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Roctest Reports Fiscal 2010 Third Quarter Financial Results

^{Published on 2010-11-04 09:31:04 - Market Wire}
 

ST-LAMBERT, QC, Nov. 4 /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 nine-month periods ended September 24^th, 2010. All results are reported in Canadian dollars.

"We generated our highest quarterly EBITDA and net income of the year in the third quarter, despite continued pressure on our top line," said François Cordeau, President and CEO, Roctest.  "Our industrial sector continues to show quarter over quarter growth in revenue and profitability while our civil engineering sector has been struggling with reduced orders mostly caused by delays in a number of projects. Careful management of costs has enabled us to improve profitability since the start of 2010 despite challenges in the business."

Financial Results

For the third quarter ended September 24^th, 2010, revenues decreased 17% to $5.72 million compared to $6.89 million in the third quarter of 2009. The unfavourable shift in exchange rates, compared to the same period last year, had a negative impact of $0.43 million on revenues. Roctest generates over 80% of its revenues in foreign currency. For the first nine months of 2010, revenues decreased by 6.5% to $17.7 million compared to $19.0 million for the first nine months of 2009.

Sales in the civil engineering sector decreased by 16% in the third quarter, mostly as a result of delays of significant projects in some countries.  Sales in the industrial sector decreased by 20% to $1.58 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 41.6% in the third quarter compared to 41.8% for the comparable period last year. The gross margin percentage was relatively stable despite the shift in currency exchange rates in the past year, and a less favourable mix of revenues as the industrial sector generates higher margins.

For the third quarter of 2010, earnings before interest, taxes, depreciation and amortization ("EBITDA") amounted to $512,647 compared to $700,000 in the same period in 2009. The decrease was due to a decrease of $0.50 million in gross margin, partially offset by a reduction in expenses of $0.28 million.

Roctest recorded net earnings of $0.15 million or $0.03 per share in Q3 2010, compared to net earnings of $0.40 million or $0.07 per share in the third quarter of 2009.

Further information relating to Roctest's third 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.

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