PowerTech Corporation Inc.

PowerTech Corporation Inc.

December 20, 2007 08:30 ET

PowerTech Records Revenue Growth of Almost 50% During its Last Fiscal Year Ended September 30, 2007

TERREBONNE, QUEBEC--(Marketwire - Dec. 20, 2007) - PowerTech Corporation Inc. "PowerTech" (TSX VENTURE:PWB) today disclosed its financial results for the fiscal year ended September 30, 2007.

During this period, the Company recorded revenues of $625,820 compared to $419,707 last year, for an increase of 49%. This sales progress should accelerate in the coming quarters, notably via the full deployment of the manufacturing and marketing agreement formed with NPK Construction Equipment.

PowerTech's net loss was $3.8 million or $0.12 per share on a diluted basis during the last fiscal year, compared to a net loss of $2.3 million or $0.08 per share for the preceding fiscal year.

During the last year, the Company's administration expenses were $1.2 million, compared to $1.1 million for the 2006 fiscal year. Sales and marketing expenses, net of government assistance received, were $1.7 million, whereas they were $828,751 for the 2006 fiscal year. This increase is mainly attributable to a write-off of $739,278 made on demonstration units, which had stayed in the field for more than one year and which did not feature the latest product improvements. The Company decided that the eventual sale of these units would not serve its strategic and commercial objectives.

The Company's technological development expenses, net of received tax credits, were $44,872 for the fiscal year ended September 30, 2007, compared to zero for the preceding fiscal year. All development fees incurred before March 31, 2007 were recorded in the balance sheet as a deferred charge.

Furthermore, in terms of current assets, cash and cash-equivalents totalled $1.26 million as at September 30, 2007, compared to $1.28 million as at September 30, 2006. In spite of the loss recorded in 2007, the Company was able to end the fiscal year with a liquidity level comparable to that posted on the same date one year earlier. This is thanks to the completion of a private financing in the amount of $3.2 million in April 2007. In addition, PowerTech's total assets were $2.8 million as at September 30, 2007, compared to $3.4 million as at September 30, 2006. This decrease in assets mainly results from the write-off of the demonstration units mentioned above. In regards to liabilities as at September 30, 2007, current liabilities were $631,587, compared to $400,444 one year earlier. At the end of the last fiscal year, the Company's long-term debt was mainly composed of two convertible debentures that together total $2.7 million.

A year highlighted by the achievement of several decisive milestones

For PowerTech, the last year was highlighted by the achievement of several decisive development milestones. This progress has enabled PowerTech to build the foundation required to establish gradual and steady revenue growth and an increasing order book in the quarters to follow. Today, PowerTech is a company whose commercialization activities are truly gaining momentum and these activities are expected to intensify during the coming quarters.

"There is no doubt that the formation of an OEM agreement with NPK Construction Equipment in February 2007 has proven to be a turning point for the Company and will contribute to our revenue growth. Nevertheless, this manufacturing and marketing agreement should be viewed in the context of our overall strategy. The anticipated success through our partnership with NPK represents just one engine of our future growth. During the last year, we have also worked very hard on other promising projects that should soon help the Company to accelerate its development," said Mr. Carol Murray, President and Chief Executive Officer of PowerTech.

In addition to OEM agreements, such as the one formed with NPK, PowerTech's business model also includes the development of its own distribution and marketing network under the PicBucket brand, as well as the development of specialized markets such as those in the military sector, energy sector (pipelines) and tool and equipment rental centres.

OEM agreements: strong and recurring revenues

"OEM agreements are at the core of our business development strategy. They enable us to work with world renowned partners and benefit from their extensive distribution networks. An important detail of these agreements is that they have the potential to generate recurring, first-year sales of several hundred product units," said Mr. Murray.

Through its agreement with NPK, a world leader in the construction equipment industry, PowerTech's multi-functional buckets will be marketed under the NPK brand name in the United States, Mexico and Latin America. In the first phase, the Company began delivering 2000 Series buckets to its partner in September 2007 to validate specifications and performance. Recently, the 1000 and 3000 Series began to be developed and adapted under the NPK brand. This will have the effect of significantly increasing PowerTech's order book in the coming months. Soon, PowerTech's 5000 Series, a bucket that equips very large sized excavators, will also be marketed by NPK.

Furthermore, we are continuing our efforts and demonstrations of a prototype bucket with other large original equipment manufacturers who are highly interested in marketing our technology in other regions that are not served by NPK. Our goal continues to be establishing other similar OEM agreements very soon, which could have a positive impact on our financial results in the short term.

Other growth leverage opportunities

The establishment of a network of authorized PowerTech distributors will also be powerful leverage for the Company's business development. With this in mind, PowerTech has set up some key new agreements in Canada, notably with the companies Creighton Rock and Drill and Champion Road Machinery in the Ontario market. Today, PowerTech is backed by a network of dynamic partners with more than 100 points of sale in Canada.

"In regard to specialized markets, we have put extra focus on members of the North American military industry, with the goal of promoting the relevance of using our technology in real military applications. We hope that this evaluation of the PicBucket will allow our product to be registered on military equipment lists to equip several kinds of military vehicles in the future," said Mr. Murray.

Furthermore, over the last year, some rental centres, such as Caterpillar's CAT Rental Store, have been added to PowerTech's distribution network. This niche is a promising market segment for PowerTech.

"Over the last year, we have made major progress through gradual and strategic moves in our game plan. Today, we are in a highly promising position to successfully continue our development. It is with determination and renewed enthusiasm that we take on the new year," concluded Mr. Murray.

Issuance of stock options

The board of directors of Power Tech authorized today the issuance of 113,000 stock options to two new employees conforming to the Corporation's Stock Option Plan approved October 27, 2004. 110,000 of these options were issued to Mr. Robert Duhamel, the Company's new Vice-President, Global Supply Chain. Each option gives the holder the right to acquire one Power Tech common share at a price of $0.45 for a period of 5 years. 20% of the stock options will vest after twelve months and then 10% every three months after that for the following eight quarters.

About PowerTech (www.powertechci.com)

PowerTech is the only company in the world that manufactures and commercializes percussion technology with interchangeable tools and accessories for the construction, demolition, aluminum, mining, tunnelling, forestry and military industries. PowerTech's percussion technology, marketed under the PicBucket and PicHammer names, is a technological breakthrough that combines the power of a hydraulic hammer with the stripping force and manoeuvrability of a conventional bucket.

PowerTech is positioning itself as a leader in the development, integration and commercialization of leading edge technologies that allow for substantial improvements in excavation and demolition equipment performance, productivity and functionality.

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

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