Matrikon releases Q4 and fiscal year 2009 results and declares quarterly

    -   Revenue of $17.62 million in Q4-09; $73.24 million for FY-09

    -   Net income of $0.49 million in Q4-09; $2.31 million for FY-09

    -   Gross margin of 54% in Q4-09; 56% for FY-09

    -   Cash generated from operating activities was $1.18 million in Q4-09;
        cash used for operating activities was $0.09 million for FY-09

    -   Board of directors declares quarterly dividend of $0.03 per common

EDMONTON, Nov. 9 /CNW/ - Matrikon Inc. (TSX:MTK), a leading provider of solutions for industrial intelligence, today reported financial results for the fourth quarter and fiscal year ended August 31, 2009. Matrikon's president & CEO Nizar J. Somji commented, "Our fiscal year 2009 results are reflective of a delayed reaction to the global economic downturn, which affected us particularly in Q3-09. The economic slowdown caused our sales cycle to lengthen as many of our clients required additional time and due diligence to obtain approval for contracts. After a disappointing third quarter, sales activity started to pick up late in the fourth quarter, particularly in oil & gas and mining.

"Late in the fourth quarter, we had a record project win for cyber security in the power and utilities industry. We anticipate even more opportunities in this industry given the timeline for compliance and Matrikon's expertise in this area.

"Following Q3-09, we made investments in R&D and staffing levels and made the adjustments needed to bring cost structures into alignment with revenue levels. With this realignment and the positive indications that more of the opportunities in our pipeline will proceed in the near term, we are well positioned as the economy recovers. Given the business closed in Q4-09 as well as the strong pipeline, we anticipate to continue to improve from our fourth quarter performance fiscal year 2010."

Based on projects underway and expected improvements to Q1-10 results, Matrikon's board of directors also declared a dividend of $0.03 per common share for the fourth quarter of fiscal year 2009. This dividend is payable December 21, 2009 to all shareholders of record on November 19, 2009. The dividend is an eligible dividend for Canadian tax purposes.

For FY-09, Matrikon posted revenue of $73.24 million, a decrease of 8% from FY-08. Net income decreased to $2.31 million from $9.10 million in FY-08. Earnings per share for FY-09 were $0.07, decreasing from $0.30 per share in FY-08.

Fourth quarter revenue was $17.62 million, down from $20.16 million in Q4-08, and net income was $0.49 million, down from $2.58 million in Q4-08. Earnings per share in Q4-09 were $0.02, compared to earnings of $0.09 per share in Q4-08.

    Quarter Highlights:

    -   Revenue improved by 8% compared to Q3-09 as Solutions (consulting and
        equipment) revenue increased by 9%. The primary contributor to this
        improvement was an increase of 86% in equipment revenue.

    -   Software license revenue increased by 12% in Q4-09 compared to Q3-09
        as off-the-shelf products sales increased 18% and OPC sales increased

    -   Gross margin was up 4 basis points to 54% on higher revenue and flat
        cost of sales in the quarter compared to Q3-09.

    -   Total expenses declined by 10% and represented 51% of revenue,
        compared to 60% in Q3-09. Q3-09 expenses were elevated due to
        restructuring costs incurred at the end of quarter.

    -   Net income recovered from a loss of $2.96 million in Q3-09 to income
        of $0.49 million in Q4-09 as a result of increased gross profit and a
        reversal in foreign currency translation rates. We realized a foreign
        currency translation gain of $0.005 million in Q4-09 compared to a
        loss of $2.13 million in the previous quarter.

    -   Cash provided by operating activities increased from $0.52 million in
        Q3-09 to $1.18 million in Q4-09 as we continued to focus on accounts
        receivable collections.

    -   MatrikonOPC(TM) announced a global partnership with Shell for OPC

    -   Matrikon announced a US$1.94 million contract to provide a power
        generation company in Illinois with a comprehensive asset management

    -   Matrikon announced a significant project for a major US power company
        worth a record value of US$13.5 million towards the end of the
        quarter. This strategic win capitalizes on Matrikon's core strength
        of real-time monitoring and reporting to protect critical assets and
        processes and achieve compliance under new North American Electric
        Reliability Council (NERC) Critical Infrastructure Protection


We remain committed to our strategy of transitioning to a Solutions oriented company and will continue to build upon it in 2010. Our main objective for FY-2010 is to return to top line growth while improving our profit margin.

