Science & Technology
Science and Technology
Science and Technology
Mon, November 14, 2011 
November 14, 2011 16:00 ET
Tranzeo Provides Third Quarter 2011 Results
PITT MEADOWS, BRITISH COLUMBIA--(Marketwire - Nov. 14, 2011) - Tranzeo Wireless Technologies, Inc. (TSX:TZT), a leading producer of high-speed wireless broadband communication systems, today announced its financial results for the third quarter 2011.
Financial Results:
- Revenue was $2.7 million compared with $2.1 million year over year.
- Gross profit was $0.8 million compared with $0.6 million with % margins at 30% compared to 28% a year ago.
- Aperto Network Inc. USA operations have been discontinued. All future product shipments and technical support will come from Tranzeo Canada. All non USA operation will remain the same.
- The resulting change of the discontinuation of the Aperto Subsidiary is the removal of Aperto Inc. net liabilities in the amount of $2.0 million from the consolidated balance sheet and a gain of $2.0 million in the Statement of Earnings as an one time adjustment.
- EBITDA (excluding stock based compensation) was positive at $0.5 million compared to a loss of $2.2 million for 2010. The decrease in the loss was primarily due to the reduction of operating expenses in the Aperto USA subsidiary and the gain realized on the subsidiary been discontinued.
- Shipment to India continue to ramp in Q3 and we expect this to continue in Q4 and in to 2012.
Tranzeo and the Tranzeo logo are registered trademarks of Tranzeo Wireless Technologies Inc.
About Tranzeo Wireless Technologies Inc:
Tranzeo Wireless Technologies Inc. (TSX:TZT) leads the wireless broadband industry as a premier manufacturer of high-performance wireless network equipment that allows communities and businesses to communicate without boundaries. Tranzeo's full spectrum of point-to-point and point-to-multipoint radios, WiMAX equipment, and mesh network solutions are designed for wireless internet service providers, governments, campuses, military, carriers, enterprise customers, and systems integrators around the globe. Headquartered in British
Columbia, Canada, Tranzeo also has offices in San Diego, California, San Jose, California, and Indonesia. Visit [ http://www.tranzeo.com ] or phone 1.866.872.6936 for more information.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. We use words such as "anticipate", "plan", "expect", "believe", "intend" and similar expressions to identify forward-looking statements that relate to our business, management, operating results and financial condition. These statements are not historical facts, but reflect our current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risk Factors" in our Annual Information Form and Management's Discussion and Analysis which may be found on SEDAR at [ www.sedar.com ].
TRANZEO WIRELESS TECHNOLOGIES INC.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
QUARTER ENDED SEPTEMBER 30, 2011
(Unaudited)
(IN CANADIAN DOLLARS)
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Consolidated Balance Sheets | ||
| September 30, 2011 | ||
| (Unaudited) | December 31, 2010 | |
| Assets | ||
| Current assets: | ||
| Cash | $ 40,150 | $ 72,066 |
| Accounts receivable | 1,734,808 | 1,000,754 |
| Prepaid expenses | 296,572 | 388,936 |
| Inventory | 3,911,606 | 4,754,634 |
| 5,983,136 | 6,216,390 | |
| Property and equipment | 8,995,734 | 9,812,338 |
| Deferred development costs | 600,000 | - |
| $ 15,578,870 | $ 16,028,728 | |
| Liabilities and Shareholders' Equity | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | $ 6,344,341 | $ 7,768,160 |
| Due to related party | 984,027 | 1,179,214 |
| Current portion of capital lease obligation | 31,886 | 51,310 |
| Short term debt | 1,178,500 | 764,500 |
| 8,538,754 | 9,763,184 | |
| Convertible debentures | 1,216,000 | - |
| Capital lease obligation | 51,342 | 84,972 |
| 9,806,096 | 9,848,156 | |
| Shareholders' equity: | ||
| Share capital | 34,345,385 | 31,779,583 |
| Shares issuable | - | 1,699,787 |
| Reserve | 5,359,088 | 2,937,089 |
| Retained deficit | (33,931,699) | (30,235,887) |
| 5,772,774 | 6,180,572 | |
| $ 15,578,870 | $ 16,028,728 | |
| Consolidated Statements of Operations and Deficit | ||||
| (Unaudited) | ||||
| September 30 | September 30 | |||
| 2011 | 2010 | 2011 | 2010 | |
| Sales | $ 2,674,989 | 2,135,231 | $ 7,132,558 | 9,949,185 |
| Cost of goods sold | 1,862,600 | 1,538,273 | 4,865,542 | 7,574,020 |
| Gross Profit | 812,389 | 596,958 | 2,267,016 | 2,375,165 |
