CriticalControl Solutions Corp.

CriticalControl Solutions Corp.

May 30, 2005 19:38 ET

CriticalControl Releases Q1 2005 Financial Results

CALGARY, ALBERTA--(CCNMatthews - May 30, 2005) - CriticalControl Solutions Corp. (TSX VENTURE:CCZ) ("CriticalControl" or the "Company") has filed its consolidated financial statements for the three months ended March 31, 2005. Revenue for the quarter was $3.6 Million as compared to $3.3 Million for the three months ended March 31, 2004 - an increase of 8%.

CriticalControl had a net loss of $0.8 Million for the three months ended March 31, 2005 compared to net income of $0.1 Million for three months ended March 31, 2004. The net loss for the period included amortization of $0.4 Million ($0.3 Million for the same period in 2004), interest expense of $0.2 Million ($0.04 Million for the same period in 2004) of which $0.1 Million (nil for the same period in 2004) was non-cash interest paid with respect to debentures. The net loss for the period also included research and development expenses of $0.2 Million (nil for the same period in 2004).

Revenue and operating results are in line with expectations. The Company originally planned on ceasing the capitalization of research and development related to CriticalControl's proprietary ezy-Ops and Pipeworks applications at the end of the second quarter of 2005, coinciding with expected full commercialization of the products. However, in April 2005, the audit committee of the Board of Directors of the Company chose to cease capitalizing these costs at the end of the fourth quarter of 2004 due to early commercialization. As such, research and development of $0.2 Million was expensed in the first quarter of 2005 instead of being capitalized.

Between the first quarter 2004 and the first quarter 2005, working capital improved from $0.1 Million to $2.3 Million and net assets increased from $4.3 Million to $8.9 Million.

"Subsequent to March 31, 2005, the Corporation has announced the renewal of its outsourcing contract with the Government of Alberta and the award of significant new imaging contracts, resulting in strong organic growth which will be evident in the Corporation's results for the second and third quarters of 2005. With these contracts combined with revenues and strong cash flow resulting from the acquisition of BMP, management is confident in the viability of its business model and immediate growth prospects", said Alykhan Mamdani, President of CriticalControl.

"Subsequent to the end of the quarter, the Corporation closed a bought deal private placement of $4 million. These funds will be used to execute management's aggressive growth strategy aimed at consolidating software technologies focused on operationally improving the business of oil and gas producers. Given the Corporation's strong market leadership in this area acquired through BMP, management is confident of its long term growth prospects," said George Watson, CEO of CriticalControl.

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Contact Information

  • CriticalControl Solutions Corp.
    Mr. George Watson
    Chief Executive Officer
    (403) 705-7500
    CriticalControl Solutions Corp.
    Mr. Alykhan Mamdani
    (403) 705-7500