Torq Resources Inc. press release
Sirit Reports Financial Results for the Third Quarter Ended September 30, 2006
TSXV - TSX Venture Exchange · Copper · Gold · Molybdenum · Iron · Canada
Company achieves strong revenue growth across all application areas
TORONTO, Nov. 15 /CNW/ - Sirit Inc. (TSX: SI), a leading provider of radio frequency identification (RFID) technology, today reported its financial results for the third quarter ended September 30, 2006. All amounts are stated in Canadian Dollars unless otherwise noted. Revenue continues to show strong growth over prior year across all applications. For the third quarter of fiscal 2006, total revenue reached $5.1 million, a 64% increase from the $3.1 million reported in the same quarter of 2005. Automatic Vehicle Identification (AVI) related products comprised 73% or $3.7 million of total revenue, an increase of 42% over the third quarter of 2005. Radio Frequency Solutions (RFS) related revenue represents 27% or $1.4 million of total revenue, a 180% increase over prior year reported revenue of $0.5 million. "Sirit remains one of the few companies with significant, real world RFID experience with over 330,000 RFID readers deployed around the world. As supply chain adoption hovers on the horizon, our solid and profitable AVI business becomes an important differentiator among our peers," noted Anastasia Chodarcewicz, Chief Financial Officer, Sirit Inc. "With continued focus on top line growth and bottom line cost controls, we believe that we should achieve a cash flow neutral position by the end of next year." Gross margin for the third quarter of 2006 remained consistent with both the second quarter of 2006 as well as the third quarter of 2005. Total operating expenses of $4.4 million are down $0.8 million when compared to the prior quarter and up $1.5 million in relation to the third quarter of 2005. The decrease from the prior quarter relates primarily to severance costs incurred in the second quarter as well as resulting lower salary costs incurred during the third quarter. The resultant net loss was $2.6 million in the third quarter compared to $3.3 million in the second quarter. Year-to-date total revenue of $16.0 million represents a 32% or $3.8 million increase when compared to the same period in 2005. AVI revenue was $12.5 million and RFS revenue was $3.5 million compared to $9.3 million and $2.9 million respectively in the first nine months of 2005. Revenue year-to-date from the AVI vertical has increased 34% compared to the first nine months of 2005. In the previous year, Sirit reported that there were one-time unusual items including the consolidation of three toll agencies into one that significantly impacted AVI revenue. The Company utilized $2.7 million to fund ongoing operations and development efforts. Sirit ended the quarter with $9.0 million in cash compared to $11.7 million at the beginning of the quarter. The Company's working capital balance was $10.0 million at September 30, 2006 (June 30, 2006 $12.3 million). On November 10, 2006, the Company received US$1.8 million from the sale of its investment in Medsite, Inc. These funds represent 90% of the anticipated gross proceeds with the remaining 10% in escrow for a period of up to 12 months. The Company remains financially secure and has sufficient resources to fund ongoing operations. "As we promised earlier in this year, Sirit continues to grow revenue across all application areas while making the necessary investments to deliver best of breed technology such as our INfinity 510 and IDentity MaX solutions," said Norbert Dawalibi, President and CEO, Sirit Inc. "With our completed portfolio of products, the outlook for the Company is brighter than it has ever been and we have now taken the next steps to readjust our team to set the company on a path to profitability."
Q3 Corporate Highlights and Announcements
Sirit continues to make strategic corporate advancements to address its key target markets:
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Conference Call Sirit will host a conference call to discuss the quarterly results on Wednesday, November 15, 2006 at 10:00 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 September 30 December 31 2006 2005
Assets Current Assets Cash and cash equivalents $ 8,961 $ 6,079 Accounts receivable 3,614 2,941 Inventory 3,264 2,020 Prepaids and deposits 398 108 16,237 11,148
Long-term investments 3,182 3,182 Property and equipment 1,221 838 Intangible assets 1,875 370 Deferred development costs 11 59 Goodwill 3,905 2,829
$ 26,431 $ 18,426 Liabilities Current Liabilities Accounts payable and accrued liabilities $ 5,045 $ 3,526 Deferred revenue 859 815 Warranty obligations 369 290 6,273 4,631
Shareholders' Equity Share capital 47,847 35,195 Contributed surplus 1,912 1,316 Deficit (29,601) (22,716) 20,158 13,795
$ 26,431 $ 18,426
Sirit Inc. Interim Consolidated Statements of Operations (expressed in thousands of Canadian dollars except per share amounts) Unaudited
Three Months Ended Nine Months Ended September 30 September 30 2006 2005 2006 2005
Revenue $ 5,086 $ 3,107 $ 16,006 $ 12,165 Cost of Sales 3,399 2,070 10,480 7,949 Gross profit 1,687 1,037 5,526 4,216
Expenses Selling, general and administrative 2,387 1,515 7,197 6,049 Stock-based compensation 168 203 596 786 Development 1,551 899 4,044 2,481 Amortization 262 157 621 457 Foreign exchange loss 14 149 119 65 4,382 2,923 12,577 9,838 Operating (loss) (2,695) (1,886) (7,051) (5,622)
Write-down of investment - (900) - (900) Interest income, net 81 27 166 103 Net (loss) for the period $ (2,614) $ (2,759) $ (6,885) $ (6,419)
Deficit, beginning of period (26,987) (17,678) (22,716) (14,018)
Deficit, end of period $(29,601) $(20,437) $(29,601) $(20,437)
Basic and diluted (loss) per share $ (0.02) $ (0.03) $ (0.06) $ (0.07)
Basic and diluted weighted average number of common shares ('000s) 145,527 92,864 117,893 92,525
Sirit Inc. Interim Consolidated Statements of Cash Flows (expressed in thousands of Canadian dollars) Unaudited
Three Months Ended Nine Months Ended September 30 September 30 2006 2005 2006 2005 Cash provided by/(used in): Operating Activities (Loss) from operations $ (2,614) $ (2,759) $ (6,885) $ (6,419) Items not involving cash and cash equivalents 430 1,260 1,217 2,143 (2,184) (1,499) (5,668) (4,276) Net change in non-cash working capital items (423) 626 (141) 1,176 (2,607) (873) (5,809) (3,100) Investing Activities Additions to property and equipment (120) (73) (274) (238) Acquisitions, net of cash acquired - - (2,667) - (120) (73) (2,941) (238) Financing Activities Public offering of common shares, net of associated expenses (38) - 11,523 - Issuance of common shares upon exercise of stock options 1 29 109 310 (37) 29 11,632 310
Exchange rate impact on cash and cash equivalents - 7 - 21
Increase/(Decrease) in cash and cash equivalents (2,764) (910) 2,882 (3,007) Cash and cash equivalents, beginning of period 11,725 7,924 6,079 10,021 Cash and cash equivalents, end of period $ 8,961 $ 7,014 $ 8,961 $ 7,014
Cash and cash equivalents consist of: Cash and deposit accounts with banks $ 1,392 $ 692 $ 1,392 $ 692 Short-term commercial paper 7,569 6,322 7,569 6,322 $ 8,961 $ 7,014 $ 8,961 $ 7,014 >>