Cymat Reports Q4 and 2012 Year-End Results
TORONTO, Aug. 1, 2012 /CNW/ - Cymat Technologies Ltd., a materials technology company focused on the military, automotive and architectural industries, announced its results for the quarter and the year ending April 30, 2012.
Fourth Quarter and Fiscal 2012 - Key Financial Metrics
- Revenue totalled $484,000 for the fourth quarter (2011 - $1,174,000) and $2,795,000 for fiscal 2012 (2011 - $1,852,000).
- Plant operating costs totalled $843,000 for the fourth quarter (2011 - $934,000) and $3.6 million for fiscal 2012 (2011 - $2.9 million).
- SG&A expenses (excluding stock-based compensation expense) totalled $306,000 for the fourth quarter (2011 - $435,000) and $1.7 million for fiscal 2012 (2011 - $2.2 million).
- A one-time impairment loss in the amount of $2.4 million with respect to the technology rights acquired from Hydro Aluminum a.s. in 2001 was recorded in the fourth quarter of 2012.
- Net loss, excluding the above noted impairment, totalled $574,000 for the fourth quarter (2011 - net income of $27,000) and $2.4 million for fiscal 2012 (2011 - $4.1 million).
- In 2012, operating activities used cash of $711,000, compared to used cash of $2.6 million for fiscal 2011.
Revenue for the final quarter of 2012 was $484,000, a decrease of $690,000 from $1,174,000 for the same quarter of 2011. The quarterly revenue for 2011 included $1,005,000 from larger architectural projects (Mallorca Congress Center and 9/11 Memorial) for AlusionTM, as compared to $293,000 from the Mallorca Congress Center in the last quarter of 2012.
Annual revenue for fiscal 2012 was approximately $2,795,000, an increase of $943,000 over revenue for the prior year of $1,852,000. For the year, revenue from architectural sales increased by approximately $1,008,000 on a year-over-year basis. Large architectural projects (Mallorca Congress Center and an office building in the country of Georgia) were the primary source of the architectural sales increase.
Plant operating expenses for the quarter ended April 30, 2012 were approximately $843,000, a decrease of $90,000 from the same expenses of $933,000 for the quarter ended April 30, 2011. Plant operating expenses for fiscal 2012 were $3,622,000 as compared to $2,920,000 for fiscal 2011. Increased direct plant operating expenses resulted from increased sales levels. Plant operating expenses also include depreciation and amortization expense. Depreciation and amortization expense of $1,537,000 and $1,546,000 are included in plant operating expenses for fiscal 2012 and fiscal 2011, respectively.
Selling, general and administration ("SG&A") expenses, excluding stock-based compensation expenses, for the fourth quarter of 2012 totalled $306,000, a decrease of $129,000 from SG&A of $435,000 for the last quarter of 2011. This improvement was largely the result of lower employee salary and benefit expenses due to a reduction in head count.
SG&A expenses for fiscal 2012, excluding stock-based compensation, totalled $1.7 million compared to $2.2 for 2011. This improvement was largely the result of lower employee salary and benefits due to a reduced head count and lower professional fees.
An impairment loss in the amount of $2,378,000 was recorded in the fourth quarter of fiscal 2012 regarding the technology rights acquired from Hydro Aluminum a.s. ("Hydro") in 2001. At April 30, 2012, the recoverable value of the Company's intangible assets was estimated using a discounted cash flow approach, whereby the future cash flows from the sale of SAF were estimated for the remaining useful life of the assets, which is until the end of calendar 2013. As a result of the withdrawal of funding for the Humvee project as described in the Year in Review section, the estimated net cash flows until December 2013 were determined to require the recognition of an impairment charge.
It is important to note that the impairment charge is related only the technology rights acquired from Hydro in 2001 and does not reflect management's overall assessment of its technology and patent portfolio which includes additional protection relating to underlying concepts and manufacturing processes, the value of which is not reflected in the statement of financial position.
The net loss for the quarter ended April 30, 2012 was $3.0 million, compared to net income of $27,000 for the corresponding quarter of 2011. Excluding the impairment loss and non-cash interest amounts, the loss for the fourth quarter of fiscal 2012 was $770,000 as compared to a loss of $233,000 for the same quarter of fiscal 2011.
The net loss for the fourth quarter of fiscal 2012 also includes the non-cash items of depreciation and amortization of $394,000 (2011 - $399,000) and share-based compensation expense of $101,000 (2011 - an expense recovery of $12,000).
The net loss for the year ended April 30, 2012 was $4.8 million compared to a net loss of $4.1 million for 2011. Excluding the impairment loss and non-cash interest amounts, the loss for the fiscal 2012 was $3.0 million as compared to a loss of $4.1 million for fiscal 2011.
The net loss for fiscal 2012 also includes the non-cash items of depreciation and amortization of $1.6 million (2011 - $1.6 million) and share-based compensation expense of $553,000 (2011 - $764,000).
