| Highlights |
Q2-08 revenue growth of 13% to $19.44 million compared to Q2-07;
YTD revenue growth of 9% to $39.33 million compared to FY-07
Q2-08 net income growth of 489% to $1.81 million or $0.06 per share
compared to Q2-07; YTD net income growth of 92% to $4.05 million or
$0.13 per share compared to FY-07
Q2-08 gross margin of 54% compared to 58% in Q2-07; YTD gross margin
of 55% compared to 58% in FY-07
Overhead expenses, including stock-based compensation and amortization,
were reduced to 41% of revenue compared to 58% of revenue in Q2-07;
YTD overhead expenses were 40% of revenue compared to 54% of revenue
in the same period of FY-07
Cash generated from operating activities was $5.82 million in Q2-08;
and $8.34 million YTD.
Board of directors declares initial quarterly dividend of $0.03 per common share
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Edmonton, Alberta – April 10, 2008
Matrikon Inc. (TSX:MTK), a leading provider of solutions for industrial intelligence, today reported financial results for the second quarter of fiscal year 2008, which ended February 29, 2008.
Second quarter revenue was $19.44 million compared to $17.25 million in Q2-07 and $19.89 million in Q1-08 (adjusted to reflect current presentation of interest income). Net income in the second quarter was $1.81 million or $0.06 per share, compared to $0.31 million or $0.01 per share in Q2-07 and $2.24 million or $0.07 per share in Q1-08.
Year-to-date revenue was $39.33 million compared to $36.05 million in the first half of FY-07. YTD net income was $4.05 million or $0.13 per share, compared to $2.11 million or $0.07 per share in the first half of FY-07.Matrikon president, CEO and interim CFO Nizar J. Somji commented on the quarter: “Achieving the best Q2 in our history is a testament to the dedication and commitment of everyone at Matrikon. We have remained focused, and each individual has worked diligently to deliver on the strategy in a quarter that is often challenging from a results perspective.
With our cost base stabilized, we are now in a position to direct our attention and our energy on top line growth. Some key solutions that we expect to deliver to our clients over the next two quarters will form the framework of new opportunities and future growth.”
Matrikon’s board of directors also declared a quarterly dividend of $0.03 per common share to all shareholders of record on April 25, 2008, payable on May 9, 2008.
“We are pleased to announce Matrikon’s first dividend, following several quarters of strong cash generation and a growing cash balance,” stated Hugh Bolton, Chair of Matrikon’s board. “The commencement of a quarterly dividend reflects the belief of the board that Matrikon is back on the right track and that we have confidence in the future.”
| Additional Highlights |
Strong software license and support revenue contributed to near record
quarterly revenue in Q2-08, a quarter which is traditionally light on revenue
and net income as it has fewer working days and spans the holiday period.
Gross margin was 54%, comprised of 91% gross margin on software
license revenue, 95% on support revenue, 37% on consulting revenue
and 25% on equipment revenue.
Overhead expense reductions were maintained in the quarter at $7.92 million
or 41% of revenue compared to $10.08 million or 58% of revenue in
Q2-07. Year-to-date overhead expenses were $15.74 million or 40%
compared to $19.33 million or 54% of revenue in the first six months of FY-07.
Cash generated by operations was $5.82 million compared to $0.37
million in Q2-07. Year-to-date, cash generated by operations was $8.34
million compared to $3.07 million in the first six months of FY-07.
The rolling 12-month average collection period (on trade receivables)
improved to 78 days at the end of Q2-08 compared to 86 days at the end of
Q2-07 and 84 days at the end of Q1-08. This improvement is the result of
an increased focus on collections.
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MD&A and Financial Statements
The MD&A and Financial Statements for the current quarter can be found on Matrikon’s website at http://www.matrikon.com/about/corporate/investors/financial/q-reports.aspx or by contacting Nicole Sayler at 1-877-628-7456 extension 4010.
Conference Call and Webcast
Matrikon President, CEO and interim CFO Nizar J. Somji will hold a conference call to discuss second quarter results on Thursday, April 10, 2008 at 5:00 pm Eastern time (3:00 pm Mountain time). To participate live, call 416-644-3416 in the Toronto area and 1-800-733-7560 for all other areas.
A replay will be available until midnight, May 1, 2008. To access the playback service, please dial 416-640-1917 in Toronto or 1-877-289-8525 elsewhere. The reservation number is 21265626 followed by the pound sign.
The conference call will also be webcast and podcast until July 9, 2008 at: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2196040
For more information, contact:
Nicole Sayler
Corporate Communications & Investor Relations
780-945-4010
email: nicole.sayler@matrikon.com
Matrikon and ProcessMORe are trademarks or registered trademarks of Matrikon Inc.
Forward Looking Statements
In order to provide our investors with an understanding of our current results and future prospects, our communications often include written or oral forward-looking statements. This earnings announcement & MD&A and other material filed with the Canadian securities regulators contain statements that are forward-looking. These statements are made pursuant to the “safe harbor” provisions of applicable Canadian securities legislation. These statements represent Matrikon’s intentions, plans, expectations and beliefs and are based on our experience and our assessment of historical and future trends and the application of key assumptions relating to future events and circumstances. These statements may include, but are not limited to, comments about our objectives and priorities for 2008 and beyond, strategies and targets, expectations for our financial condition, and the outlook for our operations and external factors that may impact results, including global economies and industry trends.
Forward-looking statements require assumptions and involve risks and uncertainties related to our business and the general economic environment, many beyond our control. There is significant risk that the predictions, forecasts, conclusions or projections we make will not prove to be accurate and that our actual results will be materially different from the targets, expectations, estimates or intentions expressed in the forward-looking statements. We caution readers of this information circular not to place undue reliance on our forward-looking statements.
The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic conditions in the countries in which we operate; currency fluctuations; market demand for our products and services; our ability to execute projects and deliver solutions; our ability to execute our strategic plans and to complete and integrate acquisitions; the degree of competition in the geographic and business areas in which we operate; our ability to attract and retain qualified employees and contain payroll costs; our ability to contain expenses; technological changes and research and development; the length of the sales cycle required to close larger solution contracts; availability of financial resources to carry out our strategy; our ability to protect our intellectual and intangible properties; legal claims; critical accounting estimates; the possible effects on our business of war or terrorist activities; disease or illness that affects local, national or international economies; and disruptions to public infrastructure, such as transportation, communications, power or water supply. We caution that this list is not exhaustive of all possible factors.
Other factors could adversely affect our results. For more information, please see the discussion on the principal risks that could affect our results, beginning on page 44 of Matrikon’s 2007 Annual Report.
When relying on forward-looking statements to make decisions with respect to Matrikon, investors should carefully consider these factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. Unless required by law, we do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by the company or on its behalf.
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