Rutter Releases First Quarter Unaudited Financial Statements

ST. JOHN'S, Jan. 14 /CNW/ - Today, Rutter Inc. (TSX: RUT) released its unaudited first quarter consolidated financial statements for the three month period ended November 30, 2010.

Summary financial information is provided in this press release which should be read in conjunction with the full financial statements and MD&A available on the Company's web site at www.rutter.ca or on SEDAR at www.sedar.com.  Fraser H. Edison, President and CEO of the Company, and Karen M. Snook, Chief Financial Officer, will host a conference call on Monday, January 17, 2011, to discuss the results. Details of this call were announced in a press release dated January 14, 2011 and are also available on the Company's web site.

SUMMARY OF RESULTS

The Company's quarterly results are summarized in the tables below:

(in thousands)
  Three
Months
November 30 2010
Three
Months
November 30 2009
Increase
(Decrease)
Revenues:
  Third party manufacturing $ 5,854 $9,679 $(3,825)
  Company owned products 1,899 2,138 (239)
  Total Technologies 7,753 11,817 (4,064)
  Other (including Corporate) 660 1,086 (426)
    Company total 8,413 12,903 (4,490)
    
EBITDA    
  Technologies Segment 1,396 1,310 86
  Other (including Corporate) (270) (74) (196)
    Company total 1,126 1,236 (110)
 
Other costs (2) (916) (1,034) (118)
 
Net earnings (loss)       210 202       8
 
Earnings (Loss) Per Share $ 0.003 $ 0.003 $   -

(1) EBITDA is identified in the Company's financial statements as "Earnings before undernoted items" and is more fully defined in the Company's financial statements and MD&A.
(2) Other (costs) income include:  Depreciation and amortization; Interest on long-term debt; Interest and bank charges; (Gain) on sale of investments; other items; Equity income; all of which are separately disclosed in the Company's financial statements.

Revenues

Revenues of $8,413,000 reflect an increase as compared to the final two quarters of fiscal 2010. 

The higher third party manufacturing revenues in the first quarter of the prior year were due to unusually high activity levels throughout fiscal 2009 and into the first quarter of fiscal 2010.

Radar revenues continue to grow and VDR revenues have stabilized through the final two quarters of fiscal 2010 and the first quarter of fiscal 2011.

Engineering revenues included in Other were positively impacted in the first quarter of the prior year by government stimulus spending. 

EBITDA

EBITDA decreased modestly by 9% versus the comparative quarter considering that revenues decreased by 35%.  EBITDA in the current year is at 13.3% of revenues versus 9.6% in the prior year. This improvement is the result of ongoing cost savings efforts throughout fiscal 2010 and improved gross margins attributable to change in sales mix.

Other (costs) income

Other costs decreased by $118,000 versus the comparative quarter. Included in the current year is a gain on sale of the disposition of $173,000 with respect to AFN Engineering Inc, an equity accounted investee disposed of during the quarter. Interest on long-term debt decreased only slightly versus the comparative quarter as the Company was subject to a 4% default interest penalty during the quarter that effectively offset any interest reductions that would have been achieved from reductions in borrowing levels versus the prior year.

Net Earnings (Loss)

The Company recorded net earnings of $210,000 for the quarter compared to $202,000 in the prior year.

CONCLUSION

"During the quarter, we repaid $2,013,000 of debt, renegotiated terms on our senior debt, and completed the disposition of a non-core investment asset" noted Fraser Edison, President and CEO.  "We also achieved a proportionately much stronger EBITDA result on a significantly smaller revenue stream than in the prior year's first quarter.  Meanwhile our backlog remains healthy with our key military customer and our radar business continues to demonstrate further growth opportunity. We have strong core operations and we will continue efforts to reduce debt and associated borrowing costs" he concluded".

About Rutter Inc. - Rutter is an enterprise focused on providing innovative technologies and engineering solutions. Rutter's global network supplies technologies to improve efficiency and safety in the marine, defense, transportation, oil and gas sectors from its headquarters in the Province of Newfoundland and Labrador. Multidisciplinary consulting engineering services including civil, structural, mechanical and electrical engineering as well as environmental and construction management services are provided to a diverse client base which includes all levels of government and the oil and gas and industrial sectors. For more information see www.rutter.ca

Forward-Looking Statements
This press release may contain forward-looking statements that involve risks and uncertainties. These statements reflect current expectations and are subject to a number of risks and uncertainties including but not limited to, change in technology and general market conditions. Due to the many risks and uncertainties, Rutter Inc. cannot assure that forward-looking statements that may be contained in this press release will be realized.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

SOURCE RUTTER INC.

For further information:

Karen Snook, Chief Financial Officer and Corporate Secretary, Rutter Inc. +1 709 368 3174

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RUTTER INC.

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