This news release contains forward-looking statements. Reference should
be made to "Forward-looking Statements" at the end of this news release.
TORONTO, Dec. 10 /CNW/ - Atlantis Systems Corp. (TSX: AIQ), a globally
recognized training integrator in the military, commercial aviation and energy
markets, today provided its business outlook for fiscal 2008 and an update on
new contract opportunities and strategic initiatives in each of its key target
markets: military, power generation and commercial aviation.
For fiscal 2008, Atlantis expects to report revenue of approximately
$35 million and to achieve profitability for the full year.
The Company's guidance takes into account the previously announced cost
reduction plan, which is expected to reduce overall operating expenses by 15%
for annual savings of approximately $4.0 million.
The Company's fiscal 2008 guidance also takes into account the portion of
its backlog that is expected to be recognized next year. As of September 30,
2007, Atlantis' backlog was $41.4 million, which included $26.1 million from
the Contracted Flying Training and Support (CFTS) program (of which
$18.4 million related to support services for the 20-year support period) and
$9.3 million from Atlantis Systems Eduplus (ASE) contracts.
The Company also reiterated its revenue guidance for the fourth quarter
of fiscal 2007 of $5.0 to $7.0 million.
The Company continues its discussions with its banker to remedy the
previously reported covenant breaches on its $2.8 million term loan, and is
investigating alternate sources of financing should the need arise.
Business Pipeline Update
Atlantis is pursuing significant new business opportunities in each of
its key target markets. In recent quarters, the Company has implemented a
customer relationship management system and analyzed and prioritized sales
opportunities. As a result, the Company is devoting more resources to
sole-sourced opportunities and those which leverage existing Atlantis
technology embedded with current customers.
The Company estimates that its pipeline of qualified opportunities is
$120 to $125 million across all its business units. This includes known
procurements which are expected to be awarded in 2008 and for which Atlantis
is either an incumbent supplier, holds the intellectual property required for
delivery of the service, or has a unique competitive advantage. In several
cases, Atlantis is currently in contract negotiations.
"We continue to see a strong pipeline in each of our target markets, and
are pursuing our priority list aggressively to build the backlog for 2008 and
future years," said Andrew Day, President and CEO of Atlantis Systems Corp.
"The resurgence in Canadian military training spending and other market trends
are working in our favour, and we believe that our intellectual property,
innovative products and solid reputation position us to capitalize on the
growing demand for mission-critical training systems."
Following is a summary of several of the key opportunities and
initiatives currently being pursued:
- In Q2 2008, Atlantis expects to enter into contract negotiations with
CAE for Canadian Forces Operational Training Systems Provider (OTSP)
contracts. As previously announced in the Company's third quarter
earnings release, Atlantis is a member of the CAE-led pan-Canadian
team for the OTSP contracts initially targeted to the C-130J and CH-
- The Company is in negotiations to secure a multi-million dollar
follow-on contract to provide the first of a series of upgrades to
the CFTS program. CFTS is approaching full operational capability and
will be used to provide initial flight training for all Canadian
- Atlantis has been advised by select military customers of their
intention to purchase additional implementations of the Integrated
Maintenance Training System (IMTS). The IMTS provides high-fidelity
simulation of attack fighter jet operating systems to train
maintenance technicians on operational and troubleshooting
- Atlantis has signed a teaming agreement with a strategic partner to
bid on the Air Force Integrated Information Learning Environment
(AFIILE) for the Canadian Forces. Work on AFIILE would be comprised
of online courseware and curriculum design consulting services to be
provided by ASE. If awarded, the AFIILE work is expected to begin in
late Q2 2008. ASE is uniquely positioned to win this work because of
its highly relevant experience on the existing Maritime Helicopter
Program for the Canadian Forces.
- ASE is delivering flight training online courseware systems for the
Canadian Forces Maritime Helicopter Program, and anticipates a
multi-million dollar follow-on contract to develop additional pilot
procedures training online courseware.
- Atlantis has quoted three separate new contracts to provide system
upgrades to existing power generation training systems.
