Epic Data International Inc.
TSX VENTURE : EKD

Epic Data International Inc.

February 24, 2011 17:44 ET

Epic Data Announces Q1 Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 24, 2011) - 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 the three months ended December 31, 2010.

Results of Operations        
    Three months ended
      December 31,
    2010   2009
 
Revenue $ 1,281,452 $ 1,471,310
 
Cost of sales   610,736   676,353
 
Gross margin   670,716   794,957
 
Expenses        
General and administration   365,790   417,955
Sales and marketing   277,434   191,463
Product development   145,586   124,441
Amortization of property, plant and equipment   8,676   24,636
Net finance charges   11,163   14,780
Stock based compensation   5,229   5,127
Foreign exchange   32,055   21,613
Severance   -   4,871
 
    845,933   804,886
 
Net loss for the period   (175,217)   (9,929)
 
Loss per share - basic and diluted $ (0.01) $ 0.00

Results of Operations for the three months ended December 31, 2010

Revenue

Total revenue for the three months ended December 31, 2010 decreased $189,858 or 13% to $1,281,452 compared with $1,471,310 million in the same period last year. The decrease in revenue was due to lower maintenance contract revenue as a result of companies decreasing their spending on information technology support contracts. Revenues in general were also negatively impacted by approximately $80,000 due to the strong Canadian dollar as most of our revenues are denominated in foreign currencies. While revenues were down in comparison to the first quarter of the prior year, they were at the highest quarterly level since that quarter.

Gross margin

The gross margin for the three months ended December 31, 2010 decreased $124,241 or 16% to $670,716 as compared with $794,957 in the same period last year. The decrease was due to the lower level of revenue. The gross margin as a percentage of revenue for the three months ended December 31, 2010 decreased slightly to 52% compared with 54% in the same period last year. The decrease was due mainly to slightly lower productivity, due to fixed costs and lower revenue.

General and administration

General and administration expenses for the three months ended December 31, 2010 decreased $33,931 or 9% to $365,790 compared with $399,721 in the same period last year. The decrease is principally due to lower staff levels.

Sales and marketing

Sales and marketing expenses for the three months ended December 31, 2010 increased $67,737 or 32% to $277,434 compared with $209,697 in the same period last year. The increase is due primarily to the opening of the representative office in China for the new marketing initiatives in China.

Product development

Product development expenses for the three months ended December 31, 2010 increased $21,145 or 17% to $145,586 compared with $124,441 in the same period last year. The increase is due to the development of the Epic Data MES suite of application for the China market and a reduction in the amount of staffing costs being allocated to cost of sales resulting from less project work in the current period compared to the same period last year.

Net loss

Net loss for the three months ended December 31, 2010 was $175,217 compared to $9,929 in the same period last year.

New Director

The Company announces that effective today Mr. James Topham has been appointed to the Board of Directors. Mr. Topham is a chartered accountant and was partner with KPMG LLP from 1988 to 2008 during which time he built their high tech practice serving a number of public and private technology companies from small start up companies to large multi-nationals. Mr. Topham is currently a financial consultant and Board member to a number of high technology companies.

"The Board welcomes James Topham to Epic Data," said Iain Mant, Chairman of the Board. "He brings a wealth of financial and business experience to Epic Data, which will be of great benefit as the Company executes on its corporate growth strategies."

New Stock Option Plan

The Company announces that is has adopted a new 10% rolling stock option plan (the "New Plan") to provide incentive to the Company's officers, directors, employees and consultants. The maximum number of common shares which may be issued under the New Plan is ten percent (10%) of the issued and outstanding common shares of the Company at the time an option is granted, less common shares reserved for issuance on exercise of options then outstanding under the New Plan.

The adoption of the New Plan was approved by the Company's Board of Directors on January 11, 2011 and by the Company's shareholder at the annual general meeting held February 24, 2011. The New Plan is subject approval by the TSX Venture Exchange (the "Exchange"). Pursuant to Exchange policies, the New Plan will require the annual approval of shareholders at the Company's annual general meetings.

Grant of Stock Options

The Company announces that effective March 1, 2011 it has granted 700,000 stock options to a non-management directors and an employee. The term of the options will be 7 years and the exercise price will be the greater of the closing price on February 28, 2011 or $0.10 per share.

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 and machinery manufacturers, employ Epic Data solutions to optimize the return on investment of their manufacturing information technology 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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