Audiotech Announces Fiscal 2002 Financial Results.Business Editors KAMLOOPS, B.C.--(BUSINESS WIRE)--Feb. 11, 2003 Audiotech Healthcare Corporation (TSX Venture Exchange TSX Venture Exchange Originally called the Canadian Venture Exchange (CDNX), this was a result of the merger of the Vancouver and Alberta stock exchanges. The goal of TSX Venture Exchange is to provide venture companies with effective access to capital while protecting investors. :AUD AUD In currencies, this is the abbreviation for the Australian Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) (Pink Sheets:AUDJF) is pleased to report its financial and operating results for the year ended September 30, 2002. The corporation generated record revenues of $2,989,160 and earnings before interest, taxes, depreciation, and amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) of $147,193 for the year ended September 30, 2002. This represents an improvement in operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before (EBITDA) of $573,129 or almost $0.05 per share over fiscal 2001. At the end of fiscal 2001, management established a number of objectives for fiscal 2002, most notably, the reduction of general, administrative and operating costs operating costs npl → gastos mpl operacionales through the elimination of duplicated services at the head office level, and a renewed focus on the profitability and efficiency at individual clinics. Management is pleased to report that the cost cutting measures undertaken during late fiscal 2001 and early fiscal 2002 have had a considerable positive impact on profitability as anticipated. It is important to note that despite the operating cost reductions, the company was able to maintain revenues at or above the record levels achieved in fiscal 2001. Revenues derived from the company's Canadian operations of $1,855,175 were on par with those achieved during fiscal 2001 as management focused on expense reduction and creating operating efficiencies at existing clinics as opposed to acquiring or developing new operations. South of the border, Audiotech continues to generate growth and record revenues. The company's Idaho operations contributed revenues of $1,133,985 during the 12 month period ended September 30, 2002, an increase of 23% over the prior fiscal year. This growth resulted from the increased utilization of the Rexburg clinic made possible by the hiring of an additional audiologist Audiologist A person with a degree and/or certification in the areas of identification and measurement of hearing impairments and rehabilitation of those with hearing problems. to meet local demand, and improved effectiveness of the clinic's marketing program.
Statement of Income
Year ended September 30
2002 2001
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Canadian Revenues $1,855,175 $1,887,114
U.S. Revenues 1,133,985 923,399
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Total Revenues $2,989,160 $2,810,513
Gross Profit 1,925,644 1,654,079
EBITDA(A) 147,193 (425,936)
Net Loss (47,428) (575,268)
EPS (0.004) (0.044)
(A) earnings before interest, taxes, depreciation and amortization
As a result of improved efficiencies, cost of sales as a percentage of revenues declined very significantly, resulting in a substantial increase in gross margins to 64.4% from only 58.9% during fiscal 2001. As noted above, management was successful in sustaining the cost reduction program originally initiated in late fiscal 2001. General and administrative expenses totaled $1,862,668 during the 12 month period ended September 30, 2002, a decrease of 9% from the $2,028,338 during the same period in fiscal 2001 despite significantly higher interest costs related to its long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. financing. Major cost reductions were achieved in a number of categories including corporate development, professional and filing fees, advertising, and wages. Audiotech was also successful in turning around its e-commerce subsidiary, HearingDepot.com, by both increasing revenues and dramatically reducing expenses. HearingDepot.com currently generates an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. and is experiencing significant revenue growth. As noted previously, all cost reductions were accomplished without affecting service levels at our clinics. As a result of the revenue growth in fiscal 2002, significantly improved operating margins, and reduced general and administrative expenses, Audiotech reported a net loss after non-cash amortization expenses of only of $47,428 or $0.004 per share for the year ended September 30, 2002, compared to a loss of $575,268 or $0.044 per share during fiscal 2001, an impressive turn around of $527,840. Audiotech achieved positive cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses (earnings before amortization, disposal of assets, and taxes) of $62,976 during the period. Management is confident that the trend towards increasing profitability will continue. Further cost reductions are anticipated in several key expense categories