LOREX announces year end results

TORONTO, Jan. 28 /CNW/ - LOREX Technology Inc. ("LOREX" or the "Company") (NEX: LOX.H) announces results* for the three and twelve months ended September 30, 2009.

Highlights of the three and twelve month operating results are as follows:

    
    (Thousands of US $, unless otherwise noted)
    -------------------------------------------------------------------------
                                Three months ended      Twelve months ended
                                   September 30            September 30
                             ------------------------------------------------
                                 2009        2008        2009        2008
    -------------------------------------------------------------------------
    Revenue                       11,798      11,096      46,810      47,693
    -------------------------------------------------------------------------
    Earnings (loss) before
     interest, taxes,
     amortization**              710        (112)      1,720        (143)
    -------------------------------------------------------------------------
    Profit (loss) before
     income taxes                    205        (405)        406      (1,674)
    -------------------------------------------------------------------------
    Profit (loss)                    440        (431)        580      (1,703)
    -------------------------------------------------------------------------
    Earnings (loss) per
     common share, basic           $0.02      ($0.02)      $0.02      ($0.06)
    -------------------------------------------------------------------------
    Earnings (loss) per
     common share, diluted         $0.01      ($0.02)      $0.02      ($0.06)
    -------------------------------------------------------------------------
    Weighted average number
     of shares - basic        26,954,083  26,954,083  26,954,083  26,954,083
    -------------------------------------------------------------------------
    Weighted average number
     of shares - diluted      31,030,170  26,954,083  27,981,480  26,954,083
    -------------------------------------------------------------------------
    *  Audited financial information is available at www.sedar.com.

    ** EBITDA is not a measure of performance under Canadian GAAP. EBITDA
         should not be considered in isolation or as a substitute for Net
         Earnings nor as a measure of operating performance or profitability.
    

Commenting on the results for the three and twelve months ended September 30th, Chairman and CEO Reuben Klein stated, "We showed continued strength in the fourth quarter of 2009 with a 6% year over year revenue improvement. While for the year we fell 2% short of last year's full year revenue totals, the second half of the year was an improvement over the same period in 2008. The year over year revenue decrease reflects a curtailment of unprofitable International activities as we focused our efforts on the North American market."

"The Company in the fourth quarter experienced a significant turnaround from the same prior year period. Following a loss in the first quarter of 2009, the Company made great strides over the course of the year with growing profitability each quarter totaling full year earnings compared to losses in 2008."

"Our current projections indicate growth and increased customer diversity as we strive to take advantage of market opportunities by offering products featuring increasing appeal to consumers."

"LOREX is progressing with new product introductions that are easier to connect to the internet, and that can be used on a broad range of mobile phone platforms. Our line-up of cameras that transmit video with a digital wireless signal is expanding, as is our line-up of advanced internet protocol cameras which integrate seamlessly on information technology ("IT") platforms commonly found in businesses and homes. As stated in a prior news release, this past month we received engineering and design innovation awards at the 2010 International Consumer Electronics Show for each of our Link multi-platform digital video recorder (DVR) and LW2700 Multifunctional Digital Wireless Surveillance System. The LW2700 offers ease of set-up, use and is a competitively priced full recording solution with convenient SD card memory, already available in our retail channel. The high powered Link DVR offers an intuitive touch panel, easy connectibility to the internet and can be used on most existing mobile phone browsers including Blackberry(TM), iPhone(TM) and Windows Mobile(TM) smart-phones, and will be introduced through major national retailers and e-tailers in a variety of configurations beginning in the second quarter. We also successfully introduced in late 2009 a highly economical, fully featured DVR platform called the ECO, which we plan to offer in additional configurations through our retail channel."

"This past year and the subsequent period to date has had many highlights, as LOREX raised capital, changed the CEO, changed its lender, and returned to profitability, all while the North American economy continued to impact consumer buying patterns. While the market is experiencing growing competitive pressure we believe that LOREX is well positioned to take advantage of opportunities in 2010."

The fourth quarter results include an income tax recovery of approximately $235,000 which arose primarily as a result of future income tax benefits including non capital loss carryforwards and other benefits were recognized. As a result of the company's return to profitability, when Management assessed the valuation allowances relating to the future income tax assets they concluded that there was a likelihood that the tax benefits would be realized in the future and therefore reduced prior year's valuation allowances.

