Atlantis reports fiscal 2005 first quarter financial results
Revenue backlog increases substantially on strength of new contracts
Toronto Stock Exchange Symbol: AIQ
TORONTO, May 16 /CNW/ - Atlantis Systems Corp, (TSX: AIQ), a leading
developer of fully integrated simulation-based flight and maintenance training
systems, today announced its financial and operating results for the three
months ended March 31, 2005. All dollar amounts are in Canadian dollars unless
otherwise specified.
Q1 2005 Summary
---------------
- Atlantis, as part of Allied Wings consortium, was awarded the
Contracted Flying Training and Support (CFTS) contract by the
Canadian Department of National Defence. The contract is expected to
generate revenue of approximately $100 million over next 20 years,
with $65 million expected over the first 30 months.
- The sales and marketing team has been expanded to support growth and
diversification into new markets.
- Recorded revenue of $4,430,000, compared with $4,480,804 for Q1 2004.
- Recorded a net loss of $845,000, compared with net income of $365,000
in Q1 2004.
- Revenue backlog currently at $111 million, compared with $3.8 million
at year-end.
- Subsequent to quarter end, awarded $8.6 million follow-on contract to
upgrade the Integrated Maintenance Training Systems (IMTS) for the
Royal Australian Air Force.
- Subsequent to quarter end, completed financings totaling
approximately $5.1 million, providing the Company with a solid
working capital foundation and financial flexibility to deliver on
new contracts and execute its business plan.
"The first quarter of fiscal 2005 was a pivotal one for Atlantis, with
the announcement of the substantial new CFTS contract," said President and CEO
Andrew Day. "CFTS is an important milestone in establishing Atlantis as a
full-service training integrator, capable of supplying and integrating
everything from flight training devices to innovative, web-based training. We
expect to begin recognizing revenue from the CFTS contract in the second
quarter of 2005, with revenue increasing in the third quarter when we have
fully deployed the resources to service the contract."
Financial Review
----------------
Atlantis reported revenues of $4,430,000 for the quarter ended March 31,
2005, compared with $4,804,000 for the three months ended March 31, 2004.
During the quarter, the Company delivered two Airbus A320 Flight Training
Devices (FTD) to Spirit Airlines, completing the requirements of that
programme. In addition, Atlantis commenced work on a follow-up contract worth
$8.6 million for the Royal Australian Air Force, following the successful
completion in 2004 of the F/A-18 Integrated Maintenance Training Systems
(IMTS) contract.
Gross margin for the first quarter was $580,000 (13.1%) versus $1,910,000
(39.8%) for the three months ended March 31, 2004. The lower gross margin
percentage reflects the sale of the Airbus A320 FTDs at cost, as well as
expenditures of $284,000 on research and development. The FTD sale, at cost,
to Spirit Airlines, was a strategic decision to assist Atlantis in re-entering
the commercial aviation market. The Company expects its gross margin to return
to 2004 levels during the second quarter.
General and administrative (G&A) expenses for the first quarter were
$943,000, compared with $553,000 for the same period in 2004. Included in the
G&A expenses is a $416,000 expense related to the vesting of options under the
Company's stock option plan. Excluding this, G&A expenses for Q1 2005 were
slightly lower than the comparable period in 2004. Sales and marketing
expenses for the first quarter were $389,000, compared with $311,000 in Q1
2004. During the first quarter, the Company further expanded its sales and
marketing organization to support efforts to increase Atlantis' presence in
the commercial airline market and to develop new markets.
Atlantis recorded an operating loss from continuing operations, before
depreciation, amortization, interest expense, and financing costs of $747,000
for the three months ended March 31, 2005, compared to $1,054,000 during the
same period in 2004. This was primarily due to the sale of the Airbus A320 FTD
at cost; the continuing investment in sales and marketing to support future
growth; and expensing vested options.
For the three months ended March 31, 2005, the Company recorded a net
loss of $845,000 ($0.02 per share) compared with net income of $365,000
($0.03 per share) in 2004.
Atlantis' order backlog currently stands at approximately $111 million,
compared with $3.8 million at year end.
