,879)

(599)

(5,478)

As of 31 December 2012

$        5

$   96,577

$             -

$                  -

$        (4,159)

$           92,423

$                      -

$      92,423


Profit for the period

-

-

-

-

824

824

-

824


Share based payments

-

-

622

-

-

622

-

622


Other comprehensive profit

-

-

-

(2)

-

(2)

-

(2)

Total for the period

-

-

622

(2)

824

1,444

-

1,444

As of 31 March 2013

$        5

$   96,577

$        622

$               (2)

$        (3,335)

$           93,867

$                     -

$      93,867



















(1)

During the three month period ended June 30, 2012, the Company recorded an additional issued capital and capital reserve related to the issuance of the Company's IPO of American depositary shares, which began trading on NYSE MKT on April 27, 2012, and was offset by costs associated with the IPO in accordance with IFRS rules.

Acquity Group Limited

Consolidated Statements of Cash Flows - Unaudited

(Amounts in thousands)









Three Month Periods Ended




March 31, 2013

March 31, 2012

Operating activities:



Profit before tax

$        1,466

$          6,645

Adjustments to reconcile profit before tax to net cash flows from operating activities:




Non-cash:





Depreciation of property and equipment

679

481



Amortization of intangible assets and straight-line rent

626

652



Impairment loss of trade receivables

222

126



Finance costs, net

(19)

15



Equity in losses of associates

-

442



Share based payments

622

-



Other

3

2


Working capital adjustments:





Trade receivables and unbilled receivables

(1,978)

(6,010)



Due from customers under fixed-price contracts

(417)

(222)



Prepayment and other receivables

(4)

(667)



Trade payables

(372)

366



Other payables and accruals

(4,165)

(2,342)



Due to customers under fixed-price contracts

5

(23)



Other non-current assets

-

(4)


Income tax paid

(1,357)

(189)

Net cash flows used in operating activities

(4,689)

(728)







Investing activities:



Purchase of property and equipment

(378)

(881)

Increase in restricted cash

-

(2,162)

Net cash flows used in investing activities

(378)

(3,043)







Net decrease in cash and cash equivalents

(5,067)

(3,771)







Cash and cash equivalents at the beginning of the period

36,454

6,875

Cash and cash equivalents at the end of the period

$      31,387

$           3,104

Acquity Group Limited

Reconciliation of Non-IFRS Financial Measures to IFRS Profit - Unaudited (1) 

(Amounts in thousands, except per share data)











Three Month Periods Ended




March 31, 2013

March 31, 2012







IFRS profit attributable to equity holders, as reported

$             824

$         3,845

Finance (income)/costs, net

(19)

15

Income tax expense

642

2,864

Depreciation and amortization:




Property and equipment

679

481


Intangible assets

645

645

Costs associated with initial public offering (2)

-

116

Equity in losses of associates

-

442

Share based payments

622

-


Non-IFRS adjusted EBITDA

$         3,393

$          8,408











Three Month Periods Ended




March 31, 2013

March 31, 2012







IFRS operating profit, as reported

$         1,452

$          7,102

Costs associated with initial public offering (2)

-

116

Amortization of intangible assets

645

645

Share based payments

622

-


Non-IFRS operating profit

$         2,719

$          7,863











Three Month Periods Ended




March 31, 2013

March 31, 2012







IFRS profit attributable to equity holders, as reported

$            824

$          3,845

Costs associated with initial public offering (2)

-

116

Amortization of intangible assets, net of tax

387

381

Share based payments, net of tax

398

-


Non-IFRS adjusted profit

$         1,609

$          4,342







Adjusted profit per share attributable to equity holders of the Company:



American depositary shares (3)

$           0.07

$            0.23

Ordinary shares

$           0.03

$            0.12







Shares used in computing profit per share:



American depositary shares (3)

23,516.4

18,738.6

Ordinary shares

47,032.8

37,477.3





(1)

The Company includes these adjusted calculations for the three month periods ended March 31, 2013 and March 31, 2012 because management believes they are useful to investors in that they provide for greater transparency with respect to supplemental information used by management in its financial and operational decision making.

 

Accordingly, the Company believes that the presentation of this analysis, when used in conjunction with IFRS financial measures, is a useful financial analysis tool that can assist investors in assessing the Company's operating performance and underlying prospects. This analysis should not be considered in isolation or as a substitute for profit/(loss) prepared in accordance with IFRS. This analysis, as well as the other information in this press release, should be read in conjunction with the Company's financial statements and related footnotes contained in the documents that the Company files with the U.S. Securities and Exchange Commission.

(2)


The three month period ended March 31, 2012 includes costs associated with the Company's IPO of American depositary shares, which began trading on NYSE MKT on April 27, 2012. The Company recorded this charge in accordance with IFRS rules, which allow the Company to (1) fully capitalize costs directly attributable to the IPO and (2) capitalize a portion of costs indirectly attributable to the IPO, based on the size of the offering.

(3)


On May 2, 2012, the Company completed the IPO of its American depositary shares representing ordinary shares and is now listed on NYSE MKT under the stock symbol "AQ." Pursuant to our registration statement filed with the U.S. Securities and Exchange Commission, each American depositary share presented in the Reconciliation of Non-IFRS Financial Measures to IFRS Profit represents two ordinary shares outstanding.

SOURCE Acquity Group Ltd.