Lyrtech Inc. announces its 2009 third quarter results

QUEBEC CITY, Nov. 30 /CNW Telbec/ - Lyrtech Inc. (Lyrtech or the Company) (TSX-V: LTK), a firm specializing in digital signal processing technologies, announces today its results for the three and nine-month periods ending September 30, 2009 .

2009 third quarter highlights

    
    - Profit before financial charges of $0.5 M.
    - Gains on forgiveness of debts of $0.65 M, mainly from the discontinued
      business.
    - Decrease in the gross margin versus Q2 2009 as a consequence of the mix
      of products and services sold.
    - Signed major engineering contracts.
    

"This first nine months of 2009 have been challenging in the aftermath of the Innovator disposal, the resulting balance sheet, and global economy slowdown. We are maximising our resources on the projects generating the highest returns. We signed major engineering contracts and important projects were granted to Lyrtech, all of which should generate positive results for Lyrtech in the coming months," declared Louis N. Bélanger, president and CEO of Lyrtech.

Financial review

During the third quarter of 2009, total revenues from continuing operations reached $1.8 M, compared to $2.2 M during the same period in 2008, representing a decrease of 20 %. During the period of nine months ending September 30, 2009 , total revenues from continuing operations reached $5.6 M, compared to $7.0 M during the same period in 2008. The variation mainly results from the decrease in the revenues of Q2 2009 versus Q2 2008. The decrease in revenues results from the global economy slowdown; more specifically, some projects with major customers have been postponed. The major decreases have been in the sale of DSP solutions as well as non-recurring engineering activities.

The gross margin from continuing operations reached 38 % of revenues during the third quarter of 2009 from 50 % during the same period in 2008. This decrease results from the mix of products sold. The gross margin reached 44 % of revenues during the first nine months of 2009 from 46 % during the same period in 2008.

Selling and marketing expenses from continuing operations decreased by 20 % to $0.2 M during the third quarter of 2009, compared to the same period in 2008. They decreased by 29 % to $0.57 M during the first nine months of 2009, compared to the same period in 2008. These decreases are mainly attributable to salary savings following the departures of three employees.

Administrative expenses from continuing operations totalled $0.3 M during the third quarter of 2009, a decrease of 17% from the same period in 2008. The main element explaining this variation is the decrease in professional fees during this quarter compared to the same quarter of 2008. Administrative expenses from continuing operations totalled $1.1 M during the first three quarters of 2009, a non material variation from 2008.

Research and development expenses, net of tax credits, reached $0.4 M during the third quarter of 2009, an increase of 33 % compared to the same period in 2008. Although the Company applied restrictions in development activities and salaries, it witnessed an increase of approximately $0.1 M in the use of materials for the performance of an important contract. These expenses reached $0.9 M during the first nine months of 2009, an increase of 27 %, or $0.2 M, compared to the same period in 2008.

Financial expenses from continuing operations reached $0.3 M during the third quarter of 2009, an increase of $0.3 M from to the same period in 2008. They reached $1.1 M during the first three quarters of 2009, an increase of $0.7 M from to the same period in 2008. These increases are mainly the result of higher exchange losses in 2009, compared to minimal losses in 2008 as well as higher volume of accounts receivables factored.

The net profit for the third quarter of 2009 was $0.07 M, or $0.0026 per basic and diluted share, compared to a net profit of $0.03 M, or $0.0012 per basic and diluted share, during the same period in 2008. The net loss for the first nine months of 2009 was $0.34 M, or $0.0132 per basic and diluted share, compared to a loss of $0.74 M, or $0.0301 per basic and diluted share, during the same period in 2008.

Lyrtech had a negative working capital of $4.9 M on September 30, 2009 , a non-material variation from December 31, 2008 .

As of November 27, 2009 , Lyrtech had 24,673,792 class A shares issued and paid, 16,137,283 warrants outstanding and 1,995,243 options outstanding for a total of 42,806,318 shares on a fully diluted basis following a share consolidation on September 17, 2008 on a basis of ten old shares for one new share and prior to shares issued in this financing.

Forward-looking statements

This press release contains forward-looking statements that reflect the company's current expectations regarding future events. These forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected herein.

About Lyrtech

Lyrtech develops and manufactures advanced digital signal processing solutions for companies worldwide, a vital technology to network and wireless communications, audio and video processing, as well as electronic systems in all fields of technology. Lyrtech offers a full range of DSP-FPGA development platforms, as well as design, prototyping, and manufacturing of electronic products. Lyrtech works in partnership with industry leaders such as Texas Instruments, The MathWorks, and Xilinx. Lyrtech's customers include many prestigious names of the consumer electronics, telecommunications, aerospace and defence fields. For more information, visit www.lyrtech.com.

    
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For further information: Louis N. Bélanger, president and CEO, Lyrtech Inc., [phone], [email protected]