Notice of Conference Call
Atlantis will be hosting a conference call on Monday, May 16, 2005 at
10:00 am ET to discuss its first quarter financial results and other corporate
developments. To access the conference call by telephone, dial 416-640-4127 or
1-800-814-4853. A live audio webcast of the call will be available at
www.newswire.ca and at www.atlantissi.com. The webcast will be archived for
90 days.
About Atlantis Systems Corp
Headquartered near Toronto, Canada, Atlantis is a globally recognized
developer of simulation-based training systems principally for military and
commercial aircraft servicing an international client base. For over
twenty-five years, Atlantis has produced turn-key training solutions including
flight training devices, advanced maintenance trainers, tactical team
trainers, sensor and system part-task training solutions, pilot selection
systems, avionic test equipment, and simulated cockpit controls and displays.
Atlantis is registered under a number of quality management programs including
ISO 9001:2000, AS 9100:2001; Boeing BQMS D6-82479, and Rockwell Collins
RC-9000, among others. Atlantis trades on the Toronto Stock Exchange under the
symbol AIQ.
Full financial information is available on SEDAR at www.sedar.com.
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ATLANTIS SYSTEMS CORP.
CONSOLIDATED BALANCE SHEETS
As at March 31, 2005 and December 31, 2004
(Stated in thousands of dollars)
(unaudited)
March 31, December 31,
2005 2004
------------ ------------
ASSETS
Current assets
Cash and cash equivalents $ 106 $ 369
Accounts receivable 2,458 4,932
Unbilled revenue 1,432 577
Inventory 418 1,783
------------ ------------
4,414 7,661
------------ ------------
Capital assets, net 697 425
Mortgage receivable 361 358
Goodwill
11,735 11,735
------------ ------------
12,793 12,518
------------ ------------
$ 17,207 $ 20,179
------------ ------------
------------ ------------
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 1,339 2,511
Accrued costs on percentage completion 451 184
Promissory notes 407 986
Deferred revenue -- 1,059
------------ ------------
2,197 4,740
------------ ------------
SHAREHOLDERS' DEFICIT
Share capital 87,522 87,522
Contributed surplus 3,533 3,117
Deficit (76,045) (75,200)
------------ ------------
15,010 15,439
------------ ------------
$ 17,207 $ 20,179
------------ ------------
------------ ------------
ATLANTIS SYSTEMS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
For the three months ended March 31, 2005 and 2004
(Stated in thousands of dollars except per share amounts)
(unaudited)
2005 2004
------------ ------------
Revenue from commercial operations $ 4,430 $ 4,804
Cost of sales 3,850 2,894
------------ ------------
Gross margin 580 1,910
Other income 5 8
------------ ------------
585 1,918
Expenses
General and administrative 943 553
Selling and marketing 389 311
------------ ------------
Operating income (loss) before depreciation,
amortization, interest expense, and
financing costs (747) 1,054
Depreciation and amortization 30 44
Interest expense and financing costs 68 645
------------ ------------
Net Income (loss) (845) 365
Deficit, beginning of period (75,200) (75,212)
------------ ------------
Deficit, end of period $ (76,045) $ (74,847)
------------ ------------
------------ ------------
Net income (loss) per common share $ (0.02) $ 0.03
------------ ------------
------------ ------------
ATLANTIS SYSTEMS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2005 and 2004
(Stated in thousands of dollars)
(unaudited)
2005 2004
------------ ------------
Cash flows provided by (used in):
Operating activities :
Net income (loss) $ (845) $ 365
Items not affecting cash :
Depreciation and amortization 30 44
Accrued interest on special shares -- 19
Interest on mortgage receivable (3) (2)
Stock options issued 416 --
------------ ------------
(402) 426
Net change in non-cash working capital 1,020 (2,333)
------------ ------------
618 (1,907)
------------ ------------
Investing activities :
Investment in capital assets (302) --
------------ ------------
(302) --
------------ ------------
Financing activities :
Bank indebtedness -- (1,099)
Secured loan -- 3,007
Repayment of promissory notes (579) --
------------ ------------
(579) 1,908
------------ ------------
Net increase (decrease) in cash and
cash equivalents (263) 1
Cash and cash equivalents, beginning of period 369 4
------------ ------------
Cash and cash equivalents, end of period $ 106 $ 5
------------ ------------
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