- Atlantis is developing the IMTS to be a simulation-based e-training
platform to address the emerging high-volume training needs of the
power generation industry as well as the anticipated mass retirement
of skilled workers. The Company is currently negotiating with key
stakeholders in the industry to develop a new training system that
will train more people in less time while continuously improving the
industry's high safety standards.
- In the past year, Atlantis added its second power generation
customer. Atlantis continues to provide simulation training
engineering services by way of an embedded engineering team. The
Company anticipates that the contract will be renewed in Q2 2008.
- As previously announced, Atlantis has recently signed a Memorandum of
Understanding with a large flight training school to put its
Helicopter Virtual Task Trainer (HVTT) through commercial field
trails. The trials are expected to commence in the first half of 2008
and are expected to last for one month. Depending on the outcome of
the trials, both parties intend to enter into an agreement to use the
HVTT in select helicopter training markets.
About Atlantis Systems Corp.
Headquartered near Toronto, Canada, Atlantis is a globally recognized
training integrator for customers in the military, commercial aviation sectors
and energy markets. Atlantis combines desktop and full-flight simulation,
knowledge management, learning management systems, flight training devices and
multimedia e-learning to provide integrated flight training and aircraft
maintenance training to a global list of customers. For more than 29 years,
Atlantis has drawn on its extensive engineering background and proprietary
technology to offer cost-efficient, state of the art alternatives to real-life
conditions and situations. Atlantis is registered under a number of quality
management programs including ISO 9001:2000, AS 9100:2004, CSA-Z299.1-1985,
Boeing BQMS D6-82479 and Rockwell Collins RC-9000, among others. To learn
more, please visit the Company's web site at www.atlantissi.com.
The statements in this release are considered "forward-looking". These
forward-looking statements are based on current expectations and various
estimates, factors and assumptions and involve known and unknown risks,
uncertainties and other factors. The material factors and assumptions that
were applied in making the forward-looking statements in this release include
but are not limited to assumptions regarding: our ability to win new projects,
to successfully complete ongoing negotiations with new and existing customers
for new work and to accurately forecast the timing of such wins; our ability
in the current markets to pursue financings on reasonable terms appropriate
for a company of our size and status; our ability to protect and exploit our
intellectual property; our ability to meet contractual obligations under the
CFTS program or any other major program; the proportion of in-house and
subcontractor work on the CFTS program and the ability of subcontractors to
meet deadlines on this program; our ability to complete new and existing
projects on time and on budget; the performance of subcontractors generally;
the market for our HVTT product; the stability and growth of military markets
and expenditures worldwide and expected developments in the nuclear and
aerospace industry; and, the stability and growth of markets for
simulation-based training products;
Material factors that could cause Atlantis' actual results to differ
materially from the forward-looking statements in this release include risks
and uncertainties relating to: our ability to convert sales, negotiations and
marketing pursuits into actual awards and order backlog; our ability to source
capital to fund our operations on reasonable terms given current markets; our
ability to repay bank debt on demand; the availability of skilled personnel;
our ability to operate as a going concern; our ability to execute the cost
reduction program; reliance on subcontractors; ownership of our technology and
intellectual property; continued reliance on key customers for existing and
new work; the level of military expenditures and developments in the nuclear
and aerospace industries; the volatility of foreign exchange rates; and, the
Canadian and U.S. economies. Atlantis cannot provide any assurance that the
predictions of forward-looking statements will materialize. Atlantis assumes
no obligation to update or revise any forward-looking statement, whether as a
result of new information, future events or any other reason, except as
required by applicable securities laws and regulations. Additional information
regarding risks and uncertainties that could affect Atlantis' business is
contained in the Business Risk Factors section of Atlantis's Annual MD&A and
the Description of the Business - Risk Factors section in Atlantis' Annual
Information Form, both of which are available on SEDAR at www.sedar.com.
For further information:
For further information: George Chiarucci, Chief Financial Officer, Tel:
(905) 792-1981, Email: email@example.com; Craig Armitage, The Equicom
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