Mitec Telecom reports third quarter 2010 results
MONTREAL, March 4 /CNW Telbec/ - Mitec Telecom (TSX: MTM), a leading designer and manufacturer of mobile wireless, fixed wireless, broadcast and satellite components today announced its results for the third quarter of fiscal 2010, the three month period ended January 31, 2010.
Revenue for the quarter was $5.2 million compared with $7.9 million for the third quarter of fiscal 2009. For the third quarter of fiscal 2010, the loss from operations was $2.3 million or $0.01 per share, compared with a loss of $361,000, or nil per share in the third quarter of fiscal 2009. Mitec's loss before interest, taxes, depreciation and amortization, on an adjusted basis ("Adjusted EBITDA") was $1.6 million compared with a loss of $608,000 in the same period in fiscal 2009. Gross profit for the quarter was approximately 17%, compared with 24% for the same period in fiscal 2009.
Corporate performance this quarter was affected by a variety of factors, including delays in booking anticipated revenues for the quarter as a result of the postponement in infrastructure spending. Over this quarter and the previous quarter, Mitec continued to invest in R&D initiatives for new product lines which have now resulted in the launch of a new series of fixed wireless and very small aperture technology ("VSAT") products utilized for wireless backhaul.
"Our new product lines, including our coverage solutions products and our fixed wireless products, have begun to generate expected results. In addition, our newly designed and launched VSAT MTX Block Upconverter line, which was a significant R&D and marketing project during the last 2 years, has gained significant traction in its market. It is one of the realities of our business that our revenues tend to fluctuate depending on the stages of various transactions in our pipeline. We are looking forward to improved results in the current quarter as some of these transactions have now closed," commented Daniel Piergentili, Mitec's President and CEO.
Mitec is also working with its Mergers and Acquisitions Committee to assess various opportunities with the objectives of increasing its presence in the wireless market and achieving long-term profitability.
Mitec also reports that it has arranged a receivables financing facility in the amount of $2.5 million - which can be increased up to $5 million at Mitec's option and under certain terms and conditions - from a Canadian financial institution specializing in servicing the needs of small and medium sized businesses entering growth phases. The facility, which is subject to standard conditions, including final approval from the lender's credit committee, due diligence and completion of final documentation, will be used to support Mitec's working capital requirements and growth opportunities.
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 Montreal, Canada, Mitec also operates facilities in California and China. Mitec is listed on the Toronto Stock Exchange under the symbol MTM. On-line information about Mitec is available at www.mitectelecom.com.
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. 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)
Unaudited
As at As at
January April
31, 2010 30, 2009
-------------------------------------------------------------------------
$ $
Unaudited Audited
ASSETS
Current
Cash and cash equivalents 2,036 4,485
Short-term investments 181 181
Trade receivables 4,849 5,592
Other receivables 259 126
Income tax recoverable 494 323
Inventories 5,542 8,088
Prepaid expenses and other 656 629
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Total current assets 14,017 19,424
-------------------------------------------------------------------------
Property, plant and equipment 4,759 5,493
Intangible assets 2,670 3,263
Goodwill 1,991 1,991
Investments 25 25
Future income tax 241 125
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23,703 30,321
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-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 4,689 5,449
Current portion of long-term debt - 1,215
-------------------------------------------------------------------------
Total current liabilities 4,689 6,664
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Long-term debt 1,041 -
-------------------------------------------------------------------------
5,730 6,664
-------------------------------------------------------------------------
Shareholders' equity
Common shares 132,142 132,142
Warrants 1,151 1,925
Equity component of convertible debentures 747 14
Contributed surplus 10,787 9,836
Deficit (126,191) (119,980)
Accumulated other comprehensive loss (663) (280)
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Total shareholders' equity 17,973 23,657
-------------------------------------------------------------------------
23,703 30,321
-------------------------------------------------------------------------
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MITEC TELECOM INC.
INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE INCOME
(In thousands of Canadian dollars, except per share data and number of
shares)
Unaudited
For For
the three months ended the nine months ended
January 31, January 31,
2010 2009 2010 2009
-------------------------------------------------------------------------
$ $ $ $
Sales 5,161 7,922 19,066 33,421
Cost of sales 4,299 6,025 16,353 25,992
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Gross profit 862 1,897 2,713 7,429
-------------------------------------------------------------------------
Expenses
Research and
development 1,027 1,039 2,769 3,188
Selling and
administrative 1,499 1,430 4,336 4,678
Amortization of
intangible assets 199 211 595 789
Financial expenses 161 301 535 675
Foreign exchange 279 (786) 682 (1,236)
(Gain) loss on
disposal of property,
plant and equipment - 39 (25) 39
Impairment of property,
plant and equipment - - - 351
Stock-based compensation 41 113 149 562
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3,206 2,347 9,041 9,046
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Loss before income taxes (2,344) (450) (6,328) (1,617)
Income tax recovery (39) (89) (117) (117)
-------------------------------------------------------------------------
Net loss for the period (2,305) (361) (6,211) (1,500)
-------------------------------------------------------------------------
Unrealized gain (loss)
on translating financial
statements of self-
sustaining foreign
operations (32) 1,167 (383) 1,189
-------------------------------------------------------------------------
Comprehensive gain (loss)
for the period (2,337) 806 (6,594) (311)
-------------------------------------------------------------------------
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Basic and diluted loss
per common share (0.01) (0.00) (0.03) (0.01)
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Weighted average
number of
outstanding
common shares 220,666,756 220,666,756 220,666,756 220,656,485
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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 de-
Common shares Warrants bentures
-------------------------------------------------------------------------
Number $ Number $ $
(000) (000)
Balance,
April 30, 2008 220,312 132,097 38,016 1,931 46
Issued upon conversion
of convertible
debentures 354 25 - - -
Impact of deferred
expenses on
convertible
debentures - - - - (23)
Expired warrants - - (187) (6) -
Stock-based
compensation - - - - -
Other comprehensive
gain the period - - - - -
Net loss for the period - - - - -
-------------------------------------------------------------------------
Balance,
January 31, 2009 220,666 132,122 37,829 1,925 23
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-------------------------------------------------------------------------
Balance,
April 30, 2009 220,666 132,142 37,829 1,925 14
Issued upon conversion
of convertible
debentures - - - - (14)
Issued under a
convertible
debentures financing - - - - 747
Expired warrants - - (14,226) (774) -
Stock-based
compensation - - - - -
Other comprehensive
loss the period - - - - -
Net loss for the period - - - - -
-------------------------------------------------------------------------
Balance,
January 31, 2010 220,666 132,142 23,603 1,151 747
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Accu-
mulated
other
Contri- compre- Share-
buted hensive holders'
surplus Deficit loss equity
-------------------------------------------------------------------------
$ $ $ $
Balance,
April 30, 2008 9,223 (115,372) (894) 27,031
Issued upon conversion
of convertible
debentures - - - 25
Impact of deferred
expenses on
convertible
debentures - - - (23)
Expired warrants 6 - - -
Stock-based
compensation 562 - - 562
Other comprehensive
gain the period - - 1,189 1,189
Net loss for the period - (1,500) - (1,500)
-------------------------------------------------------------------------
Balance,
January 31, 2009 9,791 (116,872) 295 27,284
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Balance,
April 30, 2009 9,836 (119,980) (280) 23,657
Issued upon conversion
of convertible
debentures 28 - - 14
Issued under a
convertible
debentures financing - - - 747
Expired warrants 774 - - -
Stock-based
compensation 149 - - 149
Other comprehensive
loss the period - - (383) (383)
Net loss for the period - (6,211) - (6,211)
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Balance,
January 31, 2010 10,787 (126,191) (663) 17,973
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MITEC TELECOM INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of Canadian dollars)
Unaudited
For For
the three months ended the nine months ended
January 31, January 31,
2010 2009 2010 2009
-------------------------------------------------------------------------
$ $ $ $
OPERATING ACTIVITIES
Net loss for the
period (2,305) (361) (6,211) (1,500)
Add items not
affecting cash
Amortization of
property, plant
and equipment,
intangible assets
and deferred
charges 420 476 1,309 1,849
(Gain) loss on
disposal of
property, plant
and equipment - 39 (25) 39
Impairment of
property, plant
and equipment - - - 351
Stock-based
compensation 41 113 149 562
Accretion expense 93 287 308 532
Income tax recovery (39) (89) (117) (117)
-------------------------------------------------------------------------
(1,790) 465 (4,587) 1,716
Changes in non-cash
working capital
balances related
to operating
activities 1,606 (1,520) 2,198 (1,811)
-------------------------------------------------------------------------
Cash flows used in
operating activities (184) (1,055) (2,389) (95)
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Additions to property,
plant and equipment (35) (48) (361) (349)
Additions to
intangible assets (10) - (12) -
Proceeds on disposal
of property, plant
and equipment 10 13 45 13
Purchase of short-
term investments - (100) (181) (179)
Sale of short-term
investments - - 181 77
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Cash flows used in
investing activities (35) (135) (328) (438)
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Convertible
debentures issued (24) - 1,679 -
Repayment of long-
term debt - (125) (1,400) (390)
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Cash flows provided
(used) by financing
activities (24) (125) 279 (390)
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Gain (loss) on foreign cash
and cash equivalents
held 2 - (11) -
Net increase (decrease)
in cash and cash
equivalents for the
period (241) (1,315) (2,449) (923)
Cash and cash
equivalents, beginning
of the period 2,277 5,176 4,485 4,784
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Cash and cash
equivalents, end of
the period 2,036 3,861 2,036 3,861
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%SEDAR: 00002350EF
For further information: Mr. Jeffrey Mandel, Executive Chairman and Director, Investor and Corporate Relations, (514) 694-9000, [email protected]; Source: Mitec Telecom Inc.
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