Matrikon Reports 5% Revenue Growth in First Quarter 2005
Net income of $0.20 million (including $1.11 million after tax foreign currency translation losses)
Gross margin improved to 54%
Earnings per share of $0.01
Improved margin in consulting business achieved through higher margin, strategic consulting engagements and increased utilization
Matrikon reiterates fiscal year 2005 guidance for revenue growth of 14% to 23% and net income growth of 49% to 89%
Edmonton, AB January 12, 2005 Matrikon Inc. (TSX: MTK), a leading provider of solutions for industrial intelligence, today reported consolidated financial results for the fiscal year 2005 first quarter, which ended November 30, 2004. We are very pleased with the results of the first quarter of 2005 and the tremendous turnaround in the growth and profitability of our consulting business, said Nizar J. Somji, Matrikons president and chief executive officer. Our first quarter results were impacted by the strong Canadian dollar, resulting in largely non-cash losses from the revaluation of foreign denominated net assets. We are operating efficiently, and have strategic consulting contracts in place. Our momentum is building and we are in a position to capitalize on this momentum throughout 2005.First quarter revenue grew 5% to $14.96 million from $14.30 million in the comparable period of fiscal 2004. Net income for the first quarter was $0.20 million (or $0.01 per share) compared to $0.87 million (or $0.03 per share) in the comparable period of fiscal year 2004. The effect of foreign exchange translation loss was a decline in first quarter income before taxes of $1.71 million, compared to a decline of $0.66 million in the first quarter of fiscal 2004. The after tax impact to net income for the first quarter was a decline of $1.11 million ($0.03 per share). The realized foreign currency translation loss for the first quarter was $0.53 million related to exchanging US dollars into Canadian dollars; this portion of foreign exchange losses is not recoverable if rates become more favorable.Subsequent to the first quarter, December software sales were a new record for a single month and management expects this to have a positive impact on second quarter results. Matrikons annual global sales conference and first annual global service conference, to be held in mid January 2005, are expected to build momentum and position the company for strong growth throughout calendar year 2005. Outlook Based on:
first quarter results for revenue and expenses
record product sales in December
current contracts underway
continuing ability to win new business at the current pace
other factors remaining favorableManagement expects the company to achieve revenue growth of 14% to 23% and net income growth of 49% to 87% during fiscal year 2005. Due to the various risks associated with the numerous factors that may affect actual results, Matrikon discloses a target range. Quarter Highlights:
Detroit Edison selected ProcessNet and ProcessDoctor to be part of its generation optimization strategy to assist with monitoring and improving efficiencies of plant operations. ProcessNet will also provide the foundation for their corporate performance monitoring at seven of their fossil fuel plants.
Engineered Products Industries LLC (EPI) selected Matrikons targeted production scheduling and enterprise resource planning (ERP) solution. The technology provides a full range of functionality from financial management to detailed labor and material planning.
Matrikon announced several changes to the executive team:--Shafin U. Kanji, formerly chief financial officer of Matrikon, was promoted to the newly created position of executive vice president of operations--Nimal Rodrigo joined Matrikon as chief financial officer --Floyd Bjorgan, formerly managing director of Australia, returned to Matrikon's head office in the new role of vice president human resources and administration.--Sam Crisafulli, formerly a senior executive in Matrikon Australia, assumed the role of managing director in Australia.Subsequent to the quarter, Matrikon was honored to be named as one of the Fastest Growing Companies by Alberta Venture magazine, and to the Control Top 50, which rates the largest process automation companies in North America. Matrikon was #39 on the list this year compared to # 42 in 2004. MD&A and Financial StatementsThe complete Managements Discussion and Analysis and Financial Statements can be found on Matrikons website at www.matrikon.com/investors or by contacting Nicole Sayler at 1-877-628-7456 extension 4010Conference Call Thursday, January 13 at 8:00 am Eastern--Matrikon President and CEO Nizar J. Somji and CFO Nimal Rodrigo will hold a conference call to discuss fiscal year results on Thursday, January 13 at 8:00 am Eastern (6:00 am Mountain). To participate live, call 416-640-4127 in the Toronto area and 1-800-814-4857 for all other areas.A replay will be available until midnight on Thursday, January 20. To access the playback service, please dial 416-640-1917 in Toronto or 1-877-289-8525 elsewhere, reservation number 21106508#. The conference call will also be web cast at www.newswire.ca/en/webcast/viewEvent.cgi?eventID=985380
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