What did I say! Another small loss, let's see how the market responds to this:
Rutter Inc. Releases 2006 Audited Year End Financial Statements
Rutter Inc. (TSX: RUT)
ST. JOHN'S, NL, Nov. 29 /CNW/ - Today, Rutter Inc. released its audited consolidated financial statements for the year ended August 31, 2006. Summary information is provided in this release and the full statements are available on the Company's website at www.rutter.ca or through the SEDAR website at www.sedar.com Revenue from operations for fiscal 2006 was $74,297,000 an increase of $4,436,000 or 6.3% from operating revenue of $69,861,000 reported in fiscal 2005. The revenue increase consisted of an increase of $6,239,000 in the Technologies segment offset partially by a decrease in Engineering Services segment revenues of $1,803,000. For the year ended August 31, 2006, Rutter is reporting a net loss of $1,479,000 which translates to both a basic and fully diluted loss per share of $0.03 as compared to a $0.13 loss per share in 2005. Both the Technologies and Engineering Services segments saw increases in EBITDA. The Technologies segment is reporting EBITDA of $2,713,000, up $1,096,000 from the prior year. Engineering Services segment is reporting EBITDA of $3,909,000, an increase of $810,000 over last year. Corporate costs of $3,498,000 were essentially stable in comparison to the prior year. The Company's EBITDA for the year was $3,124,000, up 143.7% in comparison to $1,282,000 reported in 2005.
"Overall Rutter's financial performance can be summarized by a solid performance in our Technologies segment and a somewhat improved performance in Engineering Services," said Donald I. Clarke, Chairman and CEO of Rutter Inc. "Improvements in the Technologies side of our business are the result of the Voyage Data Recorder (VDR) market strengthening in the latter part of the year and increased manufacturing services orders from our large military customer. In Engineering Services, our 28% owned DORIS Engineering asset performed better than expected and our 74% owned Unicontrol subsidiary performed on par with our expectations. Unfortunately, the early signs of improved performance that we saw in Canada in the first quarter did not persist and a weaker than expected performance in Engineering Services in Canada held this segment back." said Clarke.
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Revenues & Earnings Data
(in thousands except per share amounts)
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Year Fourth Quarter
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Fiscal Fiscal Q4 Q4
2006 2005 2006 2005
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Revenue:
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Technologies $ 37,802 $ 31,563 $ 8,754 $ 8,664
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Engineering Services $ 36,495 $ 38,298 $ 10,137 $ 10,394
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$ 74,297 $ 69,861 $ 18,891 $ 19,058
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EBITDA:
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Technologies $ 2,713 $ 1,617 140 485
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Engineering Services $ 3,909 3,099 676 849
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Corporate Costs (3,498) (3,434) (887) (703)
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$ 3,124 $ 1,282 (71) 631
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Net Loss $ (1,479) $ (4,969) $ (849) $ (835)
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Loss Per Share
(basic and diluted) $ (0.03) $ (0.13) $ (0.02) $ (0.02)
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Segment Performance
Technologies segment - Revenue for the year of $37,802,000, an increase of 19.8% over the prior year, is attributable to increased revenues of $2,870,000 in manufacturing revenue and $3,369,000 in company owned products revenue. Technologies revenue increases are related to the Company's major military customer and to increasing demand for VDRs. Although strong competition has reduced average VDR selling prices, the Company continues to remain competitive and maintains favorable gross margins on this product, largely due to proactive initiatives to reduce manufacturing costs. The Technologies segment is reporting EBITDA of $2,713,000 up $1,096,000 or 67.8% from the prior year.
Engineering Services segment - At $36,495,000 revenue in the Engineering Services segment declined by $1,803,000 or 4.7% in comparison to last year. For fiscal 2006, our Brazilian operation (Unicontrol) revenues were $2,844,000 higher than the prior year. Unicontrol revenues last year reflect the Company's participation in the completion of major engineering projects and the revenues this year reflect the successful replacement of that work with long-term contracts on new oil and gas projects. In contrast, the Canadian engineering operation experienced a revenue decrease of $4,647,000 from the prior year. To date the Canadian operation has been unsuccessful in replacing large project revenues particularly in Newfoundland where projects have materialized. Revenues generated from the Company's industrial client base in Atlantic Canada have increased over the prior year but not strongly enough to offset the decline in large project revenues.
Engineering Services is reporting EBITDA of $3,909,000 in comparison to $3,099,000 last year, an increase of $810,000 or 26.1 %. The improvement is largely attributable to an increase in the equity earnings of DORIS along with a small EBITDA improvement in the performance of Canadian operations. Brazilian operations had a decrease in EBITDA as a result of an accrual for $671,000 compared to $303,000 in the prior year relating to taxes on certain compensation agreements; and as a result of the prior years' work being related to higher margin commissioning activities at the conclusion of projects. Work in 2006 is reflective of a different mix of activity with lower margins.
Fourth Quarter Summary
Fourth quarter revenues for Rutter were $18,891,000 in comparison to $19,058,000 in the same quarter in 2005, a decrease of $167,000 or 0.9%. The fourth quarter net loss of $849,000 or $0.02 per share is primarily related to the weaker than expected performance in the Canadian portion of Engineering Services, combined with the recording of a provision for inventory obsolescence relating to third party manufacturing in the Technologies segment. Also during the quarter, the Technologies segment incurred more sales on lower margin products related to military customers.
Conclusion and Outlook Summary
"The Company has seen significant year over year improvement in performance and is showing clear signs of recovering from past challenges", said Clarke. "With the exception of Engineering Services in Canada, we have seen stable or improved performance in all areas of our business, an indication of the value of diversification. On the basis of continued strong oil prices we expect our Engineering assets in France and Brazil to continue to do well and to see additional growth as a result of the DORIS Engenharia, SA joint venture that was inked in August of this year."
"Steps continue to be taken to ensure performance within Engineering Services in Canada improves and since installing Glenn Willar as Rutter's new President of Engineering Services in July, we are confident that our Canadian engineering assets will make a solid contribution to Rutter in 2007. The opportunities are there to do that," Clarke added. "Our Technologies segment, saw record deliveries to our long term military customer in 2006 and shareholders may recall we signed a new contract with them in May of this year. The cycle of that contract will see a decrease in orders for 2007 with that increasing again in 2008. Fortunately, we have seen record VDR deliveries in the last few months and in 2007 Rutter will benefit from what is expected to be our first full year of brisk VDR demand. In recent months the Company has also seen a considerable increase in interest in its sigma S6 Ice Navigator radar technology and sales growth there,"concluded Clarke. |
