Adeptron Technologies Reports Q2 Financial Results for 2007



    Stock Symbol: ATQ
    Listing: Toronto Stock Exchange (TSX)
    Outstanding Shares: 36.7 Million
    Web Site: www.adeptron.com

    TORONTO, Aug. 9 /CNW/ - Adeptron Technologies Corporation (ATQ: TSX)
("Adeptron" or the "Company"), a specialist at delivering integrated product
solutions and support to the global technology and electronics industry, today
reports its second quarter financial results for the three-month and six-month
periods ended June 30, 2007. All dollar figures are reported in Canadian
currency.
    F. Michael Marti, President and CEO of Adeptron commented, "In the second
quarter of 2007 we achieved our seventh consecutive profitable quarter in
spite of various challenges. The revenue mix and associated contribution
margins for the quarter were different than anticipated. Also, approximately
71% of our sales were denominated in $US and shipments were skewed to the
second half of the quarter which coincided with a renewed surge of strength in
the $CDN versus the $US.
    Marti continued, "Adeptron continues to consciously transform its
operations and processes to increase productivity and future profitability. As
a part of this transformation we expect to experience operational efficiency
savings due to our highly upgraded Markham facility. We also continue to
expand the volume of product delivered from our China-based manufacturing
partner thus adding great credibility to our marketing of this solution for
higher volume requirements."
    Marti added, "Another part of Adeptron's evolution is its previously
announced acquisition of Pacific Circuit Assembly, Inc. ("PCA") effective
May 31, 2007. PCA provides Adeptron with a strong platform for business
development in the US marketplace, and provides the Company with additional
flexibility in managing sales and costs between US and Canadian currencies."
    Marti closed by stating, "We expect that sales for the third quarter
ending September 30, 2007 may be somewhat lower than those of this second
quarter. Based on customer indications and existing backlog, we believe that
in the fourth quarter of this year Adeptron will reach higher sales levels
than in each of the previous five quarters. As we work to increase sales
through organic means we also are actively exploring acquisition opportunities
to increase revenues, expand geographic coverage or broaden the suite of
manufacturing solutions provided by Adeptron."

    
    Q2-2007 Financial Highlights:

    -   Total revenues of $10.1 million compared to $11.7 million in 2006
    -   Net earnings of $10,000 compared to $489,000 in 2006
    -   Earnings per diluted share of $Nil compared to $0.01 in 2006
    -   EBITDA(*) of  $481,000 compared to $857,000 in 2006
    

    For the three months ended June 30, 2007, sales were $10.1 million
compared to $11.7 million for the corresponding period of 2006, a decrease of
$1.6 million, or 14%. This decrease is primarily attributable to the
previously disclosed significant reduction in sales generated from the
Company's former largest customer. Revenue attributable to PCA from the date
of acquisition, May 31, 2007, was $225,000.
    For the six months ended June 30, 2007, revenue totaled $20.3 million
compared to $22.4 million for the corresponding period of 2006, a decrease of
$2.1 million, or 9%. On a year to date basis, sales attributable to the
Company's former largest customer decreased by $4.1 million when compared to
the same six-month period in 2006.
    During the six-month period ended June 30, 2007, approximately 71% of the
Company's sales were derived from USA-based and domestic-based customers with
sales denominated in US dollars ("US$"). Consequently, the strengthening of
the Canadian dollar ("CDN$") relative to the US$ has historically had an
adverse effect on the Company's reported sales when compared to the
corresponding period of the prior year.
    Gross profit percentage decreased to 15.5% for the three months ended
June 30, 2007 compared to 17.1% for the same period in the prior year. This
decrease in gross profit percentage can also be attributed to the lower sales
levels in the current quarter in comparison to the second quarter of 2006.
    Gross profit percentage decreased to 16.2% for the six months ended
June 30, 2007 compared to 17.1% for the same period in the prior year. This
decrease in gross profit percentage can also be attributed to the lower sales
levels in the first six months of 2007 in comparison to the same period of
2006.
    Selling, General and Administrative ("SG&A") expense for the second
quarter of 2007 was $1.2 million compared to $1.3 million for the same quarter
of 2006.
    For the six months ended June 30, 2007, SG&A expense was $2.5 million,
essentially unchanged from the same period in 2006.
    For the three months ended June 30, 2007, the Company recorded net income
and basic earnings per share of $10,000 and $0.00, respectively. In the second
quarter of 2006, net income and basic income per share were $489,000 and
$0.01, respectively.
    For the six months ended June 30, 2007, the Company recorded net income
and basic earnings per share of $173,000 and $0.00, respectively, compared to
net income and basic income per share of $801,000 and $0.02 for the same
period in 2006.
    Earnings before Interest, Taxes, Depreciation, Amortization and
Stock-based compensation (EBITDA(*)) for the three-month period ended June 30,
2007 was $481,000 compared to $857,000 for the same period in the prior year.
    Earnings before Interest, Taxes, Depreciation, Amortization and
Stock-based compensation (EBITDA(*)) for the six-month period ended June 30,
2007 was $1.1 million compared to $1.6 million for the same period in the
prior year.
    Working capital, defined as current assets less current liabilities, at
June 30, 2007 was $3.6 million compared to a working capital balance of
$4.8 million at December 31, 2006. The decrease in working capital of
$1.2 million is a direct result of the cash used to acquire all the issued and
outstanding shares of PCA.

