Science & Technology
Science and Technology
Science and Technology
Tue, June 1, 2010 Cantronic Reports Stronger Financial Results for the Fourth Quarter and Fiscal Year
VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 1, 2010) - Cantronic Systems Inc., ("Cantronic" or the "Company") (TSX VENTURE:CTS), today reported financial results for the fourth quarter and fiscal year ended January 31, 2010. All amounts are reported in Canadian dollars.
Fourth quarter highlights:
Revenue increased 1,223% to $5.3 million from $0.4 million in the fourth quarter of fiscal 2009;
Adjusted EBITDA1 was $1.0 million, compared with a loss of $0.5 million in the fourth quarter of fiscal 2009;
Net loss was $513 thousand, or $0.007 per share (basic and diluted), compared with a loss of $540 thousand, or $0.01 per share (basic and diluted), in the fourth quarter of fiscal 2009.
Fiscal year highlights:
Revenues increased 320% to $15.7 million from $3.7 million in fiscal 2009;
Adjusted EBITDA was $1.6 million, compared with a loss of $1.9 million in fiscal 2009;
Net loss was $507 thousand, or $0.006 per share (basic and diluted), compared with a loss of $2.4 million, or $0.034 per share (basic and diluted), in fiscal 2009;
Completed the acquisitions of networked digital video platform solution provider AVINFO and digital IP-based surveillance camera and high-definition camera manufacturer Yellow River in China.
"Fiscal 2010 was a year marked by rapid growth in revenue and a significantly improved bottom line," said James Zahn, President and CEO of Cantronic. "Over the course of the past year and a half there have been a lot of changes at Cantronic Systems. We successfully entered the fast growing Chinese market, completing two strategic acquisitions and we are closing in on a third, Actiontop Electronics. In fiscal 2010 in particular, we continued to aggressively pursue our strategy of building our capabilities and product offerings and made significant progress in integrating our acquisitions."
Financial Summary
| Operating results ($000's except per share amounts) | ||||
| Fiscal 2010 | Fiscal 2009 | |||
| Fourth Quarter | Fiscal Year | Fourth Quarter | Fiscal Year | |
| Revenue | 5,337 | 15,707 | 403 | 3,743 |
| Adjusted EBITDA (loss) | 1,004 | 1,606 | (540) | (1,902) |
| Net earnings (loss) | (513) | (507) | (540) | (2,407) |
| Net earnings (loss) per share, basic & diluted | ($0.007) | ($0.006) | ($0.005) | ($0.034) |
Cantronic's revenue increased 1,223% for the fourth quarter and 320% for the fiscal year, reflecting the Company's successful expansion into the burgeoning video surveillance market in China as well as volume orders for thermal imaging cameras and detectors.
The Company's profitability for the quarter and fiscal year improved significantly from the corresponding periods in fiscal 2009. Adjusted EBITDA was $1.0 million and $1.6 million for the quarter and fiscal year respectively, compared to a loss of $0.5 million and a loss of $1.9 million for the fourth quarter and fiscal year last respectively last year. The improvements in adjusted EBITDA and net loss is directly linked to higher sales and stronger gross margins on product offerings as well as improved operational efficiency. The Company's bottom line, while improved from the comparable periods in the prior year, was impacted by one-time expenses associated with completing the two acquisitions during the year, higher non-cash items such as amortization, and increases in research and development spending.
| Financial position($000's except per share amounts) | ||
| Fiscal 2010 | Fiscal 2009 | |
| As at Jan. 31, 2010 | As at Jan. 31, 2009 | |
| Cash and cash equivalents | 3,325 | 3,681 |
| Total assets | 22,175 | 9,079 |
| Working capital | 1,034 | 5,554 |
| Total liabilities | 14,290 | 1,275 |
| Shareholders' equity* | 7,885 | 7,804 |
| Shareholders' equity per share | $0.10 | $0.11 |
| Number of shares outstanding, basic and fully diluted** | 78,761 | 71,218 |
* Excluding non-controlling interest
** Weighted average
The Company's fiscal year end audited consolidated financial statements are available on SEDAR at [ www.sedar.com ] and on the Company's website at [ www.cantronics.com ].
Outlook
"We are very excited about the prospects for our business," said Mr. Zahn. "While our North American business is still important to us, we continue to see significantly more growth potential in the Chinese market, especially as a result of government mandated programs such as the Safe City initiative, 3111 Project and State Ordinance 458. We will continue to seek ways to expand our offering and leverage our capabilities to take advantage of the market opportunities in China. Once closed, our acquisition of Actiontop Electronics will add best-in-class technologies that complement our existing end-to-end security and surveillance system offerings."
About Cantronic Systems Inc.
Cantronic Systems Inc. manufactures, distributes, and provides training and services in the fields of infrared vision and video security surveillance technologies, specializing in passive and active infrared cameras, infrared illuminators, low light infrared sensitive CCD cameras and long-range night vision surveillance systems for demanding homeland security and surveillance application.
Cantronic, through its US subsidiary QWIP Technologies, Inc. ("QWIPTECH"), holds a worldwide, exclusive license from the California Institute of Technology ("Caltech") to produce and sell infrared detectors and sensors based on Caltech's Quantum Well Infrared Photodetector technology.
Cantronic, through its China subsidiaries Cantronic Security Systems (China) Co. Ltd., Beijing Advanced Videoinfo Technology Co. Ltd. ("AVINFO") and Shenzhen Huanghe Digital Technology Co. Ltd. ("Yellow River"), provides digital networked video surveillance solutions to government and corporate customers in China.
Cantronic is a Tier 1 issuer on the TSX-V exchange, trading under the symbol CTS. For further information about Cantronic and QWIPTECH, please visit our websites at [ www.cantronics.com ] and [ www.qwip.com ].
Follow us on Twitter at [ http://twitter.com/cantronic ]
Forward-looking statements
This news release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Cantronic Systems Inc. and the markets in which it operates. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements of Cantronic to be materially different from any future results, performance or achievements expressed or implied by said forward-looking statements.
Forward-looking statements include, but are not limited to: the completion of the Proposed Transaction, anticipated share capital following completion of the Proposed Transaction, expectations, opinions, forecasts, projections and other similar statements concerning anticipated future events, conditions or results that are not historical facts. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking information is provided as of the date of this news release, and Cantronic Systems Inc. assumes no obligation to update or revise them to reflect new events or circumstances, except as may be required under applicable securities laws.
1Adjusted EBITDA, which is defined as net income before interest, income taxes, depreciation, amortization, stock option compensation expenses, is not a financial measure recognized by Canadian generally accepted accounting principles ("GAAP") and does not have a standardized meaning prescribed by GAAP. The Company uses adjusted EBITDA internally to make strategic decisions, forecast future results and evaluate its performance. Management believes that current and potential investors can use this measure to assess the Company's current and future operating results and to make investment decisions. Investors should not consider adjusted EBITDA as an alternative to cash provided by operating activities, nor to any other indicators of performance or liquidity which have been determined under GAAP.
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.
