Omnitech Consultant Group inc.
TSX VENTURE : GCO

Omnitech Consultant Group inc.

August 27, 2007 18:34 ET

GCO Announces its Results for the First Three Quarters of 2007

QUEBEC CITY, QUEBEC--(Marketwire - Aug. 27, 2007) - Omnitech Consultant Group Inc. ("GCO") (TSX VENTURE:GCO) announces its results for the first three quarters of the 2007 financial period.

"In spite of an extremely difficult financial situation inherited from previous years and a very long, expensive and arduous reorganization effort, the Corporation was able to achieve, over the past nine months, sales of $15.4 millions and an EBITDA of over $1 million. These results demonstrate GCO's potential and the importance of the services it provides to its clients. Operating in a healthy financial context, GCO should be able to create value for its shareholders", declared Mr. Philippe Collard, Chief Executive Officer and Chairman of GCO.

Quarter ended November 30, 2006

The Corporation announces sales of $5.9 millions for the first quarter of the 2007 period, ended November 30, 2006, compared to sales of $4.9 millions for the quarter ended November 30, 2005. This growth, despite the divestment of activities during the 2006 period, is mainly due to the activities of the Process Controls and Optimization business (PCO) unit which includes the subsidiaries Groupe Cadec inc. and Groupe Isac inc.

The net loss for the first quarter of 2007, which includes amortization and depreciation expenses of $150,702, financing expenses of $331,948 and reorganization costs of $202,422, added to $(43 851). However, EBITDA amounted to $674,238, or 11% of sales.

In order to finalize the reorganization process started during the previous financial period, it became obvious for the Board of GCO that a major financial turnaround was also necessary considering the indebtedness of the Corporation, which was becoming a major detriment to the continuation of operations and the fact that the Corporation was no longer able to honour its financial obligations as they were becoming due and was accumulating debt collection legal procedures. On October 31 and November 7, 2006, the Corporation and some of its subsidiaries filed a proposal to their respective creditors in accordance with the provisions section 50.4 of the Bankruptcy and Insolvency Act. Since then, the Corporation had to pay its suppliers cash and in advance, and succeeded in generating sufficient liquidities to meet current obligations related to its operations.

Quarter ended February 28, 2007

The Corporation announces sales of $4.8 millions for the second quarter of the 2007 period, ended February 28, 2007, compared to sales of $5.0 millions for the quarter ended February 28,

2006. Sales decreased compared to the previous quarter because of the impact of the proposal on clients who postponed the signature of new contracts until the approval of the proposal.

The net loss for the second quarter of 2007, which includes amortization and depreciation expenses of $110,433, financing expenses of $235,382, reorganization costs of close to $1 million and a loss on debt payment of $843,367, added to $(1,805,249). However, EBITDA amounted to $375,506, or 7% of sales.

On February 21, 2007, the creditors approved the proposal filed by GCO and its subsidiaries Groupe de Gestion GCO inc., Toptech Groupe Conseil inc., Groupe Cadec inc. and Groupe Isac inc. offering the payment of 100% of the value of creditors' claims in common shares of GCO at a price per share of $0.05.

The effect of the proposal can mainly be seen in the consolidated balance sheet where over $9 million of liabilities were transferred in equity.

Quarter ended May 31, 2007

The Corporation announces sales of $4.7 millions for the third quarter of the 2007 period, ended May 31, 2007, compared to sales of $7.3 millions for the quarter ended May 31, 2006. The sales of the Business Process Optimization business unit considerably decreased compared to the previous quarter's, while the results of the Process Controls and Optimization business unit remained stable or growing.

The net loss for the third quarter of 2007, which includes amortization and depreciation expenses of $109,115, financing expenses of $206,687 and reorganization costs of $401,731, added to $(757,218). EBITDA decreased to $(39,685).

The quarter's loss is mainly due to the decrease in sales of the Business Process Optimization business unit, which historically had its strongest results in the quarter ended in May, while fixed costs related to the unit were only reduced at the end of the quarter with the implementation of an integrated sales team structure following the employment of a Vice-president Sales and Marketing. The development and integration of the sales teams of its two divisions, in order to create cross-sales and sign larger contracts, is the key to GCO's success. Incidentally, since the arrival of the Vice-president Sales and Marketing, the Corporation signed an increasing number of contracts, many of them new long-term mandates.



OMNITECH CONSULTANT GROUP INC.
Consolidated Income Statement for the quarter
ended November 30, 2007
-------------------------------------------------------------------------
Three-month periods
ended
November 30
-------------------------------------------------------------------------
2006 2005
(unaudited) (unaudited)
-------------------------------------------------------------------------

SALES $5,908,352 $4,904,659

OPERATING COSTS

Sales, administration and operation related
expenses 4,113,191 3,815,169
Purchases 942,517 877,790
Research and Development expenses - net
of tax credits 176,500 302,090
Financing expenses 331,948 198,696
Amortization and depreciation 150,702 386,691
Other revenues
Gain on disposal of assets 1,906 -
Share of net income from an entity
subject to significant influence - (5,863)
-------------------------------------------------------------------------
5,716,764 5,574,573
-------------------------------------------------------------------------

INCOME (LOSS) BEFORE INCOME TAXES
AND OTHER ITEMS 191,588 (669,914)

