Adeptron Q3 2009 Results

Stock Symbol: ATQ

Listing: Toronto Stock Exchange (TSX)

Web Site: www.adeptron.com

TORONTO , Nov. 16 /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 2009 unaudited third quarter financial results for the three-month and nine-month periods ended September 30, 2009 .

    
    Q3 2009 Financial Highlights:

    -   Sales decreased by $0.24 million, or 2%, to $9.432 million compared
        to $9.636 million in the third quarter of 2008
    -   Gross margin declined because of the product mix and continued
        strengthening of the CDN$ during the quarter to 3.1% compared to
        15.5% for the same quarter last year
    -   Net loss of $1.138 million compared to a net income of $0.104 million
        for the same quarter last year
    -   EBITDA of $(0.494 million) compared to EBITDA of $0.505 million for
        the same quarter last year, and
    -   Loss of $0.01 per share compared to $0.00 per share for the same
        quarter last year
    

F. Michael Marti , President & CEO of Adeptron stated, "Our third quarter performance was adversely affected by the global economic downturn and the continued strengthening of the Canadian dollar. Industry statistics show that this downturn, as it related to the electronics industry specifically, was the worst in 25 years. Customers reduced demand levels in response to the end market softness and also made significant inventory corrections. Sales from our largest customers continued to be strong and combined with sales from new customers helped to cover some of the shortfall from other existing customers. The significant reduction in gross margin was due primarily to the negative impact of a strong Canadian dollar on our predominantly US dollar denominated revenues and inventory revaluation, and product mix. The Company continues to address the erosion in gross margins by increasing our revenue base and continually improving our production processes and reducing our costs."

Marti continued, "The economy is beginning to show some improvement and we expect this to positively impact our last quarter of this year compared to the previous two quarters. Even though there seems to be a growing consensus that the recession is over, and we expect firming up of end user demand throughout 2010, we are preparing to face continuing volatility due to currency fluctuations and the unevenness of the turnaround. We will manage costs tightly given the uncertainty of the scope of the recovery. However, we are encouraged by the fact we have won several new customers that will add additional revenue as they begin to ramp and are expected to reach meaningful revenue levels as they achieve full production during 2010. To support this growth the Company made a significant investment in a new very high-speed surface mount ("SMT") line in its Ottawa facility. This SMT line was installed during the third quarter and not only allows the site to increase its production capacity but it also greatly improves operating efficiencies."

Q3-2009 - Financial Summary

Selected comparative financial information for the three-month and six-month periods ended September 30, 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    9-Month    9-Month
                                     Period     Period     Period     Period
                                  ---------  ---------  ---------  ---------
                                  September  September  September  September
                                   30, 2009   30, 2008   30, 2009   30, 2008
                                  ---------  ---------  ---------  ---------

    Sales                            $9,432     $9,636    $34,412    $29,646
    Gross Profit                        290      1,489      2,649      4,275
    Gross Profit %                     3.1%      15.5%       7.7%      14.4%
    Net Income (loss)                (1,138)       104     (2,737)    (1,451)
    EBITDA(1)                          (494)       505       (661)       797
    Net Income (loss) per share-
     basic & diluted                 ($0.01)     $0.00     ($0.03)    ($0.02)
    Weighted average number of
     shares outstanding - diluted    96,708     96,708     96,708     65,612

    EBITDA(1) reconciliations to GAAP Net Income/(Loss) for the three-month
    and nine-month periods ended September 30, 2009 and 2008 are shown below.
    (All numbers below expressed in thousands):

                                    3-Month    3-Month    9-Month    9-Month
                                     Period     Period     Period     Period
                                  ---------  ---------  ---------  ---------
                                  September  September  September  September
                                   30, 2009   30, 2008   30, 2009   30, 2008
                                  ---------  ---------  ---------  ---------

    Net income (loss) per GAAP      ($1,138)      $104    ($2,737)   ($1,451)
    Add (deduct):
    Embedded foreign currency
     derivatives                        158        (55)       507       (173)
    Interest expense                    242        153        749        847
    Loss on settlement of
     subordinated debenture               -          -          -        638
    Income tax recovery                (160)         -       (391)         -
    Depreciation and amortization       391        303      1,129        900
    Stock-based compensation             13          -         82         36
    EBITDA(1)                         ($494)      $505      ($661)      $797

    EBITDA(1) Earnings before embedded foreign currency derivatives,
    interest, taxes, depreciation, amortization, goodwill impairment, and
    stock-based compensation.
    

Working capital, defined as current assets less current liabilities, as at September 30, 2009 , was $1,384 compared to $3,876 at December 31, 2008 , representing a decrease of $2,492 . This decrease in working capital is primarily due to decrease in accounts receivables, and inventories.

Adeptron's unaudited 2009 third quarter financial statements and MD&A will be available on Adeptron's web site on November 16, 2009 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: [phone], [email protected]; Adeptron Company Contact: Francis K. Lindayen, Chief Financial Officer, Tel: [phone] x2223, [email protected]