Stock Symbol: ATQ
Listing: Toronto Stock Exchange (TSX)
Outstanding Shares: 96.7 Million
Web Site: www.adeptron.com
TORONTO, March 31 /CNW/ - Adeptron Technologies Corporation (ATQ: TSX) ("Adeptron" or the "Company"), a specialist at delivering integrated product solutions and support to the global technology and electronics industry, today reports audited financial results for the year ended December 31, 2009 and unaudited financial results for the three months ended December 31, 2009.
2009 Financial Highlights:
- Sales of $43.5 million in 2009 compared to $42.6 million in 2008
- Gross margin percentage of 5.7% in 2009 compared to 14.5% in 2008
- Net loss of $4.3 million for 2009 compared to net loss of
$0.9 million in 2008
- EBITDA of ($1.6) million compared to $1.6 million in 2008
- Loss of $0.04 per share in 2009 compared to loss of $0.01 in 2008
Q4 2009 Financial Highlights:
- Sales of $9.1 million in the fourth quarter 2009 compared to
$13.0 million in the same quarter 2008
- Gross margin percentage of (2.1%) in the fourth quarter 2009 compared
to 14.7% in the same quarter 2008
- Net loss of $1.5 million in the fourth quarter 2009 compared to net
income of $0.6 million in the same quarter 2008
- EBITDA of ($1.0) million in the fourth quarter 2009 compared to
EBITDA of $0.8 million in the same quarter 2008
- Loss of $0.01 per share in the fourth quarter 2009 compared to
earnings of $0.01 per share in the same quarter 2008
"The period covering the last quarter of 2008 and the year 2009 saw arguably the greatest economic downturn in the global electronics industry in the last 25 years and the EMS industry generally was significantly hurt as a result. Adeptron, having a majority of its operations conducted in Canada but having a significant majority of its revenues denominated in US dollars, had to face the additional headwind of the appreciation of the Canadian dollar versus its US counterpart. This led to lower reported sales, reduced gross margins, increased foreign exchange write-offs of net monetary assets and losses on embedded derivatives that would not have occurred if the exchange rate had held steady throughout the year. Adeptron also continued the revamping of its organizational structure and reduction of its workforce at various levels. The associated severance costs were charged to cost of goods sold, selling, general and administrative expenses, or restructuring, as was deemed appropriate under Canadian generally accepted accounting principles. We do not expect any kind of severance costs in 2010 that would be more than a small fraction of the amount we experienced in 2009. In fact, based on current conditions we expect to add employees to our end of 2009 head count in order to meet increased customer demands," stated F. Michael Marti, President and CEO of Adeptron.
Marti continued, "It is very important to note that after adjusting for non-cash charges expensed during 2009 that the net loss of approximately $4.3 million is reduced to an approximately $2.1 million cash loss. Changes in non-cash working capital balances related to operations provided approximately $4.1 million and when netted against the cash loss means that the operating activities of the Company provided net cash of approximately $2 million in the year."
"At this time our management group is clearly focused on 2010 and beyond. In 2009 and thus far in 2010 we have won nine new customers and added an important program from an existing customer. This new program involves product integration that is being repatriated to the USA from China. These different program wins helped us to increase our 2009 sales over the 2008 level despite the economic downturn and exchange issues mentioned earlier. Based on the continuing ramp up of these program wins and the firming up of orders from existing customers we are expecting a much better 2010. At this point we have already realized or booked orders for over 50% of our planned sales for the year." Marti added.
Marti ended by saying, "It is also very positive that we have the support in various facets of our business from our major shareholder, RH Global Technologies Ltd. The Company did not comply with certain financial covenants related to our credit agreement with our senior lender as at December 31, 2009. We have obtained a waiver for all breaches in our covenants incurred up to March 26, 2010 including receiving covenant compliance certificates up to January 31, 2010. We are in the process of re-negotiating the terms of the financial covenants. Management is confident, but cannot guarantee, that the covenant terms for future quarters will be successfully arranged. We are in advanced stages of finalizing additional subordinated financing which will be announced when it is closed although the closing on this cannot be guaranteed."
Gross profit for the year decreased $3,715 or 60.1% to $2,462 compared to $6,177 for the year 2008. Gross profit, expressed as a percentage of sales for the year 2009, was down to 5.7% compared to 14.5% for 2008. The erosion in gross profit for the year is due to the product mix, the effect of the volatility of the Canadian dollar and restructuring costs reflecting the continued efforts in improving operations. Gross profit for the fourth quarter of 2009 decreased $2,090, or 110%, to ($188) compared with the same period in 2008. Gross profit as a percentage of sales for the fourth quarter of 2009 was -2.1% compared to 14.7% for the same period in 2008. The decrease in gross profit and percentage in the fourth quarter of 2009 in comparison to the same period in 2008 is largely due to lower sales and increased labour costs. Due to delay in getting materials, numerous changes in production assemblies necessitated the Company to increase direct labour costs.
