NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: DEVELCON ELECTRONICS LTD.
TSE SYMBOL: DLC
APRIL 17, 1997
Develcon Electronics Ltd. Announces Unaudited Results for
the Six Months Ended February 28, 1997
SASKATOON, SASKATCHEWAN--Develcon Electronics Ltd. today announced
its unaudited results for the three and six months ended February
28, 1997.
"The results for the 1997 second quarter demonstrate that we are
beginning to benefit from the restructuring commenced last August
and the Company is making progress in its goal to restore
profitability to the organization", said Geoffrey H. Bennett,
President and Chief Executive Officer. Develcon's results for the
three months ended February 28, 1997, reflect earnings before
interest, taxes, depreciation and amortization ("EBITDA") of
$136,000 compared to a loss of $677,000 in the same period of the
previous year. The second quarter EBITDA represented a $390,000
improvement over last quarter and for the six months ended
February 28, 1997, EBITDA improved by $821,000 over the same
period in 1996.
Results for the second quarter after depreciation, amortization
and interest charges reflect a net loss of $571,000 compared with
a net loss of $896,000 in the same period of last year. Results
after depreciation, amortization and interest reflect a net loss
of $1,461,000 for the six months ended February 28, 1997, compared
with a net loss of $1,370,000 for the same period of the previous
year.
For the three months and six months ended February 28, 1997,
depreciation and amortization expense was $405,000 and $825,000
higher, respectively, than in the comparable periods a year ago,
mainly due to the periodic charges associated with the acquisition
of EDA Instruments Inc. ("Systems Division") last year.
Revenues for the six months were $9,693,000, an increase over last
year of $1,868,000. This increase was due to the inclusion of
$4,810,000 of sales from the Systems Division which was acquired
on February 22, 1996 and therefore not included in the first half
results of last year. Offsetting this increase were decreases of
$2,168,000 caused by the discontinuance of the Contract
Manufacturing Division and decreases of $263,000 in sales of OEM
products, which the company has de-emphasized in favor of
higher-margin manufactured product sales. A decrease in product
support services revenues accounted for the balance of revenue
decreases.
The improvement in gross margin percentages over the same period
last year resulted from increased higher margin sales generated by
the Systems Division and reduced lower margin sales from the
Contract Manufacturing Division.
The weighted average number of shares outstanding was 44,694,106
during the six and three months ended February 28, 1997 and
22,629,370 and 24,710,877 during the six and three months ended
February 29, 1996.
The Company continues to move towards its goals of increasing
sales revenues while controlling costs. The Company has opened an
additional sales office in Western Europe and an office in
Australasia. These offices are expected to produce additional
revenues for the Company prior to the financial year end. The
Company continues to operate at its maximum available credit
facility. Management is actively seeking ways in which to improve
its operating cash flows, to more effectively manage its working
capital and to increase credit facilities.
/T/
Develcon results were as follows (Canadian funds):
Three Months Ended Three Months Ended
February 28, 1997 February 29, 1996
------------------ ------------------
Sales $ 5,055,000 $ 4,325,000
Gross Margin $ 2,451,000 $ 1,200,000
EBITDA $ 136,000 $ (677,000)
Net Loss $ (571,000) $ (896,000)
Loss Per Share $ (.01) $ (.04)
Six Months Ended Six Months Ended
February 28, 1997 February 29, 1996
----------------- -----------------
Sales $ 9,693,000 $ 7,825,000
Gross Margin $ 4,598,000 $ 2,509,000
EBITDA $ (118,000) $ (939,000)
Net Loss $(1,461,000) $(1,370,000)
Loss Per Share $ (.03) $ (.06)
/T/
The shares of Develcon are listed on The Toronto Stock Exchange
(symbol DLC).
-30- |
