Lyrtech announces 2007 third quarter results



    QUEBEC CITY, Nov. 13 /CNW/ - Lyrtech Inc. ("Lyrtech" or the "Company")
(TSX-V: LYT), a worldwide leader in digital signal processing ("DSP")
technologies, today announced its financial results for the third quarter and
nine-month period ended September 30, 2007. The Company's financial statements
and Management's Discussion and Analysis are available at www.sedar.com and at
www.lyrtech.com.

    
    Third Quarter Operating Highlights

    -  Record backlog of contracts totalling $6.4 million as at September 30,
       2007

    -  Revenues amounted to $5.5 million, up from $4.7 million in the
       previous quarter

    -  Year-to-date revenues up by 26% to $14.6 million
    

    Financial Review

    Revenues for the third quarter ended September 30, 2007 decreased by 7%
to $5.5 million compared to $5.9 million in the third quarter of 2006. This
decrease is mainly related to lower sales generated by the manufacturing
division. Backlog at the end of the quarter stood at $6.4 million.
    Gross profits for the third quarter of 2007 amounted to $1.57 million or
29% of sales, compared to $1.74 million, or 29% of sales in the third quarter
of the previous year.
    Research and development costs, net of tax credits, stand at a cost of
$0.58 million in the third quarter of 2007, while they amounted to a cost of
$0.24 million in the corresponding quarter of the previous year. The 2006
results reflected the reporting of R&D tax credits related to past periods.
The Company continuously invests in product development to maintain the
competitive edge of its technologies and products.
    Net loss was $848,205 or $0.003 per basic and diluted share for the
quarter ended September 30, 2007, compared to a net loss of $299,893 or
$0.003 per basic and diluted share for the same quarter in 2006. The variance
between the two fiscal years is mainly due to an increase of $0.34 million in
research and development expenditures and of $0.14 million in foreign exchange
losses.
    Revenues for the first nine months of 2007 increased by 26% to
$14.6 million compared to $11.7 million for the first nine months of 2006.
    Gross profits for the nine months ended September 30, 2007 amounted to
$4.6 million or 32% of sales, compared to $3.6 million, or 31% of sales for
the first nine months of the previous year.
    Research and development costs, net of tax credits, amounted to
$1.85 million in the first three quarters of 2007, compared to $0.3 million in
the corresponding nine months of the previous year. The results of the
previous year included the recovery of scientific research and experimental
development (SR & ED) tax credits for previous fiscal years.
    Lyrtech incurred a net loss of $2,738,178 or $0.013 per basic and diluted
share in the first nine months ended September 30, 2007, as opposed to a net
loss of $1,322,733 or $0.013 per basic and diluted share in the first nine
months of the previous year. The variance between the two fiscal years is
mainly due to an increase of $1.6 million in research and development
expenditures and of $0.4 million in foreign exchange losses.
    As at September 30, 2007, cash and cash equivalents were at positive
$453,737, compared to $72,842 as at December 31, 2006.
    Working capital stood at $2.7 million as at September 30 2007, compared
to negative $3.2 million as at December 31, 2006.
    The financial results of the third quarter have caused the Company to be
in breach of a ratio covenant in its banking facility. Lyrtech continues to
work closely with the lender towards a resolution of this matter and the
lender continues to make credit facilities available to the company.
    The basic weighted average number of shares outstanding totaled
246,737,924 for the quarter ended September 30, 2007 while it totaled
118,581,484 for the third quarter of the previous fiscal year.

    Subsequent event

    On November 8, 2007, Lyrtech Inc. announced it has been awarded a
contract for up to $8 million over 12 months to supply circuit processors and
engineering services to a customer in the global security industry. Under
terms of the agreement, Lyrtech will initially receive $4 million for the
manufacturing of units and provision of warranty services, with the potential
for an additional $4 million to be received if all options are exercised. It
is expected that up to twenty jobs will be created to fulfill this contract
and revenue recognition will commence in January 2008.

    Conference Call Information

    Lyrtech management will host a conference call on November 14, 2007, at
10:00 am (EDT) to discuss the Company's third quarter financial results. To
access the conference call by telephone, dial 1-866-249-5221. The conference
call will be archived for 7 days.

    About Lyrtech Inc.

    Lyrtech is a worldwide leader in digital signal processing ("DSP")
technologies with state of the art EMS facilities. The Company develops and
manufactures advanced digital signal processing solutions for companies
worldwide, a vital technology to network and wireless communications, audio
and video processing, as well as electronic systems in all fields of
technology. Lyrtech offers a full range of DSP-FPGA development platforms, as
well as design, prototyping, and manufacturing of electronic products through
its Innovator division.
    Lyrtech works in partnership with industry leaders such as Texas
Instruments, The MathWorks, and Xilinx. Lyrtech's customers include many
prestigious names of the consumer electronics, telecommunications, aerospace,
and defense fields such as BAE Systems, Defence Research and Development
Canada (DRDC), the European Aerospace Defence and Space Company (EADS),
Fujitsu, Harris, ITT, Motorola, Neural Audio, NTT DoCoMo, and Samsung-Thales.
For more information please visit www.lyrtech.com.

    FORWARD LOOKING STATEMENTS

    Certain statements made in this press release regarding Lyrtech's future
operations, expected financial position, future revenues, projected costs,
prospects, plans and objectives are forward-looking statements. These
forward-looking statements, by their nature, necessarily involve risks and
uncertainties that could cause actual results to differ materially from those
contemplated by the forward-looking statements. Lyrtech considers the
assumptions on which these forward-looking statements are based to be
reasonable at the time they were prepared, but cautions that these assumptions
regarding future events, many of which are beyond Lyrtech's control, may
ultimately prove to be incorrect. Factors and risks which could cause actual
results to differ materially from current expectations are discussed in
Lyrtech's annual report for the year ended December 31, 2006. Lyrtech
disclaims any intention or obligation to update or revise any forward-looking
statements. For additional information on risks and uncertainties relating to
these forward-looking statements, investors should consult Lyrtech's ongoing
filings, including its most recent annual report, found on SEDAR at
www.sedar.com

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

    %SEDAR: 00014715EF




For further information:

For further information: Miguel Caron, President and Chief Executive
Officer, Lyrtech Inc., (418) 877-4644, miguel.caron@lyrtech.com; Alain Landry,
Chief Financial Officer, Lyrtech Inc., (418) 877-4644,
alain.landry@lyrtech.com; Investor Relations: Matthieu Cardinal, The Equicom
Group, (514) 844-6054, mcardinal@equicomgroup.com

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LYRTECH INC.

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