Epic Data International Inc.
TSX VENTURE : EKD

Epic Data International Inc.

May 09, 2008 17:00 ET

Epic Data Announces Second Quarter Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 9, 2008) - Epic Data International Inc. (TSX VENTURE:EKD) today announced financial results for its second quarter ended March 31, 2008.

Financial Summary

- Q2 2008 revenue of CDN $2.2 million, down from CDN $3.0 million in Q2 2007. Year to date revenue of CDN $3.9 million, down from CDN $5.9 million for the first 6 months of fiscal 2007.

- Q2 and year to date gross margin percentage of 48%, down from 51% for the same periods in 2007.

- Q2 operating expense of CDN $1.2 million, a reduction of 28% from Q2 2007 levels of CDN $1.74 million. Year to date operating expense of CDN $2.4 million, a reduction of 29% from year to date operating expenses in the first 6 months of fiscal 2007.

- Q2 net loss of CDN $287,000, compared to a net loss in Q2 2007 of CDN $183,000. Year to date net loss of CDN $0.63 million, compared to a net loss of CDN $0.37 million in the first half of fiscal 2007.

- March 31, 2008 cash position of CDN $390,000, down from the quarter's opening position of CDN $591,000.

- March 31, 2008 contracted sales backlog of CDN $7.4 million, an increase of CDN $3.8 million from the quarter's opening backlog position of CDN $3.6 million.

During the quarter, the Company announced the award of a CDN $4.8 million data collection system contract with a U.S. defense contractor. Approximately 10% of the system was completed in Q2 with the balance scheduled to be delivered over the next 2 quarters.

To support working capital requirements driven by the above Q2 contract win, the Company drew down CDN $125,000 of its existing CDN $500,000 operating facility during the quarter. Subsequent to quarter end, the Company has drawn down an additional CDN $250,000.

"Our increased contracted sales backlog at close of Q2 provides a strong base of revenue for the last half of fiscal 2008," said James Dodds, Epic Data's President and CEO. "While we execute the delivery of this backlog, we will remain focused on investing in the enhancement of our sales opportunity pipeline for new business. We have instituted a revitalized and focused campaign for lead generation while we actively recruit new, industry experienced sales personnel."

About Epic Data International Inc.

For over 30 years Epic Data has been a leader in automatic identification and data collection solutions for the world's most progressive organizations.

In aerospace and defense, industrial equipment, automotive and technology, our systems are used to increase plant productivity and production velocity while identifying the continuous improvement initiatives vital to winning in today's competitive manufacturing environments.

People and technology make Epic Data a global leader in automated data collection solutions for the extended enterprise.

Information about Epic Data is available at www.epicdata.com.

Note: Forward-looking statements in this news release are based on current expectations of management. Epic Data cautions investors that, due to risks and uncertainties, actual events may differ materially from current expectations.



EPIC DATA INTERNATIONAL INC.
Consolidated Balance Sheets

(Thousands of Canadian dollars)


As at
March 31 September 30
2008 2007
(unaudited) (audited)
--------------------------------
Assets:

Current assets
Cash and cash equivalents $ 390 $ 759
Accounts receivable - Net 1,295 1,546
Inventory 233 180
Prepaid expenses 637 669
------------ --------------
2,555 3,154

Prepaid expenses 222 421
Capital assets 192 271
------------ --------------
$ 2,969 $ 3,846
------------ --------------
------------ --------------

Liabilities and Shareholders' Deficiency

Current liabilities:
Accounts payable and accrued
liabilities $ 1,511 $ 1,362
Deferred revenue 1,865 2,328
Related party loan 125 -
------------ --------------
3,501 3,690
------------ --------------

Related party loan, net of equity portion
of $37 (September 30, 2007 - $51) 963 949
Deferred Revenue 355 429

Deficiency in assets:
Share capital and contributed surplus 59,074 59,072
Deficit (60,924) (60,294)
------------ --------------
(1,850) (1,222)
------------ --------------
$ 2,969 $ 3,846
------------ --------------
------------ --------------

Certain comparative figures have been reclassified to conform with the
financial statement presentation adopted for Fiscal 2008.



