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Lyrtech announces third consecutive profitable quarter and improves its financial situation

^{Published on 2010-11-29 08:51:06 - Market Wire}
 

QUEBEC CITY, Nov. 29 /CNW Telbec/ - Lyrtech Inc. (Lyrtech or the Company) (TSX-V: LTK), a leader in digital signal processing technologies, announced today its financial results for the three-month period ending September 30, 2010. The Company's interim consolidated financial statements and management report are available at [ www.sedar.com ].

2010 third quarter highlights

• EBITDA of $0.8 million, positive for a third consecutive quarter.
• Net profit of $0.4 million, profitable for a third consecutive quarter.
• Backlog of $3.7 million to be delivered in the last quarter of 2010.
• Closing of a US$28 million contract over 24 months.

"We have experienced a clear rebound in our industry in the last quarters during which we received and executed high-margin development contracts, many with associated production. We are very proud to have turned around our operations. We are building on this positive momentum and advancing our original equipment manufacturer (OEM) products strategy with the recently signed US$28M contract. Our team is working on further developing this strategy, which is the key to our success and growth," stated Louis Bélanger, president and CEO of Lyrtech.

Financial review

During the third quarter of 2010, total revenues reached $2.1 M, compared to $1.8 M during the same period in 2009, representing an increase of 22%. This increase results from the accumulation of engineering contracts following delays in the past quarters.

Gross margin reached 47% of revenues during the third quarter of 2010, compared to 36% during the same period in 2009. This increase in the gross margin results from the mix of revenues where Lyrtech sold more engineering contracts that generated a higher gross margin than other products and services of its offering.

Selling and marketing expenses decreased by 40% to $0.1 M between the third quarters of 2010 and 2009. This decrease results from an adjustment of approximately $0.1 M in accrued commissions which should have been eliminated earlier this year.

Administrative expenses remained stable between the third quarters of 2010 and 2009. 

Research and development expenses, net of tax credits, decreased by $0.3 M between the third quarters of 2010 and 2009, to $0.1 M. The main reason for this decrease is the capitalization of $0.1 M of research and development expenses during the third quarter of 2010 considering the work on a new project which will generate benefits in the coming years.

Financial expenses reached $0.5 M during the third quarter of 2010, an increase of $0.2 M from the same period in 2009. This increase results from the financing of an important project since the end of 2009.

The Company successfully negotiated with unpaid suppliers of discontinued activities for repayments below their face value on terms the Company could afford and in the respect of said suppliers. This effort concluded in a gain of $0.4 M on forgiveness of debt during the third quarter of 2010. This effort had started during the third quarter of 2009 with a similar gain.

The net profit for the third quarter of 2010 was $0.4 M, or $0.0116 per basic and diluted share, compared to a net profit of $0.1 M, or $0.0026 per basic and diluted share, during the same period in 2009.

As of November 26, 2010, Lyrtech had 36,611,252 class A shares issued and paid, 15,616,731 warrants outstanding and 2,196,042 options outstanding for a total of 54,424,025 shares on a fully diluted basis.

Non-GAAP financial measure

The Company uses only one financial measure that is not consistent with generally accepted accounting principles (GAAP) in Canada, namely earnings before interest, income taxes, depreciation and amortization (EBITDA). Such a measure is used because the management believes it provides meaningful information about the Company's performance and operating results. Such a non-GAAP measure has no standardized meaning as prescribed by GAAP and may not be comparable to similarly titled measures presented by other companies. Accordingly, it should not be considered in isolation. Refer to conciliation table below:

Forward-looking statements

This news release contains certain forward-looking statements concerning the future performance of the Company's business, its operations and its financial results and condition. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. We consider the assumptions on which these forward-looking statements are based to be reasonable, but caution the reader that these assumptions regarding future events, many of which are beyond our control, may ultimately prove to be incorrect since they are subject to risks and uncertainties that affect us.

About Lyrtech

Lyrtech develops and manufactures advanced digital signal processing solutions for companies worldwide, a vital technology to network and wireless communications, audio and video processing, as well as electronic systems in all fields of technology. Lyrtech offers a full range of DSP-FPGA development platforms, as well as design, prototyping, and manufacturing of electronic products. Lyrtech works in partnership with industry leaders such as Texas Instruments, The MathWorks, and Xilinx. Lyrtech's customers include many prestigious names of the consumer electronics, telecommunications, aerospace and defence fields. For more information, visit [ www.lyrtech.com ].

Neither TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this release.

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