Atlantis Systems Corp.
TSX VENTURE : AIQ.H

Atlantis Systems Corp.

November 16, 2011 18:08 ET

Atlantis Reports Third Quarter 2011 Financial Results

TORONTO, ONTARIO--(Marketwire - Nov. 16, 2011) -

This news release may contain forward-looking statements. Reference should be made to "Forward-looking Statements" at the end of this news release. All amounts are stated in Canadian dollars except where otherwise noted.

Atlantis Systems Corp. (NEX:AIQ.H), a globally recognized training integrator in the military and commercial aviation markets, today announced its unaudited interim financial and operating results for the third quarter ended September 30, 2011. Full results are available on www.sedar.com.

About Atlantis Systems Corp.

Atlantis Systems Corp (NEX:AIQ.H) uses its core capabilities in simulation-aided design, engineering and e-learning, combined with various technology tools, to help customers in military and civil aviation ensure the feasibility, capability, and effective utilization of their complex assets. In more than 30 years of operation, Atlantis has developed a solid reputation for its creative workforce and innovative solutions in supporting global OEM customers and defence organizations. To learn more, please visit the Company's web site at www.atlantissi.com.

Forward-Looking Statements

Atlantis assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason. Additional information regarding risks and uncertainties that could affect Atlantis' business is contained in the Business Risk Factors section of Atlantis's Annual MD&A available on SEDAR at www.sedar.com.

ATLANTIS SYSTEMS CORP.
Condensed Consolidated Interim Statements of Operations and Comprehensive Income/(Loss)
For the three and nine months ended September 30, 2011 and 2010
(Expressed in thousands of Canadian dollars except per share amounts)
(Unaudited)
For the three months For the nine months
ended September 30 ended September 30
2011 2010 2011 2010
(Note 22) (Note 22)
Revenue $ 2,843 $ 4,485 $ 11,578 $ 13,621
Cost of revenue 2,159 2,707 8,480 8,529
Gross margin 684 1,778 3,098 5,092
Other income (Note 21) 128 - 871 -
Expenses
General and administrative 1,000 853 2,749 3,143
Selling and marketing 110 120 477 372
Share-based compensation expense - 2 - 11
1,110 975 3,226 3,526
Operating income (loss) (298 ) 803 743 1,566
Depreciation and amortization 47 342 151 1,034
Interest and financing costs, net (Note 8) 620 208 1,363 982
Currency exchange (gain)/loss on foreign debt 894 (265 ) 673 (257 )
Write down of investments - - 6 -
(Gain) loss on disposal of capital assets - (479 ) 6 (479 )
Net income / (loss) $ (1,859 ) $ 997 $ (1,456 ) $ 286
Net income / (loss) and comprehensive gain / (loss) $ (1,859 ) $ 997 $ (1,456 ) $ 286
Net gain/(loss) per share
Basic:
Net gain / (loss) $ (0.18 ) $ 0.10 $ (0.14 ) $ 0.04
Diluted:
Net gain / (loss) $ (0.18 ) $ 0.10 $ (0.14 ) $ 0.04
Weighted average number of shares:
Basic 10,233,683 10,016,346 10,233,683 7,361,375
Diluted 10,258,683 10,041,346 10,258,683 7,386,375
ATLANTIS SYSTEMS CORP.
Condensed Consolidated Interim Statements of Financial Position
As at September 30, 2011, December 31, 2010 and January 1, 2010
(Expressed in thousands of Canadian dollars)
(Unaudited)
September 30 December 31 January 1
as at 2011 2010 2010
(Note 22) (Note 22)
ASSETS
Current assets
Cash and cash equivalents $ 1,473 $ 1,110 $ 161
Note receivable (Note 11) 100 200 -
Trade and other receivables (Note 9) 1,918 2,439 2,089
Unbilled revenue 4,876 3,679 2,376
Inventory (Note 10) - 118 489
Prepaid expenses 237 167 143
Current assets of discontinued operations (Note 7) - 16 16
8,604 7,729 5,274
Note receivable (Note 11) - 100 -
Capital assets, net (Note 12) 534 615 667
Long-term prepaid expenses 1 151 54
Other long-term assets 71 77 77
Core technology - - 797
606 943 1,595
$ 9,210 $ 8,672 $ 6,869
LIABILITIES
Current liabilities
Operating line of credit
(Notes 13, 19)
$ 12,918 $ 6,732 $ 5,555
Accounts payable and accrued liabilities 2,572 4,659 4,162
Deferred revenue 1,468 2,566 3,367
Bridge loans (Note 13) - - 898
Term debt (Note 13) - 996 2,733
Current liabilities of discontinued operations (Note 7) - 11 11
16,958 14,964 16,726
SHAREHOLDERS' DEFICIENCY
Share capital and warrants (Note 14) 92,837 92,837 89,917
Share-based payments reserve 9,338 9,338 9,327
Deficit (109,923 ) (108,467 ) (109,101 )
(7,748 ) (6,292 ) (9,857 )
$ 9,210 $ 8,672 $ 6,869
The accompanying notes are an integral part of these condensed consolidated interim statements.

