AIMGlobal Technologies second quarter results
- REVENUES UP 59% IN AIMTRONICS
- ORDER BACKLOG BALLOONS TO $70 MILLION
AUSTIN, TX, Nov. 11 /CNW/ - AimGlobal Technologies (AMEX and TSE: AGT)
AimGlobal Technologies today announced fiscal 2000 financial results for the
second quarter ending September 30, 1999. The Company confirmed that results
are on track with the Company's plan, and that investment into the businesses
is now clearly indicative of the upside potential for the Company's developing
business model.
Steve deJaray, President and Chief Executive Officer of AimGlobal stated,
``With electro-technologies manufacturing revenues, in Aimtronics alone, up
over 59% over the same quarter last year and over-all revenues up over 28% in
the same period, we are seeing a clear increase and developing demand for our
products and services. We are pleased that current order backlog continues to
grow in line with our projections and expectations. Order backlog for the
next 12 months currently exceeds $70 million, a first for the Company and a
considerable milestone in our evolving business model.'
deJaray continued, ``We have invested aggressively this year in our
future. For example, our JD Edwards ERP system implementation, a $4.5 million
investment, is now successfully integrated into 50% of our facilities.
Capacity utilization - a key to growing profits has consistently increased
month over month. We have seen margins increase to 44% of sales in consumer
gas-related products. We are encouraged and optimistic and we are looking
forward to the successful following and consecutive quarters with continued
growth and bottom-line results.
AIMGLOBAL TECHNOLOGIES COMPANY INC.
SECOND QUARTER REPORT
Ending September 30, 1999
(Unaudited - Prepared by Management)
Management's Discussion and Analysis
General
AimGlobal Technologies through three operating subsidiaries, serves the
Medical, Aerospace, Communications, Industrial, Military, Power Utility,
Emergency Services Consumer markets and Internet business applications
markets. With operations in Texas, New York State, Ontario and British
Columbia, AimGlobal Technologies is a recognized technical innovator and a
leading manufacturer of proprietary microelectronic solutions and hazardous
air and gas monitoring products for life, health and safety applications.
During September 1999, the Company acquired Catouzer Electronic
Publishing and Consulting Inc. (Aimagine Global Software) a software
engineering and technical support company. Catouzer provides further develop
and market of Synergy, an internet-enabling business software product.
Sales
Revenue from AimGlobal for the six months ended September 30, 1999,
increased by $9.4 million, or 28%, to $43.1 million from $33.7 million in the
six months ended September 30, 1998.
Aimtronics' sales increased by $13.2 million or 59%, to $35.6 million in
the six months September 30, 1999 from $22.4 million in the six months
September 30, 1998.
Aim Safe-Air's total sales for the six months ended September 30, 1999 of
$7.4 million represents a lag of $4.0 million or 35%, over the six months
ended September 30, 1998 sales of $11.4 million. Sales of consumer carbon
monoxide products are seasonal.
Gross Profit
AimGlobal's gross profit for the six months ended September 30, 1999
decreased to $4.6 million from $5.8 million in the same six months last year,
a decrease of $1.2 million, or 20%.
Total Aimtronics gross profit decreased by $0.8 million to $1.2 million,
or 3.4% of sales, for the six months ended September 30, 1999 compared to $2.0
million or 8.3% of sales, for the six months ended September 30, 1998. The
decrease in gross profit from the prior year was primarily due to increased
capacity during late fiscal 1999.
Aim Safe-Air's gross profit for the six months ended September 30, 1999
decreased to $3.3 million, or 44.2% of sales, from $3.9 million, or 33.7% of
sales, in the six months ended September 30, 1998, an decrease of $0.6
million, or 15.0%.
Operating Costs
Operating expenses increased $4.4 million, or 65%, for the six months
ended September 30, 1999 to $11.1 million (26% of revenue) from $6.7 million
(20% of revenue) for the same period last year. The increased expense levels
are a result of higher selling and marketing expenses incurred to support both
current and future revenue growth as well as expenses incurred by the
operations acquired during the second half of fiscal 1999.
