Engagement Labs Releases FY 2020 Audited Results
New Brunswick, NJ/Toronto, ON — April 30, 2021 - Engagement Labs Inc. (TSXV: EL) released results for its fiscal year ended December 31, 2020. Audited consolidated Financial Statements and Management Report are available on SEDAR’s website at www.sedar.com.
Since Q1 of 2020, COVID-19 has had a significant impact on the marketplace and led to a reduction in marketing spend by major brands of the type who are our customers and with it a pull back in spending on services of the type we provide. This had a revenue impact on our 2020 results. During this difficult time, management made a priority of reducing costs in light of the revenue decrease. As a result, the Non-GAAP Adjusted EBITDA loss improved by 41% due to cost containment measures implemented by the Company.
Fiscal year 2020 Audited Results: Highlights
- Revenue was $2,560,569 for the year ended December 31, 2020, a decrease of 37% compared to $4,083,497 for the year ended December 31, 2019;
- Operating expenses were $4,495,839 for the year ended December 31, 2020, a decrease of 34% compared to $6,813,918 for the year ended December 31, 2019. Excluding impairment loss on goodwill and gain on extinction of debt and equity components of convertible debentures, the non-GAAP Operating expenses before non-operational expenses decreased by 37% or $2,098,859, to $3,565,839 for the year ended December 31, 2020 from $5,664,698 for the year ended December 31, 2019;
- Non-GAAP adjusted EBITDA(1) loss improved by 41% or $844,613, from -$2,070,568 for the year ended December 31, 2019 to -$1,225,955 for the year ended December 31, 2020;
- EBITDA(1) loss improved by 34% or $1,426,907, from -$4,174,041 for the year ended December 31, 2019 to -$2,747,134 for the year ended December 31, 2020;
- The net loss for the year ended December 31, 2020 decreased to -$3,515,098, down 34% or $1,774,989 from -$5,290,087 for the year ended December 31, 2019. Basic and diluted loss per share was ($0.02) for the year ended December 31, 2020, compared to ($0.03) for the year ended December 31, 2019;
- Gross profit decreased from $2,006,774 for the year ended December 31, 2019 to $896,942 for the year ended December 31, 2020. As a percentage of revenue, the gross margin decreased from 49% for the year ended December 31, 2019 to 35% for the year ended December 31, 2020;
- As of December 31, 2020, the Company was holding cash of $868,053 compared to $844,107 as at December 31, 2019. During the year ended December 31, 2020, the Company has been able to seek loans and grants totaling $1,208,787. Management estimates that $435,704 of these loans will likely be forgiven by the US Government under the terms of the PPP loan program.
(1)EBITDA is defined as earnings before interest, income taxes, depreciation and amortization. Number for comparative periods were revised to exclude SRED credit tax, variation on exchange, and bank charges in EBITDA. Adjusted EBITDA is a non-GAAP financial measure defined as EBITDA to which the Company adds stock-based compensation including the grant of stock options, restricted shares units, and restricted share awards as these expenses do not result in any use of operating cash flows by the Company, severance payments, impairment loss on goodwill, write-off of intangible assets, change in fair value of investment in shares, expenses related to acquisition or disposal of business, and loss on extinction of debt and equity components of convertible debentures, which are extraordinary and non-recurrent expenses, and Board remuneration, which is paid in shares units. EBITDA and non-GAAP adjusted EBITDA are provided as a supplementary earning measure to assist readers in determining the ability of ENGAGEMENT LABS INC. to generate cash from operations and to cover financial charges. They are also widely used for business valuation purposes. These measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.
“We were off to strong start of the year, as evidenced by the TotalSocial revenue growth of 11% in Q1 ’2020 versus Q1 2019, before the impact of COVID-19 hit and had a significant impact on our revenues for the rest of 2020,” said Ed Keller, CEO. “The Company took quick action to reduce costs and those efforts succeeded in cushioning the impact of the pandemic on our non-GAAP Adjusted EBITDA loss, which in fact improved by 41% over 2019.”
“As we look to 2021, we have announced several important signings recently, including a multi-year renewal with a leading global media and advertising agency valued at $430,000 and contracts with two leading multinational technology brands valued at $158,000, one of whom was a long-time client who has now returned to our client roster. Additionally, we announced a business development partnership with a leading digital activation firm to use our proprietary data, which we will expect will add a new revenue stream in FY 2021,” Keller continued.
About Engagement Labs
Engagement Labs (TSXV: EL) is an industry-leading data and analytics firm that provides social intelligence for Fortune 500 brands and companies.
To learn more visit www.engagementlabs.com
Disclaimer in regard to Forward-looking Statements
Certain statements included herein constitute "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Investors are cautioned not to put undue reliance on forward-looking statements. Except as required by law, Engagement Labs does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events.
Neither 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.