Roctest reports revenue growth, cleans up its balance sheet and returns
to profitability before income taxes, write-offs and one-time charges
ST-LAMBERT, QC, March 26 /CNW Telbec/ - Roctest Ltd "Roctest" (TSX: RTT)
reports revenues of $5.97 million for the fourth quarter ended December 28,
2007, compared to revenues of $5.05 million for the same quarter in 2006,
which represents an increase of 18.2% from 2006 but also an increase of 14,1%
over the third quarter of 2007. For fiscal year 2007 ending December 28, 2007,
Roctest had revenues of $21.3 million compared to revenues of $19.9 million
for 2006, an increase of 6.6%.
For the fourth quarter 2007, Roctest's earnings before taxes, asset
write-offs and one-time restructuring charges, amounted to $0.3 million
compared to a loss of $1.5 million for the same quarter in 2006 and a loss of
$0.3 million for the previous quarter. In the fourth quarter, the Company took
a non-cash charge of $2.17 million to write-off intangible assets; a non- cash
charge $1.19 million to eliminate the goodwill related to a subsidiary, and a
one-time charge related to restructuring activities, for an amount of
$0.42 million. Including all these charges, the loss before income taxes was
$3.5 million in the fourth quarter compared to $1.6 million in 2006. For the
year, the loss before income taxes amounted to $5.1 million compared to
$3.5 million for fiscal year 2006.
In the fourth quarter, a non-cash charge of $1 million was also taken to
write-off future income tax assets. Hence, the net loss for the quarter is
$4.5 million compared to a loss of $2.3 million for the same quarter of 2006.
For the year, the net loss is $6.2 million compared to $3.6 million in 2006.
The increase in revenues for the fourth quarter of 2007, when compared to
the same quarter in 2006, is mainly attributable to an increase of 45.3% in
revenues from the industrial sector and an increase of 12.3% in revenues from
the civil engineering sector. For the year 2007, the increase in revenues is
shared between the industrial sector with an increase of 7.4% and the civil
engineering sector with an increase of 6.3%.
The improvement in the profitability of the group in the fourth quarter
of 2007, before the asset write-offs and one-time charges, is mainly
attributable to the higher revenues, the improvement in gross margins as a
percentage of revenues from 32.5% in 2006 to 44.6%, the $0.1 million reduction
in R&D expenses, and the overall reduction of $0.5 million in sales and
"We are very pleased with the operational results of the fourth quarter.
Our efforts and cost reduction activities started showing improvements in the
third quarter and have now allowed us to return to profitability in the fourth
quarter, before the asset write-offs and one-time restructuring charges."
declared Francois Cordeau, President and chief executive officer of Roctest.
The EBITDA for the fourth quarter was positive and amounted to $266,888 while
the Company generated positive cash flow from operations of $0.13 million for
fiscal 2007 compared to a negative cash flow of $1.92 million in 2006. "I
truly believe the worst is behind us. We have demonstrated positive EBITDA for
the last two quarters of 2007, we now have a very clean balance sheet, our
cost structure has been significantly reduced, we have announced a new
financial partner and we are planning growth in all our sectors of activities
in 2008. We can definitely focus more energy on achieving longer-term
objectives." added Francois Cordeau.
On December 28, 2007, Roctest's working capital totalled $2,318,982
compared to $3,808,100 on December 29, 2006. Cash and cash equivalents stood
at $660,262 at the end of the fourth quarter of 2007, compared to $2,291,953
at the end of the previous fiscal year. Roctest's total assets were valued at
$17,227,991 on December 28, 2007, compared to a value of $25,657,060 on
December 29, 2006, consequence of the net loss but mostly because of
management's decision to clean the balance sheet of its intangible assets. The
Company's long term debt stood at $426,287 at the end of the fourth quarter of
2007, compared to $775,046 at the end of the previous fiscal year. Due to the
fact that the Company did not respect certain financial ratios with its main
banker, an amount of $1.3 million, representing long term debt instalments
which would have been due beyond 2008, is classified as current, reducing
working capital by an equivalent amount.
The main banker of the Company previously indicated its intention not to
renew Roctest credit facilities as of January 31, 2008. However, with the
announcement, on February 1st 2008, of a new financial partner, Corporation
Financière Brome, it has agreed to maintain the credit facilities until the
new ones were put in place. Since March 21 2008, the Company is no longer
using the short-term credit facilities of the main banker and is using the new
credits facilities provided by Brome, which can reach a maximum of $1 million
for Roctest Ltd and $750,000 for FISO Technologies Inc. With this new
financing and the expected positive EBITDA during 2008, the Company is
confident it will have the financial resources required to maintain its
abilities to invest in projects and to improve its working capital.
Except for historical information provided herein, the 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, and as such involve a number of risk factors. Such factors may
include, without excluding other considerations, risks related to foreign
exchange fluctuations, evolution in customer demand for the Company's products
and services, the impact of price pressure from competitors and general market
trends, economic and geopolitical changes. As a result, readers are advised
that actual results may differ from expected results. The Company is not
required to update or revise publicly its forward-looking statements, except
as may be required under applicable law.
Roctest designs, manufactures and markets sensors and high-precision
measuring instruments for the civil engineering, energy, healthcare and
industrial control markets. The Company is recognized for its leading-edge
technology, the quality of its technical expertise and its product development
capabilities for challenging and demanding environments. Its products are
mainly sold internationally. The shares of the Company are listed on the
Toronto Stock Exchange under the symbol RTT.
Three months ended Twelve months ended
December 28, December 29, December 28, December 29,
2007 2006 2007 2006
Revenues $ 5,972,046 $ 5,051,262 $21,262,084 $19,941,173
Gross profit $ 2,664,479 $ 1,640,601 $ 8,550,148 $ 7,282,353
EBITDA $ 266,888 ($ 974,843) ($ 284,734) ($ 1,864,730)
cost $ 279,692 ($ 1,537,793) ($ 1,167,395) ($ 3,309,671)
Net loss before
income taxes $ 3,503,071 $ 1,603,345 $ 5,075,158 $ 3,556,501
Net loss $ 4,490,356 $ 2,331,313 $ 6,165,177 $ 3,590,465
Net loss per
share $ 0.81 $ 0.43 $ 1.11 $ 0.66
shares 5,563,071 5,455,564 5,563,071 5,455,564
For further information:
For further information: François Cordeau, President and Chief Executive
Officer, Roctest Ltd., (450) 465-1113, firstname.lastname@example.org, www.roctest.com