Financial Position
Working capital at the end of the quarter totaled $18.2 million, as
compared with $40.6 million in the prior year. This decrease resulted from
the current and prior year's losses and the acquisition of Pachena Industries
Ltd. During last year.
About the Company
Founded 14 years ago, and through three operating subsidiaries, AIMGlobal
Technologies serves the Medical, Aerospace, Communications, Industrial,
Military, Power Utility, Emergency Services Consumer markets and Internet
business applications markets. With operations in Texas, New York State,
Ontario and British Columbia, AIMGlobal Technologies is a recognized technical
innovator and a leading manufacturer of proprietary microelectronic solutions
and hazardous air and gas monitoring products for life, health and safety
applications.
Safe Harbor Statement
Certain information in this press release contains ``forward looking
statements' within the meaning of the Securities Exchange Act of 1934,
including those concerning the Company's future results and strategy. Actual
results could differ from those in the forward looking statements due to a
number of uncertainties, including, but not limited to, the demand for the
Company's products and services; the size, timing and recognition of revenue
from significant orders; increased competition, changes in Company strategy;
product life cycles; the impact of rapid technological advances, evolving
industry standards, changes in customer requirements, and fluctuations in
foreign exchange rates. The Company's expense levels are based, in part, on
its expectations as to future revenue and a significant portion of the
Company's expenses do not vary with revenue. As a result, if revenue is below
expectations, results of operations are likely to be materially adversely
effected.
<<
AimGlobal Technologies Company Inc.
Incorporated under the laws of British Columbia
CONSOLIDATED BALANCE SHEETS
(Unaudited - in thousand of Canadian Dollars)
As at September 30,
1999 1998
$ $
------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents 64 19,045
Accounts receivable 17,943 13,363
Inventory 24,570 15,502
Prepaid expenses 513 513
------------------------------------------------------------------------
Total current assets 43,090 48,423
------------------------------------------------------------------------
Capital assets 23,929 17,082
Intangible and other assets 28,461 20,666
------------------------------------------------------------------------
95,480 86,171
------------------------------------------------------------------------
------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank Indebtedness 7,067 -
Accounts payable and accrued liabilities 17,711 7,599
Current portion of capital lease 595 240
------------------------------------------------------------------------
Total current liabilities 25,373 7,839
Obligations under capital lease 4,120 1,346
Loan and mortgage payable 2,022 -
Deferred income taxes 721 647
------------------------------------------------------------------------
Total liabilities 32,236 9,832
------------------------------------------------------------------------
Shareholders' equity
Share capital 83,403 83,330
Cumulative translation adjustments 462 352
Deficit (20,621) (7,343)
------------------------------------------------------------------------
Total shareholders' equity 63,244 76,339
------------------------------------------------------------------------
95,480 86,171
------------------------------------------------------------------------
------------------------------------------------------------------------
On behalf of the Board:
(signed) Steven A. W. deJaray (signed) Bernie M. Joyce
Steven A. W. deJaray, Director Bernie M. Joyce, Director
AimGlobal Technologies Company Inc.
Incorporated under the laws of British Columbia
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND DEFICIT
(Unaudited - in thousand of Canadian Dollars)
Three Six
months ended months ended
September 30, September 30,
1999 1998 1999 1998
$ $ $ $
------------------------------------------------------------------------
Sales 21,891 17,147 43,134 33,765
Cost of sales 18,935 13,795 38,483 27,903
------------------------------------------------------------------------
Gross profit 2,956 3,352 4,651 5,862
Interest and other income 188 403 210 555
------------------------------------------------------------------------
3,144 3,755 4,861 6,417
------------------------------------------------------------------------
Expenses
General and administration 2,960 1,919 5,336 3,189
Professional fees 101 166 323 291
Salaries 2,418 1,502 4,454 2,577
Depreciation and amortization 575 339 1,075 678
------------------------------------------------------------------------
6,054 3,926 11,188 6,735
------------------------------------------------------------------------
Income (loss) before income taxes (2,910) (171)(6,327) (318)
------------------------------------------------------------------------
Income taxes
Income tax (recovery) provision - (135) (495) (294)
Reduction in income taxes resulting
from application of losses not
previously recorded - - - -
------------------------------------------------------------------------
(135) (495) (294)
------------------------------------------------------------------------
Net income (loss) for the period (2,910) (36)(5,832) (24)
Deficit, beginning of period (17,711)(7,307)(14,789) (7,319)
------------------------------------------------------------------------
Deficit, end of period (20,621) (7,343)(20,621) (7,343)
------------------------------------------------------------------------
Basic earnings (loss) per share (0.26) (0.00) (0.52) (0.00)
------------------------------------------------------------------------
Weight Average Number
of shares outstanding 11,156,845 11,123,512 11,140,178 11,123,512
------------------------------------------------------------------------
AimGlobal Technologies Company Inc.
