LOREX announces fiscal 2007 financial results



    TORONTO, Dec. 5 /CNW/ - LOREX Technology Inc. ("LOREX") (TSX: LOX)
announces unaudited results for the three and twelve months ending
September 30, 2007.
    Highlights of the three and twelve month operating results are as
follows:

    
    -------------------------------------------------------------------------
                               Three months ended      Twelve months ended
                                   September 30            September 30
                              -----------------------------------------------
                                   2007        2006        2007        2006
                                (US$,000)   (US$,000)   (US$,000)   (US$,000)
    -------------------------------------------------------------------------
    Revenue                       12,151       8,102      45,146      44,737
    -------------------------------------------------------------------------
    Earnings (loss) before
     interest, taxes,
     amortization(*)                  12      (1,686)       (468)     (1,882)
    -------------------------------------------------------------------------
    Net loss                        (574)     (2,254)     (2,140)     (4,835)
    -------------------------------------------------------------------------
    Net loss per common
     share (basic)                ($0.02)     ($0.08)     ($0.08)     ($0.18)
    -------------------------------------------------------------------------
    Weighted average number
     of shares outstanding    26,954,083  26,742,104  26,954,083  26,768,946
    -------------------------------------------------------------------------
    (*) It is important to note that EBITDA is not a measure of performance
        under Canadian GAAP. EBITDA should not be considered in isolation or
        as a substitute for Net Earnings prepared in accordance with Canadian
        GAAP nor as a measure of operating performance or profitability
    

    The Company's fourth quarter revenues of $12.2 million increased by 50%,
from $8.1 million, for the same period of the prior year. Revenue of $45.1
million for the twelve months was slightly higher than the $44.7 million
realized in the prior year.
    The Company's fourth quarter sales volume increase of 50% was achieved
despite the loss of a major account in 2006 that represented approximately
$10.0 million of that year's revenue. The growth comes from expansion of the
retail customer base in the United States, as the Company's sales force
secured increased shelf presence. LOREX product can now be purchased through
security distribution channels as well through our newest business partners,
including Toys 'R' Us, Office Max, Radio Shack, Best Buy, and others.
    The Company's net loss of approximately $574,000 in the fourth quarter
included an approximate $1.6 million additional write down in the value of
inventory. It is the opinion of Management that its current balance of slow
moving inventory of $2.2 million should be sold in fiscal 2008.
    LOREX and Digimerge continue to expand overseas and recently developed
distribution relationships in the Middle East. Digimerge in this last quarter
added a full compliment of IP cameras to its product assortment. This is a new
product grouping for Digimerge, and the Company believes that this innovative
selection offers substantial opportunity. This product category attracts the
sophisticated buyer within the IT business segment.
    The Company expects earnings and continuing revenue growth in the first
quarter of 2008. Our Product Development Team is continuously striving to
introduce innovative product and our Logistics Group has streamlined our
supply chain management.
    Management confirms that all lending covenants are in compliance as at
the end of fiscal 2007 and the Company's lenders are in concurrence with the
Company's business plan. We believe the Company's borrowing arrangements
support LOREX's expected sales growth initiatives.

    Q4 '07 CONFERENCE CALL

    LOREX will be holding a conference call for investors and analysts to
discuss its financial results at 4:00 PM ET on Thursday, December 6, 2007.

    Please dial 1-800-590-1508 to access the call.

    For those unable to participate in the conference call at the scheduled
time, a replay of the conference call will be available beginning on Thursday,
December 6, 2007 at 6:00 PM until Thursday, December 13, 2007 at 11:59 PM ET:

    
    Replay Access No.:    416-640-1917
    Passcode:             21255987 followed by the number sign.

    Replay Access No.:    1-877-289-8525
    Passcode:             21255987 followed by the number sign.
    

    About LOREX Technology Inc.:

    LOREX Technology Inc. (TSX: LOX) global brands empower consumers and
professionals with leading-edge security video solutions delivering advanced
technology and innovative performance.

    The TSX has not reviewed and does not accept responsibility for the
    adequacy or accuracy of this release.

    Certain information included in this news release contains statements
that are forward-looking, such as statements relating to anticipated future
revenues of the Company and the success of product offerings. Such
forward-looking information involves important risks and uncertainties that
could significantly affect anticipated results in the future, and,
accordingly, such results may differ materially from those expressed in any
forward-looking statements made by or on behalf of the Company.


    
    LOREX TECHNOLOGY INC.

