Epic Data International Inc.
TSX VENTURE : EKD

Epic Data International Inc.

August 25, 2011 19:53 ET

Epic Data Announces Q3 Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 25, 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 and nine months ended June 30, 2011.

Results of Operations
Three months ended Nine months ended
June 30, June 30,
2011 2010 2011 2010
Revenue $ 1,024,998 $ 1,059,987 $ 3,267,105 $ 3,610,633
Cost of sales 490,908 539,804 1,624,173 1,770,063
Gross margin 534,090 520,183 1,642,932 1,840,570
Expenses
General and administration 375,761 378,691 1,058,902 1,201,871
Sales and marketing 327,524 324,598 903,497 809,620
Product development 150,484 114,685 447,669 382,819
Amortization of property, plant and equipment 3,507 10,912 31,377 47,662
Net finance charges 29,442 11,179 58,159 40,587
Stock based compensation 10,029 23,441 25,241 34,205
Foreign exchange 11,023 (18,076) 77,193 53,691
Interest accretion 2,127 - 3,546 -
Severance - (8,531) - 37,460
909,897 836,899 2,605,584 2,607,915
Net loss for the period $ (375,807) $ (316,716) $ (962,652) $ (767,345)
Loss per share - basic and diluted $ (0.02) $ (0.02) $ (0.04) $ (0.05)

Results of Operations for the Three and Nine months ended June 30, 2011

Revenue

Revenue for the three months ended June 30, 2011 decreased $34,989 or 3% to $1,024,998 compared with $1,059,987 in the same period last year. Revenue for the nine months ended June 30, 2011 decreased $343,528 or 10% to $3,267,105 compared with $3,610,633 in the same period last year. The decrease in revenue for both periods was due mainly to the stronger Canadian dollar, which negatively impacted revenue for the three and nine months ended June 30, 2011 by approximately $45,000 and $211,000, respectively.

Gross Margin

The gross margin for the three months ended June 30, 2011 increased $13,907 or 3% to $534,090 as compared with $520,183 in the same period last year. The gross margin for the nine months ended June 30, 2011 decreased $197,638 or 11% to $1,642,932 as compared with $1,840,570 in the same period last year. The decrease was due to the lower revenue and foreign exchange.

The gross margin as a percentage of revenue for the three months ended June 30, 2011 increased to 52% compared with 49% in the same period last year, while for the nine months ended June 30, 2011 it decreased to 50% compared with 51% in the same period last year. The changes in the current periods was due mainly to the amount of staffing costs being allocated to cost of sales based on the amount of project work.

General and administration

General and administration expenses for the three months ended June 30, 2011 decreased $2,930 or 1% to $375,761 compared with $378,691 in the same period last year. General and administration expenses for the nine months ended June 30, 2011 decreased $142,969 or 12% to $1,058,902 compared with $1,201,871 in the same period last year. The decrease is principally due to lower staff levels, lower head office rent and a recovery of building operating costs in the second quarter of 2011 of approximately $63,000.

Sales and marketing

Sales and marketing expenses for the three months ended June 30, 2011 increased $2,926 or 1% to $327,524 compared with $324,598 in the same period last year. Sales and marketing expenses for the nine months ended June 30, 2011 increased $93,877 or 12% to $903,497 compared with $809,620 in the same period last year. The increase in both periods 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 June 30, 2011 increased $35,799 or 31% to $150,484 compared with $114,685 in the same period last year. Product development expenses for the nine months ended June 30, 2011 increased $64,850 or 17% to $447,669 compared with $382,819 in the same period last year. The increases in both periods is due to the development of the Epic Data MES suite of applications, including for the China market, and staffing costs being allocated to product development rather than to cost of sales as a result of less project work in the current periods compared to the same periods last year.

Net loss

Net loss for the three months ended June 30, 2011 increased $59,091 or 19% to $375,807 compared with $316,716 in the same period last year. Net loss for the nine months ended June 30, 2011 increased $195,307 or 26% to $962,652 compared with $767,345 in the same period last year.

Financing Activities

On August 8, 2011 the Company closed a non-brokered private placement of 6,000,000 common shares at $0.20 per share for gross proceeds of $1,200,000. The 6,000,000 common share issued are subject to a four month hold period expiring on December 9, 2011. The proceeds will be used to market the Company's manufacturing operations management software products, to fund product development and for general working capital purposes.

Grant of Stock Options

The Company announces that effective August 30, 2011 it has granted 150,000 stock options to an employee. The term of the options will be 7 years and the exercise price will be the greater of the closing price on August 29, 2011 or $0.10 per share.

About Epic Data

Epic Data International Inc. is a provider of manufacturing operations management and warehouse management solutions. For 36 years Epic Data has delivered real-time data collection and production information to 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 Hawker Beechcraft, Lockheed Martin, Bell Helicopter, Komatsu, Bombardier Learjet, CAE Inc., Kingfisher (B&Q) 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.

Contact Information