Rutter Releases Second Quarter Unaudited Financial Statements

ST. JOHN'S, April 12 /CNW/ - Today, Rutter Inc. (TSX: RUT) released its unaudited second quarter consolidated financial statements for the six month period ended February 28, 2010.

Summary financial information is provided in this press release which should be read in conjunction with the full financial statements and MD&A available on the Company's web site at www.rutter.ca or on SEDAR at www.sedar.com. Fraser H. Edison, President and CEO of the Company, and Karen M. Snook, Chief Financial Officer, will host a conference call on Thursday, April 15, 2010, to discuss the results. Details of this call were announced in a press release dated April 12, 2010 and are also available on the Company's web site.

SUMMARY OF RESULTS

The Company's quarterly results are summarized in the tables below:

    
    -------------------------------------------------------------------------
                   (in thousands except per share amounts)
    -------------------------------------------------------------------------
                     Three     Three    Change       Six       Six    Change
                    Months    Months              Months    Months
                      2010      2009                2010      2009
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Revenue        $ 8,788   $14,071   $(5,283)  $21,691   $25,689   $(3,998)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    EBITDA(1)          454     1,518    (1,064)    1,691     2,374      (683)
    -------------------------------------------------------------------------
    Other costs(2)   1,511     1,403      (108)    2,547     2,110      (437)
    -------------------------------------------------------------------------
    Earnings
     (Loss) from
     Continuing
     Operations     (1,057)      115    (1,172)     (856)      264    (1,120)
    -------------------------------------------------------------------------
    Net loss -
     Discontinued
     Operations          -    (1,754)    1,754         -    (1,737)    1,737
    -------------------------------------------------------------------------
    Net and
     Comprehensive
     Loss           (1,057)   (1,639)      582      (856)   (1,473)      617
    -------------------------------------------------------------------------
    Loss Per
     Share         $ (0.01)  $ (0.02)  $  0.01   $ (0.01)  $ (0.02)  $  0.01
    -------------------------------------------------------------------------

    -----------------
    (1) EBITDA is identified in the Company's financial statements as
        "Earnings before undernoted items" and is more fully defined in the
        Company's financial statements and MD&A.
    (2) Other (costs) income include: Depreciation and amortization; Interest
        on long-term debt; Interest and bank charges; Other items; Write down
        of assets; Equity income; all of which are separately disclosed in
        the Company's financial statements.


    -------------------------------------------------------------------------
                               (in thousands)
    -------------------------------------------------------------------------
                     Three     Three    Change       Six       Six    Change
                    Months    Months              Months    Months
                      2010      2009                2010      2009
    -------------------------------------------------------------------------
    Revenues:
    -------------------------------------------------------------------------
      Third party
       manufactu-
       ring        $ 6,258    10,266    (4,008)   15,938    17,102    (1,164)
    -------------------------------------------------------------------------
      Company
       owned
       products      1,882     3,384    (1,502)    4,019     7,603    (3,584)
    -------------------------------------------------------------------------
      Total
       Technolo-
       gies          8,140    13,650    (5,510)   19,957    24,705    (4,748)
    -------------------------------------------------------------------------
      Other
       (including
       Corporate)      648       421       227     1,734       984       750
    -------------------------------------------------------------------------
      Company
       total         8,788    14,071    (5,283)   21,691    25,689    (3,998)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    EBITDA
    -------------------------------------------------------------------------
      Technologies
       Segment         892     2,091    (1,199)    2,203     3,398    (1,195)
    -------------------------------------------------------------------------
      Other
       (including
       Corporate)     (438)     (573)      135      (512)   (1,024)      512
    -------------------------------------------------------------------------
    

Technologies

Technologies revenues for the quarter declined by $5,510,000 and on a year to date basis by $4,748,000. The decrease is partially the result of anticipated declines in third party manufacturing from the previous year's historic high which continued to impact revenues in the first quarter of the current year. In company owned products, VDR revenues continue to decline as the regulatory deadline for installation of the product approaches. Radar revenues have increased both for the quarter and year to date as the Company continues to pursue its strategy to grow its presence in the radar market. EBITDA has decreased as compared to the same quarter of the prior year due primarily to the impact of decreased revenues. While selling, general and administrative expenses and variable overheads have been reduced, these reductions do not entirely offset the impact of decreased revenues.

Earnings (Loss) from Continuing Operations

Overall continuing operations lost $1,057,000 in the quarter resulting in year to date losses of $856,000 compared to earnings of $264,000 for the same period last year. Contributing to the loss was a $532,000 write-down of product development costs as the result of the Company's decision during the quarter to cancel development of an electronic charting and display system.

CONCLUSION

"Our performance in the manufacturing business is essentially in line with expectations, having settled back to more normal levels in the current quarter", said Fraser H. Edison, President and CEO of the Company. "We had hoped for stronger operating results overall but the VDR market continues to be softer worldwide than anticipated, a trend that began with the economic downturn in the prior year. During the second quarter we have taken action to redirect more research and development efforts to complete the commercialization of the radar product line and completed a restructuring to realign the organization with the current sales activity. In addition, we continue to reduce excess costs that have been legacy issues of past acquisitions and divestitures, including resolution of an office lease in the US and reaching an agreement with a Canadian landlord to reduce the total square footage leased. We have also negotiated the sale of a building which will reduce the Company's debt upon closing.

Our strong relationship with our large military customer, solid technology in our radar products, a growing consulting engineering business and productive work environment are the core operational strengths that are the foundation of our future growth", he concluded.

About Rutter Inc. - Rutter is an enterprise focused on providing innovative technologies and engineering solutions. Rutter's global network supplies technologies to improve efficiency and safety in the marine, defense, transportation, oil and gas sectors from its headquarters in the Province of Newfoundland and Labrador. Multidisciplinary consulting engineering services including civil, structural, mechanical and electrical engineering as well as environmental and construction management services are provided to a diverse client base which includes all levels of government and the oil and gas and industrial sectors. For more information see www.rutter.ca

Forward-Looking Statements

This press release may contain forward-looking statements that involve risks and uncertainties. These statements reflect current expectations and are subject to a number of risks and uncertainties including but not limited to, change in technology and general market conditions. Due to the many risks and uncertainties, Rutter Inc. cannot assure that forward-looking statements that may be contained in this press release will be realized.

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

%SEDAR: 00022015E

SOURCE Rutter Inc.

For further information: For further information: Karen Snook, Chief Financial Officer, Rutter Inc., (709) 368-3174; Dan Herder, Corporate Secretary, Rutter Inc., (709) 368-3174

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Rutter Inc.

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