Going concern (Note 2); Subsequent Events (Note 20)

Commitments (Note 17)
ATLANTIS SYSTEMS CORP.
Condensed Consolidated Interim Statement of Changes in Shareholders' Deficiency
For the nine months ended September 30, 2011 and 2010
(Expressed in thousands of Canadian dollars, except number of shares)
(Unaudited)



Number of
Shares



Common
Stock
Share-based Payments
Reserve
Warrants


Accumulated
Deficit




Total
Shareholders'
Deficiency


(Note 22)
Balance, January 1, 2010 2,799,383 $ 89,314 $ 9,327 $ 603 $ (109,101 ) $ (9,857 )
Net income / (loss) and comprehensive income / (loss) - - - - 286 286
Balance, September 30, 2010 2,799,383 $ 89,314 $ 9,327 $ 603 $ (108,815 ) $ (9,571 )
Net income / (loss) and comprehensive income / (loss) - - - - 348 348
Warrants exercised 465,000 855 - (576 ) - 279
Granted - term debt conversion 6,969,300 2,641 - - - 2,641
Share-based payments reserve - - 11 - - 11
Balance, December 31, 2010 10,233,683 $ 92,810 $ 9,338 $ 27 $ (108,467 ) $ (6,292 )
Net income / (loss) and comprehensive income / (loss) - - - - (1,456 ) (1,456 )
Balance, September 30, 2011 10,233,683 $ 92,810 $ 9,338 $ 27 $ (109,923 ) $ (7,748 )
The accompanying notes are an integral part of these condensed consolidated interim statements.
ATLANTIS SYSTEMS CORP.
Condensed Consolidated Interim Statements of Cash Flows
For the three and nine months ended September 30, 2011 and 2010
(Expressed in thousands of Canadian dollars)
(Unaudited)


For the three months
ended September 30


For the nine months
ended September 30

2011 2010 2011 2010
(Note 22) (Note 22)
Cash flows provided by (used in):
Operating activities:
Net income / (loss) $ (1,859 ) $ 997 $ (1,456 ) $ 286
Items not affecting cash:
Depreciation and amortization 47 342 151 1,034
Gain/(loss) on disposal of capital assets - (479 ) 6 (479 )
Writedown of investments - - 6 -
Long-term prepaid expenses (152 ) 100 (150 ) -
Other long-term assets - - 6 -
Interest and financing costs, net 620 208 1,363 982
Share-based payment expense - 2 - 11
(1,344 ) 1,170 (74 ) 1,834
Net change in non-cash working capital (Note 18) 734 (1,958 ) (3,032 ) (2,744 )
Net cash used in operations (610 ) (788 ) (3,106 ) (910 )
Interest paid (707 ) - (1,642 ) (481 )
Net cash used in operating activities (1,317 ) (788 ) (4,748 ) (1,391 )
Investing activities:
Investment in capital assets (6 ) (67 ) (83 ) (124 )
Proceeds from disposal of capital assets - 514 - 514
Net cash provided by (used in) operating activities (6 ) 447 (83 ) 390
Financing activities:
Term debt conversion to shares - 279 - 279
Term debt proceeds / (repayment), net - (416 ) (996 ) (55 )
Net change to operating line of credit 2,410 323 6,186 895
Net cash provided by financing activities 2,410 186 5,190 1,119
Net cash provided by foreign exchange gain/(loss) on term debt - 252 4 133
Net increase in cash 1,087 97 363 251
Cash, beginning of period 386 227 1,110 73
Cash, end of period $ 1,473 $ 324 $ 1,473 $ 324
SUPPLEMENTAL INFORMATION
Income taxes paid $ - $ - $ - $ -
The accompanying notes are an integral part of these condensed consolidated interim statements.

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