Atlantis reports fiscal 2005 second quarter financial results
Substantial increase in revenue and strengthened cash flow as work
commences on CFTS
Toronto Stock Exchange Symbol: AIQ
TORONTO, Aug. 15 /CNW/ - Atlantis Systems Corp. (TSX: AIQ), a leading
developer of integrated simulation-based flight and maintenance training
systems, today announced its financial and operating results for the three
months ended June 30, 2005. All dollar amounts are in Canadian dollars unless
otherwise specified.
Q2 2005 Summary
---------------
- Total revenue for the quarter of $12.8 million, compared with
$4.9 million for Q2 2004.
- Atlantis generated $8.8 million in revenue related to work on the
Contracted Flying Training and Support (CFTS) program for the
Canadian Department of National Defence.
- Recorded net income of $426,000, compared with net income of
$388,000 in Q2 2004.
- Revenue backlog at June 30, 2005 is $28 million, which includes the
remaining portion of the enabling agreement with the prime
contractor of the CFTS program. The Company anticipates the CFTS
contract process will be completed in the third quarter, which will
increase the backlog by $50 million.
- Awarded $8.8 million follow-on contract to upgrade the Integrated
Maintenance Training Systems (IMTS) for the Royal Australian Air
Force.
- Continued work on Student Aircraft Interface Trainer Stations
(SAITS) for the U.S. Navy.
"The second quarter of fiscal 2005 saw the achievement of several key
milestones as we commenced work on CFTS while simultaneously fulfilling
further contractual obligations on behalf of the Royal Australian Air Force
and the U.S. Navy," said President and CEO Andrew Day. "We are pleased with
our progress so far on the CFTS program - it remains a transformational event
for Atlantis as it positions us as a leading aviation training integrator. In
addition to the strong organic growth we expect from CFTS and increased sales
of our proprietary technology, we continue to evaluate acquisition
opportunities."
Financial Review
----------------
Atlantis reported revenues of $12.8 million for the quarter ended
June 30, 2005, compared with $4.9 million for the three months ended June 30,
2004. During the quarter, the Company commenced work on the CFTS program,
which included formalizing agreements with major subcontractors and ramping up
the in-house portion of the program. During the second quarter of 2005, the
Company recorded total revenues under CFTS of $8.8 million. Atlantis also
commenced work on upgrades to the F/A-18 Integrated Maintenance Training
System (IMTS) previously delivered to the Royal Australian Air Force. Revenues
recognized during the quarter under this contract were $2.6 million. In
addition, the Company earned revenues of $891,000 as it continued work on the
Student Aircraft Interface Trainer Stations (SAITS) for the U.S. Navy's F/A-18
Visual Environment Maintenance Trainers.
Gross margin for the second quarter of 2005 was $1.5 million (11.8%)
versus $1.6 million (33.0%) for the three months ended June 30, 2004. The
gross margin does not yet reflect any profit generated through Atlantis' work
on the CFTS program as accounting for the enabling contract does not permit
the inclusion of profit. In addition, the gross margin for the second quarter
of 2005 reflects the continued investment in proprietary intellectual
property, consistent with the Company's growth strategy. General and
administrative (G&A) expenses for the second quarter were $585,000, compared
with $705,000 for the same period in 2004. Sales and marketing expenses for
the second quarter were $352,000, compared with $238,000 in Q2 2004. As growth
is driven by the combined output of sales and marketing, Atlantis remains
committed to further investment in these areas. In accordance with its growth
strategy, the Company continues to pursue initiatives aimed at increasing its
presence in the military and commercial airline markets and at developing new
markets.
Atlantis earned operating income from continuing operations, before
depreciation, amortization, interest expense, and financing costs of $606,000
for the three months ended June 30, 2005, compared to $685,000 during the same
period in 2004.
For the three months ended June 30, 2005, the Company earned net income
of $426,000 ($0.01 per share) compared with net income of $388,000 ($0.03 per
share) in 2004.
Atlantis' order backlog currently stands at approximately $28 million.
This figure is expected to increase in the third quarter of 2005 when the
final portion of the CFTS contract is received. This contract is expected to
be worth approximately $80 million, with $65 million to be earned during the
first thirty months.
Notice of Conference Call
Atlantis will be hosting a conference call on Monday, August 15, 2005 at
10:00 am ET to discuss its second quarter financial results and other
corporate developments. To access the conference call by telephone, dial
416-640-4127 or 1-800-814-4861. 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
training integrator for customers in the military and commercial aviation
sectors. Atlantis combines desktop and full-flight simulation, flight training
devices and multimedia courseware to provide integrated flight training and
aircraft maintenance training to a global list of customers. For over
twenty-five years, Atlantis has drawn on its extensive engineering background
and proprietary technology to offer cost-efficient, state of the art
alternatives to real-life conditions and situations. 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.
To learn more, please visit the company's web site at www.atlantissi.com
Full financial information is available on SEDAR at www.sedar.com,
Forward-Looking Statements
Certain statements contained in this news release may constitute "forward-
looking statements". When used in this news release, the words "may," "would,"
"could," "will," "intend," "plan," "anticipate," "believe," "estimate,"
"expect," and similar expressions, as they relate to Atlantis or its
management are intended to identify forward-looking statements. Such
statements reflect Atlantis' current views with respect to future events and
are subject to certain risks, uncertainties and assumptions. Many factors
could cause Atlantis' actual results, performance or achievements to be
materially different from any future results, performance or achievements that
may be expressed or implied by such forward looking statements, including
among other things, those which are discussed in documents that Atlantis files
from time to time with securities regulatory authorities. Should one or more
of these risks or uncertainties materialize, or should assumptions underlying
the forward-looking statements prove incorrect, actual results may vary
materially from those described herein as intended, planned, anticipated,
believed, estimated or expected. Atlantis does not intend, and does not assume
any obligation, to update these forward-looking statements.
