Mitec Telecom announces fourth quarter and year-end results for fiscal 2008



    
    -   Quarterly revenue was $10.8 million, an increase of 10% over the
        previous quarter and 40% over the fourth quarter, 2007
    -   Annual gross profit increased by almost 50% for fiscal 2008
    -   Yearly net operating loss reduced by 45%
    -   Adjusted EBITDA for the year grew 89%
    

    MONTREAL, July 30 /CNW/ - Mitec Telecom (TSX: MTM) today announced its
fourth quarter and full year results for the 2008 fiscal year, which ended
April 30, 2008.
    Sales for the quarter were $10.8 million, an increase of 10 per cent over
the previous quarter and 40 per cent over sales reported in the fourth quarter
of 2007. A net loss of $1.8 million, or $.01 per share was also reported for
the quarter, compared with $1.1 million, or $.01 in the fourth quarter of
fiscal 2007. Cash burn was nominal for the quarter.
    Almost sixty percent of the fiscal 2008 fourth quarter net loss was
related to non-operational expenses, including a write down of a non-core
investment and stock-based compensation. EBITDA from continuing operations,
net of restructuring expenses and stock-based compensation was negative
$35,000 for the quarter, compared to negative $607,000 in the fourth quarter
of fiscal 2007.
    Annual sales reached $36.2 million in fiscal 2008, versus $33.8 million
in fiscal 2007. The Company's net loss for the year was $6.4 million, or
$.03 per share compared with $12.4 million, or $.10 per share in fiscal 2007.
Adjusted EBITDA from continuing operations for the year was negative
$534,000-a significant improvement compared with negative $4.9 million in
fiscal 2007.
    "I am pleased to report that Mitec has reached several of the milestones
that were set when we began our restructuring almost two years ago," said
President and CEO Dan Piergentili. "Our focus on increasing productivity and
boosting operational performance has improved gross margins, even as we invest
more heavily in R&D to support our product pipeline. In addition, we are
delivering solid revenue growth despite high commodity prices and U.S. dollar
depreciation, both of which have had a significant impact on many North
American manufacturers."
    Telecom sector results were particularly notable, with fourth quarter
shipments increasing to $3.3 million, growth of more than 165 per cent
compared with the fourth quarter in fiscal 2007. During fiscal 2008, Mitec
also announced several new product contracts, an expansion of its China
manufacturing facility and the launch of its next-generation amplifier
solutions, developed by Keragis Corporation, a California-based company that
Mitec acquired in the fall of 2007.
    Mitec's wireless division, which operates mainly from its China
manufacturing facility, also gained significant traction in fiscal 2008. An
order backlog continues to grow, mainly due to large-scale wireless network
deployments in developing countries and the Company's popular Coverage
Solutions product line.
    "Mitec is now well into a growth phase", said Dan Piergentili. "We
launched several new products in our main vertical markets. Some have already
been selected by our customers as preferred vendor solutions and have
potential to generate significant revenue. We are also encouraged by longer
term opportunities that are being generated by the disruptive and
patented-pending technology developed by Keragis Corporation, which continues
to develop opportunities with the defense industry."

    About Mitec Telecom

    Mitec Telecom is a leading designer and provider of radio frequency (RF)
products for the telecommunications and satellite communications industries,
as well as a variety of other sectors. The Company sells its products
worldwide to network providers for incorporation into high-performing wireless
networks used in voice and data/internet communications. Headquartered in
Pointe-Claire, Canada, the Company also operates facilities in California and
China. Mitec Telecom Inc. is listed on the Toronto Stock Exchange under the
symbol MTM. Online information about Mitec is available at
www.mitectelecom.com.


    
    MITEC TELECOM INC.
    CONSOLIDATED BALANCE SHEETS
    (In thousands of Canadian dollars)
    Audited                                               As at        As at
                                                       April 30,    April 30,
                                                           2008         2007
                                                              $            $
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents                             4,784        6,286
    Short-term investments                                   77           75
    Trade receivables                                    10,036        5,064
    Other receivables                                       630          889
    Income tax recoverable                                  839        1,112
    Inventories                                           8,759        7,672
    Prepaid expenses and other                              580          757
    -------------------------------------------------------------------------
    Total current assets                                 25,705       21,855


    Property, plant and equipment                         6,110        7,106
    Intangible assets                                     4,284        2,365
    Goodwill                                              3,598            -
    Investments                                              25          750
    Deferred charges                                        321        1,087
    -------------------------------------------------------------------------
                                                         40,043       33,163
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities             11,372        6,647
    Current portion of long-term debt                       382          415
    -------------------------------------------------------------------------
    Total current liabilities                            11,754        7,062

    Long-term debt                                          742          382
    Future Income tax liabilities                           515            -
    -------------------------------------------------------------------------
                                                         13,011        7,444
    -------------------------------------------------------------------------

    Shareholders' equity
    Common shares                                       132,097      125,631
    Warrants                                              1,931        1,311
    Equity component of convertible debentures               46            -
    Contributed surplus                                   9,223        8,645
    Deficit                                            (115,372)    (108,951)
    Accumulated other comprehensive income                 (894)        (917)
    -------------------------------------------------------------------------
    Total shareholders' equity                           27,031       25,719
    -------------------------------------------------------------------------
                                                         40,043       33,163
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    MITEC TELECOM INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS, COMPREHENSIVE LOSS AND DEFICIT
    (In thousands of Canadian dollars, except per share data and number of
    shares)

                                         Unaudited                   Audited
                              For the three months     For the twelve months
                                    ended April 30,           ended April 30,
                                 2008         2007         2008         2007
                                    $            $            $            $
    -------------------------------------------------------------------------
    Sales                      10,766        7,757       36,176       33,807
    Cost of sales               8,367        6,162       28,058       28,357
    -------------------------------------------------------------------------
    Gross profit                2,399        2,581        8,118        5,450
    -------------------------------------------------------------------------

