Year end results from Mitec. Book value looks to be around $3/share. It looks attractive at these levels...
Attention Business/Financial Editors:
MITEC ANNOUNCES YEAR END RESULTS
Fourth Quarter Loss as Previously Stated
New Corporate Facilities Position Mitec To Attract New OEM's
MONTREAL, June 28 /CNW/ - Mitec Telecom Inc. (ME/TSE: MTM) today reported
results for the fourth quarter and year ended April 30, 1999, in line with the
Company's announcement of May 6, 1999.
Summary of Financial Highlights
--------------------------------
($ in thousands, except per share amounts)
Year Ended April 30,
1999 1998
--------------------------
Sales 37,423 34,343
Net Income (Loss) 1,633 2,638
Net Income (Loss) Per Share
Basic 0.17 0.27
Fully diluted 0.17 0.27
Fourth Quarter
1999 1998
-------------------------
Sales 7,489 11,040
Net Income (Loss) (998) 975
Net Income (Loss) Per Share
Basic (0.10) 0.10
Fully diluted (0.09) 0.10
Mitec President and Chief Operating Officer, John Robinson, acknowledged
the poor performance was due, in part, to predictions which did not
materialize. ''We relied too heavily on the forecasts of our customers who had
suggested strong and steady growth. We have since created a realistic business
plan which more accurately reflects the requirements of our clients.''
Mr. Robinson stated efforts are currently underway to secure additional
OEM customers. ''Our goal is to attract and support new OEM customers in the
months ahead. Now that we are installed in our new corporate headquarters and
manufacturing complex, a state-of-the art 88,000 square foot facility, we have
made this a top priority. Our older Montreal facilities were not up to the
standards required by the larger OEMs. This is no longer the case.''
Mitec Chairman and CEO, Myer Bentob, said that while the Company is
continuing to diligently serve its Satcom & Terrestrial customers, the future
is in wireless, specifically the new ''3G'' product family. This is the next
generation in wireless, which will provide a mobile phone with full motion
video, internet protocol (IP) and data. Mitec is poised to be an important
participant in this revolution, in particular for the diverse requirements of
vital base stations for the upcoming wireless networks.
''It is with that in mind, that we have trebled the budget for our R&D
effort in fiscal 2000. Combined with a new efficiently configured plant, we
look forward to reinforcing our position with present and newly acquired
customers by providing solutions and products to our OEMs. We are presently
involved in a number of development projects, which we anticipate will evolve
into on-going business. This, unquestionably, is where the opportunities are.
''Despite last year's shortcomings, even our harshest critics agree Mitec
has the technology and the products OEMs require. We have refined our
procedures, committed more money to expand our R&D and have efficiently
configured a new plant. We can confidently state that Mitec is a qualified
global supplier, able to provide solutions to OEMs,'' concluded Mr. Bentob.
Mitec's Vice President Finance and Chief Financial Officer, Keith
Findlay, explained much of the fourth quarter loss is attributable to a
$500,000 write-down of inventory. The majority of the write-off is in New
Jersey on inventory that was held since the acquisition of this company in
1995. In addition, there was a write-off of leasehold improvements in Montreal
of $350,000 resulting in Mitec moving to the new facility.
Mr. Findlay stated the backlog was at a record $16.1 million.
He said Y2K is not an issue for the company. ''Our total budget
allocated to this area will not exceed $100,000 of which we have already spent
$50,000. We are about 75% complete in our compliance program and we will be
fully compliant before year end.''
During the months of April and May Mitec acquired 166,400 of its own
common shares through a Normal Course Issuer Bid.
Mitec Telecom Inc. designs and manufacturers components, subsystems and
multifunction subsystems for the wireless telecommunications industry. The
Company sells its products worldwide primarily to original equipment
manufacturers for incorporation into wireless infrastructure equipment, which
is used in voice, data and cable communications networks. Mitec Telecom has
275 employees at its facilities in Pointe Claire (Quebec), Tinton Falls (New
Jersey), Copthorne (England), Wang-Noi (Thailand), and Vaxjo, (Sweden).
MITEC TELECOM INC.
