All amounts in this news release are in United States dollars unless otherwise noted.
Intermap reported total revenue of $0.9 million for the second quarter of 2016, a 20% increase from $0.7 million in the second quarter of 2015. The majority of the year-over-year increase in revenue was from increased data licensing and InsitePro software sales. Net operating loss for the second quarter of 2016 was $3.5 million, compared to a net operating loss of $4.4 million for the second quarter of 2015. Second quarter adjusted EBITDA, a non IFRS financial measure, was a loss of $3.3 million, an improvement from an adjusted EBITDA loss of $3.7 million for the same period in 2015. Adjusted EBITDA excludes share-based compensation, change in value of derivative instruments, and gain or loss on foreign currency translation.
"During the quarter we supported efforts to obtain the project financing associated with a $175 million spatial data infrastructure (SDI) contract that we announced in February of this year. Although Intermap is not responsible for the project financing on this contract, we provide support to our client in connection with their negotiation of final financing terms," said Todd Oseth, President & CEO of Intermap. "If and when project financing is completed, we will issue a detailed press release. We believe this award can be a catalyst to close other large Orion Platform government implementations in the future, as well as promote Intermap's location based Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) product offerings for the enterprise sector."
Mr. Oseth added, "During the second quarter we continued to see expanded interest in our InsitePro™ user base in the US. Our risk based customers have expressed significant interest in InsitePro's capabilities and the fact that we can customize the application for proprietary risk scoring to suit their individual needs. In addition to the expansion of our software business, we also received repeat business for further data acquisition in North America. The expanded contract was for $2.6 million and further task orders to expand this project are expected. The flying portion of this contract is now complete, ahead of schedule and under budget. Our data acquisition results surpass our published specifications. We continue to create a high quality dataset for this customer."
Financial Review
Consolidated revenue for the second quarter of 2016 totaled $0.9 million and included (i) $0.1 million in mapping services, (ii) $0.1 million in professional services, (iii) $0.4 million in data licensing, and (iv) $0.3 million in software licensing. For the same period in 2015, consolidated revenue totaled $0.7 million and included (i) $0.1 million in mapping services, (ii) $0.1 million in professional services, (iii) $0.3 million in data licensing, and (iv) $0.2 million in 3DBI software licensing. Contract backlog at the end of the quarter totaled $3.5 million.
For the second quarter of 2016, personnel expense was $2.6 million, compared to $3.0 million in the same period last year. The decrease was primarily due to reduced personnel in all of the Company's locations.
For the second quarter of 2016, purchased services and materials expense was flat at $1.2 million when compared to the same period last year. Purchased services and materials includes (i) aircraft related costs, including jet fuel, (ii) professional and consulting costs, (iii) third-party support services related to airborne data collection efforts, processing and editing of the Company's data collection efforts, and (iv) software expenses (including maintenance and support).
The cash position of the Company at June 30, 2016 (cash, restricted cash, and cash equivalents) was $0.3 million, compared to $0.8 million at December 31, 2015. Subsequent to the close of the second quarter, Intermap completed a $2.0 million promissory note with Vertex One Asset Management ("Vertex") bearing interest at 15% per annum and maturing on the earlier of (i) July 8, 2017, or (ii) the date on which a down payment from a material geospatial project is received by the Company. Amounts receivable and unbilled revenue at June 30, 2016 was $0.7 million, compared to $2.3 million at December 31, 2015. Working capital was negative $29.1 million at June 30, 2016, compared to negative $16.6 million at December 31, 2015.
Vertex has been the primary funding partner for Intermap beginning in February 2015. Since that time they have provided $21.3 million of debt financing and have restructured the terms of such outstanding debt on three separate occasions. The maturities of the outstanding debt occur (i) $9.1 million, plus accrued interest, on August 24, 2016 (ii) $13.1 million, plus accrued interest, on October 11, 2016, and (iii) $2.0 million, plus accrued interest, on either July 8, 2017, or the date on which a down payment from a material geospatial project is received by the Company. Intermap has historically relied on Vertex to provide debt financing and also to restructure debt maturities and other terms of the debt until such time that cash proceeds from operations are sufficient to repay the outstanding debt. There is no guarantee that additional financing, from Vertex or otherwise, will continue to be available. (see "Intermap Reader Advisory" below).
Detailed financial results and management's discussion and analysis can be found on SEDAR at: www.sedar.com.
Second Quarter Business Highlights
- On, June 13, 2016, Intermap announced that the Channel Syndicate (Channel) had subscribed to InsitePro for underwriting of United States flood insurance. Channel underwrites in the Lloyd's insurance marketplace and will be using InsitePro to provide reliable location-based risk assessments in the US. In the United States, Channel conducts business through multiple Managing General Agents (MGAs), requiring a disciplined approach to underwriting and pricing. By using an InsitePro risk score as a common understanding of risk between the underwriters in London and the MGAs, Channel can better maintain that discipline.
- On May 13, 2016, Intermap announced that the Company was awarded a US $2.6 million contract for an airborne radar mapping services solution. Intermap is using its proprietary Interferometric Synthetic Aperture Radar (IFSAR) technology to collect orthorectified radar imagery and high resolution elevation data to enhance the customer's existing geospatial map database. This new dataset will be used for improved disaster planning, resource management, security interests, and infrastructure planning. The project commenced in June 2016 and the final deliveries of the dataset are expected to be substantially complete by the end of the year 2016.
- On April 15, 2016 Intermap announced that it had entered into an agreement with its senior lender, pursuant to which three of its outstanding promissory notes, which were to become due and payable in April 2016 , were restructured and consolidated, together with an additional advance of $5,000,000 , into a new promissory note that bears interest at 15% per annum, with a maturity date of October 11, 2016 .
The material terms of the debt restructuring are as follows (all $ amounts shown are in USD):
- Promissory note dated April 1, 2015 (the "First Note"), in the principal amount of $1,500,000 , bearing interest at 20% per annum ( $309,041 in accrued interest), was cancelled.
- Promissory note dated April 27, 2015 (the "Second Note"), in the principal amount of $2,500,000 , bearing interest at 20% per annum ( $479,452 in accrued interest), was cancelled.
- Promissory note dated July 9, 2015 (the "Third Note"), in the principal amount of $3,000,000 , bearing interest at 15% per annum ( $341,506 in accrued interest), was cancelled.
- The principal amounts and accrued interest due under the First Note, the Second Note and the Third Note were restructured and consolidated, together with an additional $5,000,000 debt financing, into a new note dated April 12, 2016 (the "Restructured Note"), in the principal amount of $13,130,000 , bearing interest at 15% per annum, with a maturity date of October 11, 2016 , subject to a prepayment right by the Company at 107.5% of the principal amount at any time upon delivery of a 30 day prior written notice.
- The Restructured Note is secured by way of a first priority lien over all of the assets of the Company.
