Zedi Inc.

Zedi Inc.

May 18, 2010 18:22 ET

Zedi Inc. Announces Q1 2010 Financial Results

CALGARY, ALBERTA--(Marketwire - May 18, 2010) - Zedi Inc. (the "Company" or "Zedi") (TSX VENTURE:ZED) today releases results for Q1 2010. "Coming off of a strong Q4 in 2009, I am very pleased to announce that Q1 of 2010 was one of the strongest quarters in the Company's history. The performance was largely driven by growth in the Canadian market, particularly our field operations and our retrofit sales, all supported by our recurring revenue. I want to thank all of our staff for the tenacity they have shown through the downturn, as it is their hard work and dedication that led to this accomplishment," said Matthew Heffernan, Zedi President & CEO. The Q1 2010 interim 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 Q1 2010 were $14,720,000 compared to $12,712,000 in Q1 2009, surpassing the previous record of $14,339,000 posted in Q4 2008. Operations continue to generate strong cash flow, with $6,089,000 generated in Q12010 compared to $216,000 used in operations during Q1 2009. Closing working capital for Q1 2010 was $14,428,000, up from $12,878,000 at December 31, 2009.

Net income before tax for Q1 2010 was $1,339,000 or $0.01 per common share compared to net income before tax of $495,000 or $0.00 per common share for Q1 2009. This result was attributed to strong recurring revenue, an increase in retrofit sales activity and growth in field operations. A stock-based compensation expense of $194,000 was recognized in Q1 2010. Although this is a non-cash expense, with no actual impact on the Company's operations, generally accepted accounting principles require that it be recognized in the calculation of net income. Earnings before interest, taxes, depreciation, amortization and stock –based compensation expense ("EBITDAS") for Q1 2010 was $2,193,000 compared to $1,661,000 in Q1 2009. While EBITDAS is a non GAAP measure it is commonly used by industry to normalize non-operating factors that are included in net income.

The Company tracks recurring revenue as a percentage of operating expenses. Recurring revenue for Q1 2010 increased to 173% of operating expenses, up from 154% in Q1 2009. Zedi as well tracks recurring revenue as a percentage of the Company's total cash expenditures, which in addition to operating expenses includes deferred development and capital asset purchases, and reports 157% for Q1 2010 up from 126% in Q1 2009. The Company believes that these two measures are significant indicators of performance and sustainability.

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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