TORONTO, Aug. 29 /CNW Telbec/ - Grey Island Systems International Inc.
(TSX VENTURE: GIS) a leading supplier of real-time vehicle tracking, telematic
applications and predictive arrival systems, reported revenues of $3.9 million
for the quarter ended June 30, 2007.
Financial highlights for the quarter
The current results are a reflection of the Company's previously stated
objectives to grow organically and through acquisition with a goal to increase
the Company's share of the U.S. market place. The following highlights relate
- Revenue for the third quarter increased to $3,876,918, an increase of
13.1% over the comparable period a year ago.
- Revenue arising from US customers for the third quarter increased by
12.4% to $2,462,490 compared to $2,190,019 for the comparable period a
- U.S. revenues now account for $2,462,490 of total Company revenue of
$3,876,918 for the current quarter compared to $2,190,019 of total
Company revenue of $3,427,052 for the comparable period.
- The Company announced that the Board of County Commissioners of
Franklin County (Ohio) approved and awarded a contract resulting from
an RFP for a GPS/AVL System for Franklin County Engineer's Office.
Total value of the contract is $US 4,093,826.
During the past quarter, the Company has been successful in expanding its
sales and marketing efforts in the United States ("US"). The Company has an
office in the State of New York in the USA, operating under the name of
Interfleet, providing sales and services for our Interfleet products to our US
customers. NextBus Inc., ("NextBus"), an information technology company
located in Alameda, California, USA, provides sales and services for our
Results of Operations
Revenue for the quarter ended June 30, 2007 increased by 13.1% to
$3,876,918 from $3,427,052 for the quarter ended June 30, 2006. For the nine
month period ended June 30, 2007, the revenue increased by 34.1% to
$11,723,072 from $8,740,800.
The increase in revenues recorded in the past quarter was due to the
organic growth of the Company's Interfleet and Nextbus products, and the
overall growth of the industry. Nextbus contributed revenues of approximately
$1,659,058 for the quarter ended June 30, 2007 from $1,492,242 for the quarter
ended June 30, 2006. Revenues from its US customer base have increased to
$2,462,490 for the quarter ended June 30, 2007, compared with $2,190,019 for
the quarter ended June 30, 2006. The Company continues to increase its revenue
through new customer hardware sales, thereby increasing its monthly subscriber
base in both Canada and the United States. It has also endeavoured to provide
more comprehensive services to existing customers.
Gross profit for the quarter ended June 30, 2007, remained virtually
unchanged at $1,895,734 from $1,895,101 for the quarter ended June 30, 2006
and increased by 32.3% to $6,208,901 from $4,692,180 over the nine month
period ended June 30, 2006 due mainly to the growth in Interfleet product
sales in the U.S. market, where the Company has been concentrating its efforts
in recent quarters. Gross margin for the current quarter was 48.9%, down from
55.3% and for the nine month period gross margin was 53.0% compared to 53.7%
for the comparative period. The change in quarterly margin can be attributed
to a change in proportion of engineering related income as compared to
equipment and service revenue.
Operating expenses include general and administrative, sales and
marketing, engineering, development and research, data centre operations costs
and foreign exchange loss. The Company's operating expenses have increased by
51.6% to $2,061,357 from $1,360,034 for the quarter ended June 30, 2007. For
the nine month period ended June 30, 2007, operating expenses increased by
35.4%. The main reason for this increase is the increased staff levels,
particularly in production, and engineering and development, where the Company
requires additional support for its increased number of contracts production
requirements and to enhance product capabilities. In addition, a foreign
exchange loss of $257,375 was recorded, as a result of the weaker US dollar
exchange rate and the translation of US dollar denominated balances at the end
of the quarter.
Income/loss from operations
The net loss for the quarter ended June 30, 2007 was $336,682 or $0.0037
per share, compared to net income of $241,605 or $0.0040 per share in the
quarter ended June 30, 2006. For the nine month period ended June 30, 2007 the
net loss was $177,608 or $0.0024 per share compared to a loss of $346,146 or
$0.0058 per share for the comparative period. Gross profits remained unchanged
year over year for the three months ended June 30, 2007 and increased by 32.3%
year over year for the nine months ended June 30, 2007, and operating expenses
increased by 51.6%, for the quarter ended June 30, 2007 and by 35.4% over the
nine month period ended June 30, 2007, resulting in an operating loss of
$195,188 versus operating income of $516,063 in the comparable quarter of 2006
and in operating income of $502,941 versus operating income of $502,990 for
the comparable nine month period. However, additional costs were recorded
through the substantial amortization expense of $229,034 for the quarter ended
June 30, 2007 and of $687,136 for the nine month period ended June 30, 2007,
which contributed to an overall increase in expenses of 42.4% when compared to
the quarter ended June 30, 2006 and of 28.8% for the nine month period ended
June 30, 2007.
Liquidity and Capital Resources
At June 30, 2007, Grey Island had cash and cash equivalents of
$12,449,899. The Company's working capital was $15,701,200 as at June 30,
2007. The Company intends to use these funds for bonding requirements,
expanding its operations in both Canada and the U.S., and for general working
capital. As with most growth enterprises, depending on the pace of the
anticipated expansion of the Company's operations additional financing may be
contemplated in the future.
The Company also maintains a $6.9 million revolving credit facility with
a Canadian chartered bank secured by a cash guarantee of $5,750,000. This
facility can be used for direct advances or through letters of guarantee. The
balance of advances outstanding at June 30, 2007 was $nil, while letters of
guarantee amounting to $5,881,578 were outstanding against the facility.
The Company's consolidated financial statements, accompanying notes and
Management's Discussion and Analysis will be available on the System for
Electronic Document Analysis and Retrieval ("SEDAR") website (www.sedar.com)
on or before August 29, 2007.
About Grey Island
Grey Island Systems International Inc. (TSX-V: GIS), together with its
subsidiaries NextBus Inc. in Alameda, California, InterFleet, Inc. in New
York, New York is a leading provider of custom real-time GPS/AVL, security and
Telematics solutions as well as real-time passenger information systems to
government and related fleets. To find out more about our products and
services, visit our websites at www.interfleet.com or www.nextbus.com.
Forward Looking Statements
This news release contains forward-looking information based on
management's best estimates and the current operating environment. These
forward-looking statements are related to, but not limited to, Grey Island's
operations, anticipated financial performance, business prospects and
strategies. Such forward-looking statements are subject to a number of known
and unknown risks, uncertainties and other factors which could cause actual
results or events to differ materially from those expressed or implied by such
forward-looking statements. These risks and uncertainties include, among other
things, business risks, changes in market and competition, technological and
competitive developments and potential downturns in economic conditions
generally. Therefore, there can be no assurance that the expectations of the
management of Grey Island will prove to be correct.
THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY
OR ACCURACY OF THIS RELEASE.
For further information:
For further information: Grey Island Systems Inc.: Owen Moore, (416)
348-9991, (416) 348-9993 (FAX), email@example.com,
www.interfleet.com; Renmark Financial Communications Inc.: John Boidman:
firstname.lastname@example.org; Julien Ouimet: email@example.com,
(514) 939-3989, Fax: (514) 939-3717, www.renmarkfinancial.com