<<
ATLANTIS SYSTEMS CORP.
Consolidated Balance Sheets
(in CDN $000's)
June 30, December 31,
2005 2004
----------- -----------
ASSETS (unaudited)
Current assets
Cash and cash equivalents $ 11,100 $ 369
Accounts receivable (note 5) 6,691 4,932
Unbilled revenue 2,667 577
Inventory 503 1,783
----------- -----------
20,961 7,661
----------- -----------
Capital assets, net 778 425
Mortgage receivable 364 358
Deferred financing costs 269 -
Goodwill 11,735 11,735
----------- -----------
13,146 12,518
----------- -----------
$ 34,107 $ 20,179
----------- -----------
----------- -----------
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 7,886 $ 2,511
Accrued costs on percentage completion 342 184
Promissory notes - 986
Deferred revenue 3,678 1,059
----------- -----------
11,906 4,740
----------- -----------
Convertible debentures (note 6) 2,287 -
----------- -----------
SHAREHOLDERS' EQUITY
Share capital (note 7) 91,954 87,522
Contributed surplus 3,579 3,117
Deficit (75,619) (75,200)
----------- -----------
19,914 15,439
----------- -----------
$ 34,107 $ 20,179
----------- -----------
----------- -----------
ATLANTIS SYSTEMS CORP.
Consolidated Statements of Operations and Deficit
(in CDN $000's except per common share amounts)
For the three months For the six months
ended June 30 ended June 30
------------------------ ------------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue from commercial
operations (note 3) $ 12,799 $ 4,871 $ 17,229 $ 9,675
Cost of sales 11,287 3,262 15,137 6,156
----------- ----------- ----------- -----------
Gross margin 1,512 1,609 2,092 3,519
Other income 31 19 36 27
----------- ----------- ----------- -----------
1,543 1,628 2,128 3,546
Expenses
General and
administrative 585 705 1,528 1,258
Selling and marketing 352 238 741 549
----------- ----------- ----------- -----------
Operating income (loss)
before the undernoted 606 685 (141) 1,739
Depreciation and
amortization 33 44 63 88
Interest expense
and financing costs 147 253 215 898
----------- ----------- ----------- -----------
Net income (loss) $ 426 $ 388 $ (419) $ 753
Deficit, beginning of
period (76,045) (74,847) (75,200) (75,212)
----------- ----------- ----------- -----------
Deficit,
end of period $ (75,619) $ (74,459) $ (75,619) $ (74,459)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net income (loss)
per common share,
basic and fully
diluted (note 9) $0.01 $0.03 ($0.01) $0.05
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
ATLANTIS SYSTEMS CORP.
Consolidated Statements of Cash Flows
(in CDN $000's)
For the three months For the six months
ended June 30 ended June 30
------------------------ ------------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
Cash flows provided
by (used in) :
Operating activities :
Net income (loss) $ 426 $ 388 $ (419) $ 753
Items not affecting
cash:
Depreciation and
amortization 33 44 63 88
Accrued interest
on special shares - 9 - 28
Stock options issued 46 - 462 -
Accretion on debentures 32 - 32 -
Interest on mortgage
receivable (3) (3) (6) (5)
----------- ----------- ----------- -----------
534 438 132 864
Net change in non-cash
working capital (note 8) 4,563 (1,254) 5,583 (3,587)
----------- ----------- ----------- -----------
5,097 (816) 5,715 (2,723)
----------- ----------- ----------- -----------
Investing activities :
Investment in capital
assets (114) - (416) -
----------- ----------- ----------- -----------
(114) - (416) -
----------- ----------- ----------- -----------
Financing activities :
Common share issuance 2,040 5,625 2,040 5,625
Share issuing costs (113) (526) (113) (526)
Exercise of common
share purchase warrants 1,734 - 1,734 -
Exercise of common
share option 55 - 55 -
Issuance of
convertible debenture 3,100 - 3,100 -
Debenture financing costs (398) - (398) -
Repayment of
promissory notes (407) - (986) -
Bank indebtedness - (2) - (1,101)
Secured loan - - - 3,000
Line of credit - - - 7
----------- ----------- ----------- -----------
6,011 5,097 5,432 7,005
----------- ----------- ----------- -----------
Net increase in cash
and cash equivalents 10,994 4,281 10,731 4,282
Cash and cash equivalents,
beginning of period 106 5 369 4
----------- ----------- ----------- -----------
Cash and cash equivalents,
end of period $ 11,100 $ 4,286 $ 11,100 $ 4,286
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
SUPPLEMENTAL INFORMATION:
Conversion of special
shares & accrued
dividends $ - $ (1,000) $ - $ (1,000)
Conversion of
promissory notes - (1,912) - (1,912)
Conversion of
line of credit - (188) - (188)
Conversion of
accounts payables - (1,025) - (1,025)
Interest paid 123 102 148 145
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