VANCOUVER, British Columbia, May 18, 2018 (GLOBE NEWSWIRE) -- RSI International Systems Inc . (TSX-V:RSY ) (“RSI” or the “Company”) has provided the following commentary further to its first quarter 2018 interim financial statements as released May 18, 2018.
RSI President and CEO, Tim Major commented, “We are pleased to resume our progress in becoming Operating Free Cash Flow positive after getting off trend in Q3 and Q4 last year. With the payments resulting from a customer billing dispute and the costs of significantly reducing our monthly office space fully provided for in Q4 2017, two major cost hurdles are behind us and this will help our financial performance going forward”.
As discussed in a news release November 3, 2017, although the Company had made tremendous progress in cutting expenses and streamlining operations to that point in 2017, it was expected that a customer billing dispute would cause the Company’s progress towards becoming Operating Free Cash Flow positive to be interrupted until the benefits of some cuts materialized in the earlier parts of 2018. As further detailed in news releases from April 20 and February 18, 2018, the Company settled the billing dispute with the customer in part by agreeing to pay the customer $130,000 in twelve installments, beginning March 1, 2018. Although the monthly payments are made in future periods, under accounting rules, the total amount of the payments was recorded in Q4 2017. In these news releases, the Company also discussed reducing its leased office space, with projected savings of approximately $25,000 to $30,000 a month, beginning February 1, 2018. In order to effect this reduction, the Company incurred a one-time fee of approximately $90,000 in Q4 2017.
Mr. Major concluded, “We had some difficult decisions to make in 2017, and in particular towards the end of the year. We believe that the Company is now set to reap the financial benefits of these and other decisions, as we continue to improve the Company’s financial health and best position ourselves to deliver value to our shareholders”.
For more information on these matters, please see the Company’s Financial Statements and Management Discussion & Analysis, as released May 18, 2018. For more information on the Company’s products and services, please visit www.roomkeypms.com
As illustrated in Table 1 below, during the twelve months of 2017, the Company significantly reduced its Operating Free Cash Flow deficit versus the same period in 2016 from (-$1,281,128) to (-$727,387) respectively, or 43%. This improvement was despite the large, two above- detailed costs, which caused the trend to be significantly interrupted in Q3 and Q4 2017. In Q1 2018, the Company has reduced its Operating Free Cash Flow deficit versus the prior two quarters and believes it is back on trend towards its goal of becoming Operating Free Cash Flow positive.
Table 1 ( All figures C$ and taken from the Company’s applicable period financial statements )
| Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | Q1 2018 | |
| Cash Flow from Operations | $ 9,524 | $(256,696) | $ (91,055) | $ (76,683) | $ 48,554 | $ 112,500 | $ 10,717 | $(343,840) | $ (97,194) |
| Equipment & Technology Investment | $(198,921) | $(262,343) | $(203,508) | $(201,446) | $(158,283) | $(174,824) | $(166,762) | $ (55,449) | $ (27,854) |
| OPERATING FREE CASH FLOW | $(189,397) | $(519,039) | $(294,563) | $(278,129) | $(109,729) | $ (62,324) | $(156,045) | $(399,289) | $(125,048) |
| Change in Working Capital | $ (20,175) | $(114,365) | $ 176,836 | $ (49,375) | $ 19,551 | $ (30,255) | $(126,987) | $ 400,404 | $ (6,900) |
| Net Free Cash Flow | $(209,572) | $(633,404) | $(117,727) | $(327,504) | $ (90,178) | $ (92,579) | $(283,032) | $ 1,115 | $(131,948) |
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.
About RSI 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 604-914-3711 tmajor@roomkeypms.com
