Matrikon reports revenue down in first quarter | Automation.com

Matrikon reports revenue down in first quarter

January 14, 2009 - Matrikon reported financial results for the first quarter of fiscal year 2009 and announced that it has obtained regulatory approval for a normal course issuer bid (the “Bid”) to purchase its common shares.

Matrikon president and CEO Nizar J. Somji commented on the quarter: “Against the backdrop of a global economic slowdown, I’m pleased with our results for Q1-09 and our outlook for the remainder of the year. While current conditions contributed to lower than expected software license revenue in the quarter, they have also presented our Solutions division with opportunities to win new business from companies looking to enhance efficiencies and reduce operating costs.”

Revenue for the first quarter, which ended November 30, 2008, was $19.58 million compared to $19.89 million in Q1-08 and $20.16 million in Q4-08. Net income in the first quarter was a record $2.76 million or $0.09 per share compared to $2.24 million or $0.07 per share in Q1-08 and $2.58 million or $0.09 per share in Q4-08.

Pursuant to the Bid, Matrikon is entitled to acquire up to 1,547,595 common shares, representing not more than 5% of the 30,951,918 common shares issued and outstanding as of January 14, 2009. The Bid will commence January 16, 2009 and end January 15, 2010. Daily purchases will be limited to 23,679 common shares, other than block purchase exceptions until March 31, 2009 and thereafter shall be limited to 11,839 common shares, other than block purchase exceptions.

Matrikon believes that the current market price for its common shares does not at times accurately reflect the value of its business or its future prospects.

Somji commented on the buyback: “Given our healthy financial position, we believe that a share buyback program represents another opportunity to enhance shareholder value without impairing our ability to capitalize on future growth opportunities.”

Any common shares purchased by Matrikon under the Bid will be purchased on the open market through the facilities of the Toronto Stock Exchange (“TSX”) pursuant to the rules of the TSX governing normal course issuer bids. The price that Matrikon will pay for any common shares purchased pursuant to the Bid will be the prevailing market price of such shares on the TSX at the time of such purchase. The common shares to be purchased will be cancelled. Matrikon has not made any other purchases in the past 12 months under any other Normal Course Issuer Bid.

The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.

Additional Highlights
  • Software license sales in Q1-09 shrank by 12% compared to Q1-08 and 26% compared to Q4-08 as certain orders were delayed.
  • Foreign currency translation gains amounted to $1.14 million in Q1-09, compared to a loss of $0.47 million in Q1-08, as the Canadian dollar weakened against other currencies in which we do business.
  • Support revenue was a record $2.52 million, an increase of 20% compared to Q1-08.
  • Quarterly gross margin was 61%, comprised of 97% gross margin on software license revenue, 98% on support revenue, 45% on consulting revenue and 25% on equipment revenue.
  • Overhead expenses for Q1-09 were $9.32 million or 48% of revenue and included third-party consulting costs and professional fees of $0.32 million. Sales and marketing expenses were up 35% from Q1-08, as we continue to invest in sales and marketing to drive top-line growth.

    Conference Call and Webcast
    Matrikon President and CEO, Nizar J. Somji and CFO Jonathan Chia will hold a conference call to discuss first quarter results on Wednesday, January 14, 2009 at 5:00 pm ET (3:00 pm MT). To participate live, call 416-644-3414 in the Toronto area and 1-800-733-7571 in all other areas.

    A replay will be available until midnight, February 4, 2009. To access the playback service, please dial 416-640-1917 in Toronto or 1-877-289-8525 elsewhere. The reservation number is 21291281 followed by the pound sign (#).
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