A key element of our strategy is to continue development of new industry applications based on our Intuition framework, particularly for the power industry. At the same time, we will continue to grow the market share of our existing applications (such as Well Performance Monitor(TM) and Mobile Equipment Monitor(TM)) as the sectors that these applications serve begin to recover from the recession.

Annual Results

Complete financial statements, notes to the financial statements and management's discussion and analysis will be filed on SEDAR ( by November 16, 2009 and will be available to download from the investor relations section of our website at as soon as they are filed.

Our information circular and other annual materials will be mailed on or about November 22, 2009.

Conference Call November 18, 2009 at 8:30 am EST

A conference call will be held on Wednesday, November 18, 2009 at 8:30 am EST (6:30 a.m. MST). To participate live, call 416-644-3421 in the Toronto area and 1-877-974-0446 for all other areas.

A replay will be available until midnight MST on Monday, December 14, 2009. To access the playback service, please dial 416-640-1917 in the Toronto area or 1-877-289-8525 in all other areas, reservation number 4179134 followed by the pound sign.

The conference call will also be webcast and podcast at:

Annual General Meeting

We invite you to join us at Matrikon's 2009 annual shareholders meeting on January 11, 2010 at 2:00 pm MST (4:00 pm EST). The meeting will be held at our head office in Edmonton, Alberta: Suite 1800, 10405 Jasper Avenue.

About Matrikon

Matrikon ( provides industrial software solutions to process control industries, empowering their clients to achieve operational excellence. Matrikon products transform production data into knowledge and action that enable users to maximize performance while managing risk. With offices throughout North America, Australia, Europe and the Middle East and a client base that includes industry leaders in a wide range of process industries, Matrikon's reach is global. Empowering excellence since 1988, Matrikon is traded on the Toronto Stock Exchange under the symbol MTK.

Matrikon, Matrikon Well Performance Monitor and Matrikon Mobile Equipment Monitor are trademarks or registered trademarks of Matrikon Inc.

Forward Looking Statements

In order to provide our investors with an understanding of our current results and future prospects, our communications often include written or oral forward-looking statements. This news release and other materials filed with the Canadian securities regulators contain statements that are forward-looking. These statements are made pursuant to the "safe harbor" provisions of applicable Canadian securities legislation. These statements represent Matrikon's intentions, plans, expectations and beliefs and are based on our experience and our assessment of historical and future trends and the application of key assumptions relating to future events and circumstances. These statements may include, but are not limited to, comments about: our objectives and priorities for 2010 and beyond, our strategies, expectations for our financial condition, the outlook for our operations, and external factors that may impact results, including global economies and industry trends.

Forward-looking statements require assumptions and involve risks and uncertainties related to our business and the general economic environment, many beyond our control. There is significant risk that the predictions, forecasts, conclusions or projections we make will not prove to be accurate and that our actual results will be materially different from the targets, expectations, estimates or intentions expressed in the forward-looking statements. We caution readers of this news release not to place undue reliance on our forward-looking statements.

The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic conditions in the countries in which we operate; currency fluctuations; market demand for our products and services; our ability to execute projects and deliver solutions; our ability to execute our strategic plans and to complete and integrate acquisitions; the degree of competition in the geographic and business areas in which we operate; our ability to attract and retain qualified employees and contain payroll costs; our ability to contain expenses; technological changes and research and development; the length of the sales cycle required to close larger solution contracts; availability of financial resources to carry out our strategy; our ability to protect our intellectual and intangible properties; legal claims; critical accounting estimates; the possible effects on our business of war or terrorist activities; disease or illness that affects local, national or international economies; and disruptions to public infrastructure, such as transportation, communications, power or water supply. We caution that this list is not exhaustive of all possible factors.

Other factors could adversely affect our results. For more information, please see the discussion on the principal risks that could affect our results, beginning on page 52 of Matrikon's 2008 annual report.

