TECHMIRE LTD ("TCM-M") - Concludes Best Year Ever - Net Earnings Of $820,000
For its fiscal year ended July 31, 1998, TECHMIRE Ltd. posted the best results since its founding in 1973. This performance arose from an in-depth restructuring of operations commenced in 1996 which helped considerably improve manufacturing processes. As a result, the gross profit margin rose sharply, from 19.6% in 1997 to 25.6% in 1998. The break-even point in number of units sold was reduced by 36%, enabling Techmire to offer shareholders solid profitability.
During fiscal 1998, sales totaled $16.5 million, compared with $14.5 million during the previous year. Sustained demand, a stronger sales team and a broader network of independent agents enabled the Company to increase its sales in North America and Europe. In fact, European sales more than doubled compared to last year's sales. Techmire exported 86% of its products in 1998, some 30% of such sales being recorded outside North America.
Gross profit climbed to $4.2 million in 1998, up 49.2% over $2.8 million in 1997. Stephen May, President and Chief Operating Officer, commented: "Thanks to the participation of our employees, we have significantly improved our operations. Our project management is rigorous and we tightly control our costs. We are all proud of this achievement which will lead not only to greater profitability for the Company, but also to more rapid service for our customers."
In the wake of the restructuring, selling and administrative expenses were also reduced. A number of sales were made without an intermediary, thereby cutting commissions paid during the year. Despite a 14.2% increase in sales, selling and administrative expenses thus dropped from $3.5 million (24.2% of sales) in 1997 to $3.1 million (18.6% of sales) in 1998.
Financial expenses also decreased, from $495,000 in 1997 to $333,000 in 1998. Cash flow from operations for the year was used to fully repay the line of credit, which was $2.8 million as at July 31, 1997.
Net earnings amounted to $820,954 for fiscal 1998, as opposed to a net loss of $1,157,881 for the previous year. Earnings per share stood at $0.29 ($0.18 on a fully diluted basis) in 1998, compared with a loss of $0.62 in 1997. Cash flow from operations reached $2.8 million in 1998, up from just $450,000 in 1997. The return on equity was 24%.
"We reviewed and restructured the entire Company, from production to sales. We are now able to generate much more consistent profitability, as reflected by our last six quarters. The increase in profitability has also enabled us to improve our financial position considerably. We currently show a long-term debt/equity ratio of 0.6:1," indicated Stephen Yaffe, Chairman of the Board and Chief Executive Officer.
Solid growth avenues
Major R&D investments have been made over the past two years, including the development of a new generation of plastic injection molding machines, for which marketing will start in the second quarter of fiscal 1999. In addition, since the creation of TCM Precision Inc., a subsidiary that manufactures molds for the Company's machines, and the alliance with Friedrich + Pfuderer (Germany) for the distribution by Techmire of conventional die casting machines, the Company now offers a more complete range of products and services.
"The strengthening of our overseas sales network will enable us to take advantage of the economic recovery in Europe, where we intend to further increase our sales in 1999. Combined with our solid direct sales force in major markets, the current fiscal year bodes most favourably," added Stephen Yaffe.
Profile
Founded in 1973, Techmire Ltd. is a world leader in the design and manufacture of small multiple-slide die casting machines. The Company's equipment, which is renowned for its high quality, is sold to manufacturing companies operating in a variety of industries - electronics, automotive, telecommunications and consumer products - in over 20 countries. The components manufactured by its machines, made of zinc, lead or plastic, are found in a multitude of items such as locks, pens, lighters, computers, telephones and cars.
Financial Highlights
Years ended July 31,
(in thousands of dollars) 1998 1997 Variation
Sales 16,517 14,459 14.2%
Gross profit 4,226 2,831 49.2%
Gross profit margin 25.6% 19.6% 30.6%
Selling and administrative expenses 3,071 3,495 -12.1%
Financial expenses 333 495 -32.6%
Net earnings (loss) 821 (1,158) ---
Net profit margin 5.0% -8.0% ---
Return on equity 24.0% -44.5% ---
Earnings (loss) per share 0.29 (0.62) ---
Earnings (loss) per share (fully diluted) 0.18 (0.62) ---
Weighted average number
of shares outstanding 2,156,725 2,156,725
TEL: (514) 354-6110 Stephen Yaffe, Chairman of the Board and CEO or
Stephen May, President and Chief Operating Officer Web site: techmire.com E-mail: finance@techmire.com |