About LOREX Technology Inc.:

LOREX Technology Inc. ('LOREX') (NEX:LOX.H) provides businesses and consumers with leading edge video surveillance security solutions and sells its products under the LOREX and Digimerge brands. The LOREX brand, which caters to both small business and consumer markets, is available in over 9,000 retail locations across North America and in the UK. The Digimerge division distributes its products through major distributors in both North America and Europe. Both brands concentrate on the sale of wired, wireless and IP security surveillance equipment including cameras, digital video recorders and all-in-one systems.

LOREX subsidiaries include; LOREX Canada Inc., Digimerge Technologies Inc., LOREX Corporation and Strategic Vista Corporation Limited, Hong Kong.

The NEX 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.
    CONSOLIDATED BALANCE SHEETS
    (Expressed in U.S. dollars - unaudited)
    -------------------------------------------------------------------------

                                               September 30     September 30
                                                   2009             2008
                                              --------------   --------------

    Assets

    Current assets:
    Cash                                      $     315,293    $     347,467
    Accounts receivable                           6,751,116        5,349,192
    Inventory                                     8,635,047        8,468,575
    Prepaid expenses and deposits                   823,485          865,259
    Future income taxes                              94,709           15,435
    -------------------------------------------------------------------------
                                                 16,619,650       15,045,928

    Capital assets                                  365,924          398,463
    Intangible assets                                 8,152           34,019
    Future income taxes                             436,456          253,265
    Goodwill                                        710,069          718,309
    -------------------------------------------------------------------------
                                              $  18,140,251    $  16,449,984
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity

    Current liabilities:
    Bank indebtedness                         $   6,162,184    $   6,895,675
    Accounts payable and accrued liabilities      6,028,536        5,375,340
    -------------------------------------------------------------------------
                                                 12,190,720       12,271,015

    Future income taxes                              10,709           47,924

    Shareholders' Equity

    Capital stock                                 9,746,310        9,746,310
    Preferred share subscriptions                 1,119,087                -
    Contributed surplus                           1,328,941        1,223,227
    Accumulated other comprehensive income        1,498,883        1,495,486
    Deficit                                      (7,754,399)      (8,333,978)
    -------------------------------------------------------------------------
                                                  5,938,822        4,131,045

    -------------------------------------------------------------------------

                                              $  18,140,251    $  16,449,984
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    LOREX TECHNOLOGY INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
    (Expressed in U.S. dollars - unaudited)
    -------------------------------------------------------------------------

                            3 Months Ended             12 Months Ended
                             September 30                September 30
                          2009          2008          2009          2008
                      ------------- ------------- ------------- -------------

    Revenue           $ 11,797,932  $ 11,095,908  $ 46,810,408  $ 47,692,698

    Cost of sales        7,933,729     7,331,641    31,235,958    32,417,657
                      ------------- ------------- ------------- -------------

    Gross profit         3,864,203     3,764,267    15,574,450    15,275,041

    Expenses:
    Marketing, selling
     and operations      1,963,651     2,441,709     9,351,222    10,326,865
    Administration       1,166,017       787,026     3,517,046     3,374,612
    Research and
     development           269,501       465,115       912,015     1,478,054
    Interest               447,683       181,941     1,036,365       919,724
    Amortization            57,102       110,848       277,957       611,069
    Loss (gain) on
     foreign exchange     (245,007)      182,793        73,794       238,402
                      ------------- ------------- ------------- -------------
                         3,658,947     4,169,432    15,168,399    16,948,726
                      ------------- ------------- ------------- -------------

    Profit (loss) for
     the period before
     income taxes          205,256      (405,165)      406,051    (1,673,685)

    Income taxes
     (recovery)           (234,528)       25,900      (173,528)       29,518

    Profit (loss) for
     the period            439,784      (431,065)      579,579    (1,703,203)

    Other comprehensive
     loss (note 2)         (21,910)      (10,256)        3,397        (2,785)
                      ------------- ------------- ------------- -------------
    Comprehensive
     income (loss)    $    417,874  $   (441,321) $    582,976  $ (1,705,988)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------
    Profit (loss) per
     common share -
     basic            $       0.02  $      (0.02) $       0.02  $      (0.06)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------
    Profit (loss) per
     common share -
     diluted          $       0.01  $      (0.02) $       0.02  $      (0.06)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    Number of common
     shares
    Weighted average
     basic              26,954,083    26,954,083    26,954,083    26,954,083
    Weighted average
     diluted            31,030,170    26,954,083    27,981,480    26,954,083
    Total outstanding   26,954,083    26,954,083    26,954,083    26,954,083



