Mitec Telecom reports improved third quarter results



    
    - Sales reach $9.8 million, an increase of 22 per cent
      quarter-over-quarter,
    - EBITDA from continuing operations of $206,000 is first positive
      cash flow since 2004
    - 100 per cent growth in wireless sales over Q2, 2008
    

    MONTREAL, March 13 /CNW Telbec/ - Mitec Telecom (TSX: MTM) today reported
its results for the third quarter of fiscal 2008, the three-month period ended
January 31, 2008.
    Mitec Telecom's sales reached $9.8 million compared with $8.5 million
reported in the third quarter of fiscal 2007. The Company's net loss for the
third quarter was $1.4 million, or $0.01 per share-a significant reduction
over a net loss of $2.6 million, or $0.02 per share, in the third quarter of
fiscal 2007. Mitec's earnings before interest, taxes, depreciation and
amortization (EBITDA) were $206,000, marking the first positive cash flow
since early 2004.
    The Company's gross profit for the quarter was $2.0 million, compared
with $1.9 million during the same period last year and operating expenses were
$2.6 million versus $3.3 million reported in the same period last year.
Mitec's sales increased 22 per cent when compared with Q2, 2008 results
released in mid-December, 2007.
    "Mitec continues to deliver on its strategic objectives, which include
expanding our existing products into new markets and working with current and
potential customers to prove our capabilities as a leading provider of
wireless and satellite communications," said Dan Piergentili, Mitec's Chief
Executive Officer. "I am pleased with the progress we have made and confident
in our ability to achieve the objectives we have set."
    To date in 2008, Mitec has expanded its customer base and leveraged its
existing technologies by:

    
    - Delivering off-the-shelf amplifiers to a major North American wireless
      operator. As part of Mitec's sales strategy, telecom operators were
      targeted as potential new customers.
    - Initiating deliveries of our interference mitigation filters to a major
      Chinese telecom provider
    - Having been selected as an ongoing supplier of Very Small Aperture
      (VSAT) components for build-out of an African cellular network

    "The synergies between Mitec's satellite communication and wireless
product lines are beneficial to customers. For example, in some emerging
markets, satellites have become a preferred link for wireless build-outs,"
said Bruno Dumais, Mitec's Chief Financial Officer. "As a result, Mitec's
Wireless division experienced over 100 per cent sales growth in Q3 over the
previous quarter. Our Satcom division, which was able to facilitate some of
these orders benefitted as well."
    "Mitec is proving our capabilities and finding new and existing customers
to generate orders," said Jeffrey Mandel, Director, Investor and Corporate
Relations for Mitec Telecom. "With our ability to manufacture some of the
components in China and our innovative engineering capabilities, this is a
very exciting time for Mitec to grow its global commercialization footprint."

    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
Montreal, 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.

    Except for historical information provided herein, this press release may
contain information and statements of a forward-looking nature concerning the
future performance of the Company. These statements are based on suppositions
and uncertainties as well as on management's best possible evaluation of
future events. Such factors may include, without excluding other
considerations, fluctuations in quarterly results, evolution in customer
demand for the Company's products and services, the impact of price pressures
exerted by competitors, and general market trends or economic changes. As a
result, readers are advised that actual results may differ from expected
results.


    MITEC TELECOM INC.
    INTERIM CONSOLIDATED BALANCE SHEETS
    (In thousands of Canadian dollars)
    Unaudited
                                                         As at         As at
                                                    January 31,     April 30,
                                                          2008          2007
                                                             $             $
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents                            5,087         6,286
    Short-term investments                                  77            75
    Trade receivables                                    9,102         5,064
    Other receivables                                      638           889
    Income tax recoverable                                 717         1,112
    Inventories                                          7,904         7,672
    Prepaid expenses and other                             617           757
    -------------------------------------------------------------------------
    Total current assets                                24,142        21,855

    Property, plant and equipment                        6,325         7,106
    Intangible assets                                    8,898         2,365
    Investments                                            726           750
    Deferred charges                                       511         1,086
    -------------------------------------------------------------------------
                                                        40,602        33,162
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities            11,000         6,647
    Current portion of long-term debt                      416           416
    -------------------------------------------------------------------------
    Total current liabilities                           11,416         7,063

    Long-term debt                                          69           380
    Convertible debentures                                 979             -
    -------------------------------------------------------------------------
                                                        12,464         7,443
    -------------------------------------------------------------------------

    Shareholders' equity
    Common shares                                      131,732       125,631
    Warrants                                             2,063         1,311
    Equity component of convertible debentures              79             -
    Contributed surplus                                  8,904         8,645
    Deficit                                           (113,621)     (108,951)
    Accumulated other comprehensive income              (1,019)         (917)
    -------------------------------------------------------------------------
    Total shareholders' equity                          28,413        25,719
    -------------------------------------------------------------------------
                                                        40,602        33,162
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    MITEC TELECOM INC.
    INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS,
    COMPREHENSIVE INCOME AND DEFICIT
    (In thousands of Canadian dollars,
    except per share data and number of shares)
    Unaudited
                      For the three months ended   For the nine months ended
                                      January 31,                 January 31,
                              2008          2007          2008          2007
                                 $             $             $             $
    -------------------------------------------------------------------------
    Sales                    9,829         8,536        25,410        26,050
    Cost of sales            7,870         6,649        19,691        22,195
    -------------------------------------------------------------------------
    Gross profit             1,959         1,887         5,719         3,855
    -------------------------------------------------------------------------