Consolidated Balance Sheet
Unaudited As at April 30,
(in thousands of CDN dollars) 1999 1998
----------------------------------------------------------------------
ASSETS
Current
Cash and term deposits $ 1,748 $ 6,675
Marketable securities at cost 6,480 4,030
Trade receivables 6,218 7,366
Inventories 5,238 5,313
Income tax receivable 229 -
Prepaid expenses and deposits 374 354
Current portion of deferred income taxes 466 256
----------------------------------------------------------------------
Total current assets 20,753 23,994
----------------------------------------------------------------------
Capital assets 11,978 10,220
Deferred income taxes 388 494
Goodwill 1,097 1,250
Building in progress 4,328 -
----------------------------------------------------------------------
$ 38,544 $ 35,958
----------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness $ 1,259 -
Accounts payable and accrued liabilities 6,182 4,265
Income tax payable - 801
Current portion of obligation under capital leases 70 76
Current portion of deferred taxes 100 -
----------------------------------------------------------------------
Total current liabilities 7,611 5,142
----------------------------------------------------------------------
Obligations under capital leases 25 96
Deferred income taxes 1,386 1,218
----------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital stock 20,783 21,489
Retained earnings 9,166 8,391
Cumulative translation adjustment <427> <378>
----------------------------------------------------------------------
Total shareholders' equity 29,522 29,502
----------------------------------------------------------------------
$ 38,544 $ 35,958
----------------------------------------------------------------------
MITEC TELECOM INC.
Consolidated Statements of Income
Unaudited 3 months ended 12 months ended
April 30, April 30,
(in thousands of CDN dollars 1999 1998 1999 1998
except per share data)
------------------------------------------------------------------------
Sales $ 7,489 $ 11,040 $ 37,423 $ 34,343
Cost of sales 5,628 7,179 25,067 22,468
------------------------------------------------------------------------
Gross profit 1,861 3,861 12,356 11,875
------------------------------------------------------------------------
Expenses
Research and development 842 412 2,840 1,798
Selling and administrative 2,318 1,844 7,383 6,517
Financial expenses 209 110 <282> <221>
Interest on long-term debt 1 1 11 9
Interest revenue <94> <121> <449> <399>
Other 346 - 571 -
------------------------------------------------------------------------
3,622 2,255 10,074 7,704
Income <loss> before income
taxes <1,761> 1,606 2,282 4,171
------------------------------------------------------------------------
Income taxes
Current <410> 325 528 954
Deferred <353> 306 121 579
------------------------------------------------------------------------
<763> 631 649 1,533
------------------------------------------------------------------------
Net income <loss> for the period <998> 975 1,633 2,638
------------------------------------------------------------------------
Average number of shares
outstanding ('000) 9,612 9,809 9,754 9,666
Basic earnings <loss>
per share $ <0,10> $ 0.10 $ 0.17 $ 0.27
------------------------------------------------------------------------
Fully diluted earnings <loss>
per share $ <0,09> $ 0.10 $ 0.17 $ 0.27
MITEC TELECOM INC.
Consolidated Statements of Changes in Financial Position
Unaudited 3 months ended 12 months ended
(in thousands of CDN dollars) April 30, April 30,
1999 1998 1999 1998
------------------------------------------------------------------------
Operating Activities
Net income (loss) $ <998> $ 975 $ 1,633 $ 2,638
Add (deduct) items not
affecting cash:
Amortization of capital
assets and goodwill 225 350 1,695 1,402
Gain on disposal of assets 113 - 113 -
Deferred income taxes <310> <365> 164 579
Other 571 - 571 -
------------------------------------------------------------------------
<399> 1,690 4,176 4,619
Changes in non-cash working
capital balances 1,594 316 1,991 <2,551>
------------------------------------------------------------------------
Cash provided by operating
activities 1,195 2,006 6,167 2,068
------------------------------------------------------------------------
Investing activities
Acquisition of capital assets,
including building
in progress 4,947 <1,379> <8,331> <4,036>
Proceeds on disposal of capital
assets 88 - 88 -
Business aquisitions net of
cash acquired - <22> - <1,246>
Translation adjustment <16> 31 <19> <145>
------------------------------------------------------------------------
Cash used in investing
activities <4,875> <1,370> <8,262> <5,427>
------------------------------------------------------------------------
Financing activities
(Decrease) in obligation
under capital leases <17> <19> <77> <154>
Issuance costs - <50> - <85>
Issuance of common shares 32 <14> 70 1,350
Cancelled shares under normal
course issue bid <1,541> - <1,663> -
Tax benefit of deemed
compensation - - 29 -
------------------------------------------------------------------------
Cash provided by (used in)
financing activities <1,497> <83> <1,641> 1,111
------------------------------------------------------------------------
Increase (decrease) in cash
position <5,177> 553 <3,736> <2,248>
Cash position, beginning
of period 12,146 10,152 10,705 12,953
------------------------------------------------------------------------
Cash position,
end of period(x) $ 6,969 $ 10,705 $ 6,969 $ 10,705
(x) Cash position consists of cash, cash equivalents including term
deposits and marketable securities less bank indebtedness
-0- 06/28/1999 |
