20-20 Technologies Reports First Quarter 2012 Results and Announces Review of Strategic Alternatives

LAVAL, QC, April 4, 2012 /CNW Telbec/ - 20-20 Technologies Inc. (TSX: TWT), the world leader in 3D interior design and furniture manufacturing software, today announced its results for the first quarter ended January 31, 2012. The Company also announced that its Board of Directors has initiated a review of strategic and financial alternatives to enhance shareholder value. All amounts are in US dollars unless otherwise indicated and presented under IFRS.

FIRST QUARTER 2012 RESULTS

Highlights

• Revenues of $16.6 million, up 1.9% compared to last year
• Revenues in Europe, Middle East and Africa (EMEA) region up 12.6%
• Adjusted EBITDA at $1.6 million compared to $1.7 million in 2011
• Net earnings stood at $0.14 million or $0.01 per share compared to $0.37 million or $0.02 per share last year

As expected, we continue to experience volatility from one quarter to another. Sales momentum in the EMEA region was maintained during the quarter, while our two other operating regions saw some declines.  Sales of inSight and of related professional services in Germany and Eastern Europe continued to fuel growth of EMEA.  Despite some increasingly positive statistics related to the U.S. economy, market conditions remained weak in the Home and Manufacturing sectors. In the Asia Pacific (APAC) region, we are transitioning our business from selling third party solutions through distributors to direct selling of our own proprietary solutions, with the specific goal of improving our margins over time. As the transition proceeds, we expect that our growth rate in the APAC region will continue to be temporarily impacted.  "We continue to expect an overall trend of sustained growth in all regions in 2012," said Jean-François Grou, Chief Executive Officer.

"During the quarter we consolidated our professional services in North America into a shared services group in order to improve efficiency. Our gross margin for the quarter was adversely affected as a result of this, and we anticipate improvements in the upcoming quarters," said Mr. Grou.

Revenues for the quarter increased 1.9% to $16.6 million, compared with $16.3 million a year ago. Without the negative impact of exchange rates revenues would have increased by 2.8%.

Based on the reorganization during 2011 of the Company's operations in three geographic areas, revenues are reported for the first time based on the following segmentation: the Americas; Europe, Middle East and Africa; and Asia Pacific. The regions represented 48.2%, 48.3% and 3.5% of total revenues, respectively.

Revenues in the Americas declined by 5.2% over the previous year due to continued soft market conditions in the U.S. For the same period, EMEA revenues increased by 12.6% fuelled by the sale of manufacturing solutions in Germany and Russia and also by the Home sector in France. APAC revenues declined by 20.8% with the decreased contribution of third party license sales when compared to 2011. As an indication, revenues related to proprietary software licenses increased by 94.0% over 2011. With a lower professional service and maintenance revenue ratio to license in China when compared to the overall company, fluctuations should be anticipated from one quarter to another.

Home sector revenues, accounting for 51.9% of total revenues, reached $8.6 million, down 1.3% over the previous year. For the same period, overall license revenues increased by 7.3% and were offset by declines from maintenance and other recurring revenues, and professional services of 3.8% and 15.4%, respectively. License revenues benefitted from a contract with a large retail chain in France and growth in the APAC region. The decline in professional services reflects the lower creation and maintenance of catalogues, a situation which management regards as temporary.

Manufacturing sector revenues, which accounted for 30.9% of total revenues, increased by 5.4% to $5.1 million. For the EMEA region, revenues increased by 21.8% while the Americas and APAC regions recorded declines of 14.4% and 75.4%, respectively. License revenues were essentially flat while professional service revenues registered growth of 15.9% reflecting the implementation of solutions signed in recent quarters. Maintenance and other recurring services increased by 2.6% for the quarter and 3.2% on a trailing twelve month basis compared with a decline of 2.0% for fiscal 2011. The sales pipeline for manufacturing solutions in the EMEA and APAC regions remains very healthy.

Office sector revenues reached $2.8 million, up 5.7% over the previous year. The office sector is benefiting from a timid recovery in the U.S. office industry and, to a larger extent, from the introduction of Visual Impression, launched in the latter part of the first quarter of 2011. This contributed to growth in overall licenses and maintenance and other recurring services for 2012 of 6.1% and 6.5%, respectively, over the previous year. Revenues from professional services were up modestly year-over-year.

Operating expenses for the first quarter were essentially flat when compared with 2011 despite the increase in the headcount. As indicated before, in recent quarters, some research and development personnel were redirected to professional services to address higher demand.

