Mindready Solutions Inc.
TSX : MNY

Mindready Solutions Inc.

August 15, 2006 08:00 ET

Mindready Solutions Reports 2005 Results

MONTREAL, QUEBEC--(CCNMatthews - Aug. 15, 2006) - Mindready Solutions Inc. (TSX:MNY), a leading supplier of innovative solutions for test and embedded systems, today reported its results for the year ended December 31, 2005. The management discussion and analysis (MD&A) for the fiscal year ending December 31, 2005 will be published in the following days.

Sales in 2005 were at $16.9 million compared to $21.3 million in 2004. Operating losses before amortization of property and equipment, interest expense (income), stock-based compensation, exchange losses and write-off of investment and other non-recurring charges was $1.1 million in 2005 compared to $2.0 million in 2004. Net loss was $28.7 million in 2005 compared to $4.0 million in 2004.

Most of this loss, $28.0 million, is related to the write-off of investment and other non-recurring charges in UTTC United Tri-Tech Corporation of which $12.0 million will be reversed in June 2006 as a result of an out-of-court settlement previously announced, which entails the cancellation of $12.0 million of liabilities, thereby increasing retained earnings by the same amount. It should also be noted that of the remaining loss, only $1.7 million has had a direct cash impact, the remainder resulting in the issuance of shares and warrants.

The AMF has allowed Mindready until August 31, 2006 to file the interim financial statements for the quarters ending March 31, 2006 and June 30, 2006. The management cease trade order will be maintained until such financial statements are duly filed.

Furthermore, the regulatory authorities may impose a general cease trade order if Mindready fails to file the aforementioned documents prior to the above-mentioned deadline.

"The closing of 2005 financial statements is a major step forward and we are now close to filing Q1 and Q2 results bringing us back to compliance. More importantly, once these steps are completed, our complete focus will be on operations and growth," said Marc Lamy, President and Chief Executive Officer.

About Mindready Solutions

Mindready Solutions Inc. (TSX: MNY) is a leading supplier of innovative end-to-end solutions for new electronic product introduction, from design to manufacturing and test systems, serving the aerospace & defense, wireless telecommunication and automotive & transportation markets. Mindready serves clients such as Alcatel, Boeing, Faurecia, FlightSafety International, Lockheed Martin, Samsung, Nortel, Northrop Grumman, Rockwell Collins and Visteon. More information about Mindready and its products, systems and engineering services can be found at www.mindready.com.

The statements regarding the company's future operating results, performance and business prospects contained in this press release, and any other statements not constituting historical information, are forward-looking statements. These forward-looking statements reflect the company's current opinions and assumptions with respect to future business decisions and results, and are based on the information currently available to the company. Accordingly, these statements are subject to risks, uncertainties and contingencies that could cause the company's future operating results, performance or business prospects to differ from those expressed in, or implied by, these statements.



Mindready Solutions Inc.
Consolidated statements of operations and deficit (unaudited)
(in thousands of dollars, except per share amounts)

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2005 2004

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Sales $16,858 $21,341

Cost of sales 11,987 15,394
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4,871 5,957

Expenses:
Selling and administrative 5,999 6,778
Research and development 41 1,153
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6,040 7,931

Loss before the following items: (1,169) (1,984)

Amortization of property and equipment 539 728
Interest expense (income) 482 (142)
Stock-based compensation 332 75
Exchange losses 83 211
Write-off of investment and other
non-recurring charges 27,971 1,136
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29,407 2,008

Loss before income taxes (30,576) (3,992)
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Income taxes
Current 16 55
Future (1,866) (44)
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(1,850) 11

Net loss (28,726) (4,003)

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Weighted average number of common shares
outstanding 14,609,208 12,057,636

Basic and diluted loss per share $(1.97) $(0.33)

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Mindready Solutions Inc.
Consolidated balance sheets
(in thousands of dollars)

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December 31, 2005 December 31, 2004
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ASSETS

Current assets:
Cash and cash equivalents $ 1,776 $ 2,336
Accounts receivable 4,059 4,215
Income taxes receivable 8 -
Tax credits receivable 663 99
Work in progress 1,080 1,014
Inventories 1,355 1,401
Prepaid expenses 150 92
Future income taxes 1,866 -
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10,957 9,157

Property and equipment 474 895
Deferred financing costs 699 -
Goodwill 4,640 2,097
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$ 16,770 $ 12,149
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LIABILITIES AND SHAREHOLDERS'
EQUITY

Current liabilities:
Accounts payable $ 2,011 $ 1,037
Accrued liabilities 2,385 3,975
Income taxes payable - 30
Deferred revenue 495 228
Current portion of obligations,
long-term debt and convertible
term notes 7,271 -
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12,162 5,270

Obligations, long-term debt
and convertible notes 7,057 -
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19,219 -
Shareholders' equity:
Share capital (note 3) 22,082 6,740
Equity component of convertible notes 1,977 -
Contributed surplus 2,674 96
Deficit (28,991) (265)
Cumulative translation adjustment 191 308
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(2,249) 6,879

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$ 16,770 $ 12,149
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