AZCAR Technologies Incorporated

AZCAR Technologies Incorporated

May 12, 2005 16:42 ET

AZCAR Announces Record Revenue, For The Third Consecutive Quarter, In Q1 2005

MARKHAM, ONTARIO--(CCNMatthews - May 12, 2005) - Stephen F. Pumple, President & CEO of AZCAR (TSX:AZZ) today announced first quarter revenues of C$16.8 million, representing a 68% increase over Q1 2004. The increase is attributable to AZCAR's success in expanding its equipment business with clients such as the University of North Carolina Television, Medcom in Panama and other customers. The sales mix shift reflects an increase in revenue from lower margin equipment, thereby decreasing the Company's average gross margin rate.

The net income of $122,000 or 0.8 cents per share, while an improvement over the corresponding period in 2004, continues to fall below the Company's objectives. The mandate of the management team is to improve on the bottom line performance of the company.

Consolidated Statement of Operations

2005 2004 - Better (Worse)
First Quarter Ended March 31 March 31 C$ %
(Canadian $000's) (unaudited) (unaudited)

Revenue 16,807 10,021 6,786 68%

Gross margin 1,856 1,574 282 18%
Gross margin % 11.0% 15.7%

Operating expenses 1,719 1,522 (197) -13%

Income (loss) before taxes 137 52 85 163%
Income taxes (payable)
recoverable (49) (71) (22) 31%

Net income (loss) before
minority interest 88 (19) 107
Minority interest 34 (18) 52

Net income (loss) 122 (37) 159

In March, the Company borrowed $2 million in accordance with the term credit facility arranged with the Royal Bank of Canada, in order to support the cash flow demands of the University of North Carolina Television project.

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 Stock Exchange under the symbol: AZZ.

This review contains Management's discussion of the 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, 2004, and the related "Management's Discussion and Analysis" (MD&A).

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

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