Adjusted EBITDA
Adjusted EBITDA reached $1.6 million or 9.9% of revenues, compared to $1.7 million or 10.4% of revenues a year ago. The decrease in Adjusted EBITDA is due largely to a lower gross margin due to organizational changes indicated above. Costs remain well under control and margins should progressively improve with higher levels of revenue, as events demonstrated in Q4 of 2011.

Net Earnings
The Company generated net earnings of $0.14 million or $0.01 per share, compared with net earnings of $0.37 million or $0.02 per share, a year ago.

Balance Sheet
The Company maintained a solid balance sheet with cash and cash equivalents of $9.2 million compared with $13.0 million for the previous year. Long-term debt, including the current portion, was reduced by $1.9 million when compared with last year and stood at $4.8 million as of January 31, 2012.

Outlook
"Despite a slow start to 2012, we expect momentum to build during the year similarly to how sales developed in 2011 as the first quarter is traditionally lower due to the holiday period. Clearly, on a short-term basis, we will focus on increasing the margin of professional services and remain vigilant on how resources are allocated to the best revenue opportunities. One of the most important strategic moves of our history, the migration of 20-20's end-to-end solution to the cloud (i.e. Ideal Spaces) will increasingly contribute to reinforce our position as the industry leader," Mr. Grou concluded.

Conference Call Information
20-20 will host a conference call to discuss first quarter results on April 4, 2012 at 8:30 a.m. (EST).  The  call  will  be  accessible  by  telephone  at  1-888-231-8191,  or 514-807-9895. An audio replay of the conference call will be available until midnight on Tuesday, April 10, 2012. To access it, dial 1-855-859-2056 and enter the pass code: 67805974.

Please note that 20-20 Technologies' full financials and MD&A are available on SEDAR as well as on the Company's web site, www.2020technologies.com.

REVIEW OF STRATEGIC AND FINANCIAL ALTERNATIVES

The Company's Board of Directors has initiated a review of strategic and financial alternatives with the objective of enhancing shareholder value. The Company has appointed a Special Committee to review and consider such alternatives. This Special Committee is composed of four independent directors of the Company, namely Jocelyn Proteau as Chairman of the Committee, Jacques Malo, Philip Deck and Benoît La Salle.

The Company further announced that it has engaged TD Securities Inc. as its financial advisor and Stikeman Elliott LLP as its legal advisor. Fasken Martineau Dumoulin LLP has also been engaged to assist the Special Committee with the review announced today.

Please note that the Company's Board of Directors has not set any deadline for completing the review of such strategic alternatives, and may ultimately determine that its current business plan is the best means to enhance shareholder value.  Accordingly, there can be no assurance that the strategic review will result in the consummation of any agreement or transaction. The Company does not intend to make further announcements regarding the strategic review process unless it concludes they are warranted by the circumstances or are expressly required by law.

ABOUT 20-20 TECHNOLOGIES INC.

20-20 Technologies is the world's leading provider of computer-aided design, business and manufacturing software tailored for the interior design and furniture industries. Dealers and retailers use our desktop and Web-based products for the home and office markets. 20-20 offers a unique end-to-end solution, integrating the entire breadth of functions in interior design. It provides a bridge for data communication from the point-of-sale to manufacturing, including computer-aided engineering and plant floor automation software. Operating in eleven countries with more than 500 employees and an extensive network of partners worldwide, 20-20 is a publicly traded company (TWT) on the Toronto Stock Exchange (TSX). For more information, visit www.2020technologies.com.

NON-IFRS MEASURE

Adjusted EBITDA is a non-IFRS measure related to cash earnings and is defined for these purposes as operating income plus amortization, adjusted for non-recurring items and other items such as restructuring costs. Adjusted EBITDA is reported for information purposes only and is a financial performance measure mainly used in the financial industry. This measure does not have a standardized meaning as prescribed by IFRS and therefore may not be comparable to similar measures reported by other public companies. The reader must know that Adjusted EBITDA is not a substitute to net earnings as an indicator of our operating results neither under IFRS nor to cash flows from operating and financing activities as a measure of liquidity and cash flows.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release constitute forward-looking information within the meaning of securities laws.

Implicit in this information, particularly in respect of future operating results and economic performance of the Company are assumptions regarding projected revenue and expenses. These assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual future operating results and economic performance of the Company are subject to a number of risks and uncertainties, including general economic, market and business conditions and could differ materially from what is currently expected.

