Mitec Telecom reports first quarter, fiscal 2010 results, provides update on
market opportunities, mergers and acquisitions committee activies and date of
annual general meeting
Sales were
Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization) from continuing operations net of stock-based compensation and foreign exchange was negative
"Q1 is historically our weakest quarter but, we're encouraged by recent signs of economic recovery. Several global infrastructure programs that had been put on hold have resumed, generating orders for preferred suppliers including Mitec," said President and Chief Executive Officer Daniel Piergentili. "If you eliminate the effect of foreign exchange fluctuation, which had a dramatic impact on all manufacturing businesses, Mitec hit its quarterly budget numbers. And, that's despite our having to defer revenue from the first part of a major telecom contract that came in after the quarter ended which was in our first quarter budget."
Year-over-year satcom revenue remained stable at
Market Opportunities
As part of its growth strategy Mitec is actively pursuing several large niche market opportunities. This includes an exciting, new approach that helps small telecom operators improve network bandwidth and overcome coverage loss challenges at a reduced cost. "While promising, new initiatives require some expenditure to ensure they are positioned effectively, we are investing in them conservatively. I am very pleased with the results we have achieved in the wireless, satcom and military segments and confident that each these markets will generate significant future returns," said Piergentili.
Mergers and Acquisitions Committee
Earlier in 2009, a Mergers and Acquisitions Committee was formed and given a mandate to review buy and sell-side opportunities that would result in increased shareholder value through a transformative transaction that would ensure Mitec's ongoing future profitability. Opportunities may involve joint ventures, acquisitions, mergers and, under certain circumstances, the divestiture of various divisions of Mitec. Due to the confidential nature of these initiatives and to regulatory requirements, additional information cannot be provided at this time, however the Corporation is actively involved in several initiatives and some of them are more advanced than others.
Due to the confidential nature of these initiatives and regulatory requirements, additional information cannot be provided at this time however the Corporation is actively involved in several initiatives, some more advanced than others.
Annual General Meeting Date
The Corporation's Annual General Meeting will take place on
Please note: Due to confidentiality provisions, Mitec is generally not able to disclose the names of its major customers or the financial data related to sales transactions.
About Mitec Telecom Inc.
Mitec is a leading designer and provider of radio frequency (RF) products for the telecommunications and satellite communications industries, as well as a variety of other sectors. Mitec sells its products worldwide to network providers for incorporation into high-performing wireless networks used in voice and data/internet communications. Headquartered in
Certain statements in this release, including statements regarding future results and performance, are forward-looking statements based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, decreases in demand for Mitec's products, fluctuations in selling prices and adverse changes in general market and industry conditions and other factors listed in Mitec's public filings with the appropriate securities regulatory authorities.
MITEC TELECOM INC.
INTERIM CONSOLIDATED BALANCE SHEETS
(In thousands of Canadian dollars) As at As at
July 31, April 30,
2009 2009
$ $
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Unaudited Audited
ASSETS
Current
Cash and cash equivalents 3,344 4,485
Short-term investments 181 181
Trade receivables 5,758 5,592
Other receivables 690 126
Income tax recoverable 353 323
Inventories 7,402 8,088
Prepaid expenses and other 935 629
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Total current assets 18,663 19,424
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Property, plant and equipment 5,215 5,493
Intangible assets 3,060 3,263
Goodwill 1,991 1,991
Investments 25 25
Future income tax 164 125
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29,118 30,321
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 6,506 5,449
Current portion of long-term debt 1,316 1,215
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Total current liabilities 7,822 6,664
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Shareholders' equity
Common shares 132,142 132,142
Warrants 1,925 1,925
Equity component of convertible debentures 7 14
Contributed surplus 9,895 9,836
Deficit (122,049) (119,980)
Accumulated other comprehensive loss (624) (280)
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Total shareholders' equity 21,296 23,657
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29,118 30,321
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MITEC TELECOM INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
In thousands of Canadian dollars,
except per share data and number of shares)
Unaudited
For the three months ended
July 31,
2009 2008
$ $
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Sales 6,707 14,931
Cost of sales 5,672 11,765
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Gross profit 1,035 3,166
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Expenses
Research and development 1,064 1,013
Selling and administrative 1,210 1,534
Amortization of intangible assets 220 305
Financial expenses 154 179
Foreign exchange 411 (108)
Impairment of property, plant and equipment 25 -
Stock-based compensation 59 202
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3,143 3,125
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Profit (loss) before income taxes (2,108) 41
Income tax recovery (39) (14)
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Net profit (loss) for the period (2,069) 55
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Unrealized gain (loss) on translating financial
statements of self-sustaining foreign operations (344) 22
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Comprehensive profit (loss) for the period (2,413) 77
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Basic and diluted profit (loss) per common share (0.01) 0.00
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Weighted average number of outstanding
common shares 220,666,756 220,343,256
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MITEC TELECOM INC.
INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands of Canadian dollars,
except for number of shares)
Unaudited
Equity
component
of conver-
tible deb-
Common shares Warrants entures
-------------------------------------------------------------------------
No.(000s) $ No.(000s) $ $
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Balance,
April 30, 2008 220,312 132,097 38,016 1,931 46
Issued under a
convertible
debenture
financing 354 43 - - -
Stock-based
compensation - - - - -
Other comprehensive
gain for the period - - - - -
Net profit for the
period - - - - -
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Balance,
July 31, 2008 220,666 132,140 38,016 1,931 46
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Balance,
April 30, 2009 220,666 132,142 37,829 1,925 14
Issued upon
conversion of
convertible
debentures - - - - (7)
Stock-based
compensation - - - - -
Other
comprehensive
loss for the
period - - - - -
Net loss for the
period - - - - -
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Balance,
July 31, 2009 220,666 132,142 37,829 1,925 7
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Accumu-
lated
other
Con- compre- Share-
tributed hensive holders'
surplus Deficit loss equity
---------------------------------------------------------------
$ $ $ $
---------------------------------------------------------------
Balance,
April 30, 2008 9,223 (115,372) (894) 27,031
Issued under a
convertible
debenture
financing - - - 43
Stock-based
compensation 202 - - 202
Other comprehensive
gain for the period - - 22 22
Net profit for the
period - 55 - 55
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Balance,
July 31, 2008 9,425 (115,317) (872) 27,353
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Balance,
April 30, 2009 9,836 (119,980) (280) 23,657
Issued upon
conversion of
convertible
debentures - - - (7)
Stock-based
compensation 59 - - 59
Other
comprehensive
loss for the
period - - (344) (344)
Net loss for the
period - (2,069) - (2,069)
---------------------------------------------------------------
Balance,
July 31, 2009 9,895 (122,049) (624) 21,296
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MITEC TELECOM INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of Canadian dollars)
Unaudited For the three months ended
July 31,
2009 2008
$ $
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OPERATING ACTIVITIES
Net profit (loss) for the period (2,069) 55
Add items not affecting cash
Amortization of property, plant and
equipment, intangible assets and
deferred charges 468 753
Impairment of property, plant and
equipment 25 -
Stock-based compensation 59 202
Accretion expense 111 128
Income tax recovery (39) (14)
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(1,445) 1,124
Changes in non-cash working capital
balances related to operating activities 677 (2,416)
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Cash flows used in operating
activities (768) (1,292)
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INVESTING ACTIVITIES
Additions to property, plant and
equipment and intangible assets (364) (149)
Purchase of short-term investments - (79)
Sale of short-term investments - 77
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Cash flows used in investing activities (364) (151)
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FINANCING ACTIVITIES
Repayment of long-term debt - (94)
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Cash flows used by financing
activities - (94)
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Loss on foreign cash and cash
equivalents held (9) -
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Net decrease in cash and cash
equivalents for the period (1,141) (1,537)
Cash and cash equivalents, beginning
of the period 4,485 4,861
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Cash and cash equivalents, end of the
period 3,344 3,324
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%SEDAR: 00002350EF
For further information: Mr. Jeffrey Mandel, Director, Investor and Corporate Relations, (514) 694-9000, [email protected]; Source: Mitec Telecom Inc.
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