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Roctest Reports Fiscal 2010 Second Quarter Financial Results

^{Published on 2010-08-05 09:31:04 - Market Wire}
 

ST-LAMBERT, QC, Aug. 5 /CNW/ - Roctest Ltd ("Roctest") (TSX: RTT), a leading designer and manufacturer of high-precision sensors for the civil engineering market and applications in the energy, healthcare and process control industries, today announced its operational and financial results for the three and six-month periods ended June 25th 2010. All results are reported in Canadian dollars.

"We continued to grow revenue in our civil engineering segment through our increasing success in international markets. While this growth was offset by weaker results in our industrial segment and by unfavourable exchange rates, we returned to profitability in the second quarter, as anticipated," said François Cordeau, President and CEO, Roctest. "We also strengthened our product offering and added new customers and revenue opportunities through the Geomation acquisition of their field monitoring and control product line which closed after the end of the quarter."

Financial Results

For the second quarter ended June 25th, 2010, revenues decreased 5% to $5.97 million compared to $6.31 million in the second quarter of 2009. Expressed in their currency of origin, revenues would have increased, but an unfavourable shift in exchange rates in the past year had a negative impact of $0.74 million on revenues. Roctest generates over 80% of its revenues in foreign currency. For the first six months of 2010, revenues remained fairly flat at $12.0 million compared to $12.1 million for the first six months of 2009.

Sales in the civil engineering sector increased by 2% despite the currency headwinds. Sales in the industrial sector decreased by 21% to $1.53 million, due to a major customer's decision several quarters ago to gradually reduce its inventory levels over a period that is now expected to last until the first quarter of 2011.

Gross margin was 39.7% in the second quarter compared to 42.7% for the comparable period last year. The decrease is attributable to a shift in currency exchange rates in the past year, and to a less favourable mix of revenues as the industrial sector generates higher margins.

For the second quarter of 2010, earnings before interest, taxes, depreciation and amortization ("EBITDA") amounted to $416,427 compared to $560,385 in the same period in 2009. The decrease was due to a decrease of $0.32 million in gross margin, partially offset by a reduction in expenses of $0.18 million.

Roctest recorded net earnings of $0.11 million or $0.02 per share in Q2 2010, compared to net earnings of $0.26 million or $0.05 per share in the second quarter of 2009.

Outlook

"We expect modest improvements in our industrial sector over the second half of the year as well as ongoing success in our civil engineering sector, with overall profitability continuing to improve," said Francois Cordeau. "More broadly, we are seeing a rising awareness worldwide of the immeasurable value of including instrumentation on major infrastructure projects, due in part to a recent series of high profile disasters that might have been preventable. Our increased market presence and strengthened distribution channels are helping us capitalize on growing demand."

Further information relating to Roctest's second quarter 2010 operating results and financial results may be found on the Company's website at [ www.roctest.com ] and on SEDAR ([ www.sedar.com ]).

About Roctest Ltd

Roctest designs, manufactures and markets sensors and high-precision measuring instruments for civil engineering and energy, healthcare and industrial control applications in the industrial sector. The Company is recognized for its leading-edge technology, the quality of its technical expertise and its product development capabilities for challenging and demanding environments. Its products are mainly sold internationally. The shares of the Company are listed on the Toronto Stock Exchange under the symbol RTT. To reach Roctest Ltd via the worldwide web, please visit [ www.roctest.com ].

Caution concerning forward-looking statements

Except for historical information provided herein, this press release may contain information and statements of a forward looking nature concerning the future performance of the Company. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events, and as such involve a number of risk factors. Such factors may include, without excluding other considerations, risks related to foreign exchange fluctuations, evolution in customer demand for the Company's products and services, the impact of price pressure from competitors and general market trends, economic and geopolitical changes. As a result, readers are advised that actual results may differ from expected results. The Company is not required to update or revise publicly its forward-looking statements, except as may be required under applicable law.