Continued growth in AlusionTM is expected as recently added agents like StoneSource grow, and we add representation in important new markets. Subsequent to the year end, Cymat announced that we have reached agreement with the Latin American Division of Hunter Douglas N. V. ("Hunter Douglas") that they will our exclusive distributor of Alusion™ product in Chile, Mexico, Brazil, Argentina, Columbia, Peru, Panama and Uruguay. Hunter Douglas is the world market leader in window coverings and a major manufacturer of architectural products. The Hunter Douglas architectural group has manufacturing facilities with a significant ability to develop systems, engineering solutions, and deliver product innovations. Cymat's management views the Hunter Douglas signing as a landmark agreement for the Company which is expected to significantly increase the AlusionTM brand awareness and the sales pipeline.
The Company should benefit from the inclusion of AlusionTM on recent high profile projects in Majorca, Georgia and the 9/11 Memorial as these projects come to completion and attract recognition. Going forward we expect AlusionTM to be included in other major high-profile architectural projects. In fiscal 2013, we expect AlusionTM to be installed in the new Fondazione Prada exhibition centre in Milan, Italy. In addition, AlusionTM has been specified in the Steven Holl design of the new Queens Library at Hunters Point in the state of New York. AlusionTM has also been specified in the Frank Gehry designed project that will house the LUMA Foundation at the Parc des Ateliers in Arles, France. The exposure for AlusionTM that these high profile installations will create is expected to generate long-lasting benefits to Cymat.
The Company has also continued to innovate its product line, with the recent launch of our new Mid-Cell product providing a new and interesting visual look. The Company has also worked on colouring of our products and is now able to offer AlusionTM in multiple colours. Initial market reaction to these new offerings has been very positive, especially from our long standing agents.
While the withdrawal of funding for the US military's Humvee retrofit program was disappointing, SmartMetalÔ continues to be evaluated by several OEMs in various military vehicle platforms for next generation and retrofit vehicles. Sales of this nature generally have long timelines, require deep relationships and require the ability to design and engineer customized solutions. In addition to the continued focus of its internal resources on development of this market, Cymat has expanded its growth strategy for military markets to include the use of agents to assist in the development of international military markets for SmartMetalTM.
The automotive industry is recovering from conditions that recently led to extraordinary cost cutting, brand contraction and corporate mergers. On the automotive front, Cymat continues to investigate the efficacy of SmartMetal™ applications in automotive design. A recent meeting with a major manufacturer in the automotive industry centered on a renewed interest in the possibility of incorporating SmartMetalTM, as produced from Cymat's flat panel line, into the design for automotive crash-boxes. Management believes that SmartMetalTM has the potential to resolve the conflicting requirements within automotive design for increased vehicle crashworthiness while at the same time reducing vehicle weight.
Additionally, Cymat continues to explore new markets for various non-vehicular applications of SmartMetalTM. The Company expects to build upon recently delivered prototype orders in connection with the investigation of SmartMetalTM's utility for blast mitigation with respect to stationary objects. As another example of new potential uses for SmartMetalTM, subsequent to year end, Cymat announced that SmartMetalTM has been specified into the design of the new ITER nuclear reactor project in France. SmartMetalTM has been specified for use in the base of the cargo lift, to act as an energy absorber in the event of lift failure.
Cymat's management expects that its financing efforts will continue to meet the needs of the Company as it executes its growth strategy. Subsequent to the year end, the Company raised gross proceeds of $227,500 through the issuance of equity units that consisted of 4,550,000 common shares and 3,775,000 common share purchase warrants. The Company's equity financing efforts are ongoing.
Cymat's management is optimistic that 2013 will continue to build upon the success of fiscal 2012. Michael Liik, Executive Chairman of Cymat said "Our combined focus on revenue growth and cost improvement lead to a historically low use of cash over the last fiscal year". He went on to say that "with our continued efforts to grow sales from Alusion combined with revenue opportunities from military and other markets, we hope to reach our objective of positive cash flow in this fiscal year"
Cymat develops innovative materials for industry. The company has worldwide rights, through patents and licenses, for producing Stabilized Aluminum Foam. The ultra-light metallic foam is manufactured by bubbling gas through molten alloyed aluminum containing a dispersion of fine ceramic particles and can be produced as either Near-net Shapes or Flat Panels. The result is a revolutionary material with a wide array of features including very low density, mechanical energy absorption, thermal and acoustic insulation, is recyclable, time and temperature insensitive and has a relatively low cost of production. Cymat is collaborating with a number of partners spanning the automotive, architectural and blast mitigation industries. For further information, visit the Web site www.cymat.com.
The foregoing press release contains forward-looking statements relating to the development of markets, development programs, future revenues and improvements in technology, which are subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include the availability of funding, existing and future relationships with suppliers and manufacturers, the results of research and development activities, risks of technological breakthroughs that make Cymat stabilized aluminum foam less attractive, risks relating to the breadth, scope and enforceability of intellectual property rights, general industry and market conditions, availability of qualified personnel, and reliance on co-development partners. For additional information with respect to these and other factors, see the reports filed by Cymat Technologies Ltd. with the Ontario Securities Commission. Cymat Technologies Ltd. disclaims any intention or obligation to update or revise any forward-looking statements.
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