EPIC DATA INTERNATIONAL INC.
Consolidated Statements of Operations, Comprehensive Income (Loss) and
Deficit

(Thousands of Canadian dollars except per share amounts - unaudited)

Three months Six months
ended March 31 ended March 31
-------------------- --------------------

2008 2007 2008 2007
--------- --------- --------- ---------

Revenue $ 2,152 $ 3,010 $ 3,925 $ 5,909

Cost of sales 1,112 1,469 2,050 2,916

--------- --------- --------- ---------
Gross margin 1,040 1,541 1,875 2,993

Gross margin percentage 48% 51% 48% 51%

Operating expenses:
Selling, marketing and
administrative 1,122 1,281 2,127 2,689
Product development 125 459 262 694
--------- --------- --------- ---------
1,247 1,740 2,389 3,383
--------- --------- --------- ---------

Loss before undernoted items (207) (199) (514) (390)

Other expenses (income):
Amortization of capital assets 47 60 101 130
Unused leased facilities - (107) - (215)
Net finance charges 33 31 60 66
Other Income 0 - (45) -
--------- --------- --------- ---------
80 (16) 116 (19)
--------- --------- --------- ---------

Net income (loss) and
comprehensive income
(loss) for the period (287) (183) (630) (371)

Deficit, beginning of period (60,637) (60,881) (60,294) (60,693)

--------- --------- --------- ---------
Deficit, end of period $ (60,924) $ (61,064) $ (60,924) $ (61,064)
--------- --------- --------- ---------
--------- --------- --------- ---------

Weighted average number of
shares 12,897 12,901 12,897 12,901

Earnings (loss) per share $ (0.02) $ (0.01) $ (0.05) $ (0.03)

Certain comparative figures have been reclassified to conform with the
financial statement presentation adopted for Fiscal 2008.



EPIC DATA INTERNATIONAL INC.
Consolidated Statements of Cash Flows

(Thousands of Canadian dollars except per share amounts - unaudited)


Three months Six months
ended March 31 ended March 31
----------------- ------------------
2008 2007 2008 2007
--------- ------ --------- -------

Cash provided by (used in):

Operating:
Loss for the period $ (287) $ (183) $ (630) $ (371)
Items not involving cash:
Amortization of capital assets 47 60 101 130
Provision for unused leased
facilities - (107) - (215)
Accretion of related party loan 7 15 14 31
Stock-based compensation expense
(recovery) (7) (2) 2 (41)
Change in non-cash operating
working capital:
Accounts receivable 216 1,368 251 (635)
Inventory (12) (48) (53) 1
Prepaid expenses 20 (50) 231 (210)
Accounts payable & accrued
liabilities 39 173 149 (114)
Deferred revenue (344) (222) (537) 1,543
--------- ------ --------- -------
(321) 1,004 (472) 119

Investing:
Net acquisition of capital assets (5) (26) (22) (26)
Cash equivalents pledged as
security - 14 - 400
--------- ------ --------- -------
(5) (12) (22) 374

Financing:
Related party loan 125 - 125 -
--------- ------ --------- -------
125 - 125 -
--------- ------ --------- -------

Increase (decrease) in cash and
cash equivalents (201) 992 (369) 493

Cash and cash equivalents,
beginning of period 591 119 759 618

--------- ------ --------- -------
Cash and cash equivalents, end of
period $ 390 $ 1,111 $ 390 $ 1,111
--------- ------ --------- -------
--------- ------ --------- -------

The Company's cash position
consists of:
Cash and cash equivalents $ 390 $ 1,111 $ 390 $ 1,111
Cash and cash equivalents
pledged as security - 1,200 - 1,200
--------- ------ --------- -------
Cash position $ 390 $ 2,311 $ 390 $ 2,311
--------- ------ --------- -------
--------- ------ --------- -------

Supplementary information:
Interest paid $ - $ - $ 35 $ 35
Interest received $ 2 $ 5 $ 7 $ 9

Certain comparative figures have been reclassified to conform with the
financial statement presentation adopted for Fiscal 2008.


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