Zedi Inc.

Zedi Inc.

May 15, 2009 17:01 ET

Zedi Inc. Announces First Quarter 2009 Financial Results

CALGARY, ALBERTA--(Marketwire - May 15, 2009) - Zedi Inc. (the "Company" or "Zedi") (TSX VENTURE:ZED) today releases results for Q1 of 2009. "In an economic climate that continues to be very difficult, we delivered results that once again prove the value of our business model and demonstrates our commitment to significant ongoing investments in products, technologies and geographies. This reflects our ongoing commitment to long term growth and profitability of the Company. We are prudently managing costs while staying true to our strategy, protecting the future viability and success of Zedi through continued investment in the development of products and services. The general industry outlook for the remainder of the year continues to be one of caution," said Matthew Heffernan, Zedi President & CEO. The first quarter 2009 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 Q1 of 2009 were $12,712,000, compared to $11,377,000 in 2008, an increase of approximately 12%. Although new drilling activity was very low throughout the quarter, the Company generated net new revenue through services that appeal to producers facing increased cost pressures, and the recurring revenue base remains strong. Zedi maintained its strong balance sheet position with end of period working capital of $11,503,000.

Net income for Q1 2009 was $301,000 compared to net income of $864,000 for Q1 2008, after the impact of a retroactive change in accounting policy for intangible assets that caused reductions in net income of $189,000 for Q1 of 2009 and $13,000 for Q1 of 2008. The change in accounting policy was adopted in Q1 of 2009 as mandated by Canadian GAAP and serves as a step toward the Company's adoption of International Financial Reporting Standards in fiscal year 2011.

A stock-based compensation expense of $310,000 was recognized in Q1 2009 compared to $413,000 for Q1 2008. Although these are non-cash expenses, with no actual impact on the Company's operations, generally accepted accounting principles require that they be recognized in the calculation of net income. Earnings before interest, taxes, depreciation, amortization and stock-based compensation expense ("EBITDAS") for Q1 2009 was $1,661,000 compared to $2,309,000 for Q1 2008. The change in accounting policy described above reduced EBITDAS by $410,000 in Q1 2009 and by $200,000 in Q1 2008. 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.

Zedi continued to execute against a strategy of delivering value through data throughout Q1. As a result of the three acquisitions completed in 2008, Zedi now monitors in excess of 36,000 wells, of which 25,000 are measured with charts and over 11,000 are measured electronically.

Zedi's vision is to become the global leader in production operations management, building on investments in new technologies and markets. Zedi proved its vision and technical capabilities and established itself as a leader in the market by developing unique well monitoring and optimization products that fundamentally changed the way natural gas wells are operated in Canada. To achieve the vision of becoming a global leader, a more complete solution suite and penetration of international markets are required. To this end, in 2008 Zedi invested approximately $7,300,000 or $ 0.07 per share on forward looking activities including research and development, marketing and international sales efforts. The Company expects to invest a similar amount in 2009, notwithstanding current conditions in the energy business. This investment will allow Zedi to enhance existing solutions and release new products and services, positioning the Company to achieve success in the oil side of the business similar to its achievement in natural gas. The investment also advances the pursuit of international customers.

Zedi's core business is profitable and generates the cash necessary to fund these investments for the future. Zedi strongly believes that ongoing significant investment is in the best interest of the company and our long term shareholders and will result in the realization of becoming the Global Leader in Production Operations Management.

Zedi Inc. (TSX VENTURE:ZED) specializes in the end-to-end management of oil and gas production operations. Zedi arms producers from the field to head office with accurate, timely and centralized data to help them make better business decisions. Using technology to gather highly accurate data from well sites, Zedi automatically moves it through critical work processes including web-based field data capture and production accounting systems. Zedi technology is continually evolving in the control and optimization of wells to ensure maximum production and cost reduction. Established in 1987, Zedi has enhanced the operational performance of more than 400 upstream, midstream and oilfield service customers.

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

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