Mitec Telecom reports fiscal 2010 Q2 results
Revenue was
EBITDA from operating activities (earnings before interest, income taxes, depreciation and amortization) was negative
"We are seeing signs that the global demand for wireless infrastructure components is generating opportunities as customers are asking for speed, capacity, bandwidth and reliability for their wireless devices. We have positioned ourselves to benefit from this demand and continue to work with both network providers and operators to deliver this connectivity", said Dan Piergentili, Mitec's President and CEO.
"We are also very pleased with the growth of our military based business which is being led by the Keragis high power amplifier line. These products deliver enhanced communication capacity demanded by military applications and while the qualification process is lengthy, once the sales cycle begins, it generates predictable revenue at favourable gross margins", said Piergentili.
Mitec completed a private placement in late October to replace its existing convertible debt which had come due in mid-October. Mitec's Management and its Board of Directors continue to monitor and initiate cost containment measures.
About Mitec Telecom Inc.
Mitec is a leading designer and provider of radio frequency (RF) products for the telecommunications and satellite communications industries, as well as a variety of other sectors. Mitec sells its products worldwide to network providers for incorporation into high-performing wireless networks used in voice and data/internet communications. Headquartered in
Certain statements in this release, including statements regarding future results and performance, are forward-looking statements based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, decreases in demand for Mitec's products, fluctuations in selling prices and adverse changes in general market and industry conditions and other factors listed in Mitec's public filings with the appropriate securities regulatory authorities.
MITEC TELECOM INC.
INTERIM CONSOLIDATED BALANCE SHEETS
(In thousands of Canadian dollars) As at As at
October 31, April 30,
2009 2009
$ $
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Unaudited Audited
ASSETS
Current
Cash and cash equivalents 2,277 4,485
Short-term investments 181 181
Trade receivables 6,147 5,592
Other receivables 579 126
Income tax recoverable 551 323
Inventories 6,121 8,088
Prepaid expenses and other 669 629
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Total current assets 16,525 19,424
Property, plant and equipment 4,982 5,493
Intangible assets 2,860 3,263
Goodwill 1,991 1,991
Investments 25 25
Future income tax 202 125
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26,585 30,321
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 5,349 5,449
Current portion of long-term debt - 1,215
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Total current liabilities 5,349 6,664
Long-term debt 955 -
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6,304 6,664
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Shareholders' equity
Common shares 132,142 132,142
Warrants 1,151 1,925
Equity component of convertible debentures 758 14
Contributed surplus 10,747 9,836
Deficit (123,886) (119,980)
Accumulated other comprehensive loss (631) (280)
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Total shareholders' equity 20,281 23,657
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26,585 30,321
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MITEC TELECOM INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands of Canadian dollars, except per share data and number of
shares)
Unaudited
For the three months ended For the six months ended
October 31, October 31,
2009 2008 2009 2008
$ $ $ $
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Sales 7,198 10,568 13,905 25,499
Cost of sales 6,381 8,202 12,053 19,967
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Gross profit 817 2,366 1,852 5,532
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Expenses
Research and
development 678 1,136 1,742 2,149
Selling and
administrative 1,647 1,714 2,857 3,248
Amortization of
intangible assets 154 273 374 578
Financial expenses 222 196 376 375
Foreign exchange (8) (342) 403 (450)
Impairment of
property, plant and
equipment (50) 351 (25) 351
Stock-based
compensation 50 247 109 449
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2,693 3,575 5,836 6,700
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Loss before income
taxes (1,876) (1,209) (3,984) (1,168)
Income tax recovery (39) (14) (78) (28)
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Net loss for the
period (1,837) (1,195) (3,906) (1,140)
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Unrealized gain (loss)
on translating
financial statements
of self-sustaining
foreign operations (7) 233 (351) 255
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Comprehensive loss for
the period (1,844) (962) (4,257) (885)
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Basic and diluted loss
per common share (0.01) (0.01) (0.02) (0.01)
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Weighted average
number of
outstanding common
shares 220,666,776 220,666,776 220,666,776 220,651,370
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MITEC TELECOM INC.
INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands of Canadian dollars, except for number of shares)
Unaudited
Equity
component
of
convertible
Common shares Warrants debentures
-------------------------------------------------------------------------
No. (000s) $ No. (000s) $ $
-------------------------------------------------------------------------
Balance,
April 30, 2008 220,312 132,097 38,016 1,931 46
Issued under
conversion of
convertible
debentures 354 61 - - (10)
Expired warrants - - (187) (6) -
Stock-based
compensation - - - - -
Other comprehensive
gain the period - - - - -
Net loss for the
period - - - - -
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Balance,
October 31, 2008 220,666 132,158 37,829 1,925 36
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Balance,
April 30, 2009 220,666 132,142 37,829 1,925 14
Issued upon
conversion of
convertible
debentures - - - - (14)
Issued under a
convertible
debentures
financing - - - - 758
Expired warrants - - (14,226) (774) -
Stock-based
compensation - - - - -
Other comprehensive
loss the period - - - - -
Net loss for the
period - - - - -
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Balance,
October 31, 2009 220,666 132,142 23,603 1,151 758
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Accumu-
lated
other
Contri- compre- Share-
buted hensive holders'
surplus Deficit loss equity
-------------------------------------------------------------------------
$ $ $ $
-------------------------------------------------------------------------
Balance,
April 30, 2008 9,223 (115,372) (894) 27,031
Issued under
conversion of
convertible
debentures 14 - - 65
Expired warrants 6 - - -
Stock-based
compensation 449 - - 449
Other comprehensive
gain the period - - 255 255
Net loss for the
period - (1,140) - (1,140)
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Balance,
October 31, 2008 9,692 (116,512) (639) 26,660
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Balance,
April 30, 2009 9,836 (119,980) (280) 23,657
Issued upon
conversion of
convertible
debentures 28 - - 14
Issued under a
convertible
debentures
financing - - - 758
Expired warrants 774 - - -
Stock-based
compensation 109 - - 109
Other comprehensive
loss the period - - (351) (351)
Net loss for the
period - (3,906) - (3,906)
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Balance,
October 31, 2009 10,747 (123,886) (631) 20,281
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MITEC TELECOM INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of Canadian dollars)
Unaudited
For the three months ended For the six months ended
October 31, October 31,
2009 2008 2009 2008
$ $ $ $
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OPERATING ACTIVITIES
Net loss for the
period (1,837) (1,195) (3,906) (1,140)
Add items not
affecting cash
Amortization of
property, plant
and equipment,
intangible assets
and deferred
charges 420 619 889 1,373
Impairment of
property, plant
and equipment (50) 351 (25) 351
Stock-based
compensation 50 247 109 449
Accretion expense 105 118 215 246
Income tax recovery (39) (14) (78) (28)
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(1,351) 126 (2,796) 1,251
Changes in non-cash
working capital
balances related to
operating activities (85) 2,113 591 (306)
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Cash flows provided
(used) in operating
activities (1,436) 2,239 (2,205) 945
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INVESTING ACTIVITIES
Additions to property,
plant and equipment
and intangible assets (73) (152) (290) (301)
Purchase of short-term
investments (181) - (181) (79)
Sale of short-term
investments 181 - 181 77
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Cash flows used in
investing activities (73) (152) (290) (303)
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FINANCING ACTIVITIES
Convertible debentures
issued 1,702 - 1,702 -
Repayment of long-term
debt (1,400) (156) (1,400) (250)
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Cash flows used by
financing activities (302) (156) (302) (250)
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Loss on foreign cash
and cash equivalents
held (6) - (15) -
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Net increase
(decrease) in cash
and cash equivalents
for the period (1,067) 1,931 (2,208) 392
Cash and cash
equivalents,
beginning of the
period 3,344 3,245 4,485 4,784
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Cash and cash
equivalents, end of
the period 2,277 5,176 2,277 5,176
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%SEDAR: 00002350EF
For further information: Mr. Jeffrey Mandel, Executive Chairman and Director, Investor and Corporate Relations, (514) 694-9000, [email protected]; Source: Mitec Telecom Inc.
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