zed.i solutions inc.

zed.i solutions inc.

May 02, 2007 19:16 ET

Zedi announces first quarter 2007 financial results

CALGARY, ALBERTA--(CCNMatthews - May 2, 2007) - zed.i solutions inc. (the "Company" or "Zedi")(TSX VENTURE:ZED) today releases results for the first quarter, 2007. "All measures of first quarter financial performance were positive despite a significant decline in customer drilling activity, which was down 63% year over year. Our ability to generate solid earnings and cash flow while the industry experiences this downturn validates our model of revenue diversification from the further adoption of our traditional products and the introduction and acceptance of new solutions and acquisitions" said Matthew Heffernan, President and CEO of Zedi. Q1 2007 audited financial statements and MD & A are filed on SEDAR and can be accessed at www.sedar.com or on the Company's website at www.zedi.ca.

Revenues for the first quarter of 2007 were $8,435,000, compared to $11,308,000 in the first quarter of 2006. Cash flow from operations in the first quarter was $2,806,000, compared to $2,034,000 in Q1 2006. The quarter ended with cash on hand of $11,656,000 and working capital of $23,234,000.

Net income before tax for the first quarter 2007 was $887,000 or $0.01 per common share compared to net income before tax of $1,808,000 or $0.02 per common share for the same quarter in 2006. A stock-based compensation expense of $641,000 was recognized in Q1 2007. Although these are non-cash expenses, with no actual impact on the Company's operations, generally accepted accounting principals require that they be recognized in the calculation of net income. Earnings before interest, taxes, depreciation, amortization and stock option expense ("EBITDAS") for the quarter was $2,092,000 compared to $2,745,000 for the same quarter in 2006. While EBITDAS is a non GAAP measure it is a common measure used by industry to normalize non-operating factors that are included in the net income results.

The Company tracks recurring revenue as a percentage of operating expenses. Recurring revenue for the quarter increased to 94% of operating expenses, up from 57% in the first quarter of 2006. Zedi has begun to report on recurring revenue as a percentage of the Company's total cash requirements as well and reports 66% for Q1 2007 up from 44% in Q1 2006. The Company believes that these two measures are significant indicators of performance.

Zedi specializes in production operations management, delivering systems and services that help oil and gas producers to better manage people, assets and information. We help our customers increase earnings from production, decrease operating costs, best utilize human, physical and fiscal assets and mitigate compliance risk.

Established in 1987, Zedi has enhanced the operational performance of more than 200 upstream, midstream and oilfield service customers. Please visit www.zedi.ca, for more information.

The TSX Venture Exchange has neither approved nor disapproved the contents of this news release.

Contact Information