    Q2-2007 Financial Summary

    Selected comparative financial information for the three-month and
six-month periods ended June 30, 2007 and 2006 is shown below. (All numbers
below expressed in thousands except per share information and gross margin
percentages):

    


    Income Statement                    3-Month   3-Month   6-Month   6-Month
                                         Period    Period    Period    Period
                                      ---------  -------- --------- ---------
                                       June 30,  June 30,  June 30,  June 30,
                                          2007      2006      2007      2006
                                      ---------  -------- --------- ---------

    Revenue                           $ 10,149  $ 11,655  $ 20,309  $ 22,371
    Gross Profit                         1,571     1,995     3,295     3,828
    Gross Profit %                       15.5%     17.1%     16.2%     17.1%
    Net Income                              10       489       173       801
    Net Income per Share-basic
     & diluted                        $    Nil  $   0.01  $    Nil  $   0.02
    Weighted average number of
     shares outstanding - diluted       37,317    34,613    38,450    34,613
    EBITDA(*)                         $    481  $    857  $  1,083  $  1,557

    Adeptron's 2007 Q2 financial statements and MD&A will be available on
August 13, 2007 on Adeptron's web site at www.adeptron.com and www.sedar.com.

    EBITDA(*) reconciliations, as reported above, to GAAP Net Income/(Loss) for
the three-month and six-month periods ended June 30, 2007 and 2006 are shown
below.  (All numbers below expressed in thousands):

                                        3-Month   3-Month   6-Month   6-Month
                                         Period    Period    Period    Period
                                      ---------  -------- --------- ---------
                                       June 30,  June 30,  June 30,  June 30,
                                          2007      2006      2007      2006
                                      ---------  -------- --------- ---------

    Net income per GAAP               $     10  $    489  $    173  $    801
    Add:
    Interest on subordinated notes         Nil        98       Nil       227
    Interest on long-term debt             210       Nil       416       Nil
    Interest on bank operating loan         68       110       117       211
    Depreciation and amortization          186       148       339       286
    Stock-based compensation                21        12        52        32
    Tax Recovery                           (14)      Nil       (14)      Nil
    EBITDA(*)                         $    481  $    857  $  1,083  $  1,557

    (*) - EBITDA represents Earnings before Interest, Taxes, Depreciation,
          Amortization and Stock-based compensation.
    

    EBITDA(*) is not a recognized measure under Canadian generally accepted
accounting principles. However, management believes that EBITDA(*) is a useful
supplemental measure to net income (loss), as it provides investors with an
indication of cash earnings prior to debt service, capital expenditure, income
tax and other non-cash items. Readers should be cautioned, however, that
EBITDA(*) should not be construed as an alternative to net income (loss)
determined in accordance with generally accepted accounting principles as an
indicator of the Company's performance or to cash flows from operating,
investing and financing activities as a measure of liquidity and cash flows.
The Company's method of calculating EBITDA(*) may differ from the methods by
which other companies calculate EBITDA(*) and, accordingly, the EBITDA(*) used
herein may not be comparable to measures used by other companies.

    About Adeptron:

    Adeptron's business is Integrating Ideas with Solutions(TM) within the
technology and electronics industries, to enhance our customers' competitive
advantage. Adeptron delivers global product solutions and support for the
complete product life cycle, including design, prototyping, supply chain
management, manufacturing, assembly, testing, product assurance, distribution
and after-sales service solutions. Adeptron's facilities are ISO 9001:2000
registered.
    Adeptron is a public company whose common shares are listed for trading
on The Toronto Stock Exchange under the symbol: "ATQ". The Company has
approximately 36.7 million common shares outstanding. Visit Adeptron at:
www.adeptron.com or www.investorfile.com.

    THIS NEWS RELEASE MAY CONTAIN FORWARD-LOOKING INFORMATION. ACTUAL FUTURE
RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED. THE RISKS,
UNCERTAINTIES AND OTHER FACTORS, BOTH KNOWN AND UNKNOWN, THAT COULD INFLUENCE
ACTUAL RESULTS MAY BE SUBSTANTIAL AND INCLUDE THOSE DESCRIBED IN DOCUMENTS
FILED WITH REGULATORY AUTHORITIES, SUCH AS THE COMPANY'S MOST RECENTLY FILED
ANNUAL AND QUARTERLY REPORTS AND ANNUAL INFORMATION FORM. ACCORDINGLY, NO
ASSURANCES CAN BE GIVEN THAT ANY OF THE EVENTS ANTICIPATED BY THE
FORWARD-LOOKING STATEMENTS WILL TRANSPIRE OR OCCUR, OR IF ANY OF THEM DO SO,
WHAT BENEFITS THE COMPANY WILL DERIVE THEREFROM.

    %SEDAR: 00012076E




For further information:

For further information: Adeptron Company Contact: F. Michael Marti,
President & Chief Executive Officer,  Tel: (416) 705-6534,
fmmarti@adeptron.com; Adeptron Investor Relations: Gerry Wimmer,
INVESTORFILE.com, Tel: (416) 360-8895, Toll Free: 1-888-894-8222,
gwimmer@investorfile.com

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ADEPTRON TECHNOLOGIES CORPORATION

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