including corporate development, and interest on long-term debt. Furthermore, Audiotech will be adopting a new accounting policy for the recognition and recording of goodwill amortization pursuant to a new disclosure policy recently pronounced by the Canadian Institute of Chartered Accountants The Canadian Institute of Chartered Accountants (CICA) is the umbrella body for the Chartered Accountant profession in Canada and Bermuda. Membership of the CICA totals 70,000 Chartered Accountants and 8,500 students. . Under this new policy, which will take effect in fiscal 2003, goodwill is only expensed in the event of an impairment in value rather than on the basis of a subjective percentage per accounting period. It is management's opinion that at present, there are no impairments in the value of Audiotech's goodwill that would result in a charge against earnings under the new policy during fiscal 2003. As a result, amortization or expensing of goodwill is not anticipated during fiscal 2003, resulting in an overall expense savings of more than $25,000. As at September 30, 2002, Audiotech had a cash balance of $613,817, including term deposits in the amount of $320,000, compared to $303,102 as at the beginning of fiscal 2002. During the first 9 months of fiscal 2002, the corporation raised a total of $847,586 in new borrowings and repaid a total of $342,039 in existing debt, resulting in a net increase in debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay of $505,547. An additional $9,000 was raised through the issuance of common shares upon the exercise of stock options. Capital purchases of clinical equipment totaling $46,624 were made during the fiscal year. Approximately $200,000 of Audiotech's long-term debt is comprised of interest-free loans from a major North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. hearing aid supplier. The remaining debt consists primarily of convertible debentures and loans bearing interest at an average interest rate of slightly more than 10%. Management has set an objective for fiscal 2003 to substantially reduce, or if market conditions are amenable, to eliminate the company's long-term debt. This will have a positive impact on profitability by reducing interest costs. Since October 1, 2002, more than $200,000 in long-term debt has already been retired. The repayment of this debt was funded internally through the company's term deposits and cash flow. No acquisitions were undertaken during fiscal 2002, however, management continues to advance negotiations with a number of parties in accordance with its acquisition / consolidation strategy. Management is also examining other transactions and initiatives to maximize shareholder value. Audiotech is also aggressively seeking new Audiologists to join its clinical staff to further enhance its service capacity at its busiest Canadian clinics and its Idaho operations. There is currently a shortage of newly graduated audiologists across North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , however, based on its favorable industry reputation, competitive compensation package, and its strong financial footing, management believes Audiotech is better positioned than the majority of its competitors to attract qualified applicants. Management is optimistic about the corporation's outlook for growth during fiscal 2003 and beyond. Shifting demographic trends and emerging hearing aid technologies continue to create new opportunities for Audiotech. We are confident that we have positioned the company to take full advantage of these opportunities. Management looks forward to announcing its progress in this regard as significant milestones are achieved. Audiotech currently owns and operates 13 audiology audiology /au·di·ol·o·gy/ (aw?de-ol´ah-je) the study of impaired hearing that cannot be improved by medication or surgical therapy. au·di·ol·o·gy n. and hearing care clinics across Western Canada
Western Canada, commonly referred to as the West and the Northwest U.S. and is the third largest public consolidator of the highly-fragmented hearing care industry in North America. The company's shares are listed and posted for trading on Tier 1 of the TSX Venture exchange under the symbol "AUD," and are quoted on the over-the-counter (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). ) market in the United States through the facilities of the Pink Sheets LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , formerly known as the National Quotation Bureau National Quotation Bureau A service that publishes bid and offer quotes from market makers in OTC transactions. National Quotation Bureau , under the trading symbol Trading symbol See: Ticker symbol "AUDJF". For copies of the year end financials or more information on the company, contact Osvaldo (Ozzie) Iadarola, President & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , at (250) 372-5847, or visit our website at www.audiotech.org. Public Documents can also be viewed at http://www.sedar.com/ |
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