Topro, Inc. Announces Record Revenue for the Quarter Ending September
30, 1997 and Additional Y2K Engagements
PR Newswire - November 14, 1997 11:28
DENVER, Nov. 14 /PRNewswire/ -- Topro, Inc., d.b.a. TAVA Technologies,
Inc., (Nasdaq: TPRO) a leading provider of automation and information
technology solutions to industry, announced results for its first fiscal
quarter ending September 30, 1997 and additional Y2K engagements for its
PlantY2K One product and services.
Revenues for the quarter increased 42% to a record $11,319,000 from
$7,967,000 recorded in the first quarter in 1997. Gross margins increased by
33% to a record $3,825,000 (34% of revenue) in the first quarter of 1997. The
company recorded a net loss of $575,000 and a net loss applicable to common
shareholders of $605,000 ($0.04 per share).
John Jenkins, CEO commented, "We are extremely pleased with the revenue and gross margin growth in the base business, particularly since, during the quarter, the company had from 15 to 20 engineers diverted from billable project work to PlantY2K One product development. Had these engineers been dedicated to base business projects, revenues would have been considerably higher. Our decision to make this heavy resource commitment paid off in the on-time release of our CD-ROM product, resulting in strong acceleration in market interest."
Jenkins added, "Customer response to our PlantY2K One CD-ROM product has
been very positive. As a result of rapid customer acceptance and our early
investment in sales and marketing, we would expect to see growing revenue and
gross profit contribution beginning in our fiscal Q2, with significant
contribution in Q3."
Doug Kelsall, CFO noted that earnings before taxes, interest, depreciation
and amortization were $42,000. "During the first quarter, operating expenses
were up sharply as the company was investing heavily in the PlantY2K One
product rollout and in development of the infrastructure necessary to support
the company's anticipated growth. As a direct result of the accelerating
interest in the product, major client presentations, proposal work, production
of promotional materials and pre-CD release technical demonstrations were all
at a scale much greater than originally planned."
Kelsall added, "The company also incurred significant expenses for
recruiting, internal training and travel associated with developing
distribution channels and administrative support functions. We expect these
expenses to continue to remain high in the near term as we expand our Y2K
market position, but decline as a percent of sales as revenues increase."
Interest expense was down slightly due to the conversion of $2,685,000 of
the company's subordinated debentures. A full quarter effect was not realized
due to the timing of the conversion.
As a general update to the company's Year 2000 activity, John Jenkins, CEO
offered the following;
"Our Year 2000 business opportunity is accelerating faster than our
initial expectations." The initial release of our CD-ROM based methodology
and tools, on schedule in mid-October, was an important step. The initial
production of CD's have been used internally and have not been available for
third party sale. Our second production run of 20,000 is on schedule for
completion on November 20.
Our total engagement count now exceeds 25 clients covering more than 60
sites. New clients include Cyprus Amax Minerals, Kennecott, Unilever Foods
North America, and Ivax Pharmaceuticals among others. While many clients are
still in the pilot stage, developing cost models for their 1998 budgets others
are accelerating dramatically their activity. Unilever Foods has tasked us to
complete the assessment and analysis phases on their U.S. and Canadian plants
before the end of November. A similar engagement with Ivax covers a number of
domestic and international operations with a completion target of January
1998.
In the past three weeks, the company has received orders for more than
$1,500,000 of PlantY2K One product and services, and expects to close up to
another $2,000,000 in the next 30 to 45 days. These orders represent
primarily initial inventory and assessment tasks, and include little
remediation effort.
As a raw measure of our activity level, we are in various stages of
negotiation with a large number of multi-plant organizations that cover
approximately 3000 plant sites. These include both domestic and international
operations.
The company's position as a provider of Year 2000 solutions in factory
automation and process control has gained significant additional recognition.
Specifically, we will be presenting at the Year 2000 Conference & Expo on
Tuesday, November 18th where we have been asked to address specifically
manufacturing and control system strategies.
Further, the company is developing alliance relationships with information
technology service companies active in addressing Year 2000 compliance in
business systems. This has already led to a number of joint proposals
providing clients with full scope Year 2000 service.
To meet the accelerating demand for our products and services, the company
is actively recruiting and has been successful in several key placements. One
of these was the recent appointment of Ken Owen as Vice President of Business
Development. Owen was recently the Director of Systems Integration at Fluor
Daniel and an early leader in the recognition of Year 2000 issues in factory
automation systems.
The company is continuing development of specific product variations of
the PlantY2K One suite of particular promise is a product targeted for the
utility industry.
EARNINGS RECAP:
3 months ending
(unaudited)
9/30/97 9/30/96
Revenues 11,319,000 7,967,000
Cost of Sales 7,494,000 5,082,000
Gross Profit 3,825,000 2,885,000
Expenses
Sales Expense 827,000 598,000
General & Administrative 3,151,000 1,932,000
Amortization of Capitalized
Software and Goodwill 276,000 103,000
4,254,000 2,633,000
Operating Income (expense)
Gain/Loss on Sale 0 (3,000)
Interest Expense (165,000) (172,000)
Other 19,000 4,000
(146,000) (171,000)
Net Income (loss) (575,000) 81,000
Net Income (loss) applicable
to common shareholders (605,000) 81,000
Net Income (loss) per share: $(0.04) $0.01
Weighted Average common and common
equivalent shares outstanding
during the period 15,030,634 7,841,716
Topro, Inc.
As of September 30, 1997
Numbers in ($000) Unaudited
Assets Liabilities and Owners Equity
Current Assets 14,269 Current Liabilities 10,172
Fixed assets net
of depreciation 2,624 Long Term Liabilities 2,774
Goodwill 8,373 Owners Equity 15,488
Other Assets 3,168 Total Liabilities and
Total Assets $28,434 Owners Equity $28,434
Statements made in this Press Release that are not historical or current
facts are "forward looking statements" made pursuant to the safe harbor
provisions of federal securities laws. Forward-looking statements represent
management's best judgment as to what may occur in the future, but are subject
to certain risks and uncertainties that could cause actual results and events
to differ materially from those presently anticipated or projected. Such
factors include adverse economic conditions, entry of new and stronger
competitors, inadequate capital, unexpected costs, failure to integrate
operations of recently acquired subsidiaries and failure to capitalize upon
access of new clientele. Specific risks and uncertainties which may affect
forward-looking statements about the company's PlantY2K One(TM) business and
prospects include the possibility that a competitor will develop a more
comprehensive or less expensive Y2K solution, and delays in market awareness
of Topro and its product and service solutions. These factors and others are
discussed in the "Management's Discussion and Analysis" section of the
Company's Annual Report on Form 10-KSB for the fiscal year ended June 30,
1997, to which reference should be made.
SOURCE Topro, Inc.
/CONTACT: John Jenkins of Topro, Inc., 303-935-1221; or Scott Liolios of
Pacific Consulting Group, Inc., 714-574-3860/
(TPRO) |
