Results look great, stock is breaking $6 resistance level.
Mitec Reports Strong First Half - Net Earnings Jump 89.6
Percent - Revenues Up 50.2 Percent
MONTREAL, QUEBEC--Mitec Telecom Inc., today reported continued
growth in revenues and earnings for the second quarter ended
October 31, 1998. Chairman and CEO, Myer Bentob, attributed the
gains to on-going growth in the wireless sector and a clear focus
on operational costs.
Revenue for the three months was $10.8 million compared to $7.7
million a year ago. Net earnings jumped 46.4 percent to $1.0
million or $0.10 per share, compared to $0.7 million or $0.07 per
share for the second quarter a year ago.
For the six month period, revenues climbed 50.2 percent to $21.7
million from $14.4 million a year ago. Net earnings soared 89.6
percent to reach $2.1 million or $0.21 per share, compared to $1.1
million or $0.11 per share for the six months a year ago.
"We are pleased with the progress we have made during the quarter.
Our growth is a reflection of the progress we are making as a
major player in our industry. This is a trend we expect will
continue as our capabilities are increasingly recognized," stated
Mr. Bentob.
Mitec's Chief Financial Officer, Keith Findlay, pointed out the
company achieved a significant increase in earnings despite higher
R&D costs and a foreign exchange loss. "We increased R&D expense
to 7.1 percent of sales from 5 percent during the previous quarter
this year. This is an area which will continue to move the
company forward."
Gross margin rose by 1.5 percent to 36.9 percent, while cash on
hand improved by $2 million. In addition, inventories were
reduced.
Construction has begun on mitec's new 86,000 square foot
facilities in Pointe Claire, Quebec. Completion is scheduled for
next spring and will materially increase the company's capacity.
Pursuant to the announced buy-back program, mitec purchased 24,700
shares at $4.90 each during the quarter.
President and Chief Operating Officer, Mr. John Robinson,
underlined the performance of mitec's newest member of senior
management. Michael Feld was recently appointed to the newly
created position of Executive Vice President, North American
Operations. "He has brought a renewed focus to our operations and
has already succeeded in improving efficiencies."
In addition Mr. Robinson announced the appointment of Mr. Olivier
de Brouwer as Director of Corporate Quality. Mr. de Brouwer joins
Mitec following 16 years in the electronics industry at IBM Canada
and Philips Electronics. Most recently he held the position of
Manager Quality Systems and Continuous Improvement at Harris
Canada. Mr. de Brouwer holds an engineering degree from
Universite de Sherbrooke.
Mitec Telecom Inc. designs and manufacturers components,
subsystems and multifunction subsystems for the wireless
telecommunications industry. The Company sells its products
worldwide primarily to original equipment manufacturers for
incorporation into wireless infrastructure equipment, which is
used in voice, data and cable communications networks. Mitec
Telecom has 271 employees at its facilities in Pointe Claire
(Quebec), Tinton Falls (New Jersey), Copthorne (England), Wang-Noi
(Thailand), and Vaxjo, (Sweden).
/T/
MITEC TELECOM INC.
Consolidated Balance Sheets
Unaudited As at October 31,
(in thousands of CDN dollars) 1998 1997
____________________________________________________________
ASSETS
Current
Cash and term deposits $12,020 $10,515
Trade receivables 5,646 6,591
Income taxes receivable - 4
Inventories 6,954 5,575
Prepaid expenses and deposits 376 219
Current portion of deferred income taxes 347 -
____________________________________________________________
Total current assets 25,343 22,904
____________________________________________________________
Capital assets 11,759 8,774
Deferred income taxes 149 -
Goodwill 1,174 1,302
____________________________________________________________
$38,425 $32,980
____________________________________________________________
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and
accrued liabilities $4,333 $4,283
Income tax payable 524 550
Current portion of obligations
under capital leases 80 96
____________________________________________________________
Total current liabilities 4,937 4,929
____________________________________________________________
Obligations under capital leases 55 134
Deferred income taxes 1,455 126
____________________________________________________________
SHAREHOLDERS' EQUITY
Capital stock 21,473 21,552
Retained earnings 10,403 6,648
Cumulative translation
adjustment 102 (409)
____________________________________________________________
Total shareholders' equity 31,978 27,791
____________________________________________________________
$38,425 $32,980
____________________________________________________________
MITEC TELECOM INC.
Consolidated Statements of Income
Unaudited 3 months ended 6 months ended
October 31, October 31,
(in thousands of CDN
dollars except per
share data) 1998 1997 1998 1997
_______________________________________________________________
Sales $10,846 $7,744 $21,699 $14,449
Cost of sales 6,844 5,009 13,957 9,231
_______________________________________________________________
Gross profit 4,002 2,735 7,742 5,218
_______________________________________________________________
Expenses
Research and development 773 416 1,434 854
Selling and administrative 1,796 1,593 3,495 3,013
Financial expenses 16 (218) (452) (98)
Interest income (166) (92) (235) (183)
Interest on long-term debt 3 9 6 9
Other - - 225 -
_______________________________________________________________
2,422 1,708 4,473 3,595
Income before income taxes 1,580 1,027 3,269 1,623
_______________________________________________________________
Income taxes
Current 481 244 699 386
Deferred 89 95 490 140
_______________________________________________________________
570 339 1,189 526
_______________________________________________________________
Net income for the period $1,010 $688 $2,080 $1,097
_______________________________________________________________
Average number of
shares outstanding ('000) 9,807 9,802 9,808 9,525
Basic earnings per share $0.10 $0.07 $0.21 $0.12
_______________________________________________________________
Fully diluted earnings
per share $0.10 $0.07 $0.21 $0.11
MITEC TELECOM INC.
Consolidated Statements of Changes in Financial Position
Unaudited 3 months ended 6 months ended
October 31, October 31,
(in thousands of
CDN dollars) 1998 1997 1998 1997
_______________________________________________________________
Operating Activities
Net income (loss) $1,010 $688 $2,080 $1,097
Add (deduct) items
not affecting cash:
Amortization of capital
assets and goodwill 377 353 1,003 636
Gain on disposal of assets - - - -
Deferred income taxes 90 - 491 45
_______________________________________________________________
1,477 1,041 3,574 1,778
Changes in non-cash
working capital
balances 703 (319) (148) (2,122)
_______________________________________________________________
Cash provided by (used in)
operating activities 2,180 722 3,426 (344)
_______________________________________________________________
Investing activities
Acquisition of
capital assets (951) (1,317) (2,097) (1,994)
Business acquisitions net
of cash acquired - - - (1,224)
Translation adjustment 27 (60) 111 (88)
_______________________________________________________________
Cash used in
investing activities (924) (1,377) (1,986) (3,306)
_______________________________________________________________
Financing activities
(Decrease) in obligation
under capital leases (20) (92) (41) (116)
Issuance costs - - - (35)
Issuance of common shares 38 370 38 1,363
Cancelled shares under
normal course issue bid (122) - (122) -
_______________________________________________________________
Cash provided by (used in)
financing activities (104) 278 (125) 1,212
_______________________________________________________________
Increase (decrease)
in cash position 1,152 (377) 1,315 (2,438)
Cash position, beginning
of period 10,868 10,892 10,705 12,953
_______________________________________________________________
Cash position,
end of period(i) $12,020 $10,515 $12,020 $10,515
(i) Cash position consists of cash, term deposits and marketable
securities. |
