Adeptron Technologies Reports 2006 Q4 & Annual Financial Results



    2006 net earnings increase to $0.05 per diluted share
    2006 Q4 year-over-year net earnings up 100%

    Stock Symbol: ATQ
    Listing: Toronto Stock Exchange (TSX)
    Outstanding Shares: 35.8 Million
    Web Site: www.adeptron.com

    TORONTO, March 13 /CNW/ - Adeptron Technologies Corporation (ATQ: TSX)
("Adeptron" or the "Company"), a specialist at delivering integrated product
solutions and support to the global technology and electronics industry, today
reports its fourth quarter financial results for the three-month period ended
December 31, 2006 and annual financial results for the twelve-month period
ended December 31, 2006. All dollar figures are reported in Canadian currency.

    
    2006 Annual Financial Highlights:

    -   Total revenue increased by 15% to $43.8 million compared to
        $38.2 million in 2005
    -   Net earnings increased to $1.6 million compared to a loss of
        $0.4 million in 2005
    -   Earnings per diluted share increased to $0.05 compared to a loss of
        $0.01 in 2005
    -   EBITDA(*) increased 230% to $3.3 million from $1 million in 2005

    2006 Q4 Financial Highlights:

    -   Total revenues increased by 2% to $10.9 million compared to
        $10.7 million in fourth quarter 2005
    -   Net earnings doubled to $0.3 million compared to fourth quarter 2005
        net income
    -   Earnings per diluted share increased to $0.01 compared to $0.00 in
        fourth quarter 2005
    -   EBITDA(*) increased 80% to $0.9 million compared to $0.5 million in
        fourth quarter 2005
    

    F. Michael Marti, President and Chief Executive Officer of Adeptron
commented, "We are pleased to report a significant improvement in our
year-over-year financial results for 2006 and on our management team's ability
to execute against our 2006 plan that focused on revenue growth with continued
profitability and the enhancement of the Company's balance sheet by increasing
working capital. Adeptron has now reported five consecutive quarters of net
income and at year-end had a working capital position of $4.8 million compared
to a working capital deficiency of $2.1 million at the end of 2005."
    Marti continued, "In 2006, our team accomplished year-over-year
improvements in virtually every key financial category of our business. In
2007, the plan is to reinvest in the Company, including the recruiting of new
management expertise and the setting of new focus and responsibilities for
some existing members of the management team. This is intended to strengthen
Adeptron's value proposition to its current and prospective customers. With
these moves we are assembling the catalysts for Adeptron to effectively
execute its organic business development strategy and other business expansion
plans for 2007 and beyond. We are making these investments now with the
objective of building increased longer-term profitability."
    "As well in 2007, Adeptron's management team will continue to work on
executing the Company's China strategy for improved supply chain and offshore
manufacturing capabilities. In the last quarter of 2006 Adeptron began
manufacturing product for a key customer through its offshore partners. In
2007, we expect to see the Company's volume of such offshore production
increase," said Marti.
    Revenue for 2006 was $43.8 million compared to $38.2 million in 2005, an
increase of $5.6 million, or 15%. Revenue for the three month period ended
December 31, 2006 ("fourth quarter") was $10.9 million compared to
$10.7 million for the fourth quarter of 2005, an increase of $0.2 million, or
2%.
    This revenue growth resulted in improvements in gross margin and the
gross margin percentage for 2006 compared to 2005. Gross margin for 2006
improved to $7.7 million, an increase of $2.4 million over gross margin of
$5.3 million in 2005. The gross margin percentage in 2006 of 17.6% compared
favourably to the 13.8% gross margin percentage reported in 2005. Gross margin
for the fourth quarter of 2006 improved to $2 million, an increase of
$0.3 million over gross margin of $1.7 million for the fourth quarter of 2005.
The gross margin percentage in the fourth quarter of 2006 of 18.2% compared
favourably to the 15.6 % gross margin percentage reported in the fourth
quarter of 2005.
    Selling, general and administrative ("SG&A") expenses for 2006 were
$5 million, $0.3 million higher compared to $4.7 million in 2005. SG&A
expenses for the fourth quarters of 2006 and 2005 respectively were the same
at $1.3 million each. It is important to note that even though SG&A expenses
in 2006 increased, revenue and gross margins have increased significantly more
during this same period. This is consistent with management's strategy of
growing top line revenue while minimizing SG&A expense increases.
    Net income in 2006 was $1.6 million (earnings per share of $0.05), an
improvement over the loss of $0.4 million (loss per share of $0.01) in 2005.
Net income for the fourth quarter of 2006 was $0.3 million (earnings per share
of $0.01), compared to net income of $0.2 million (earnings per share of
$0.00) in the fourth quarter of 2005.
    Earnings before Interest, Taxes, Depreciation, Amortization and
Stock-based compensation (EBITDA(*)) for 2006 was $3.3 million compared to
$1.0 million in 2005, an improvement of $2.3 million. EBITDA(*) for the fourth
quarter of 2006 was $0.9 million compared to $0.5 million in the fourth
quarter of 2005, an improvement of $0.4 million.

