Roctest releases its results for the second quarter 2007



    ST-LAMBERT, QC, Aug. 8 /CNW Telbec/ - Roctest Ltd "Roctest" (TSX: RTT)
reports revenues of $5.1 million for the second quarter ended June 29, 2007,
compared to revenues of $5.25 million for the same quarter in 2006, which
represents a slight decrease of 2.9% from 2006 but also a slight increase of
2.7% over the first quarter of 2007.
    For the second quarter of the current exercise, Roctest's loss before
taxes amounted to $623 816 compared to a loss of $517 791 for the same quarter
in 2006. The net loss amounted to $676 003 or $0.12 per share on a diluted
basis in the second quarter of 2007 compared to a net loss of $384 303 or
$0.07 per share for the same quarter in 2006.
    The loss of the second quarter 2007, when compared to the same quarter in
2006, is mainly attributable to a 1.8% deterioration in gross margin
($0.156 million) as a percentage of revenue, an increase in research and
development expenses of $0.112 million, a reduction of amortization of
$0.052 million, a lower foreign exchange loss of $0.089 million and a tax
expense of $0.052 million compared to a recovery of $0.133 million in 2006 as
the Company has not recorded any future income tax benefits from its operating
losses compared to last year.
    "These results are disappointing and hide many improvements. In our
traditional civil engineering sector, revenues have increased over the first
quarter of 2007, even though sales to Iran, a traditionally strong market,
have been virtually nil as a consequence of the sanctions taken by the UN on
February 23, 2007. Gross margins of this sector also increased significantly
from the first quarter of 2007. Cost reduction initiatives allowed this unit
to reduce their overhead cost by $200 000 in the second quarter, but
additional expenses related to temporary employee replacement, consultants,
and various banking charges have almost completely offset the savings. In
addition, our European subsidiaries Telemac and Smartec suffered delays in the
deliveries of products and services that will now happen during the third
quarter. Also during the third quarter, we expect to resume deliveries of
orders to Iran, as customers are now paying in advance of the delivery.
Finally, the initiatives of our strategic review of the second quarter are
being implemented with the support of our advisers" declared Mr. François
Cordeau, President and CEO of Roctest.
    "Revenues from our FISO subsidiary increased by 5.7% compared to the same
quarter in 2006, despite a decline in selling prices that began last year. We
maintain our strategy to focus on OEM (Original Equipment Manufacturer)
clients as they provide significant recurring revenues" added Mr. François
Cordeau.
    During the second quarter, the Company made a number of announcements
including:

    
    - FISO Technologies introduced a new generation of optical-fiber signal
      conditioner modules, combined with a new EVOLUTION table-top platform
      with significantly enhanced performance and flexibility.
    - Smartec SA announced that it is providing, in conjunction with its
      Certified Solution Provider, MacDonnell Group Consulting Limited, a
      monitoring system for the Metro Centre arena in Halifax.
    - Smartec SA announced that it has provided, in conjunction with the
      Italian Company Pegaso Systems S.r.l., a structural monitoring system,
      solely based on fiber optic technology, for the tanker ship "Four
      Island".
    - FISO Technologies was awarded new orders for a total amount of $1.2M
      for the delivery of fiber optic pressure transducers and signal
      conditioners, from a well established medical OEM partner.

    Financial Situation

    On June 29, 2007, Roctest's working capital totalled $2,485,214 compared
to $3,808,100 on December 29, 2006. Cash and cash equivalents stood at
$486 211 at the end of the second quarter of 2007, compared to $2,291,953 at
the end of the previous fiscal year. Roctest's total assets were valued at
$22,529,023 on June 29, 2007, compared to a value of $25,657,060 on
December 29, 2006. The Company's long term debt stood at $618 259 at the end
of the second quarter of 2007, compared to $775,046 at the end of the previous
fiscal year. Due to the fact that the Company did not respect certain
financial ratios with its main banker, an amount of $2.6 million, representing
long term debt instalments which would have been due beyond 2007, is
classified as current, reducing working capital by an equivalent amount.

    Perspectives

    Even though the main banker of the Company indicated its intention not to
renew the credit facilities as of October 31, 2007, the Company is confident
that the implementation of the initiatives from the review of its strategic
plan as well as numerous cost reduction measures will allow it to considerably
reduce losses over the next quarters and improve liquidity. The support of
PriceWaterhouseCoopers in this activity should also accelerate the various
initiatives.

    Forward-looking Statements

    Except for historical information provided herein, the press release may
contain information and statements of a forward-looking nature concerning the
future performance of the Company. These statements are based on suppositions
and uncertainties as well as on management's best possible evaluation of
future events, and as such involve a number of risk factors. Such factors may
include, without excluding other considerations, risks related to foreign
exchange fluctuations, evolution in customer demand for the Company's products
and services, the impact of price pressure from competitors and general market
trends, economic and geopolitical changes. As a result, readers are advised
that actual results may differ from expected results. The Company is not
required to update or revise publicly its forward-looking statements.

    About Roctest

    Roctest designs, manufactures and markets sensors and high-precision
measuring instruments for the civil engineering, energy, healthcare and
industrial control markets. The Company is recognized for its leading-edge
technology, the quality of its technical expertise and its product development
capabilities for challenging and demanding environments. Its products are
mainly sold internationally. The Company has more than 130 employees and its
shares are listed on the Toronto Stock Exchange under the symbol RTT.

    Financial Highlights

                       Three months ended             Six months ended
                  June 29, 2007  June 30, 2006  June 29, 2007  June 30, 2006

    Revenues         $5 096 399     $5 250 513    $10 057 075     $9 695 564
    Operating profit $2 022 354     $2 178 499    $ 3 760 406     $3 843 980
    EBITDA            ($287 731)     ($144 781)     ($608 008)     ($365 489)
    Net profit
     (loss) before
      tax            $  623 816     $  517 791    $ 1 292 845     $1 045 156
    Net profit (loss)$  676 003     $  384 303    $ 1 368 714     $  681 805
    Net profit (loss)
     per share            (0.12)         (0.07)         (0.25)         (0.13)
    Weighted average
     number of shares 5 563 071      5 244 496      5 563 071      5 244 496
    




For further information:

For further information: François Cordeau, President and Chief Executive
Officer, Roctest Ltd., (450) 465-1113, info@roctest.com, www.roctest.com

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