Incorporated under the laws of British Columbia
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousand of Canadian Dollars)
Six months period ended September 30,
1999 1998
$ $
------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income (loss) for the period (5,832) (24)
Add items not involving cash
Depreciation and amortization 2,876 2,114
------------------------------------------------------------------------
(2,956) 2,090
Net change in assets and liabilities (3,887) (69)
------------------------------------------------------------------------
Cash provided by (used in) operating activities (6,843) 2,021
------------------------------------------------------------------------
FINANCING ACTIVITIES
Repayment of obligations under capital lease (295) (258)
Obligations under capital lease 1,804 -
Repayment of loan and mortgage payable (474) (798)
Loan payable 1,900 -
Proceeds from revolving overdraft loan, net 4,493 -
------------------------------------------------------------------------
Cash provided by (used in) financing activities 7,428 (1,016)
------------------------------------------------------------------------
INVESTING ACTIVITIES
Business acquisition (600) -
Purchase of capital assets (3,457) (1,105)
------------------------------------------------------------------------
Cash provided by (used in) investing activities (4,057) (1,105)
------------------------------------------------------------------------
Effect of exchange rate changes on cash (195) (193)
------------------------------------------------------------------------
Net increase (decrease) in cash during the period (3,667) (293)
Cash, beginning of period 3,731 19,338
------------------------------------------------------------------------
Cash, end of period 64 19,045
------------------------------------------------------------------------
------------------------------------------------------------------------
>>
AimGlobal Technologies Company Inc.
Incorporated under the laws of British Columbia
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited - in thousand of Canadian Dollars)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements have been prepared by management in
accordance with accounting principles generally accepted in Canada. Because a
precise determination of many assets and liabilities depends on future events,
the preparation of financial statements necessarily involves the use of
management's estimates and approximations. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies used in the
preparation of these financial statements.
Basis of consolidation
These consolidated financial statements include the accounts of the
company and its subsidiary companies as follows:
Aim Safe Air Products Ltd. 100% owned
Allanco Flamex International Corp. 95% owned
Glacier Environmental Manufacturing Company Inc. 100% owned
AIM USA Inc. 100% owned
AIM Safety Technologies Limited 100% owned
AIM Safety Home Products Ltd. 100% owned ˆ1997 - 51%‚
Aimtronics Corporation Inc. 100% owned
Aimtronics Holdings Inc. 100% owned
American Computer Assembly, Inc. 100% owned
Catouzer Electronic Publishing and Consulting Inc.100% owned
On February 28, 1998, the company acquired the remaining 49% of AIM
Safety Home Products Ltd. at a nominal value. In periods prior to the
purchase of the minority interest, the company fully consolidated the results
of operations of AIM Safety Home Products Ltd. as the non-controlling interest
was not required to contribute capital to fund the subsidiary's previous
losses.
Inventory
Inventory is valued at the lower of cost, determined on a first in first
out basis, and net realizable value for finished goods and work in process and
replacement cost for raw materials. Cost of finished goods and work in
process includes direct costs and an allocation of overhead, which includes
amortization of capital assets.
Product development costs
The company defers costs related to the development of new products when
the product is determined to be technically feasible and a future market for
the product is clearly defined. The costs are amortized from the commencement
of commercial production over a period not exceeding the lesser of the
expected life of the new product and four years. If management determines
that such costs exceed net recoverable value, such excess costs are charged to
operations.
