TORONTO, May 24 /CNW Telbec/ - Grey Island Systems International Inc.
(TSX VENTURE: GIS) a leading supplier of real-time vehicle tracking, telematic
applications and predictive arrival systems, reported record revenues of
$4 million for the quarter ended March 31, 2007. Concurrently, the company
posts net income of $106,289 for the quarter, excluding non-cash based
expenses (amortization and stock-based compensation) earnings totaled $411,264
for the quarter.
Financial highlights for the quarter
During the quarter the Company has achieved significant growth in its
revenue while generating net income. The following are significant highlights
related thereto.- Revenue for the second quarter increased to $4,007,278.
- Gross margin for the current quarter was 54.0%.
- The Company achieved net income of $106,289 for the second quarter
compared to net income of $16,855 for comparable quarter a year ago.
- Revenue arising from US customers for the second quarter increased by
102% to $2,758,277 compared to $1,365,699 for the comparable period a
year ago.
- U.S. revenues now account for 68.8% of total Company revenue.
- The Company announced that the City of Indianapolis/Marion County
selected it's wholly owned subsidiary InterFleet Inc. to provide
GPS/AVL for 180 Department of Public Works vehicles including Snow
Operations and Waste Management. The initial contract was valued at
$US790,735. An additional 39 vehicles have since been added to include
the Traffic, and Water Fleet valued at $US129,695.
- The Company announced that it has signed a multiple year agreement with
the Nova Scotia Department of Transportation and Public Works to
roll-out its InterFleet GPS/AVL hardware and services for the
Department's fleet of 655 trucks. Total value of the contract is
$619,055 excluding monthly services.Overview
During the past quarter, the Company has been successful in expanding its
sales and marketing efforts in the United States ("US"). The Company has an
office in the State of New York in the USA, operating under the name of
Interfleet, providing sales and services for our Interfleet products to our
US customers. NextBus Inc., ("NextBus"), an information technology company
located in Alameda, California, USA, provides sales and services for our
Nextbus products.
Results of Operations
Revenue
Revenue for the quarter ended March 31, 2007 increased by 40.7% to
$4,007,278 from $2,849,049 for the quarter ended March 31, 2006. For the six
month period ended March 31, 2007, the revenue increased by 47.7% to
$7,846,154 from $5,313,748.
The increase in revenues recorded in the past quarter was due to the
organic growth of the Company's Interfleet and Nextbus products, and the
overall growth of the industry. Nextbus contributed revenues of approximately
$1,893,645 for the quarter ended March 31, 2007 from $870,000 for the quarter
ended March 31, 2006. Revenues from its US customer base have increased to
$2,758,577 for the quarter ended March 31, 2007, compared with $1,365,699 for
the quarter ended March 31, 2006. The Company continues to increase its
revenue through new customer hardware sales, thereby increasing its monthly
subscriber base in both Canada and the United States. It has also endeavored
to provide more comprehensive services to existing customers.
Gross Profit
Gross profit for the quarter ended March 31, 2007, increased by 35.3% to
$2,165,499 from $1,600,704 for the quarter ended March 31, 2006 and by 54.2%
to $4,313,167 from $2,797,079 over the six month period ended March 31, 2006
due mainly to the growth in Interfleet product sales in the U.S. market, where
the Company has been concentrating its efforts in recent quarters. Gross
margin for the current quarter was 54.0%, down from 56.2% and for the six
month period gross margin was 55.0% up from 52.6% for the comparative period.
The change in quarterly margin can be attributed to a change in proportion of
engineering related income as compared to equipment and service revenue.
Operating Expenses
Operating expenses include general and administrative, sales and
marketing, engineering, development and research and data centre operations
costs. The Company's operating expenses have increased by 36.1% to $1,749,048
from $1,285,072 for the quarter ended March 31, 2007. For the six month period
ended March 31, 2007, operating expenses increased by 27.5%. The main reason
for this increase is the increased staff levels, particularly in engineering
and development, where the Company requires additional support for its
increased number of contracts and to enhance product capabilities.
Income/loss from operations
The net income for the quarter ended March 31, 2007 was $106,289 or
$0.0015 per share, compared to net income of $16,855 or $0.0003 per share in
the quarter ended March 31, 2006. For the six month period ended March 31,
2007 the net income was $159,074 or $0.0024 per share compared to a loss of
$587,751 or $0.0099 per share for the comparative period. Gross profits
increased by 35.3% year over year for the three months ended March 31, 2007
and by 54.2% year over year for the six months ended March 31, 2007, and
operating expenses increased by 36.10%, for the quarter ended March 31, 2007
and by 27.5% over the six month period ended March 31, 2007, resulting in
operating income of $382,175 versus $300,336 in the comparable quarter of 2006
and operating income of $698,129 versus an operating loss of $13,073 for the
comparable six month period. The Company's future goal is to maintain moderate
increases in operating expenses on a quarter by quarter basis when compared to
expected revenue increases.
Liquidity and Capital Resources
At March 31, 2007, Grey Island had cash and cash equivalents of
$12,474,441. The Company's working capital was $15,803,159 as at March 31,
2007. As with most growth enterprises, depending on the pace of the
anticipated expansion additional financing may be contemplated in the future.
The Company also maintains a $6.9 million revolving credit facility with
a Canadian chartered bank secured by a cash guarantee of $5,750,000. This
facility can be used for direct advances or through letters of guarantee. The
balance of advances outstanding at March 31, 2007 was $nil, while letters of
guarantee amounting to $6,756,372 were outstanding against the facility.
The Company's consolidated financial statements, accompanying notes and
Management's Discussion and Analysis will be available on the System for
Electronic Document Analysis and Retrieval ("SEDAR") website (www.sedar.com)
on or before May 24, 2007.
About Grey Island
Grey Island Systems International Inc. (TSX-V: GIS), through its
subsidiaries NextBus Inc. in Alameda, California, InterFleet, Inc. in New
York, New York and Grey Island Systems, Inc in Toronto, Canada, is a leading
provider of custom real-time GPS/AVL, security and Telematics solutions as
well as real-time passenger information systems to government and related
fleets. To find out more about our products and services, visit our websites
at www.interfleet.com or www.nextbus.com.
Forward Looking Statements
This news release contains forward-looking information based on
management's best estimates and the current operating environment. These
forward-looking statements are related to, but not limited to, Grey Island's
operations, anticipated financial performance, business prospects and
strategies. Such forward-looking statements are subject to a number of known
and unknown risks, uncertainties and other factors which could cause actual
results or events to differ materially from those expressed or implied by such
forward-looking statements. These risks and uncertainties include, among other
things, business risks, changes in market and competition, technological and
competitive developments and potential downturns in economic conditions
generally. Therefore, there can be no assurance that the expectations of the
management of Grey Island will prove to be correct.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
For further information: Grey Island Systems Inc.: Owen Moore, (416)
348-9991, (416) 348-9993 (FAX), information@interfleet.com,
www.interfleet.com; Renmark Financial Communications Inc.: John Boidman,
jboidman@renmarkfinancial.com; Michael Shore, mshore@renmarkfinancial.com;
(514) 939-3989, Fax: (514) 939-3717, www.renmarkfinancial.com
