Torq Resources Inc. press release
Sirit Reports Financial Results for the First Quarter Ended March 31, 2006
TSXV - TSX Venture Exchange · Copper · Gold · Molybdenum · Iron · Canada
TORONTO, May 11 /CNW/ - Sirit Inc. (TSX: SI), a leading provider of radio frequency identification (RFID) technology, today reported its financial results for the first quarter ended March 31, 2006. All amounts are stated in Canadian Dollars unless otherwise noted.
First Quarter 2006 Financial Highlights
Total revenue in Q1 2006 reached $5.4 million, an increase of 22% from Q1 2005 and 27% from Q4 2005. Automatic Vehicle Identification ("AVI") revenue grew by 33% in the first quarter reaching $4.4 million when compared to $3.3 million in the first quarter of 2005. Radio Frequency Solutions ("RFS") applications revenue remained consistent with prior year first quarter at $1.0 million. Fluctuations in quarterly RFS results are expected to continue. Net loss for the quarter was $1.0 million, the same level as Q1 2005. Cash utilization of $0.9 million during the quarter is consistent with prior two quarters.
Three Months Ended March 31, 2006
Revenue for the three months ended March 31, 2006 totaled $5.4 million, a 22% or $1.0 million increase from $4.4 million in the first three months of 2005. The increase in total revenue is attributable to growth in toll tag sales during the quarter as sales volumes return to historical levels. Revenue from sales of RFS related products was $1.0 million during the quarter compared to $1.1 million in the 2005 first quarter. Sales of RFS products are expected to vary on a quarterly basis as customers continue to focus on testing with timing of large volume rollouts unpredictable. Gross margin for the first quarter of 2006 was similar to the first quarter of 2005 at 36.9% compared to 37.5%. The increase in margin compared to the fourth quarter of 2005 (35.8%) is attributable primarily to absorption of fixed overhead costs associated with the increased sales volume. Total operating expenses during the first quarter were $3.0 million compared to $2.7 million in the same period in 2005. The increase relates primarily to increased development costs, salary increases, stock-based compensation and foreign exchange. The Company utilized $0.9 million of cash to fund operations during the quarter resulting in a cash balance of $5.2 million at March 31, 2006. Working capital at March 31, 2006 is $5.8 million compared to $6.5 million at December 31, 2005. At March 31, 2006 there were approximately 93.3 million shares outstanding. "Sirit is focused on executing its growth strategy. The strong first quarter results represent the second consecutive quarter of increased revenue generation and demonstrate the first steps toward achieving sustained growth. While the Company has been able to maintain its cash spending levels, increased expenditures are expected for the next several quarters as the Company integrates operations from its two recent acquisitions," commented Anastasia Chodarcewicz, Vice President Finance and CFO, Sirit Inc. "I am delighted that the AVI related revenue is returning to historical levels of growth. This application area provides us with a recurring revenue base from which to leverage cash generated in support of growth into new and exciting application areas," said Norbert Dawalibi, President and CEO, Sirit Inc. "We remain confident that our business is solid and will look to ensure we continue this growth trend throughout 2006."
Conference Call Sirit will host a conference call to discuss the quarterly results on Thursday, May 11, 2006 at 11:00 am EST. The conference call will be accessible at www.sirit.com.
About Sirit Inc. Sirit Inc. (TSX: SI) is a leading provider of Radio Frequency Identification (RFID) reader technology to OEMs and solution providers worldwide. Harnessing the power of Sirit's enabling-RFID technology, customers are able to more rapidly bring high quality RFID solutions to the market with reduced initial engineering costs. Sirit's products are built on more than 12 years of RF domain expertise addressing multiple frequencies (LF/HF/UHF), multiple protocols and are compliant with global standards. Sirit's broad portfolio of products and capabilities are easily customized to address new and traditional RFID market applications including Supply Chain & Logistics, Cashless Payment, Access Control, Automatic Vehicle Identification, Inventory Control & Management, Asset Tracking and Product Authentication. For more information on Sirit, visit www.sirit.com.
Cautionary Note Regarding Forward Looking Statements Safe Harbor Statement under the United States Private Securities Litigation Reform Act of 1995: Except for the statements of historical fact contained herein, the information presented constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of Sirit to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting Sirit's business which are discussed in the section entitled "Description of the Business - Risks Factors" in Sirit's Initial Annual Information Form dated March 16, 2006 as filed with the securities regulatory authorities in Canada via SEDAR. Although Sirit has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended.
<<
Sirit Inc. Interim Consolidated Balance Sheets (expressed in thousands of Canadian dollars) Unaudited
As at As at March 31 December 31 2006 2005 Assets Current Assets Cash and cash equivalents $ 5,191 $ 6,079 Accounts receivable 3,198 2,941 Inventory 2,421 2,020 Prepaids and deposits 258 108 11,068 11,148
Long-term investments 3,182 3,182 Property and equipment 844 838 Intangible asset 320 370 Deferred development costs 43 59 Goodwill 2,829 2,829
$ 18,286 $ 18,426 Liabilities Current Liabilities Accounts payable and accrued liabilities $ 4,214 $ 3,526 Deferred revenue 778 815 Warranty obligations 290 290 5,282 4,631
Shareholders' Equity Share capital 35,195 35,195 Contributed surplus 1,518 1,316 Deficit (23,709) (22,716) 13,004 13,795
$ 18,286 $ 18,426
Sirit Inc. Interim Consolidated Statements of Operations (expressed in thousands of Canadian dollars except per share amounts) Unaudited
Three Months Ended March 31 2006 2005
Revenue $ 5,384 $ 4,426 Cost of Sales 3,396 2,766 Gross profit 1,988 1,660
Expenses Selling, general and administrative 1,838 1,824 Stock-based compensation 202 159 Development 794 645 Amortization 140 148 Foreign exchange loss/(gain) 43 (38) 3,017 2,738 Operating (loss) (1,029) (1,078)
Interest income, net 36 37 Net (loss) for the period $ (993) $ (1,041)
Deficit, beginning of period (22,716) (14,018)
Deficit, end of period $ (23,709) $ (15,059)
Basic and diluted (loss) per share $ (0.01) $ (0.01)
Sirit Inc. Interim Consolidated Statements of Cash Flows (expressed in thousands of Canadian dollars) Unaudited
Three Months Ended March 31 2006 2005 Cash provided by/(used in): Operating Activities (Loss) from operations $ (993) $ (1,041) Items not involving cash and cash equivalents 342 307 (651) (734)
Net change in non-cash working capital items (157) 104 (808) (630) Investing Activities Additions to property and equipment (80) (65)
Financing Activities Issuance of common shares upon exercise of stock options - 93
(Decrease) in cash and cash equivalents (888) (602) Cash and cash equivalents, beginning of period 6,079 10,021
Cash and cash equivalents, end of period $ 5,191 $ 9,419
Cash and cash equivalents consist of: Cash and deposit accounts with banks $ 1,478 $ 2,316 Short-term commercial paper 3,713 7,103
$ 5,191 $ 9,419
>>