Optimal Geomatics Inc.
TSX VENTURE : OPG

Optimal Geomatics Inc.

August 31, 2005 15:42 ET

Optimal Geomatics Reports Third Quarter 2005 Results; Revenues up 48% Over the Same Quarter Last Year

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 31, 2005) - Optimal Geomatics Inc., (TSX VENTURE:OPG) ("Optimal") announces its financial results for the third quarter of fiscal 2005 (Q3-FY2005) ended July 31st, 2005.

Highlights:

During this quarter, the Company:

- Maintained strong revenues for the fifth consecutive quarter.

- Achieved 9 months year-to-date earnings of $951 thousand, with a net profit margin of 13.1%.

- Booked $1.2 million in new business with repeat orders from four existing customers and two from new customers in both the electric and gas markets.

- Quarter-end order backlog is $5.7 million, the majority of which is likely to be executed and recognized as revenue during the balance of the current fiscal year.

- Broadened the Company's business base by achieving growth in both the electric and gas utility markets.

Colum Caldwell, President and CEO commented, "Q3 has historically been subject to weaker seasonal and cyclical trends of the industry. We are pleased with our performance within this context. We are on track to achieving our corporate objectives for fiscal 2005."

Financial Results

Revenue for the third quarter of fiscal year 2005 ended July 31, 2005 was $2.6 million, a 6% decrease from second quarter revenue of $2.8 million and a 48% increase from revenue of $1.8 million for the same quarter in 2004. Year to date revenue was $7.3 million representing an increase of 62% if compared with the revenue of $4.5 million for the same period last year. Gross profit margin for the three month and nine month period ending July 31, 2005 was 44% and 40% respectively. Net profit of $363 thousand or $0.01 per share was resulted from the quarter ending July 31, 2005. Nine months year-to-date net profit was $951 thousand, compared to a net loss of $849 thousand for the same period in 2004.

As at July 31, 2005, Optimal has cash and cash equivalents of $2.5 million as compared to $3.0 million as at April 30, 2005 and $292 thousand at the end of the last fiscal year ended October 31, 2004. During the current quarter, the Company repaid the remaining balance of debentures interest with aggregate amount of $208 thousand. Company liquidity continues to improve in the third quarter with $2.6 million in net working capital as at July 31, 2005, compared to $2.2 million in the prior quarter. The Company's working capital ratio (current ratio) at the end of the current quarter is 2.1, up from 1.8 as at April 30, 2005.

Quarterly Teleconference Call:

Optimal will hold its quarterly teleconference call on Thursday, September 1st at 8:00am PST (11:00am EST). To participate dial 604-899-1159 for Vancouver participants and 403-232-6311 outside Vancouver, then dial pass code 66491#. Alternatively, you can listen to the playback by visiting our website after the call at www.optimalgeo.com.

Optimal Geomatics specializes in providing highly accurate geomatic services and software solutions to a customer-base, which is primarily composed of Electric and Gas utilities. Geomatics is best described as the acquisition, storage, management, retrieval, manipulation, and distribution of spatial or geographically referenced data. Optimal employs a number of acquisition systems, including its proprietary technology for data acquisition, and applies innovative technology, techniques, and expertise for in-house processing. The Company's unique mapping products and services help utilities reduce cost, improve efficiency, and better-manage their assets by turning raw data into highly valuable geospatial information and engineering reports. Optimal's customers include many of the major utilities across the United States and the United Kingdom.



Summary of Financial Information

Balance Sheet July 31, 2005 (Unaudited)

Assets July 31, 2005 Oct 31, 2004
Cash $ 2,520,251 $ 291,898
Accounts Receivable 1,998,457 1,577,050
Work in Progress 340,621 131,091
Prepaid Expense 83,815 39,208
Property & Equipment 205,200 155,202
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Total Assets $ 5,148,344 $ 2,194,449

Liabilities & Shareholders Equity
Current Liabilities $ 2,362,394 $ 2,366,369
Share Capital & Subscriptions 18,813,664 16,897,307
Contributed Surplus 254,629 183,661
Cumulative Translation Adjustment 64,241 44,897
Deficit (16,346,584) (17,297,785)
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Total Liabilities &
Shareholders Equity $ 5,148,344 $ 2,194,449
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Income Statement 3 months 3 months 9 months 9 months
(Unaudited) ending ending ending ending
July 31, July 31, July 31, July 31,
2005 2004 2005 2004

Sales $ 2,619,864 $ 1,768,080 $ 7,265,281 $ 4,478,382
Cost of Sales 1,454,115 1,304,669 4,374,693 3,060,590
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Gross Profit 1,165,749 463,411 2,890,588 1,417,792

Expenses
Administration $ 354,082 $ 380,970 $ 1,110,598 $ 1,147,263
Marketing & Sales 269,122 265,200 783,230 739,091
Research &
Development 8,701 39,603 (26,782) (3,971)
Amortization 29,324 24,544 76,357 82,363
Reorganization Costs - - - (12,565)
Foreign Exchange
Loss (Gain) 153,009 29,679 17,215 (15,264)
Interest Expense
(income) (11,200) 112,670 (21,231) 333,782
Income Tax Expense - - - 830
(Gain) on Discontinued
Operations - - - (4,927)
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Total Expenses $ 803,038 $ 852,666 $ 1,939,387 $ 2,266,602

Net Income (Loss)
for the Period $ 362,711 $ (389,255)$ 951,201 $ (848,810)
Net Income (Loss)
per share $ 0.01 $ (0.02)$ 0.02 $ (0.04)

Weighted Avg Number
of shares outstanding 46,043,794 25,449,625 42,568,030 23,499,926
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For additional financial information: www.optimalgeo.com/financials.html.

This document may contain forward-looking statements. These statements present management's expectations, beliefs, plans and objectives regarding future events and conditions and, as such, involve inherent risks and uncertainties. Actual results could be significantly different from those projected.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of this new release.

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