For more comprehensive information on these risks and uncertainties, please refer to our most recently filed annual information form, available at www.sedar.com. Forward-looking information contained in this report is based on management's current estimates, expectations and projections, which management believes are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to do so, we are under no obligation and do not undertake to update this information at any particular time unless required by applicable securities law.

20-20 Technologies Inc. CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Amounts in thousands of U.S. dollars)  (unaudited)
			January 31,	October 31,	November 1,
		Note	2012	2011	2010
			$	$	$
ASSETS
Current assets
	Cash and cash equivalents		9,217	11,362	14,681
	Trade and other receivables		19,736	15,461	14,614
	Income taxes receivable		102	115	102
	Contracts in progress		396	684	178
	Prepaid expenses		1,042	1,429	1,022
	Income tax credits recoverable		582	631	984
			31,075	29,682	31,581
Property and equipment			2,152	2,241	2,296
Intangibles			4,893	5,186	5,938
Goodwill			50,027	51,286	51,044
Income tax credits recoverable			3,756	3,551	2,202
Deferred tax assets			2,055	2,145	2,371
Other assets			1,223	1,215	1,160
			95,181	95,306	96,592
LIABILITIES
Current liabilities
	Bank loan		-	-	148
	Trade and other payables		10,963	10,445	10,475
	Income taxes payable		105	186	413
	Deferred revenue		15,474	14,134	13,265
	Current portion of long-term debt		2,127	2,099	2,833
	Provisions		1,609	1,900	1,870
			30,278	28,764	29,004
Long-term debt			2,339	2,610	4,710
Leasehold inducements			307	350	279
Deferred tax liabilities			2,029	2,127	2,455
			34,953	33,851	36,448
EQUITY
Capital stock			58,071	58,154	58,569
Common stock options and warrants			1,612	1,622	1,422
Contributed surplus			1,096	1,058	1,050
Retained earnings (deficit)			372	228	(897)
Accumulated other comprehensive (loss) income			(923)	393	-
Equity attributable to owners of the Company			60,228	61,455	60,144
			95,181	95,306	96,592

20-20 Technologies Inc. CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Amounts in thousands of U.S. dollars, except per share data)  (unaudited)
		Three months ended
		January 31
		2012	2011
		$	$
Revenues		16,639	16,335
Cost of revenues		5,200	4,699
Gross profit		11,439	11,636
Operating expenses
	Sales and marketing	4,393	4,632
	Research and development expenses	2,903	2,877
	General and administrative	3,648	3,437
		10,944	10,946
Operating income		495	690
Finance costs		310	357
Finance income		(22)	(29)
		288	328
Profit before income taxes		207	362
Income taxes		63	(11)
Net earnings		144	373
Other comprehensive income (loss)
	Foreign currency translation differences	(1,316)	(74)
Total comprehensive income (loss) for the period		(1,172)	299
Earnings per share
	Basic and Diluted	0.01	0.02
20-20 Technologies Inc. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Amounts in thousands of U.S. dollars)  (unaudited)
		Three months ended
		January 31
		2012	2011
		$	$
OPERATING ACTIVITIES
Net earnings		144	373
Non-cash items
	Depreciation and amortization	781	814
	Leasehold inducements	(38)	(21)
	Stock-based compensation	104	19
	Accreted interest on long term debt	9	12
	Deferred taxes Interest expense, net	(292) 94	(538) 145
	Income taxes	355	527
	Unrealized forward exchange loss (gain)	394	43
	Changes in non-cash working capital items	(2 631)	(1,357)
	Cash (used in) from operating activities	(1,080)	17
	Interest paid	(124)	(236)
	Interest received	22	29
	Income taxes paid	(217)	(158)
Cash used in operating activities		(1 399)	(348)
INVESTING ACTIVITIES
Property and equipment - acquired		(213)	(214)
Intangible assets - acquired		(95)	(28)
Proceeds from disposition of property and equipment		-	5
Other assets		(19)	(1)
Cash used in investing activities		(327)	(238)
FINANCING ACTIVITIES
Repayment of long-term debt		(193)	(1,308)
Common shares buyback		(68)	-
Cash used in financing activities		(261)	(1,308)
Effect of changes in exchange rate on cash held in foreign currencies		(158)	229
Net decrease in cash and  cash equivalents		(2,145)	(1,665)
Cash and cash equivalents, beginning of period		11,362	14,681
Cash and cash equivalents, end of period		9,217	13,016

Media Relations:
MaisonBrison Communications
Pierre Boucher
[phone]