AZCAR Technologies Incorporated
TSX VENTURE : AZZ

AZCAR Technologies Incorporated

March 25, 2010 16:22 ET

AZCAR Announces Financial Results for 2009

MARKHAM, ONTARIO--(Marketwire - March 25, 2010) - Stephen F. Pumple, CEO of AZCAR Technologies Incorporated (TSX VENTURE:AZZ) today announced fourth quarter and annual revenue of C$19.4 million and C$62.3 million respectively in 2009. Despite the drop in revenue and net loss in the fiscal year related to the current global recession, AZCAR continues to focus on improving project execution as evidenced by its gross margin which rose in the fourth quarter to 23.9% of revenue versus 21.7% of revenue in Q4 2008.

  2009   2008   2009   2008  
  Three Months Ended Dec. 31   Year Ended Dec. 31  
(CDN $000) (unaudited)   (unaudited)   (audited)   (audited)  
   
Revenues 19,471   19,604   62,666   74,065  
Cost of goods sold 14,811   15,353   48,780   59,449  
Gross Margin 4,660   4,251   13,886   14,616  
  Gross Margin % 23.9 % 21.7 % 22.2 % 19.7 %
Operating expenses 4,497   4,416   14,489   13,485  
Interest expense 76   24   131   244  
Foreign exchange loss (gain) 83   (372 ) 171   (620 )
Stock-based compensation 16   15   63   63  
Amortization 192   137   776   464  
  Subtotal 4,864   4,220   15,630   13,636  
Income (loss) before income taxes and Minority Interest (204 ) 31   (1,744 ) 980  
% of revenues (1.0 %) 0.2 % (2.8 %) 1.3 %
Income tax provision (recovery) (590 ) (197 ) (747 ) (163 )
Net Income (Loss) before Minority Interest 386   228   (997 ) 1,143  
Minority Interest 76   -   -   -  
   
Net Income (Loss) 310   228   (997 ) 1,143  
   
Earnings per share                
  Basic (cents) 2.0   1.6   (6.4 ) 7.3  
  Fully Diluted (cents) 2.0   1.6   (6.4 ) 7.3  
Cash dividends per share (cents) 0.0   0.0   0.0   0.0  

Matchframe contributed $3.9 million in revenues and $0.1 million in EBITDA. The restructuring of the management team and technology enhancements are on track with the original plan. We anticipate that Matchframe will be profitable in the latter half of 2010.

Operating expenses in 2009 increased by 7.6 per cent to $14.5 million compared to $13.5 million in the previous year. The increase in operating expenses is primarily due to the increase in our cost base associated with the addition of Matchframe ($2.1 million) and a reduction in our labour recovery ($2.4 million) relating to the underutilization of our professional staff. The underutilization is the result of improved project execution on existing projects combined with customer delays on scheduled projects for which we had allocated resources. Offsetting this increase, the Company, through cost containment measures and restructuring, reduced its existing cost base by $3.4 million.

The consolidated negative EBITDA for the year totalled $0.7 million. However, excluding one-time restructuring charges, the Company achieved a consolidated positive EBITDA of $0.1 million for the fiscal year ending December 31, 2009.

The Company recorded a net loss of $1 million compared to a profit of $1.1 million in the previous year. The decrease in net income was primarily the result of the continuing deterioration in market conditions worldwide and the deferral of capital projects by our customers. Secondary factors contributing to the net loss was the increase in amortization expense as a result of the assets acquired in the Matchframe acquisition and the strengthening Canadian dollar.

AZCAR is an independent technology integration company providing the broadcast and communications industries with value-driven solutions, consulting, engineering, systems design, integration, project management and the supply of related materials and equipment. The stock trades on the Toronto Venture Exchange under the symbol: AZZ.

Except for historical information, this news release may contain certain "forward looking statements". Forward looking statements are statements that are not historical facts and are subject to a variety of risks, uncertainties and other factors that may cause the actual results, level of activity and performance to be materially different from the Company's expectations and projections.

This review contains Management's discussion of AZCAR's operational results and financial condition, and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2009, and the related "Management's Discussion and Analysis" (MD&A).

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

Contact Information

  • AZCAR Technologies Incorporated
    Sean Fleming
    Chief Financial Officer
    (905) 470-2545 ext. 215
    sean.fleming@azcar.com