    LOREX TECHNOLOGY INC.
    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
    (Expressed in U.S. dollars - unaudited)
    -------------------------------------------------------------------------

                                         Class B      Preferred
                            Common     preferred          share  Contributed
                            shares        shares  subscriptions      surplus
    -------------------------------------------------------------------------
                                 $             $              $            $
    Three months ended
     September 30

    Balance, June 30,
     2008                9,641,415       104,895             -     1,172,944
    -------------------------------------------------------------------------

    Loss for the quarter         -             -             -             -
    Unrealized losses on
     foreign currency
     translation of
     self sustaining
     operations                  -             -             -             -
    -------------------------------------------------------------------------
    Comprehensive loss           -             -             -             -
    -------------------------------------------------------------------------

    Options granted/
     forfeited                   -             -             -        50,283
    -------------------------------------------------------------------------
    Balance,
     September 30, 2008  9,641,415       104,895             -     1,223,227
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Balance, June 30,
     2009                9,641,415       104,895             -     1,336,364
    -------------------------------------------------------------------------

    Loss for the quarter         -             -             -             -
    Unrealized losses on
     foreign currency
     translation of
     self sustaining
     operations                  -             -             -             -
    -------------------------------------------------------------------------
    Comprehensive loss           -             -             -             -
    -------------------------------------------------------------------------

    Options granted/
     forfeited                   -             -             -        (7,423)
    Receipts issued for
     preferred share
     subscriptions               -             -     1,119,087             -
    -------------------------------------------------------------------------
    Balance,
     September 30, 2009  9,641,415       104,895     1,119,087     1,328,941
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Twelve months ended
     September 30

    Balance,
     September 30, 2007  9,641,415       104,895             -       912,165
    -------------------------------------------------------------------------

    Loss for the year            -             -             -             -
    Unrealized losses on
     foreign currency
     translation of
     self sustaining
     operations                  -             -             -             -
    -------------------------------------------------------------------------
    Comprehensive loss           -             -             -             -
    -------------------------------------------------------------------------

    Options granted/
     forfeited                   -             -             -       311,062
    -------------------------------------------------------------------------
    Balance,
     September 30, 2008  9,641,415       104,895             -     1,223,227
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Profit for the year          -             -             -             -
    Unrealized losses on
     foreign currency
     translation of
     self sustaining
     operations                  -             -             -             -
    -------------------------------------------------------------------------
    Comprehensive income         -             -             -             -
    -------------------------------------------------------------------------

    Options granted/
     forfeited                   -             -             -       105,714
    Receipts issued for
     preferred share
     subscriptions               -             -     1,119,087             -
    -------------------------------------------------------------------------
    Balance,
     September 30, 2009  9,641,415       104,895     1,119,087     1,328,941
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                       Accumulated
                             other
                     comprehensive
                      income (loss)      Deficit         Total
    -----------------------------------------------------------
                                 $             $             $
    Three months ended
     September 30

    Balance, June 30,
     2008                1,505,741    (7,902,916)    4,522,079
    -----------------------------------------------------------

    Loss for the quarter         -      (431,062)     (431,062)
    Unrealized losses on
     foreign currency
     translation of
     self sustaining
     operations            (10,255)            -       (10,255)
    -----------------------------------------------------------
    Comprehensive loss     (10,255)     (431,062)     (441,317)
    -----------------------------------------------------------

    Options granted/
     forfeited                   -             -        50,283
    -----------------------------------------------------------
    Balance,
     September 30, 2008  1,495,486    (8,333,978)    4,131,045
    -----------------------------------------------------------
    -----------------------------------------------------------

    Balance, June 30,
     2009                1,520,793    (8,194,183)    4,409,284
    -----------------------------------------------------------

    Loss for the quarter         -       439,784       439,784
    Unrealized losses on
     foreign currency
     translation of
     self sustaining
     operations            (21,910)            -       (21,910)
    -----------------------------------------------------------
    Comprehensive loss     (21,910)      439,784       417,874
    -----------------------------------------------------------

