Epic Data International Inc.
TSX VENTURE : EKD

Epic Data International Inc.

August 23, 2012 18:26 ET

Epic Data Announces Q3 Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 23, 2012) - Epic Data International Inc. (TSX VENTURE:EKD) (the "Company" or "Epic Data"), a provider of manufacturing execution systems (MES), today announced the results of operations for the three and nine months ended June 30, 2012.

Highlights in the Quarter

  • Signed several new manufacturing customers in China, resulting in revenue of over $130,000 for the quarter.
  • Completed an MES project with a UK aerospace company.
  • Launched the new UniView smart terminal, expected to be deployed next quarter for a major US aerospace customer, along with the latest generation of the IntegraNet manufacturing platform for the customer's multiple manufacturing facilities in the United States.
  • Increased headcount to over 140 staff at the quarter end from 36 at beginning of fiscal year.
  • Completed a $2.4 million financing, which included the participation of several members of management, including Robert Nygren, the Company's President & CEO.
Results of Operations
Three months ended June 30, Nine months ended June 30,
2012 2011 2012 2011
Revenue $ 1,194,395 $ 1,024,998 $ 3,257,244 $ 3,267,105
Cost of sales 637,767 490,908 1,724,957 1,624,173
Gross Margin 556,628 534,090 1,532,287 1,642,932
Expenses
General and administration 738,243 457,808 1,797,064 1,313,971
Sales and marketing 416,083 259,013 1,324,877 703,053
Product development 540,956 150,484 1,204,711 449,662
Net finance charges 34,569 29,442 74,771 58,159
Foreign exchange loss 16,785 11,023 46,997 77,193
Interest accretion 2,128 2,127 6,384 3,546
1,748,764 909,897 4,454,804 2,605,584
Net loss for the period (1,192,136 ) (375,807 ) (2,922,517 ) (962,652 )
Loss per share - Basic and diluted $ (0.04 ) $ (0.02 ) $ (0.09 ) $ (0.04 )

Results of Operations for the Three and Nine months ended June 30, 2012

Revenue

Revenue for the three months ended June 30, 2012 increased $169,397 or 17% to $1,194,395 compared with $1,024,998 in the same period last year. The increase was due to revenue of $159,732 in the start-up operations in China. Revenue for the nine months ended June 30, 2012 decreased $9,861 or 0.3% to $3,257,244 compared with $3,267,105 in the same period last year. The slight decrease in revenue for the nine months ended June 30, 2012 was primarily due to lower maintenance revenue not being fully offset by revenues of $176,910 from the start-up operations in China.

Gross Margin

The gross margin for the three months ended June 30, 2012 increased $22,538 or 4% to $556,628 as compared with $534,090 in the same period last year due to higher revenue. The gross margin for the nine months ended June 30, 2012 decreased $110,645 thousand or 7% to $1,532,287 as compared with $1,642,932 in the same period last year. The decrease in gross margin for the nine months ended June 30, 2012 was due to higher costs for hardware sales.

The gross margin as a percentage of revenue for the three months ended June 30, 2012 decreased to 47% compared with 52% in the same period last year, while for the nine months ended June 30, 2012 decreased to 47% compared with 50% in the same period last year. The decreases were due mainly to lower productivity, especially in professional services, with fixed costs and lower revenue and lower margins for hardware sales.

General and administration

General and administration expenses for the three months ended June 30, 2012 increased $280,435 or 61% to $738,243 compared with $457,808 in the same period last year. General and administration expenses for the nine months ended June 30, 2012 increased $483,093 or 37% to $1,797,064 compared with $1,313,971 in the same period last year. The increase in both periods is due primarily to the operations in China, which includes the opening and staffing offices in Shanghai and Wuhan, China plus a severance provision of approximately $90,000.

Sales and marketing

Sales and marketing expenses for the three months ended June 30, 2012 increased $157,070 or 61% to $416,083 compared with $259,013 in the same period last year. Sales and marketing expenses for the nine months ended June 30, 2012 increased $621,824 or 88% to $1,324,877 compared with $703,053 in the same period last year. The increase in both periods is due primarily to the operations in China, which in includes the opening and staffing of sales personnel in the offices in Shanghai and Wuhan, China. In addition, new sales staff were added in the United Kingdom and Canada.

Product development

Product development expenses for the three months ended June 30, 2012 increased $390,472 or 260% to $540,956 compared with $150,484 in the same period last year. Product development expenses for the nine months ended June 30, 2012 increased $735,049 or 168% to $1,204,711 compared with $449,662 in the same period last year. The increase in both periods is due primarily to the development of the Integra MES suite of software applications, the development of the UniView smart terminal and the establishment of a new development team in Wuhan.

Net Finance Charges

Net finance charges for the three months ended June 30, 2012 increased $5,127 or 17% to $34,569 compared with $29,442 in the same period last year. The decrease is due to the partial repayment of the term loan in November 2011. Net finance charges for the nine months ended June 30, 2012 increased $16,612 or 27% to $74,771 compared with $58,159 in the same period last year. The increase is due to the term loan received January 31, 2011.

Net loss

Net loss for the three months ended June 30, 2012 increased $816,329 or 217% to $1,192,136 compared with $375,807 in the same period last year. Net loss for the nine months ended June 30, 2012 increased $1,959,865 or 204% to $2,922,517 compared with $962,652 in the same period last year.

About Epic Data

Epic Data International Inc. has produced manufacturing execution and warehouse management solutions for 36 years. Epic Data solutions synchronize supply chain and production activities to achieve real-time visibility of manufacturing metrics that reduces cycle times and costs, optimizes production planning and control, and boosts quality and efficiency. The solutions are easily implemented either by module or as a completely integrated solution suite across the global enterprise. Customers include Lockheed Martin, Bell Helicopter, Komatsu, Hawker Beechcraft, 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