Cantronic Systems Inc.
TSX VENTURE : CTS

Cantronic Systems Inc.

July 02, 2009 12:00 ET

Cantronic Reports Financial Results for First Quarter Ended April 30, 2009

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 2, 2009) - Cantronic Systems Inc. ("Cantronic" or the "Company") (TSX VENTURE:CTS) is pleased to announce today its interim financial results for the first quarter of fiscal year 2010, ended April 30th. (All amounts are expressed in Canadian dollars unless otherwise indicated.)

For the first quarter ended on April 30, 2009, Cantronic recorded revenues of $1.13 million compared with $0.4 million during the previous quarter ended January 31, 2009. Cantronic's financial results for the last three quarters have not met management's expectations primarily due to the slowdown in spending as a result of the global economic environment during the past twelve months. However, a sharp increase of the revenue of this quarter compared with the previous quarter indicates that the worst seems to be over. During the quarter, Cantronic lost $843,000 on a consolidated basis, which includes a loss of approximately $350,000 directly attributable to recently established China subsidiary Cantronic Security Systems (China) Co. Ltd. The financial results for the first quarter ended April 30, 2008 have been restated to revenues of $1 million and a net loss of $300,000 due to an adjustment recommendation made by Ernst & Young, the Company's auditors.

Cantronic also refiled its audited financial statements for the year ended January 2008. In June 2009, it was determined that an income tax loss at December 2006 had been incorrectly calculated. The effect of this error was to increase the 2007 goodwill and future income tax liability by $379,642. The corrected loss carried forward from December 2006 resulted in a January 2008 increase in income tax payable of $138,236, a decrease in future income tax liability of $87,896 and a decrease in net income and retained earning of $50,340. The majority of this income tax payable is offset by the loss in the recent fiscal year leaving a net tax payable of less than $30,000.

The financial statements are available for review on SEDAR at www.sedar.com.

About Cantronic

Cantronic manufactures, distributes, and provides training and services in the fields of infrared vision and video security surveillance technologies, specializing in passive and active infrared cameras, infrared illuminators, low light infrared sensitive CCD cameras and long-range night vision surveillance systems for demanding homeland security and surveillance application.

Cantronic, through its US subsidiary QWIP Technologies, Inc. ("QWIPTECH"), holds a worldwide, exclusive license from the California Institute of Technology ("Caltech") to produce and sell infrared detectors and sensors based on Caltech's Quantum Well Infrared Photodetector technology.

Cantronic, through its China subsidiaries Cantronic Security Systems (China) Co., Ltd in Shanghai, China and Beijing Advanced Videoinfo Co., Ltd. ("AVINFO") in Beijing, China, provides video surveillance solution for security surveillance applications in China including China's safe city projects -- a citywide security and digital video surveillance system mandated by various level of Chinese government and corporate users.

Cantronic is a Tier 1 issuer on the TSX-V exchange, trading under the symbol CTS. For further information about Cantronic and Cantronic subsidiaries, please visit our websites at www.cantronics.com, www.qwip.com, and www.cantronics.com.cn.

Safe Harbor Statement

The Securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

Forward-looking statements contained in this press release involves known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements of Cantronic to be materially different from any future results, performance or achievements expressed or implied by the said forward-looking statements.

TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of the contents of this news release.

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