    Options granted/
     forfeited                   -             -        (7,423)
    Receipts issued for
     preferred share
     subscriptions               -             -     1,119,087
    -----------------------------------------------------------
    Balance,
     September 30, 2009  1,498,883    (7,754,399)    5,938,822
    -----------------------------------------------------------
    -----------------------------------------------------------

    Twelve months ended
     September 30

    Balance,
     September 30, 2007  1,498,271    (6,630,775)    5,525,971
    -----------------------------------------------------------

    Loss for the year            -    (1,703,203)   (1,703,203)
    Unrealized losses on
     foreign currency
     translation of
     self sustaining
     operations             (2,785)            -        (2,785)
    -----------------------------------------------------------
    Comprehensive loss      (2,785)   (1,703,203)   (1,705,988)
    -----------------------------------------------------------

    Options granted/
     forfeited                   -             -       311,062
    -----------------------------------------------------------
    Balance,
     September 30, 2008  1,495,486    (8,333,978)    4,131,045
    -----------------------------------------------------------
    -----------------------------------------------------------

    Profit for the year          -       579,579       579,579
    Unrealized losses on
     foreign currency
     translation of
     self sustaining
     operations              3,397             -         3,397
    -----------------------------------------------------------
    Comprehensive income     3,397       579,579       582,976
    -----------------------------------------------------------

    Options granted/
     forfeited                   -             -       105,714
    Receipts issued for
     preferred share
     subscriptions               -             -     1,119,087
    -----------------------------------------------------------
    Balance,
     September 30, 2009  1,498,883    (7,754,399)    5,938,822
    -----------------------------------------------------------
    -----------------------------------------------------------



    LOREX TECHNOLOGY INC.
    CONSOLIDATED STATEMENTS OF CASH FLOW
    (Expressed in U.S. dollars - unaudited)
    -------------------------------------------------------------------------

                            3 Months Ended             12 Months Ended
                             September 30                September 30
                          2009          2008          2009          2008
                      ------------- ------------- ------------- -------------

    Cash provided by
     (used in):

    Operating activities
    Profit (loss) for
     the period       $    439,784  $   (431,065) $    579,579  $ (1,703,203)

    Items not
     involving cash:
    Amortization of
     capital and
     intangible assets      57,098       110,843       277,957       611,069
    Stock option
     expense and stock
     based compensation     (3,765)       49,129       112,928       305,881
    Future income taxes   (301,067)      (76,785)     (301,067)      (76,785)

    Change in non-cash
     operating working
     capital:
    Accounts
     receivable         (1,807,885)      219,170    (1,340,291)    2,476,973
    Inventory              318,134     1,684,129      (114,951)    3,169,394
    Prepaid expenses
     and deposits          644,378      (298,688)       39,244      (113,532)
    Accounts payable
     and accrued
     liabilities          (577,408)       15,453       673,016    (1,083,252)
                      ------------- ------------- ------------- -------------
                        (1,230,731)    1,272,186       (73,585)    3,586,545

    Financing
     activities:
    Increase
     (decrease) in
     bank indebtedness     364,350    (1,034,569)     (744,597)   (3,436,357)
    Preferred share
     subscriptions       1,016,432             -     1,016,432             -
                      ------------- ------------- ------------- -------------
                         1,380,782    (1,034,569)      271,835    (3,436,357)

    Investing
     activities:
    Purchase of
     capital assets       (154,869)      (63,237)     (229,162)     (220,750)
                      ------------- ------------- ------------- -------------
                          (154,869)      (63,237)     (229,162)     (220,750)

    Effect of
     foreign currency
     translation on
     cash balances             120       (44,885)       (1,262)       (2,183)
                      ------------- ------------- ------------- -------------

    Increase (decrease)
     in cash                (4,698)      129,495       (32,174)      (72,745)

    Cash, beginning
     of period             319,991       217,972       347,467       420,212
                      ------------- ------------- ------------- -------------
    Cash, end of
     period           $    315,293  $    347,467  $    315,293  $    347,467
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------
    Supplemental cash
     flow information:
    Interest paid     $    157,325  $    141,014  $    642,464  $    785,525
    Income taxes paid $     20,000  $     21,041  $    160,359  $     30,530
    

SOURCE LOREX Technology Inc.

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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LOREX Technology Inc.

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