SG&A expense for the year 2009 increased 3.3% to $5,230 compared to $5,062 for the same period in 2008. The increase is largely due to foreign exchange losses arising from a stronger Canadian dollar, higher restructuring costs with offsets from professional services fees, commissions and bad debt expenses. The percentage of SG&A as a percentage of sales for 2009 was 12.0% up from 11.9% in 2008. Selling, general and administrative ("SG&A") expenses decreased $307 to $1,097 in the fourth quarter compared to $1,404 for the same period in 2008. The decrease in SG&A expense for the fourth quarter is largely due to lower bad debt expenses, commissions and consulting fees compared to the same period in 2008. Overall the percentage of SG&A as a percentage of sales for the fourth quarter of 2009 was 12.0% up from 10.8% for the same period in 2008.
The loss in 2009 was $4,271 compared to a loss of $871 in 2008. The decline is a change in product mix reducing gross profits and losses in embedded derivatives stemming from a weaker US dollar. Net loss for the fourth quarter 2009 was $1,534 compared to a net income of $580 for the same period of 2008. The loss in the fourth quarter in 2009 is due to lower sales compared to the same period of 2008.
EBITDA(1) decreased by $1,542 to ($962) during the fourth quarter of 2009 compared with the same period last year. EBITDA decreased by $3,225 to ($1,623) compared to $1,602 in 2008. The decrease for the fourth quarter of 2009 and the year was mainly attributable to lower sales and lower gross margins.
2009 - Financial Summary
Selected comparative financial information for the three-month and twelve-month periods ended December 31, 2009 and 2008 is shown below. (All numbers below expressed in thousands, except per share information and gross margin percentages):
Income Statement 3-Month 3-Month 12-Month 12-Month
Period Period Period Period
--------- --------- --------- ---------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2009 2008 2009 2008
--------- --------- --------- ---------
Sales $9,124 $12,973 $43,536 $42,619
Gross Profit ($188) $1,902 $2,462 $6,177
Gross Profit % (2.1%) 14.7% 5.7% 14.5%
Net Income (loss) ($1,534) $580 ($4,271) ($871)
EBITDA(1) ($962) $805 ($1,623) $1,602
Net Income (loss) per
share-basic & diluted ($0.01) $0.01 ($0.04) ($0.01)
Weighted average number of
shares outstanding - diluted 96,707 96,707 96,707 73,428
EBITDA(1) reconciliation to GAAP Net Income/(Loss) for the three-month
and twelve-month periods ended December 31, 2009 and 2008 is shown below.
(All numbers below expressed in thousands):
3-Month 3-Month 12-Month 12-Month
Period Period Period Period
--------- --------- --------- ---------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2009 2008 2009 2008
--------- --------- --------- ---------
Net income (loss) per GAAP ($1,534) $580 ($4,271) ($871)
Add (deduct):
Embedded foreign currency
derivatives 2 (355) 509 (528)
Interest expense 166 200 915 1,047
Income tax expense (recovery) 24 (21) (367) (21)
Loss on settlement of
subordinated debenture - - - 638
Depreciation and amortization 349 370 1,478 1,270
Stock-based compensation 31 31 113 67
EBITDA(1) ($962) $805 ($1,623) $1,602
EBITDA(1) Earnings before embedded foreign currency derivatives,
interest, taxes, depreciation, amortization, loss on settlement of
subordinated debenture, and stock-based compensation.
Adeptron's audited 2009 financial statements and MD&A will be available on Adeptron's web site on April 1, 2010 at www.adeptron.com and the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com.
About Adeptron:
Adeptron is a specialist at delivering integrated product solutions and support to the global technology and electronics industry. As a leading global provider of complete Electronics Manufacturing Services (EMS), Adeptron offers world class manufacturing facilities and global partners throughout Canada, the United States, Israel and China, allowing the Company to provide its customers the flexibility and scalability to competitively achieve total solutions to their present and future electronics outsourcing needs. Adeptron is a public company whose common shares are listed for trading on the Toronto Stock Exchange (TSX) under the symbol: "ATQ". Visit Adeptron at: www.adeptron.com.
Adeptron is a public company whose common shares are listed for trading on The Toronto Stock Exchange under the symbol: "ATQ". Visit Adeptron at: www.adeptron.com or www.investorfile.com.
THIS NEWS RELEASE MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO SUCH MATTERS AS EXPECTED FINANCIAL PERFORMANCE, BUSINESS PROSPECTS, TECHNOLOGICAL DEVELOPMENTS, DEVELOPMENT ACTIVITIES AND LIKE MATTERS. THESE STATEMENTS INVOLVE RISK AND UNCERTAINTIES, INCLUDING BUT NOT LIMITED TO RISK FACTORS DESCRIBED IN DOCUMENTS FILED WITH REGULATORY AUTHORITIES, SUCH AS THE COMPANY'S MOST RECENTLY FILED ANNUAL AND QUARTERLY REPORTS AND ANNUAL INFORMATION FORM. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED AS A RESULT OF THESE RISKS AND SHOULD NOT BE RELIED UPON AS A PREDICTION OF FUTURE EVENTS. ADEPTRON TECHNOLOGIES CORPORATION UNDERTAKES NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE ON WHICH SUCH STATEMENT IS MADE, OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.
%SEDAR: 00012076E
For further information: Adeptron Company Contact: F. Michael Marti, President & Chief Executive Officer, Tel: (416) 705-6534, [email protected]; Adeptron Company Contact: Francis K. Lindayen, Chief Financial Officer, Tel: (905) 470-0109 x2223, [email protected]
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