PRESS RELEASE
FOR IMMEDIATE RELEASE
Canadian Dealing Network: VRTK
Virtek Announces Second Quarter Results
WATERLOO, Ontario, August 21, 1997 - CDN - VRTK Virtek Vision International
Inc., a leading supplier of laser projection technology systems, today
reported sales of $ 1,647,556 and a net profit of $58,404, $0.00 per share,
for the second quarter ended July 31, 1997. This compares to sales of
$1,768,000 and a net loss of $49,184, $0.00 per share, for the corresponding
period last year.
Gross margins in the quarter were approximately 63% versus 52% for the
second quarter ended July 31, 1996. This significant improvement is a
result of improved operating efficiencies, manufacturing cost reductions and
certain non-recurring costs that occurred in the second quarter last year.
"We're pleased but not surprised that the quarter was profitable," said
Virtek's President and CEO, Jim Crocker. "The sales decline is small and
reflects a timing issue on orders. Our markets are continuing to show very
positive trends."
Sales for the six months ended July 31, 1997, totaled $3,174,469
representing a 30% increase over sales of $2,435,331, in the same period
last year. The net income also improved dramatically from a loss of
$918,196, ($0.06) per share, for the six months ended July 31, 1996, to a
net income of $50,840, $0.00 per share, for the corresponding period this year.
The company also announced that it had made some organization and personnel
changes consistent with increasing its marketing orientation. "We've made a
'growth correction'," said Crocker. "Our organization until now has done a
terrific job of developing technology and turning it into world class
products. Now our focus is on marketing those products - adapting and
selling what we have. We remain committed to new technology development and
have simply realigned our R&D expenditures so that they are more in line
with the company's sales level."
Ken Steven, Vice President of Marketing pointed to the company's leather
business as an example of the company's new approach. "In the past,
developing the leather product represented a large percentage of our R&D
effort," said Mr. Steven. "Over the years we have developed a technology
that is well advanced of the current marketplace. Now it is appropriate to
cut back on our development efforts and focus on marketing what we have
better. The product itself has been divided into seven separate components,
which can all be purchased individually and for substantially less money
than a complete system sold for in the past. Exclusive distribution
agreements have been canceled and our technology is being made available to
system integrators world wide. We're in front of a lot more customers and
what we're selling is much easier to buy. Our costs have been significantly
reduced and I believe our chances of success have increased significantly."
Operating expenses for the quarter remained relatively unchanged, although,
with the organizational and personnel changes they are expected to decline
in the coming quarters. Cash at the end of the quarter totaled $838,000,
with working capital remaining strong at approximately $2.5 million.
Virtek Vision International Inc., through its wholly-owned subsidiaries,
Virtek Vision Corp. in Canada and Virtek Vision Inc. in the United States,
is a leading supplier of 3D laser projection systems. Virtek is based in
Waterloo, Ontario, Canada, with offices near Boston, Massachusetts, London,
England and Munich, Germany. Virtek currently trades on the Canadian
Dealing Network and has approximately 14.4 million shares outstanding.
For full financials please go to Virtek's website: www.virtek.ca
For more information please contact:
Jay Hussey
Investor Relations
(416) 620-6961 ext.225
(416) 620-4025 fax
Internet: virtek.ca
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