AZCAR Technologies Incorporated
TSX : AZZ

AZCAR Technologies Incorporated

August 14, 2007 18:35 ET

AZCAR Announces Results for the Second Quarter of 2007

MARKHAM, ONTARIO--(Marketwire - Aug. 14, 2007) - Stephen F. Pumple, Chairman & CEO of AZCAR (TSX:AZZ), announced second quarter revenues of C$15.7 million, compared to C$17.5 million in Q2 2006. The revenue decrease resulted from lower systems integration revenue (primarily equipment) partially offset by the specialized training services revenue under the Sprint/Nextel agreement announced January 25, 2007. The lower revenue, the reduced gross margin on professional services, higher foreign exchange loss resulting from the rapid strengthening of the Canadian dollar in Q2 and increased operating expenses adversely affected the Company's income.



---------------------------------------------------------------------------
2007 2006 2007 2006
Three Months Ended June 30 Six Months Ended June 30
---------------------------------------------------------------------------
(CDN $000) (unaudited) (unaudited) (unaudited) (unaudited)
Revenues 15,652 17,489 32,646 32,258
Cost of goods sold 13,623 14,093 27,750 26,326
---------------------------------------------------------------------------
Gross Margin 2,029 3,396 4,896 5,932
Gross Margin % 13.0% 19.4% 15.0% 18.4%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Operating expenses 3,256 2,571 5,859 5,031
Stock-based compensation 14 9 24 17
Amortization 91 74 186 146
---------------------------------------------------------------------------
3,361 2,654 6,069 5,194
---------------------------------------------------------------------------
Income (loss) before
income taxes and
Minority Interest (1,332) 742 (1,173) 738
% of revenues (8.5%) 4.2% (3.6%) 2.3%
Income tax expense
(recovery) (389) 270 (419) 262
---------------------------------------------------------------------------
Income (loss) before
Minority Interest (943) 472 (754) 476
---------------------------------------------------------------------------
Minority Interest (35) 10 (23) 8

Net Income (Loss) (908) 462 (731) 468
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Earnings per share
Basic (cents) (5.8) 3.0 (4.7) 3.0
Fully Diluted (cents) (5.8) 2.8 (4.7) 2.8
---------------------------------------------------------------------------
Cash dividends per share
(cents) 0.0 0.0 0.0 0.0
---------------------------------------------------------------------------


The higher operating expenses reflect the impact of fully expensing the costs of the April NAB show, which previously had been amortized over the remainder of the year, staff recruitment charges for Engineering, Project Management and Installation personnel, and the general and administrative charges related to a senior employee misappropriating funds at the US facility. See our press release dated July 31, 2007.

In the second quarter the company closed a record amount of business increasing its backlog into 2008 to its highest level ever.

AZCAR is an independent technology integration company providing high definition digital media technology solutions for the broadcast and telecommunications industries, broadcast ministries, higher education institutions, and multi-purpose sports and entertainment venues. AZCAR provides consulting, engineering, systems design, integration, project management and the supply of related materials, equipment and software. The Company's business operates through the parent company and its subsidiaries. The stock trades on the Toronto Stock Exchange under the symbol: AZZ.

Except for historical information, this news release may contain certain "forward looking statements". Forward looking statements are statements that are not historical facts and are subject to a variety of risks and uncertainties and other factors that may cause the actual results, level of activity and performance to be materially different from the Company's expectations and projections.

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, 2006, and the related "Management's Discussion and Analysis" (MD&A).

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

Contact Information

  • AZCAR Technologies Incorporated
    Roger Miller
    Chief Financial Officer
    (905) 470-2545 ext. 244
    (905) 470-2943 (FAX)
    Email: roger.miller@azcar.com