Source: Synergx Systems Inc.
Synergx Systems Inc. Announces Third Quarter and Nine Month Results
Thursday August 9, 4:17 pm ET
SYOSSET, N.Y., Aug. 9 /PRNewswire-FirstCall/ -- Synergx Systems Inc. (Nasdaq: SYNX - News) reported the following results for its third quarter and nine-month period ended June 30, 2007 and 2006:
THREE MONTHS NINE MONTHS
2007 2006 2007 2006
Revenues $4,174,000 $3,931,000 $11,893,000 $11,370,000
(Loss) From Continuing
Operations Before
Interest, Equity
Investment And Taxes (92,000) (103,000) (343,000) (400,000)
Interest (Expense) (36,000) (27,000) (101,000) (81,000)
Gain (Loss) on Equity
Investment (18,000) 83,000 (60,000)
(Loss) Before Taxes from
Continuing operations (128,000) (148,000) (361,000) (541,000)
Net (Loss) from continuing
operations (77,000) (98,000) (300,000) (328,000)
Net (Loss) from discontinued
operation (9,000) (100,000)
Net (Loss) (77,000) (107,000) (300,000) (428,000)
Diluted (Loss) per Share
Continuing Operations ($.01) ($.02) ($.06) ($.06)
Discontinued Operations ($.00) ($.02)
Net (loss) ($.01) ($.02) ($.06) ($.08)
Weighted Average Common and
Potential Dilutive Common
Shares Outstanding 5,210,950 5,210,950 5,210,950 5,204,742
The increase in revenues from continuing operations during the three and nine month periods of 2007 primarily resulted from higher transit and audio visual product sales. During the three month period the Company secured approvals to commence shipping a new $5.0 million project for a new New York City Subway station security system. Revenues of $801,000 and $1.0 million from this project were included in the three and nine month periods of 2007, respectively, with an additional $4.0 million remaining on the contract which is currently scheduled for significant completion during the fourth quarter of fiscal 2007.
The decrease in loss from operations during the three months ended June 30, 2007 is attributed to a decrease of $168,000 in selling, general & marketing personnel reductions and from reduced information system implementation costs. These savings were offset by $153,000 of lower gross profit margin due to a shift in product mix to lower margin sales of audio visual and transit projects in 2007.
The decrease in loss from operations during the nine months ended June 30, 2007, is due to a $105,000 improvement in gross profit margin primarily attributed to higher product revenues. This improvement in gross profit was partially offset by a slight increase of selling, general, and administrative expenses caused by $96,000 of investment banking and legal expenses related to exploring strategic options.
For the nine month period of 2007, the Company recorded a gain of $83,000 on the sale of its investment in Secure 724 LP. In contrast, the prior year periods included a loss of $18,000 and $60,000, respectively, on the Company's portion of the operating loss of Secure 724 (which investment was fully impaired in September 2006) and also included a net loss of $9,000 and $100,000 from discontinued operations of our Dallas, Texas business for the three and nine month 2006 periods, respectively. This business was sold in May 2006, and the amounts for both periods of 2006 are after a $164,000 gain (net of tax) from sale of the assets.
The net loss from continuing operations for the nine month period of 2007 includes an $80,000 valuation reserve (amounting to 2 cents per share in 2007) regarding the future tax benefit to be realized from losses of Secure 724 LP.
Management commented, "We are pleased to report that the Company's order position reached $12.1 million at the end of June 2007. With our increased order position from our transit business and growing audio visual sales we do expect stronger revenues, which together with stable fixed overhead and improving gross profit from our service business should result in a return to profitability. We also expect to continue to book additional work, but there is a lag between securing large transit orders and obtaining releases for our transit backlog of projects and realizing revenues from these projects." |