    2007 Outlook

    In the first quarter of 2007, revenue is expected to be lower compared to
the same quarter of the prior year but will still be approximately $10 million
for the quarter. In the first and second quarters of 2007, and continuing
thereafter, the Company will experience a significant shift in the ongoing
revenue mix provided by its current and future customers. In 2007, the Company
expects to experience a significant reduction in the revenue level previously
provided by its largest revenue-contributing customer of 2006. Adeptron will
continue to manufacture some products on behalf of this customer in 2007. This
transition will be completed by the end of the second quarter of 2007.
    The Company expects this development will be largely offset for the full
year 2007 by increases in the revenue generated from other existing customers,
including the second largest revenue-contributing customer of 2006. Also, the
Company is expected to experience the benefit in 2007 of new customer
relationships developed in 2006 and up to this point in 2007. The outcome of
these shifts are anticipated to be fully apparent by the end of 2007 with the
beneficial result of diversifying the Company's revenues and greatly reducing
its concentration of revenue previously derived from the one customer.
    As an additional positive note, in 2007, consigned (labour-only) revenue
is anticipated to increase compared to 2006 and also provide a higher
proportion of total revenue than in 2006, versus turnkey (labour and
provisioning of raw materials) revenue. In the EMS industry there is generally
a lower margin associated with turnkey sales than labour-only sales and thus
this increase in consigned revenue is advantageous at this time.

    Annual General Meeting Information

    Adeptron's annual general and special meeting will be held at the
Company's corporate offices located at 96 Steelcase Road West Markham, Ontario
on Tuesday May 15, 2007 beginning at 1:30 p.m. EDT.

    2006 Annual & Q4 Financial Highlights

    Selected comparative financial information for the three-month and
twelve-month periods ended December 31, 2006 and 2005 is shown below. (All
numbers expressed in thousands except per share information and gross margin
percentages):

    
    Income Statement                   3-Month   3-Month  12-Month  12-Month
                                        Period    Period    Period    Period
                                       Dec. 31,  Dec. 31,  Dec. 31,  Dec. 31,
                                          2006      2005      2006      2005
                                      --------- --------- --------- ---------

    Revenue                            $10,852   $10,645   $43,832   $38,202
    Gross Margin                         1,970     1,663     7,733     5,274
    Gross Margin %                       18.2%     15.6%     17.6%     13.8%
    Net Income (Loss) per GAAP             307       153     1,614      (411)
    Net Income (Loss) per Share -
     basic & diluted                   $  0.01   $  0.00   $  0.05    ($0.01)
    Weighted average number of shares
     outstanding - diluted              38,192    34,613    35,213    34,613
    EBITDA(*)                          $   889   $   488   $ 3,340   $ 1,008


    Adeptron's 2006 audited financial statements and MD&A will be available on
March 15, 2007 on Adeptron's web site at www.adeptron.com and www.sedar.com.