The assumptions behind our outlook for fiscal 2010 include the following: that business opportunities will remain strong and the opportunities in our pipeline will materialize as contracts; that significant projects will continue as scheduled; that the global political climate will remain stable; that the global economy, particularly with respect to the markets we serve, will recover gradually with a full recovery expected by the third quarter of FY2010; that our clients will have adequate access to capital and will continue to invest in initiatives that support efficiency and reduce costs; that foreign exchange rates will not fluctuate excessively; that we will continue to be able to inspire, motivate and maintain our employee base at a sufficient level to deliver on our objectives; and that our effective tax rate will be in the range of 26% to 30%

When relying on forward-looking statements to make decisions with respect to Matrikon, investors should carefully consider these factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. Unless required by law, we do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by the company or on its behalf.

    Condensed Balance Sheets                                 As at August 31
    (thousands of Canadian dollars)                           2009      2008
    Current assets:
      Cash & cash equivalents                             $  8,734  $ 15,721
      Accounts receivable                                   23,456    22,782
      Contracts in progress                                  6,894     6,246
      Future income taxes                                      492       400
      Prepaid expenses                                       1,286     1,529
                                                            40,862    46,678

    Future income taxes                                        525       762
    Property & equipment                                     4,253     3,374
    Intangible assets                                          672     1,103
    Goodwill                                                15,807    15,851
                                                          $ 62,119  $ 67,768

    Liabilities & Shareholders' Equity
    Current liabilities:
      Accounts payable and accrued liabilities            $  8,603  $ 10,065
      Deferred revenue                                       8,292     8,909
      Income taxes payable                                     462     1,249
      Future income taxes                                      971     2,046
                                                            18,328    22,269

      Future income taxes                                       89       316
      Non-controlling interest                                  40         -
                                                               129       316
    Shareholders' equity:
      Share capital                                         31,735    30,633
      Contributed surplus                                    2,502     2,195
      Accumulated other comprehensive income                  (107)      129
      Retained earnings                                      9,532    12,226
                                                            43,662    45,183
                                                          $ 62,119  $ 67,768

                                               Unaudited           Unaudited
    Condensed Statements of Income        3 months ended          Year ended
    (thousands of Canadian dollars             August 31           August 31
    except per share amounts)             2009      2008      2009      2008
      Consulting                      $ 10,866  $ 11,503  $ 43,254  $ 46,497
      Software licenses                  3,041     5,006    14,147    17,879
      Support                            2,653     2,471    10,295     8,923
      Equipment sales                      993     1,142     4,887     5,947
      Interest income                       69        40       655       785
                                        17,622    20,162    73,238    80,031
    Cost of sales                        8,176     8,259    32,183    34,862
                                         9,446    11,903    41,055    45,169
      Consulting                         1,653     1,492     7,408     6,094
      Sales and marketing                2,007     1,632     7,632     5,855
      Research and development           1,235     1,668     6,362     6,701
      General and administrative         3,359     3,639    13,773    12,297
      Amortization                         295       340     1,229     1,276
      Stock-based compensation             369       290     1,407     1,004
                                         8,918     9,061    37,811    33,227

    Income before the undernoted           528     2,842     3,244    11,942

    Foreign currency translation
     gain (loss)                             5       768      (509)      310
    Other income                           123       627       420     1,236
                                           128     1,395       (89)    1,546
    Income (loss) before income taxes      656     4,237     3,155    13,488

    Income taxes expense (recovery):
      Current                            1,045    (1,131)    1,924     1,011
      Future                              (893)    2,785    (1,109)    3,379
                                           152     1,654       815     4,390

    Non-controlling interest               (15)        -       (26)        -
    Net income                        $    489  $  2,583  $  2,314  $  9,098

    Earnings per share:
      Basic earnings per share        $   0.02  $   0.09  $   0.07  $   0.30
      Diluted earnings per share      $   0.02  $   0.08  $   0.07  $   0.29
    Weighted average shares
     outstanding (000s):
      Basic                             30,936    30,636    30,946    30,511
      Diluted                           31,029    31,370    31,037    31,370


For further information: For further information: Nicole Sayler, Corporate Communications Director, (780) 945-4010, (877) 628-7456 x 4010, email:

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