| Expenses | ||||
| Sales and marketing | 592,199 | 861,712 | 1,648,363 | 2,075,532 |
| Research and development | 547,969 | 792,891 | 1,700,825 | 2,191,656 |
| General and administrative | 965,104 | 1,176,770 | 2,736,667 | 3,033,196 |
| Share based compensation | 139,821 | 226,723 | 618,702 | 1,093,176 |
| Amortization | 273,257 | 326,217 | 828,808 | 975,106 |
| 2,518,350 | 3,384,313 | 7,533,365 | 9,368,666 | |
| Loss from operations | (1,705,961) | (2,787,355) | (5,266,349) | (6,993,501) |
| Gain on discontinuation of subsidiary | (2,049,403) | - | (2,056,062) | - |
| Acquisition costs | - | - | - | 514,623 |
| Impairment | - | - | - | 190,501 |
| Interest expense | 87,923 | 85,347 | 253,525 | 175,524 |
| Foreign exchange loss (gain) | 262,867 | (68,433) | 232,001 | 80,354 |
| (1,698,613) | 16,914 | (1,570,537) | 961,002 | |
| Net loss | (7,348) | (2,804,269) | (3,695,812) | (7,954,503) |
| Deficit, beginning of period | (33,924,351) | (19,577,994) | (30,235,887) | (14,427,760) |
| Deficit, end of period | (33,931,699) | (22,382,263) | (33,931,699) | (22,382,263) |
| Consolidated Statement Of Changes In Equity | |||||
| Share | Shares | ||||
| Capital | Issuable | Reserve | Deficit | Total | |
| Balance at | |||||
| January 1, 2010 | 28,407,690 | 2,104,729 | (14,427,760) | 16,084,659 | |
| Shares issued | 4,076,761 | 4,076,761 | |||
| Shares to be issued for Aperto Acq. | 14,691,862 | 14,691,862 | |||
| Stock Based Compensation-Options | 866,453 | 866,453 | |||
| Net Loss | (5,150,234) | (5,150,234) | |||
| Balance at | |||||
| September 30, 2010 | 32,484,451 | 14,691,862 | 2,971,182 | (19,577,994) | 30,569,501 |
| Balance at | |||||
| January 1, 2011 | 31,779,583 | 1,699,787 | 2,937,089 | (30,235,887) | 6,180,572 |
| Issuance of common shares | 4,369,099 | 4,369,099 | |||
| Reduction of shares to be Issued | (1,699,787) | (1,699,787) | |||
| Stock Based Compensation-Options | 618,702 | 618,702 | |||
| Stock Based Compensation-Warrants | (1,803,297) | 1,803,297 | - | ||
| Net Loss | (3,695,812) | (3,695,812) | |||
| Balance at | |||||
| September 30, 2011 | 34,345,385 | - | 5,359,088 | (33,931,699) | 5,772,774 |
| Consolidated Statements of Cash Flows | ||||
| (Unaudited) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30 | September 30 | |||
| 2011 | 2010 | 2011 | 2010 | |
| Cash flows from operating activities: | ||||
| Net loss for the period | (7,348) | (2,804,268) | (3,695,812) | (7,954,502) |
| Adjustments to reconcile net earnings to net cash from operating activities: | ||||
| Amortization | 273,257 | 326,217 | 828,808 | 975,073 |
| Impairment | - | - | - | 821,501 |
| Interest on capital lease | - | 58,738 | - | 58,738 |
| Stock based compensation | 139,821 | 226,723 | 618,702 | 1,093,176 |
| 405,730 | (2,192,590) | (2,248,302) | (5,006,014) | |
| Changes in working capital assets and liabilities: | ||||
| Prepaid expenses | 48,825 | (215,087) | 92,363 | (542,256) |
| Accounts receivable | (424,621) | 1,846,005 | (734,695) | 2,159,173 |
| Accounts payable and accrued liabilities | (2,462,594) | (65,618) | (1,423,179) | 670,322 |
| Inventories | 463,989 | 269,414 | 843,029 | 644,959 |
| Net cash flows used in operating activities | (1,968,671) | (357,876) | (3,470,784) | (2,073,817) |
| Cash flows from investing activities | ||||
| Additions to property, plant and equipment | (6,624) | 46,903 | (12,203) | (585,226) |
| Deferred Development Cost | (600,000) | - | (600,000) | - |
| Technology rights | - | - | - | 250,063 |
| Sales of Technology Asset | - | - | - | - |
| Net cash flows used in investing activities | (606,624) | 46,903 | (612,203) | (335,163) |
| Cash flows from financing activities: | ||||
| Proceeds from (repayment of) short term note payable | 518,000 | 500,000 | 414,000 | 664,500 |
| Proceeds from related parties | (36,361) | 240,000 | (195,186) | 240,000 |
| Repayment of capital leases obligations | (9,079) | (301,835) | (53,056) | (539,231) |
| Repayment of equipment loan | - | (56,640) | - | (66,080) |
| Repayment of related party loan | - | (27,897) | - | (177,897) |
| Issuance of convertible debentures | 1,216,000 | 1,216,000 | - | |
| Issuance of common shares | 914,326 | 15,750 | 2,669,312 | 1,101,929 |
| Net cash flows from financing activities | 2,602,886 | 369,378 | 4,051,070 | 1,223,221 |
| Net decrease in cash | 27,591 | 58,406 | (31,917) | (1,685,886) |
| Cash, beginning of period | 12,559 | 93,540 | 72,067 | 1,837,832 |
| Cash, end of period | 40,150 | 151,946 | 40,150 | 151,946 |