Income Taxes 33,017 (198,017)
-------------------------------------------------------------------------

INCOME (LOSS) BEFORE OTHER ITEMS 158,571 (471,897)

OTHER ITEMS
Reorganization costs 202,422 -
-------------------------------------------------------------------------
NET LOSS $(43,851) $(471,897)
-------------------------------------------------------------------------

Net loss per share (note 6)
Basic (58 899 514 shares - weighted average (0.0007) (0.0008)



OMNITECH CONSULTANT GROUP INC.
Consolidated Income Statement for the quarter ended February 28, 2007
--------------------------------------------------------------------------
Three-month Six-month
periods periods
ended ended
February 28 February 28
--------------------------------------------------------------------------
2007 2006 2007 2006
(unaudited) (unaudited) (unaudited) (unaudited)
--------------------------------------------------------------------------

SALES $4,848,018 $5,068,230 $10,756,370 $9,972,889

OPERATING COSTS
Sales,
administration
and operation
related expenses 3,905,818 3,536,948 8,019,009 7,382,117
Purchases 439,271 384,104 1,381,788 1,261,894
Research and
Development
expenses - net
of tax credits 127,423 52,000 303,923 354,090
Financing
expenses 235,382 281,081 567,330 479,777
Amortization and
depreciation 110,433 366,875 261,135 723,566
Other revenues
Gain on disposal
of assets - - 1,906 -
Share of net
income from an
entity
subject to
significant
influence - 3,787 - (2,076)
--------------------------------------------------------------------------
4,818,327 4,624,795 10,535,091 10,199,368
--------------------------------------------------------------------------

INCOME (LOSS)
BEFORE INCOME
TAXES AND
OTHER ITEMS 29,691 443,435 221,279 (226,479)

Income Taxes - 126,822 33,017 (71,195)
--------------------------------------------------------------------------

INCOME (LOSS)
BEFORE
OTHER ITEMS 29,691 316,613 188,262 (155,284)

OTHER ITEMS
Loss on assets
writen-off 31,820 - 31,820 -
Reorganization
costs 959,753 - 1,162,175 -
Loss on debt
payment 843,367 - 843,367 -
--------------------------------------------------------------------------

NET INCOME (NET
LOSS) $(1,805,249) $316,613 $(1,849,100) $(155,284)
---------------------------------------------------------------------------

Net income (net
loss) per share
Basic (252 116
517 shares -
weighted average) (0.007) 0.006 (0.007) (0.006)



OMNITECH CONSULTANT GROUP INC.
Consolidated Income Statement for the quarter ended May 31, 2007
--------------------------------------------------------------------------
Three-month Nine-month
periods periods
ended ended
May 31 May 31
--------------------------------------------------------------------------
2007 2006 2007 2006
(unaudited) (unaudited) (unaudited) (unaudited)
--------------------------------------------------------------------------

SALES $4,699,171 $7,314,374 $15,455,541 $17,287,263

OPERATING COSTS

Sales,
administration
and operation
related expenses 3,961,277 3,953,158 11,980,286 11,335,275
Purchases 654,964 1,953,864 2,036,752 3,215,758
Research and
Development
expenses - net
of tax credits 152,501 1,174,664 456,424 1,528,754
Financing
Expenses 206,687 365,613 774,017 845,390
Amortization and
depreciation 109,115 329,460 370,250 1,053,026
Other revenues
Gain on disposal
of assets (29,886) - (27,980) -
Share of net
income from an
entity
subject to
significant
influence - (16,616) (18,692)

--------------------------------------------------------------------------
5,054,658 7,760,143 15,589,749 17,959,511
--------------------------------------------------------------------------

LOSS BEFORE
INCOME TAXES
AND OTHER ITEMS (355,487) (445,769) (134,208) (672,248)

Income Taxes - (127,230) 33,017 (198,425)
---------------------------------------------------------------------------

LOSS BEFORE
OTHER ITEMS (355,487) (318,539) (167,225) (473,823)

OTHER ITEMS
Loss on assets
written-off - 3,295,580 31,820 3,295,580
Reorganization
costs 401,731 731,946 1,563,906 731,946
Loss on debt
payment - 843,367
--------------------------------------------------------------------------
401,731 4,027,526 2,439,093 4,027,526

NET LOSS $(757,218) $(4,346,065) $(2,606,318) $(4,501,349)
--------------------------------------------------------------------------

Net loss per
share (note 4)
Basic (252 116
517 shares -
weighted average) (0.003) (0.075) (0.011) (0.078)



About Omnitech Consultant Group Inc. ("GCO")

GCO is a Canadian leader in performance engineering. It assists its clients in the improvement of both their business and manufacturing process by reducing delivery or production delays, increasing productivity and efficiency as well as improving quality and customer satisfaction by using industrial engineering principles, Lean Manufacturing™ and Six Sigma while integrating equipment, software and networks in order to control them, optimize them, track their performance and transform operational information into business intelligence.

TSX Venture Exchange Inc. assumes no responsibility regarding the relevance or accuracy of this press release.

Contact Information

  • Omnitech Consultant Group Inc.
    Philippe R. Bertrand
    Vice-president, Corporate Affairs
    418-626-9090
    or
    Groupe Conseil Omnitech inc.
    Philippe Collard
    Chief Executive Officer
    418-626-9090