Capital assets and amortization
Capital assets are recorded at cost and are amortized over their
estimated useful lives using the following rates and methods:
Buildings 5% declining-balance
Computer equipment 30% declining-balance
Computer software 2 years straight-line
Furniture and fixtures 20% declining-balance
Leasehold improvements over the remaining lease term
Production equipment and tools
- gas safety 3-4 years straight-line
- electro-technologies 20%-30% declining-balance
Intangible and other assets
Intangible and other assets include amounts paid for a non-competition
agreement and goodwill. Amortization of the non-competition agreement is
provided on a straight-line basis over the 42 month period of the agreement.
Goodwill represents the excess of the purchase price over the fair values
of net assets acquired, and is being amortized on a straight-line basis over
25 years. On an ongoing basis, management reviews the valuation and
amortization of goodwill and intangibles, based on future estimated operating
income and taking into consideration any events and circumstances which might
have impaired the fair value.
Foreign currency translation
The company follows the temporal method of accounting for the translation
of foreign currency amounts into Canadian dollars. Under this method, all
monetary assets and liabilities expressed in foreign currencies are translated
at rates of exchange in effect at the year end, and non-monetary assets and
liabilities are translated at historical rates of exchange. Income and expense
items expressed in foreign currencies are translated at the rate of exchange
prevailing on the date of the transaction. The company translates the
accounts of its integrated foreign subsidiary on the same basis.
Financial statements of the self-sustaining foreign subsidiary are
translated under the current rate method. Under this method, assets and
liabilities are translated at the exchange rate in effect as of the balance
sheet date and income and expense items are translated at the average exchange
rate for the period. Net unrealized exchange adjustments arising on
translation of foreign currency are included in shareholders' equity as
unrealized foreign currency translation adjustments. Realized exchange gains
or losses are included in income.
Gains and losses arising on foreign currency translation are included in
income except for gains and losses arising on long term monetary items, which
are deferred and amortized over the term of the related items.
Earnings (loss) per share
Basic earnings (loss) per share are calculated using the weighted average
number of common shares outstanding. Fully diluted earnings per share,
calculated assuming that all of the options were exercised at the beginning of
the period, have not been presented as the exercise of the options would be
anti-dilutive.
Income taxes
The company follows the deferred tax allocation method of accounting for
income taxes under which the income tax provision is based on the income
reported in the accounts.
Leases
Leases are classified as either capital or operating. Those leases which
transfer substantially all the benefits and risks of ownership of property to
the company are accounted for as capital leases. The capitalized lease
obligation reflects the present value of future lease payments, discounted at
the appropriate interest rate.
Financial instruments
The fair value of the financial instruments approximates their carrying
value in the financial statements unless otherwise indicated.
Revenue recognition
The company recognizes revenue upon the shipment of product to its
customers.
Research and development
Research costs are expensed in the period in which they are incurred.
Development costs are expensed in the period incurred unless such costs meet
the criteria under generally accepted accounting principles for deferral and
amortization.
Uncertainty due to the Year 2000 Issue
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
recognize the year 2000 as 1900 or some other date, resulting in errors when
information using year 2000 dates is processed. In addition, similar problems
may arise in some systems which use certain dates in 1999 to represent
something other than a date. The effects of the Year 2000 Issue may be
experienced before, on, or after January 1, 2000, and, if not addressed, the
impact on operations and financial reporting may range from minor errors to
significant systems failure which could affect an entity's ability to conduct
normal business operations. It is not possible to be certain that all aspects
of the Year 2000 Issue affecting the entity, including those related to the
efforts of customers, suppliers, or other third parties, will be fully
resolved.
2. ACQUISITION
During the period, the company acquired 100% of the outstanding common
shares of Catouzer Electronic Publishing and Consulting Inc. for consideration
of 100,000 common shares at a fair value of approximately $10 per share.
Catouzers' principal business is in software engineering and technical support
business sector. The acquisition has been accounted for as a purchase and,
accordingly, these consolidated financial statements include the results of
operations from the date of acquisition. Substantially all of the purchase is
allocated to software technology included in intangible assets.
%SEDAR: 00004308E
For further information: AIMGlobal Technologies, Megan Simms-Beatty
(604) 205-7609 |
