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Matrikon announces Q2 results
 
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Edmonton, Alberta – April 19, 2009 - Matrikon reported financial results for the second quarter of fiscal year 2009 which ended February 28, 2009.

Matrikon president and CEO Nizar J. Somji commented on the quarter: “Our second quarter results were weaker than we anticipated. Consulting revenue was particularly disappointing and went beyond our typical seasonal weakness. In spite of this, we achieved some significant accomplishments. Very strong software and support revenue are a clear indication that opportunities exist, although the approval process is taking longer and stretching out the sales cycle. Software revenue growth typically leads to consulting revenue in subsequent periods as projects related to the product purchased ramp up. We remain confident in our prospects and have been investing to ensure we are well positioned to capitalize on the opportunities that a more stable economic environment will present.”

Second quarter revenue was $19.66 million compared to $19.44 million in Q2-08 and $19.58 million in Q1-09. Net income in the second quarter was $2.03 million or $0.07 per share compared to $1.81 million or $0.06 per share in Q2-08 and $2.76 million or $0.09 per share in Q1-09.

Year-to-date (YTD) revenue was down slightly at $39.24 million compared to the first half of FY-08. YTD net income was $4.78 million or $0.16 per share, compared to $4.05 million or $0.13 per share in the first half of FY-08.

Matrikon’s board of directors also declared a dividend of $0.03 per common share for the second quarter of fiscal year 2009. This dividend is payable May 13, 2009 to all shareholders of record on April 29, 2009. The dividend is an eligible dividend for Canadian tax purposes.

Additional Highlights
  • Software licenses were a near record $4.70 million in Q2-09, representing growth of 15% compared to Q2-08 and 27% compared to Q1-09. YTD software licenses grew by 1% to $8.39 million compared to $8.30 million in FY-08.
  • Strong support revenue of $2.50 million was achieved in Q2-09, representing growth of 20% compared to Q2-08. YTD support revenue also grew by 20% to $5.02 million from $4.19 million in FY-08.
  • Foreign currency translation gains amounted to $0.47 million in Q2-09, compared to a loss of $0.31 million in Q2-08, as the Canadian dollar weakened against other currencies in which we do business. YTD foreign currency translation gains were $1.61 million compared to a YTD loss of $0.79 million in FY-08.
  • Quarterly gross margin was 59%, comprised of 99% gross margin on software license revenue, 93% on support revenue, 42% on consulting revenue and 27% on equipment revenue.
  • Overhead expenses for Q2-09 were $9.69 million or 49% of revenue. Sales and marketing expenses were up 49% from Q2-08, as we continue to invest in sales and marketing to drive top-line growth. General & administrative expenses were up 35% compared to Q2-08 as a result of increased training, relocation and third party consulting fees. YTD overhead expenses were $19.02 million or 48% compared to $15.74 million or 40% of revenue in the first six months of FY-08.
  • Cash used in operations was $1.24 million in Q2-09 and $1.79 million for the first six months compared to cash generated by operations of $5.82 million in Q2-08 and $8.34 million for the first six months of FY-08. Increased accounts receivable, contracts in progress and slower collections in the quarter contributed to the cash decrease.
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