Epic Data International Inc.

Epic Data International Inc.

February 25, 2010 17:04 ET

Epic Data Announces First Quarter Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 25, 2010) - Epic Data International Inc. (TSX VENTURE:EKD) (the "Company" or "Epic Data"), a provider of manufacturing operations management and real-time data collection solutions, today announced the results of operations for its first quarter ended December 31, 2009.

Results of Operations

      Three months ended
(Thousands of Canadian dollars)   December 31,
      2009   2008
Revenue    $      1,471    $     1,812
Cost of sales               676               887
Gross Margin               795               925
Selling, general and administration               733               878
Income before undernoted items -EBITDA                  62                 47
Other expenses (income)        
  Amortization of property, plant and equipment                  25                 26
  Net finance charges                  15                 16
  Foreign exchange                  22                (65)
  Other                  10                 14
                     72                  (9)
Net (loss) income for the period    $          (10)    $           56
(Loss) earnings per share        
  Basic and diluted    $      (0.00)    $        0.00

EBITDA is not a term defined under generally accepted accounting principles ("GAAP") however, it is used by investors in assessing performance of the Company and its ability to generate sufficient cash flows to continue as a going concern. As this term is not defined under GAAP it may not be comparable to similar terms used in documents of other public entities. The Company defines EBITDA as earnings from operations before interest expense, interest income, income taxes, amortization of property, plant and equipment, compensation costs related to stock options, interest accretion, severance and other non-recurring expenses and income items.

Results of Operations


Total revenue for the three months ended December 31, 2009 decreased $341 thousand or 19% to $1.5 million compared with $1.8 million in the same period last year, due mainly to the continued curtailed spending by our customers. Maintenance revenue was down $109 thousand in part to spending reductions of customers and partly due to a stronger Canadian dollar.

Gross Margin

The total gross margin for the three months ended December 31, 2009 decreased $130 thousand or 15% to $795 thousand as compared with $925 thousand in the same period last year due to the lower level of revenue, however the gross margin as a percentage of revenue increased to 54% in the three months ended December 31, 2009 compared with the same period last year, due mainly to increased margins on a significant hardware sale.

Selling, general and administration

We maintain a direct sales force in the United States, Canada and Great Britain as well as centralized marketing, executive, product development and administrative support departments located in British Columbia. 

Selling, general and administration expenses for the three months ended December 31, 2009 decreased $145 thousand or 17% to $733 thousand compared with $878 thousand in the same period last year. In addition, the prior period included the recovery of a receivable previously written off and certain other non-recurring recoveries which together totaled $180 thousand. The improvement is due to cost reductions, including staff. In addition costs directly attributable to product development, which consist primarily of employee compensation costs as well as sub-contracted design and development services, decreased to $124 thousand in the current quarter from $140 thousand.

EBITDA and net income

EBITDA for the three months ended December 31, 2009 increased $15 thousand or 32% to $62 thousand compared with $47 thousand for the same period last year. The positive EBITDA was due to cost reductions under taken by management.

Net loss for the three months ended December 31, 2009 was $10 thousand compared to a net income of $56 thousand in the same period last year. The decrease being due to a foreign exchange loss of $22 thousand in the current period compared with a foreign exchange gain in 2008 of $56 thousand plus and non-recurring recoveries of $180 thousand in the first quarter of last year.

Financing Activities

Subsequent to the end of the first quarter we closed two private placements for total gross proceeds of $995,000. Both private placements were completed under essentially the same terms and conditions, with the first private placement was done at a significant premium to the then current market price. The proceeds from the private placements will be used to continue the development of the Company's Integra Suite of parts and labour tracking software applications, for general working capital purposes and to market the Company's manufacturing operations management software products in China.

As the main investor in the first private placement, Epic Data now has a CEO with a sizeable ownership stake. I strongly believe that a company and its customers are best served in the short and long term, if the financial interests of senior management and shareholders are closely aligned.

The second private placement brings a new investor to Epic Data that will be of great assistance in helping us execute on our strategic initiative to market our solutions to manufacturers in China. Pacific Wally International Holdings Inc. has strong Canada-China business ties, and we are excited about the possibilities for our Company with this new investor.

About Epic Data

For over 30 years Epic Data has delivered real-time shop floor information to the world's most progressive discrete manufacturers through turnkey data collection, warehouse management and lean manufacturing operations management solutions. Defense contractors, aerospace, automotive, high technology and industrial equipment & machinery manufacturers, employ Epic Data solutions to optimize the ROI of their manufacturing IT infrastructure investments and operations by increasing plant productivity, materials visibility and production velocity. Customers include Lockheed Martin, Bell Helicopter, Komatsu, Learjet, CAE Inc., Kingfisher plc, Joy Mining Machinery, Cobham Defence Communications Ltd., GE Aircraft Engine, Contour Premium Aircraft Seating, McBride plc, Phoenix Contact, Rolls-Royce and Volvo.

More information about Epic Data is available at www.epicdata.com

Caution Regarding Forward-looking Statements

In this document and in other documents filed with Canadian regulatory authorities or in other communications, the Company may from time to time make written or oral forward-looking statements within the meaning of applicable securities legislation, including statements regarding the Company's business plans and financial objectives. These statements typically use words such as prospects, believe, estimate, forecast, project, expect, anticipate, plan, may, should, could and would, or the negative of these terms, variations thereof or similar terminology. By their very nature, forward-looking statements are based on assumptions and involve inherent risks and uncertainties, both general and specific in nature. It is therefore possible that the forecasts, projections and other forward-looking statements will not be achieved or will prove inaccurate. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it provides no assurance that these expectations will prove to have been correct. The Company cautions readers against placing undue reliance on forward-looking statements when making decisions, as the actual results could differ considerably from the opinions, plans, objectives, expectations, forecasts, estimates and intentions expressed in such forward-looking statements due to various material factors. Among other things, these factors include fiscal and economic policies, changes in interest and foreign exchange rates, and general economic conditions, legislative and regulatory developments, competition and access to capital. The Company further cautions that the foregoing list of factors is not exhaustive. For more information on the risks, uncertainties and assumptions that would cause the Company's actual results to differ from current expectations, please also refer to the Company's public filings available at www.sedar.com. The Company does not undertake to update any forward-looking statements, whether oral or written, made by itself or on its behalf, except to the extent required by securities regulations.

The contents of this news release have neither been approved nor disapproved by any regulatory authority.

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