    Interim Consolidated Financial Statements

    For the Fourth Quarter Ended September 30, 2007

    (these consolidated financial statements have not been
    reviewed by an independent firm of chartered accountants)


    LOREX Technology Inc.
    300 Alden Road
    Markham, Ontario L3R 4C1

    website:  www.lorextechnology.com

    Tel: (905) 946-8589
    Fax: (905) 947-0138

    Stock Symbol: TSX - LOX


    LOREX TECHNOLOGY INC.
    CONSOLIDATED BALANCE SHEETS
    (in United States dollars - unaudited)
    -------------------------------------------------------------------------

                                                  September 30  September 30
                                                       2007          2006
    Assets

    Current assets:
    Cash and cash equivalents                      $   420,212   $   874,095
    Restricted cash                                          -       400,000
    Accounts receivable                              7,851,180     5,170,950
    Inventory                                       11,689,525    13,546,788
    Prepaid expenses and deposits                      759,990       609,324
    Future income taxes                                 62,380        49,972
    -------------------------------------------------------------------------
                                                    20,783,287    20,651,129

    Capital assets                                     704,656     1,122,626
    Intangible assets                                  147,320       230,134
    Future income taxes                                170,725       201,398
    Goodwill                                           761,336       682,813
    -------------------------------------------------------------------------
                                                   $22,567,324   $22,888,100
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity

    Current liabilities:
    Bank indebtedness - current portion            $ 9,200,267   $ 7,062,773
    Accounts payable and accrued liabilities         6,657,755     8,795,265
    -------------------------------------------------------------------------
                                                    15,858,022    15,858,038

    Future income taxes                                 72,231        30,828
    Bank indebtedness - long term portion            1,111,100             -

    Shareholders' Equity

    Capital stock                                    9,746,310     9,746,310
    Contributed surplus                                912,165       326,217
    Accumulated other comprehensive income           1,498,271     1,417,714
    Deficit                                         (6,630,775)   (4,491,007)
    -------------------------------------------------------------------------
                                                     5,525,971     6,999,234

    -------------------------------------------------------------------------
                                                   $22,567,324   $22,888,100
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    LOREX TECHNOLOGY INC.
    CONSOLIDATED STATEMENTS OF LOSS AND OTHER COMPREHENSIVE INCOME
    (in United States dollars - unaudited)
    -------------------------------------------------------------------------

                               3 Months Ended           12 Months Ended
                                September 30              September 30
                              2007         2006         2007         2006
                          ------------ ------------ ------------ ------------
    Revenue               $12,151,096   $8,101,732   45,145,723  $44,736,658

    Cost of sales         $ 9,297,008    5,218,793   31,831,196   30,035,307
                          ------------ ------------ ------------ ------------

    Gross profit            2,854,088    2,882,939   13,314,527   14,701,351


    Expenses:
    Marketing and
     selling                1,884,801    3,082,879    9,707,020   11,238,484
    Administration            878,344      918,840    3,423,730    3,184,707
    Research and
     development              218,234      295,471      901,566    1,286,760
    Interest                  349,536      131,326      918,557      453,675
    Amortization              168,823      179,288      685,807      771,114
    Loss (gain) on
     foreign exchange        (139,084)      71,102      (35,542)     128,051
    Restructuring costs
     (recovery)                     -      200,999     (214,372)     745,000
                          ------------ ------------ ------------ ------------
                            3,360,654    4,879,905   15,386,766   17,807,791

    Loss from continuing
     operations before
     income taxes            (506,566)  (1,996,966)  (2,072,239)  (3,106,440)

    Future income taxes        67,529       77,603       67,529    1,139,812
                          ------------ ------------ ------------ ------------

    Net loss from
     continuing operations   (574,095)  (2,074,569)  (2,139,768)  (4,246,252)

    Discontinued
     operations (net of
     tax)                   $       -    $(179,216)          -    $(588,773)
                          ------------ ------------ ------------ ------------

    Net loss                $(574,095) $(2,253,785) (2,139,768) $(4,835,025)

    Other comprehensive
     income
    Unrealized gains on
     foreign currency
     translation of
     self sustaining
     operations               $72,535      $87,827      80,557       $87,107
                          ------------ ------------ ------------ ------------

    Total comprehensive
     loss                   $(501,560) $(2,165,958) (2,059,211)  $(4,747,918)
                          ------------ ------------ ------------ ------------
    Basic loss per
     common share              $(0.02)      $(0.08)     $(0.08)       $(0.18)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Diluted loss per
     common share              $(0.02)      $(0.08)     $(0.08)       $(0.18)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    Number of common
     shares
    Weighted average
     basic                 26,954,083   26,742,104  26,954,083    26,768,946
    Weighted average
     diluted               26,954,083   26,742,104  27,310,683    26,768,946
    Total outstanding      26,954,083   26,954,083  26,954,083    26,954,083



    LOREX TECHNOLOGY INC.
    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
    (in United States dollars - unaudited)
    -------------------------------------------------------------------------