    EBITDA(*) reconciliations, as reported above, to GAAP Net Income/(Loss) for
the three-month and twelve-month periods ended December 31, 2006 and 2005 are
shown below. (All numbers expressed in thousands):

                                       3-Month   3-Month  12-Month  12-Month
                                        Period    Period    Period    Period
                                       Dec. 31,  Dec. 31,  Dec. 31,  Dec. 31,
                                          2006      2005      2006      2005
                                      --------- --------- --------- ---------

    Net income/(loss) per GAAP         $   307   $   153   $ 1,614     ($411)
    Add/(Deduct):
    Interest on subordinated notes           0        68       302       403
    Interest on long-term debt             211         0       235         0
    Interest on bank operating loan         71       102       405       398
    Depreciation and amortization          163       140       604       540
    Stock-based compensation               137        25       180        78
    EBITDA(*)                          $   889   $   488   $ 3,340   $ 1,008

    (*) - EBITDA represents Earnings before Interest, Taxes, Depreciation,
          Amortization and Stock-based compensation.
    

    EBITDA(*) is not a recognized measure under Canadian generally accepted
accounting principles. However, management believes that EBITDA(*) is a useful
supplemental measure to net income (loss), as it provides investors with an
indication of cash earnings prior to debt service, capital expenditure, income
tax and other non-cash items. Readers should be cautioned, however, that
EBITDA(*) should not be construed as an alternative to net income (loss)
determined in accordance with generally accepted accounting principles as an
indicator of the Company's performance or to cash flows from operating,
investing and financing activities as a measure of liquidity and cash flows.
The Company's method of calculating EBITDA(*) may differ from the methods by
which other companies calculate EBITDA(*) and, accordingly, the EBITDA(*) used 
herein may not be comparable to measures used by other companies.

    About Adeptron:

    Adeptron's business is Integrating Ideas with Solutions(TM) within the
technology and electronics industries, to enhance our customers' competitive
advantage. Adeptron delivers global product solutions and support for the
complete product life cycle, including design, prototyping, supply chain
management, manufacturing, assembly, testing, product assurance, distribution
and after-sales service solutions. Adeptron's facilities are ISO 9001:2000
registered.
    Adeptron is a public company whose common shares are listed for trading
on The Toronto Stock Exchange under the symbol: "ATQ". The Company has
approximately 35.8 million common shares outstanding. Visit Adeptron at:
www.adeptron.com or www.investorfile.com.

    THIS NEWS RELEASE MAY CONTAIN FORWARD-LOOKING INFORMATION. ACTUAL FUTURE
RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED. THE RISKS,
UNCERTAINTIES AND OTHER FACTORS, BOTH KNOWN AND UNKNOWN, THAT COULD INFLUENCE
ACTUAL RESULTS MAY BE SUBSTANTIAL AND INCLUDE THOSE DESCRIBED IN DOCUMENTS
FILED WITH REGULATORY AUTHORITIES, SUCH AS THE COMPANY'S MOST RECENTLY FILED
ANNUAL AND QUARTERLY REPORTS AND ANNUAL INFORMATION FORM. ACCORDINGLY, NO
ASSURANCES CAN BE GIVEN THAT ANY OF THE EVENTS ANTICIPATED BY THE
FORWARD-LOOKING STATEMENTS WILL TRANSPIRE OR OCCUR, OR IF ANY OF THEM DO SO,
WHAT BENEFITS THE COMPANY WILL DERIVE THEREFROM.

    %SEDAR: 00012076E




For further information:

For further information: Adeptron Company Contact: F. Michael Marti,
President & Chief Executive Officer, Tel: (416) 705-6534,
fmmarti@adeptron.com; Adeptron Investor Relations: Gerry Wimmer,
INVESTORFILE.com, Tel: (416) 360-8895, Toll Free: 1-888-894-8222,
gwimmer@investorfile.com

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ADEPTRON TECHNOLOGIES CORPORATION

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