    Expenses
    Research and development    1,300          235        4,477        5,455
    Selling and administrative  1,577        1,442        6,229        7,339
    Amortization of intangible
     assets                       222          250        1,145        1,394
    Financial expenses            110          126          557          419
    Foreign exchange              147          625          787          160
    Interest income               (28)          (4)         (39)         (74)
    Write-down of intangible
     assets                        40            -           40          156
    Write-down of property,
     plant and equipment          104            -          104           85
    Write-down of investments     450            -          725            -
    Stock-based compensation      325           30          611          519
    Restructuring and other
     expenses                       -          196            -        1,728
    -------------------------------------------------------------------------
                                4,247        2,900       14,636       17,181
    -------------------------------------------------------------------------

    Loss from continuing
     operations before income
     taxes                     (1,848)        (319)      (6,518)     (11,731)
    Income tax expenses
     (recovery)                   (97)         814          (97)         633
    -------------------------------------------------------------------------
    Loss from continuing
     operations                (1,751)      (1,133)      (6,421)     (12,364)
    Loss from discontinued
     operations                     -            -            -           (8)
    -------------------------------------------------------------------------
    Net loss for the period    (1,751)      (1,133)      (6,421)     (12,372)

    Net change in the
     unrealized gain (loss)
     on translating financial
     statements of self-
     sustaining operations       (125)         148           23           84
    -------------------------------------------------------------------------
    Comprehensive loss for the
     period                    (1,876)        (985)      (6,398)     (12,288)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Deficit, beginning of the
     period                  (113,621)    (107,818)    (108,951)     (96,579)
    Net loss for the period    (1,751)      (1,133)      (6,421)     (12,372)
    -------------------------------------------------------------------------
    Deficit, end of the
     period                  (115,372)    (108,951)    (115,372)    (108,951)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted loss
     per common share from
     continuing operations      (0.01)       (0.01)       (0.03)       (0.10)
    Basic and diluted loss
     per common share           (0.01)       (0.01)       (0.03)       (0.10)
    -------------------------------------------------------------------------
    Weighted average number
     of outstanding
     common shares        217,037,556  167,769,266  197,634,243  121,903,323
    -------------------------------------------------------------------------



    MITEC TELECOM INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands of Canadian dollars)

                                         Unaudited                   Audited
                              For the three months     For the twelve months
                                    ended April 30,           ended April 30,
                                 2008         2007         2008         2007
                                    $            $            $            $
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Loss from continuing
     operations                (1,751)      (1,133)      (6,421)     (12,364)
    Add items not affecting
     cash
      Amortization of property,
       plant and equipment,
       intangible assets and
       deferred charges           734          902        3,276        3,779
      Loss on disposal and
       write-down of property,
       plant and equipment        205            3          211           97
      Write-down of investments   450            -          725            -
      Write-down of intangibles
       assets                      40            -           40          156
      Income tax expense
       (recovery)                 (97)           -          (97)         633
      Recovery of non-refundable
       tax credits                  -            -            -         (814)
      Recovery of previously
       recognized future tax
       liabilities recorded in
       research and development     -            -            -          181
      Stock-based compensation    325           30          611          519
      Accretion expense            14            -          325          114
    -------------------------------------------------------------------------
                                  (80)        (198)      (1,330)      (7,699)
    Changes in non-cash working
     capital balances related
     to continuing operations      14       (1,955)        (571)        (185)
    -------------------------------------------------------------------------
    Cash flows used in operating
     activities                   (66)      (2,193)      (1,901)      (7,884)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Additions to property,
     plant and equipment         (442)         (47)        (619)        (288)
    Additions to intangible
     assets                       (56)          (3)         (64)         (32)
    Proceeds on disposal of
     property, plant and
     equipment                      -           49           48           76
    Business acquisition, net
     of cash acquired of $14        -            -       (1,231)           -
    Purchase of short-term
     investment                     -       (2,520)        (229)      (3,117)
    Sale of short-term
     investments                    -        2,446          227       13,131
    Purchase of investments         -         (750)           -         (750)
    -------------------------------------------------------------------------
    Cash flows provided (used)
     in investing activities     (498)        (825)      (1,868)       9,020
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Increase in bank
     indebtedness                   -            -            -          349
    Repayment of bank
     indebtedness                   -            -            -       (6,365)
    Repayment of long-term debt  (125)        (125)        (500)        (953)
    Issuance of convertible
     debentures                     -            -        2,294            -
    Common shares issued upon
     exercise of warrants         379            -          379            -
    Common shares upon exercised
     of stock options               -            -           40            -
    Issuance of common shares
     and warrants, net of issue
     costs                          -        2,929            -       10,398
    -------------------------------------------------------------------------
    Cash flows provided by
     financing activities         254        2,804        2,213        3,429
    -------------------------------------------------------------------------

    Effect of exchange rate
     fluctuations changes on
     cash and cash equivalents      7          136           54           46
    -------------------------------------------------------------------------

    Net increase (decrease)
     in cash and cash
     equivalents from
     continuing operations       (303)         (78)      (1,502)       4,611
    Cash provided in
     discontinued activities        -            -            -          207
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     beginning of the year      5,087        6,364        6,286        1,468
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of the year            4,784        6,286        4,784        6,286
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    %SEDAR: 00002350EF




For further information:

For further information: Mitec Telecom Inc., Jeffrey Mandel, Director,
Investor and Corporate Relations, jeffrey.mandel@mitectelecom.com, Tel.: (514)
694-9000

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