    Expenses
    Research and
     development             1,041         1,405         3,177         5,220
    Selling and
     administrative          1,563         1,852         4,652         5,953
    Amortization of
     intangible assets         413           249           923         1,144
    Financial expenses         320            47           447           237
    Foreign exchange          (373)         (575)          640          (465)
    Interest income             (5)          (10)          (11)          (70)
    Stock-based
     compensation               76            57           286           489
    Write-down of
     investments               275             -           275             -
    Write-down of
     property, plant
     and equipment               -            85             -            85
    Write-down of
     intangible assets           -           156             -           156
    Restructuring and
     other expenses              -         1,176             -         2,518
    -------------------------------------------------------------------------
                             3,310         4,442        10,389        15,267
    -------------------------------------------------------------------------

    Loss from continuing
     operations before
     income taxes           (1,351)       (2,555)       (4,670)      (11,412)
    Income tax expenses
     (recovery)                  -             -             -          (181)
    -------------------------------------------------------------------------
    Loss from continuing
     operations             (1,351)       (2,555)       (4,670)      (11,231)
    Loss from discontinued
     operations                  -             -             -            (8)
    -------------------------------------------------------------------------
    Net loss for the
     period                 (1,351)       (2,555)       (4,670)      (11,239)

    Unrealized gain (loss)
     on translating
     financial statements
     of self-sustaining
     foreign operations        249           168          (102)          232
    -------------------------------------------------------------------------
    Comprehensive loss
     for the period         (1,102)       (2,387)       (4,772)      (11,007)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Deficit, beginning
     of the period        (112,270)     (104,364)     (108,951)      (95,680)
    Net loss for the
     period                 (1,351)       (2,555)       (4,670)      (11,239)
    -------------------------------------------------------------------------
    Deficit, end of the
     period               (113,621)     (106,919)     (113,621)     (106,919)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted
     loss per common
     share from
     continuing
     operations              (0.01)        (0.02)        (0.02)        (0.10)
    Basic and diluted
     loss per common
     share from
     discontinued
     operations              (0.00)        (0.00)        (0.00)        (0.00)
    Basic and diluted
     loss per common
     share                   (0.01)        (0.02)        (0.02)        (0.10)
    -------------------------------------------------------------------------
    Weighted average
     number of
     outstanding
     common shares     213,994,982   125,344,636   191,034,050   109,031,512
    -------------------------------------------------------------------------


    MITEC TELECOM INC.
    INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands of Canadian dollars)
    Unaudited
                      For the three months ended   For the nine months ended
                                      January 31,                 January 31,
                              2008          2007          2008          2007
                                 $             $             $             $
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Loss from continuing
     operations             (1,351)       (2,555)       (4,670)      (11,231)

    Add items not affecting
     cash
      Amortization of
       property, plant
       and equipment,
       intangible assets
       and deferred charges    973           862         2,567         2,991
      Loss on disposal of
       property, plant and
       equipment               (30)            7             6             9
      Write-down of
       investments             275             -           275             -
      Write-down of
       property, plant and
       equipment                 -            85             -            85
      Write-down of
       intangibles assets        -           156             -           156
      Stock-based
       compensation             76            57           286           489
    -------------------------------------------------------------------------
                               (58)       (1,388)       (1,537)       (7,501)
    Changes in non-cash
     working capital
     balances related to
     continuing operations     662           104           870         1,810
    -------------------------------------------------------------------------
    Cash flows provided
     (used) in operating
     activities                604        (1,284)         (667)       (5,691)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Additions to property,
     plant and equipment        37           (35)         (177)         (241)
    Additions to intangible
     assets                     (7)            -        (7,456)            -
    Proceeds on disposal of
     property, plant and
     equipment                  34            23            48            27
    Purchase of short-term
     investment                (77)            -          (229)         (597)
    Sale of short-term
     investments                77             -           227        10,686
    Purchase of investment       -             -          (251)            -
    -------------------------------------------------------------------------
    Cash flows provided
     (used) in investing
     activities                 64           (12)       (7,838)        9,875
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Increase in bank
     indebtedness                -             -             -           349
    Repayment of bank
     indebtedness                -             -             -        (6,365)
    Repayment of
     long-term debt           (125)         (472)         (375)         (828)
    Conversion of
     convertible
     debentures               (782)            -          (782)            -
    Issuance of
     convertible
     debentures, net of
     issuance costs              -             -         2,294             -
    Issuance of common
     shares and warrants       787            18         6,074         7,469
    -------------------------------------------------------------------------
    Cash flows provided by
     financing activities     (120)         (454)        7,211           625
    -------------------------------------------------------------------------

    Effect of exchange rate
     fluctuations changes
     on cash and cash
     equivalents               287          (137)           95           123
    -------------------------------------------------------------------------

    Net increase (decrease)
     in cash and cash
     equivalents from
     continuing operations     835        (1,887)       (1,199)        4,932
    Cash provided by
     (used in) discontinued
     activities                  -             -             -           (36)
    -------------------------------------------------------------------------
    Net cash (decrease) in
     cash and cash
     equivalents               835        (1,887)       (1,199)        4,896
    Cash and cash
     equivalents, beginning
     of the period           4,252         8,251         6,286         1,468
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end of
     the period              5,087         6,364         5,087         6,364
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
    %SEDAR: 00002350EF




For further information:

For further information: Jeffrey Mandel, Director, investor and
corporate relations, Mitec Telecom, (514) 694-9000, ext. #2107,
Jeffrey.mandel@mitectelecom.com; Sarah Thompson, Mansfield Communications
Inc., (416) 599-0024, ext. 244, sarah@mcipr.com

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