Epic Data International Inc.
TSX VENTURE : EKD

Epic Data International Inc.

January 11, 2011 17:39 ET

Epic Data Announces Year End Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 11, 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 and year ended September 30, 2010.

Results of Operations        
  Three months ended Year ended
  September 30, September 30,
  2010 2009 2010 2009
         
Revenue $1,120,259 $1,322,638 $4,730,892 $6,141,809
 
Cost of sales 483,342 513,058 2,253,405 2,909,850
 
Gross margin 636,917 809,580 2,477,487 3,231,959
 
Expenses (income)        
  General and administration 377,756 392,203 1,579,627 1,598,302
  Sales and marketing 227,266 350,380 1,036,886 1,433,869
  Product development 112,631 150,768 495,450 475,092
  Amortization of property, plant and equipment 10,105 23,733 57,767 99,958
  Net finance charges 8,315 24,066 48,902 84,207
  Stock based compensation 5,425 5,528 39,630 23,811
  Foreign exchange 18,296 61,722 71,987 37,611
  Severance costs 19,324 15,400 56,784 84,002
  Interest accretion - - - 21,793
  Refundable tax recovery, net of costs - 19,367 - (485,633)
 
  779,118 1,043,167 3,387,033 3,373,012
 
Net loss for the period (142,201) (233,587) (909,546) (141,053)
 
Loss per share - basic and diluted $(0.01) $(0.02) $(0.05) $(0.01)

Results of Operations for the year ended September 30, 2010

Revenue

Total revenue for the year ended September 30, 2010 decreased $1,410,917 or 23% to $4,730,892 compared with $6,141,809 million in the same period last year. The decrease in revenue was due mainly to the continued curtailed spending by our customers.

Gross margin

The gross margin for the year ended September 30, 2010 decreased $754,472 or 23% to $2,477,487 as compared with $3,231,959 million 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 year ended September 30, 2010 decreased slightly to 52% compared with 53% 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 year ended September 30, 2010 decreased $18,675 or 1% to $1,579,627 compared with $1,598,302 in the same period last year. Cost reductions in the current year totaled approximately $420,000, as the prior year balance included certain non-recurring recoveries totaling approximately $400,000.

Sales and marketing

Sales and marketing expenses for the year ended September 30, 2010 decreased $296,983 or 22% to $1,036,886 compared with $1,333,869 in the same period last year. The decrease is due to cost reductions of approximately $479,000 including staff, which is offset by an increase of approximately $182,000 in the current year for the new sales and marketing initiatives for the China market.

Product development

Product development expenses for the year ended September 30, 2010 increased $20,358 or 4% to $495,450 compared with $475,092 in the same period last year. The increase is due to the development of the Epic Data MES application for the China market and a reduction in the amount of staffing costs being allocated to cost of sales resulting from less work in the current year.

Net loss

Net loss for the year ended September 30, 2010 was $909,546 compared to $141,053 in the same period last year. The 2009 fiscal year was positively impacted by a refundable tax recovery of $485,633 and certain other non-recurring recoveries of approximately $400,000. In the absence of these amounts the year ended September 30, 2009 would have had a net loss of approximately $1,026,686. This is compared with the net loss of $909,546 for the year ended September 30, 2010.

Fourth Quarter Results

Results of operations for the fourth quarter

Revenue for the three months ended September 2010 decreased $202,379 or 15% to $1,120,259 compared with $1,322,638 in the same period of the prior year. The decrease was due to the continued slow down in business in 2010.

Expenses for the three months ended September 2010 decreased $164,049 or 17% to $779,118 compared with $943,167 in the same period of the prior year. In general the expenses for the three months ended September 30, 2010 are lower than those in the same period last year due to the ongoing efforts of management to control costs.

Net loss for the three months ended September 30, 2010 decreased $91,386 to a loss of $142,201 compared with a loss of $233,587 for the same period of the prior year. The improvement was due to lower costs resulting from cost control measures.

Board Change

The Company announces that effective today Mr. Zheng Jiang has been appointed to the Board of Directors.

Mr. Jiang has real estate holdings in British Columbia, Canada and Yunnan Province, PRC and has served as the vice chair of the Yunnan Provincial Federation of Industry & Commerce. He is also the president of North-America VanStar Investments Ltd., an investor in Epic Data. Mr. Jiang received a Masters degree from the China University of Political Science & Law in Beijing, PRC.

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

Grant of Stock Options

The Company announces the granting of 30,000 stock options to a non-management director. The term of the options will be 7 years and the exercise price will be the greater of the closing price on January 13, 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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