OMT Inc.
TSX VENTURE : OMT

OMT Inc.

November 10, 2005 18:28 ET

OMT Reports Financial Results for Third Quarter 2005

WINNIPEG, MANITOBA--(CCNMatthews - Nov. 10, 2005) - OMT Inc. (TSX VENTURE:OMT) announced today the Company's consolidated results for the period ended September 30, 2005.

Third Quarter Financial Highlights

- Completed the strongest third quarter results in the company's history for its radio broadcasting iMediaTouch and iMediaLogger product lines with new clients including Platinum Broadcasting, New England Institute of Technology, and Backyard Broadcasting.

- Deployed new Intertain Retail Preview kiosks in Best Buy and Future Shop stores in the third quarter, now reaching 90 stores across these national retail chains.

- Launched a next generation solid state audio player device for the Intertain Retail Radio service, which is superior in reliability to the hard-drive based devices that are available on the market today.

- Celebrated eight successful years of delivering top quality continuous music programming with Galaxie - CBC's Continuous Music Network, which uses iMediaTouch to reach over 4.5 million Canadian homes and businesses.

Description of Business

OMT Inc. (TSXV: OMT) is a digital media content and technology solution provider to retailers of media products and radio broadcasters. Intertain Media, the digital entertainment division, offers media previewing systems to major retailers in North America such as Best Buy as well as background music and messaging services. The iMediaTouch division delivers radio automation systems with over 1,400 domestic and international clients. OMT's broadcasting, multi-media technology, and content are heard daily by over 50 million people worldwide through radio, satellite, television and Internet delivered broadcasts. To learn more about the Company, its products and services, visit its website at www.omt.net.

Management's Discussion and Analysis

Certain statements made in the following Management's Discussion and Analysis contain forward-looking statements including, but not limited to, statements concerning possible or assumed future results of operations of the Company. Forward-looking statements represent the Company's intentions, plans, expectations and beliefs, and are not guarantees of future performance. Such forward-looking statements represent our current views based on information as at the date of this report. They involve risks, uncertainties and assumptions and the Company's actual results could differ, which in some cases may be material, from those anticipated in these forward-looking statements. Unless otherwise required by applicable securities law, we disclaim any intention or obligation to publicly update or revise this information, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance upon forward-looking statements.

Results of Operations

This review contains Management's discussion of the Company's operational results and financial condition, and should be read in conjunction with the consolidated financial statements for the previous quarter ended June 30, 2005 and the associated notes and the audited consolidated financial statements for the year ended December 31, 2004.

The unaudited consolidated financial statements provide a comparison of the three months ended September 30, 2005 to the three months ended September 30, 2004. These interim financial statements have not been reviewed by the company's auditors.



2005
------------------------------
Q3 Q2 Q1
---------- --------- --------
Total Sales $1,105 $1,044 $888
Gross Profit $695 $611 $628
Gross Profit % 62.9% 58.5% 70.7%
Operating Expenses $578 $635 $559
EBITDA $97 ($25) $89
Net Income (Loss) ($117) ($236) ($126)
Net Income (Loss) per share
(basic & diluted) ($0.004) ($0.008) ($0.004)
Dividends declared Nil Nil Nil




2004 2003
-------------------------- -----------------
Q4 Q3 Q2 Q1 Q4
-------- ------- ------- -------- --------
Total Sales $1,072 $645 $849 $916 $942
Gross Profit $616 $435 $572 $594 $480
Gross Profit % 57.5% 67.4% 67.4% 64.8% 51.0%
Operating Expenses $698 $544 $570 $566 $728
EBITDA ($85) ($123) 4 $29 ($182)
Net Income (Loss) ($324) ($284) ($139) ($137) ($404)
Net Income (Loss)
per share
(basic & diluted) $(0.03) ($0.02) $ (0.01) $ (0.01) $ (0.04)
Dividends declared Nil Nil Nil Nil Nil


Sales for the quarter ended September 30, 2005 increased by $460,000, which was 71% higher than the same quarter last year. This increase is largely attributable to added sales of Intertain Retail Preview kiosks and the iMediaTouch product line. Year to date, revenue was $3,038,000, as compared to $2,409,000 last year, an increase of 26%. Gross profit increased by $260,000, which was 60% higher than the same quarter last year. Year to date, gross profit was $1,934,000, as compared to $1,600,000 last year, an increase of 21%. The gross profit growth was largely due to the increase in iMediaTouch sales.

Operating expenses at $578,000 were 6% higher than in the same period in 2004, but 9% lower than the second quarter of 2005. The increase over the previous year is largely related to the increased revenues in iMediaTouch, which involved an expanded sales team and the associated higher selling costs.

Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) was $97,000, as compared to a loss of $123,000 in the same quarter last year. Net loss after all costs and expenses was $117,000, or $0.004 cents per share.

Liquidity

OMT had a working capital balance of $232,000 as of September 30, 2005. This is a decrease of $114,000 since December 31, 2004. The current ratio of current assets to current liabilities is 1.23:1 as compared to 1.25:1 at December 31, 2004 and 0.5:1 at December 31, 2003. The improvement over 2003 is a result of the financing that closed in December 2004. The company has no borrowings on its operating credit line as of September 30, 2005.

During the third quarter, the cash position was reduced by $56,000. Funds were used for operations of $8,000, capital expense of $9,000, and payments of long-term debt of $39,000.

Subsequent Events

Options

On October 25, 2005, OMT granted 1,400,000 incentive stock options to directors and officers, each of which entitles the recipient to purchase one common share of OMT at an exercise price of $.10 in years 1 and 2 and $0.11 thereafter. The options were issued pursuant to the stock option plan of OMT, which vest in three years and are exercisable for a period of five years from the grant date.

Bank Line of Credit

On October 28, 2005, OMT signed a term sheet with ENSIS Management Inc. for the ENSIS Growth Fund to provide a $400,000 bank guarantee in support of its existing line of credit facility for a period of twenty-four months at an annual cost of 3% and a monthly administration fee of $1,000. This guarantee is subject to final documentation and approvals.

Contact Information

  • OMT Inc.
    Marieke Wijtkamp
    President & COO
    mwijtkamp@omt.net
    or
    OMT Inc.
    Bill Baines
    Executive Chairman
    bbaines@omt.net
    or
    OMT Inc.
    Unit 1- 1555 Dublin Avenue
    Winnipeg, Manitoba Canada R3E 3M8
    (204) 786-3994
    (204) 783-5805 (FAX)
    www.omt.net