CriticalControl Solutions Corp.
TSX : CCZ

CriticalControl Solutions Corp.

November 04, 2009 16:30 ET

CriticalControl Announces 2009 Third Quarter Financial Results

-reports seventh consecutive profitable quarter-

CALGARY, ALBERTA--(Marketwire - Nov. 4, 2009) - CriticalControl Solutions Corp., (TSX:CCZ) today reported its financial results for the three month period ended September 30, 2009. 

Highlights for the quarter included (Q3 2009 compared to Q3 2008):

  • Revenue of $7.1 million in the quarter compared to $6.7 million in the previous year;
  • Gross margin as a percentage of revenue of 52% compared to 55%;
  • Net income of $0.7 million compared to $1.2 million;
  • Secured a revolving line of credit for up to $5.0 million to support working capital requirements with a Schedule I Canadian Chartered Bank; and
  • Diversification from Alberta through the acquisition of BPO Management Services, Ltd. on July 31, 2009, resulting in offices in Winnipeg and Toronto;

On October 1, 2009, the Corporation acquired 100% of the outstanding shares of Southport Data Systems Inc. ("Southport") for $2.3 million which includes $1.5 million paid on closing, $0.3 million due on October 1, 2010 and $0.5 million due on November 1, 2011 based on certain growth performance criteria. The purchase price was financed from cash on hand and CriticalControl's operating line. Southport is a provider of business process outsourcing solutions, with key strengths in large scale imaging and data entry.

Effective November 1, 2009, the Corporation acquired 100% of the outstanding shares of Gas Analytical Services, Inc., ("GAS") of Bridgeport, West Virginia for US$10.0 million paid through cash and the issuance of a US$9.0 million note, bearing interest at 4% per annum, payable over a 5 year term. After taking into account adjustments which were anticipated to occur at closing, as at September 30, 2009, GAS had assets of approximately US$4.1 million and liabilities of US$1.0 million. The cash portion of the purchase price was financed from cash on hand and CriticalControl's operating line. GAS' primary business includes the provision of gas measurement equipment and services, including gas chart integration services to over 500 active clients based in the Appalachian Basin in the Eastern United States.

"In the 3 months commencing July 31, 2009, management has successfully completed 3 acquisitions resulting in a planned diversification from the Alberta economy and increasing our pro forma annualized revenue to between $45 and $50 million," said Alykhan Mamdani. "In an effort to maximize the opportunities presented by the current economic downturn, management continues to prudently operate the business with a view to investing our continued strong cash flow in growth opportunities."

Reference is made to the Corporation's 2009 Third Quarter Financial Statements and Management Discussion and Analysis, full copies of which are available on www.sedar.com and the Corporation's website, www.criticalcontrol.com.

About CriticalControl:

CriticalControl enables its clients to increase operational performance through the better control of critical business information. Through the balance of practicality, innovation and technology, we empower our clients with everything from strategies and tools, to outsourced solutions to manage information, wherever and in whatever form that information exists. For more information please visit www.criticalcontrol.com.

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