Vancouver, B.C. November 17, 2017 – RSI International Systems Inc. (TSX-V: RSY) (“RSI” or the “Company”) is pleased to provide the following commentary on its progress towards becoming Operating Free Cash Flow positive, further to its financial statements as released November 16, 2017.
RSI President and CEO, Tim Major, commented “Although we ran into some headwinds in the third-quarter with a customer billing dispute, we’ve reduced our Operating Free Cash Flow deficit by almost six-hundred and seventy-five thousand dollars in the first nine months of 2017 versus the same period in 2016, while still continuing to grow revenue during that period. We are very proud of this progress, but we are not done yet.”
Mr. Major added “As 2017 draws to a close and we look forward to 2018, we’ve already enacted further measures to make our Company more efficient, such as significantly reducing our office space to evolve to a more efficient working environment comprised of co-working and virtual spaces that meet the needs of tech talent and tech demands. We’ve also just launched Profile Match & Merge, the first offering in our incremental product strategy, which is designed to provide new, value-added tools that are complementary to our core RoomKeyPMS product, in order to improve our current relationships and broaden our overall market appeal”.
On November 3, 2017 the Company reported that it is negotiating a billing dispute with one of its customers, representing approximately $35,000/month in revenues. Although negotiations are continuing and the Company continues to provide services to the customer, the Company elected to make a bad debt provision of $173,928 in its Q3 financial statements, related to unpaid invoices from the customer. Also in the November 3rd news release, the Company outlined projected monthly savings of approximately $25,000 to $30,000 a month, as the result of significantly reducing its leased office space beginning February 1, 2018. For more information on these matters, please see the Company’s Financial Statements and Management Discussion & Analysis, as released November 16, 2017. For more information on the Company’s products and services, please visit www.roomkeypms.com
As illustrated in Table 1 below, during the first nine months of 2017, the Company has significantly reduced its Operating Free Cash Flow deficit, versus the same period in 2016. Specifically, the combined Operating Free Cash Flow deficit for the first, second and third quarters of 2016 was (-$1,002,999). For the first three quarters of 2017, the aggregate deficit was reduced to (-$328,098), an improvement of $674,901 or 67%.
Table 1 (All figures C$ and taken from the Company’s applicable period financial statements)
|Q1 2016||Q2 2016||Q3 2016||Q4 2016||Q1 2017||Q2 2017||Q3 2017|
|Cash Flow from Operations||9,524||(256,696)||(91,055)||(76,683)||48,554||112,500||10,717|
|Equipment & Technology Investment||(198,921)||(262,343)||(203,508)||(201,446)||(158,283)||(174,824)||(166,762)|
|OPERATING FREE CASH FLOW||(189,397)||(519,039)||(294,563)||(278,129)||(109,729)||(62,324)||(156,045)|
|Change in Working Capital||(20,175)||(114,365)||176,836||(49,375)||19,551||(30,255)||(126,987)|
|Net Free Cash Flow||(209,572)||(633,404)||(117,727)||(327,504)||(90,178)||(92,579)||(283,032)|
The Company defines Operating Free Cash Flow as cash flows from business activities that are not related to working capital management and financing activities. It calculates the figure from the Statements of Cash Flows as the sum of Cash provided by / used in operating activities, minus bad debt expense, before changes in non-cash working capital items, and Cash Used in Investing Activities. Versus Basic or Net Free Cash Flow, Operating Free Cash Flow does not take into account changes to non-cash working capital items and financing activities as those activities can have significant timing components that are not directly related to the operating activities of the business during a particular period and therefore, have the potential to mask the true operational cash flow of the business.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
RSI International Systems Inc. is the developer of RoomKeyPMS, a web-based Property Management System (PMS) that incorporates a fully integrated Online Reservation Booking engine and seamless real-time connectivity to the major Global Distribution and Internet Distribution Systems. RSI markets its RoomKeyPMS and a number of other proprietary “hosted” software solutions to a wide variety of Hospitality Industry clients around the world. For more information, please see our website at www.roomkeypms.com
Cautionary Note Regarding Forward Looking Statements
This news release contains forward-looking statements. Any statements that are not strictly historical fact are considered “forward-looking statements.” Forward-looking statements cannot be guaranteed and involve assumptions and are subject to a variety of risks and uncertainties which could cause actual events or results to materially differ from those reflected in the forward-looking statements. Readers are advised to rely on their own evaluation of such risks and uncertainties and not place undue reliance upon forward-looking statements. Any forward-looking statements made herein are made as of the date hereof, and the Company assumes no obligation and disclaims any intention to revise or update any forward-looking information and statements except as required by applicable laws.
For more information, please contact:
RSI Systems International Inc.
Tim Major, President & CEO