                                         Accumulated
                                               other
                                             compre-    Retained
                      Common Contributed     hensive    earnings
                      shares     surplus      income    (deficit)      Total
    -------------------------------------------------------------------------
                           $           $           $           $           $
    Balance as at
     October 1,
     2005          9,608,363     143,117   1,330,607     344,018  11,426,105
    -------------------------------------------------------------------------
    Loss for the
     year                  -           -           -  (4,835,025) (4,835,025)
    Unrealized
     gains on
     foreign
     currency
     translation of
     self
     sustaining
     operations            -           -      87,107           -      87,107
    -------------------------------------------------------------------------
    Comprehensive
     income (loss)         -           -      87,107  (4,835,025) (4,747,918)
    -------------------------------------------------------------------------
    Stock issued
     on exercise
     of stock
     options or
     pursuant to
     stock purchase
     plan            137,947           -           -           -     137,947
    Options
     granted/
     forfeited             -     183,100           -           -     183,100

    -------------------------------------------------------------------------
    Balance as at
     September 30,
     2006          9,746,310     326,217   1,417,714  (4,491,007)  6,999,234
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (Unaudited)

    Balance as at
     October 1,
     2006          9,746,310     326,217   1,417,714  (4,491,007)  6,999,234
    -------------------------------------------------------------------------

    Loss for the
     year                  -           -           -  (2,139,768) (2,139,768)
    Unrealized
     gains on
     foreign
     currency
     translation
     of self
     sustaining
     operations            -           -      80,557           -      80,557
    -------------------------------------------------------------------------
    Comprehensive
     income (loss)         -           -      80,557  (2,139,768) (2,059,211)
    -------------------------------------------------------------------------

    Options granted/
     modified/
     forfeited             -     480,381           -           -     480,381
    Warrants issued        -     105,567           -           -     105,567

    -------------------------------------------------------------------------
    Balance as at
     September 30,
     2007          9,746,310     912,165   1,498,271  (6,630,775)  5,525,971
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    LOREX TECHNOLOGY INC.
    CONSOLIDATED STATEMENTS OF CASH FLOW
    (in United States dollars - unaudited)
    -------------------------------------------------------------------------

                               3 Months Ended           12 Months Ended
                                September 30              September 30
                              2007         2006         2007         2006
                          ------------ ------------ ------------ ------------
    Cash provided by
     (used in):

    Operating activities
    Net loss                $(574,095) $(2,074,568) $(2,139,768) $(4,246,252)
    Items not involving
     cash:
    Write-off of capital
     assets                         -       31,092            -       31,092
    Amortization of
     capital assets and
     intangible assets         61,718      178,797      685,202      769,934
    Stock option expense
     and stock based
     compensation              76,605       93,162      410,526      197,278
    Future income taxes        67,662      196,677       69,084    1,188,037

    Change in non-cash
     operating working
     capital:
    Accounts receivable      (774,679)   1,518,747   (2,552,896)   2,699,186
    Inventory                (792,319)     183,007    1,967,934    1,803,468
    Prepaid expenses and
     deposits                 217,436      304,384     (128,657)      (2,664)
    Accounts payable and
     accrued liabilities     (275,585)  (1,698,652)  (2,292,254)    (745,485)
                          ------------ ------------ ------------ ------------
                           (1,993,257)  (1,267,354)  (3,980,829)   1,694,594
    Cash flows applied
     to discontinued
     operations                     -     (110,104)           -     (337,542)
                          ------------ ------------ ------------ ------------
                           (1,993,257)  (1,377,458)  (3,980,829)   1,357,052

    Financing activities:
    Issue of share
     capital on exercise
     of stock options               -      (24,586)           -       89,680
    Increase (decrease)
     in bank
     indebtedness           1,546,595    1,612,613    3,650,180     (852,811)
                          ------------ ------------ ------------ ------------
                            1,546,595    1,588,027    3,650,180     (763,131)

    Investing activities:
    Purchase (disposition)
     of capital assets        105,789     (306,002)     (98,320)    (691,047)

    Effect of foreign
     currency translation
     on cash balances        (380,261)      98,567      (24,914)      (8,552)
                          ------------ ------------ ------------ ------------

    Increase (decrease)
     in cash and cash
     equivalents             (721,134)       3,134     (453,883)    (105,678)

    Cash and cash
     equivalents,
     beginning of period    1,141,346      870,961      874,095      979,773
                          ------------ ------------ ------------ ------------

    Cash and cash
     equivalents, end of
     period                 $ 420,212  $   874,095  $   420,212  $   874,095
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    Supplemental cash
     flow information:
    Interest paid           $ 395,735  $   131,326  $   918,557  $   453,675
    Income taxes paid       $       -  $         -  $   149,890  $    13,884
    




For further information:

For further information: Jordan Schwartz, Chief Financial Officer, LOREX
Technology Inc., Phone: (905) 946-8589 ext 168, jordan.schwartz@lorexcorp.com,
www.lorextechnology.com

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