Coreco Reports Fifth Year of Solid Profitable Growth.Business Editors MONTREAL--(BUSINESS WIRE)--March 6, 2001 CORECO (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CRC (Cyclical Redundancy Checking) An error checking technique used to ensure the accuracy of transmitting digital data. The transmitted messages are divided into predetermined lengths which, used as dividends, are divided by a fixed divisor. .) Fiscal 2000 Revenues Rise by 82%, Fourth Quarter Revenues Up by 156%, Profits by 38% Coreco Inc. today announced its results for the fourth quarter and year ended December December: see month. 31, 2000. Fourth quarter revenues grew 156% to $10,832,155 on a year over year basis, and net earnings from operations rose by 38% to $1,156,268 or $0.16 per share ($0.14 fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ). Fiscal 2000 revenues increased 82% to $31,519,288 from $17,308,973 last year. These results, which exceed the Company's target of $30 million, include the contribution of U.S. based Imaging Technology, Incorporated (ITI (Information Technology Industry Council, Washington, DC, www.itic.org) Formerly the Computer and Business Equipment Manufacturers Association (CBEMA), founded in 1916. ITI is a membership organization composed of approximately 30 large high-tech companies. ), which was acquired on June June: see month. 30, 2000. Net earnings from operations rose 24% to $3,989,306 from $3,224,518 in 1999, amounting to $0.55 on a per-share basis ($0.53 fully diluted) compared with $0.44 ($0.44 fully diluted) in 1999. During fiscal 2000, the Company generated cash flow from operating activities of $5,950,122 compared with $3,289,344 a year earlier, an increase of 81%. Working capital rose to $11,573,377 from $5,969,524, net of short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments, an improvement of 94%. Taking into account acquisition-related charges, the Company reported a loss of $935,893 or $0.13 per share for the fourth quarter, compared with a loss of $1,367,781 or $0.18 per share a year earlier. For the full year, the Company reported a loss of $301,701 or $0.04 per share, versus net earnings of $779,236 or $0.11 per share in 1999. The gross margin for the year, which reflects the combination of Coreco and ITI margins for the last six months of 2000, amounted to 60.5% of sales versus 65.0% in 1999. On a quarter over quarter basis, the gross margin in the fourth quarter improved to a blended 59.4% from 58.5% in the third quarter. The Company expects to achieve a blended target of 60% in the second half of fiscal 2001 as it continues to maximize operating synergies arising from the acquisition of ITI. Selling and marketing expenses represented 16.5% of sales in fiscal 2000, compared with 14.7% in fiscal 1999 and 15.9% in the fourth quarter of last year. In fiscal 2000, R&D expenses were in line at 12.8% of sales, consistent with that of the previous year. "Fiscal 2000 was the year in which Coreco gained new growth momentum, both financially and strategically," commented 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. Keith Keith may refer to: People with the given name Keith:
 `bən), in the Bible, Jacob's eldest son and eponymous ancestor of one of the 12 tribes of Israel. . "We acquired and successfully integrated a company that
brought us new customers, raised our international profile and enlarged
our product line, giving us the ability to offer one-stop one-stopadj. Relating to or providing a comprehensive selection of goods or services at a single location: one-stop shopping; a one-stop health-care center. shopping - from frame grabbers A device that accepts standard TV signals and digitizes the current video frame into a single, bitmapped still image. Frame grabbers can be stand-alone devices that plug into a port on the computer or a function built into the video capture board or display adapter. to embedded Inserted into. See embedded system. vision products." "We also exceeded our five-year track record for revenue growth and profitability. Since 1996, our top line has grown at a compound annual growth rate of more than 25%, while our gross margin has been mainly in the 60-65% range." In fiscal 2000, sales to Asia increased by 106%, gaining strength throughout the year as a result of sustained demand for the Viper family of intelligent frame grabbers. Sales to Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , the U.S. and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). rose
by 23%, 80% and 95%, respectively. At year-end year-end also year·endn. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. , Asia accounted for 16% of total sales, Europe for 21%, Canada for 5% and the U.S. for 58%. New products accounted for 37% of sales during the year. By product category, high performance frame grabbers represented 28% of sales, up from 5% a year ago, directly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the addition of the ITI product line. Embedded products made up 44% of sales, display products 21% and software the remaining 7% of sales. In fiscal 2000, Coreco achieved a total of 54 design-wins. In conclusion, Mr. Reuben stated, "Coreco is now entering a new phase of growth. Today, we are a 31 million dollar company that is well on track to achieve revenues of $47 million in 2001 - fuelled by revenues from ITI together with design wins. To sustain our growth into the future, we will be launching new products that combine our vision processors with optical sensor A device that measures or detects a real-world condition, such as motion, heat or light and converts the condition into an analog or digital representation. An optical sensor detects the intensity or brightness of light, or the intensity of red, green and blue for color systems. technology, thus allowing us to target end user markets that are much larger than those in which we currently compete." Normal course issuer bid The Company has received approval from the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. for the renewal of its normal course issuer bid for a period of one year ending March 7, 2002 to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. for cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. a maximum of 363,869 shares, representing approximately 5% of the 7,277,372 shares outstanding as of March 5, 2001. In the previous year, the Company purchased 70,600 shares at an average price of $4.79. To the best knowledge of Coreco, after reasonable inquiry, no director, senior officer or any of their associates, or any person acting jointly or in concert with Coreco, or any person holding 10% or more of the common shares of Coreco currently intends to sell common shares during the normal course issuer bid, with the possible exception of Mr. Daniel Crevier Daniel Crevier (born 1947) is a Canadian entrepreneur and artificial intelligence and image processing researcher. He is also the author of AI: the Tumultous History of the Search for Artificial Intelligence. In 1974 Crevier received a Ph.D. , a director of the Company. The normal course issuer bid has been renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. in that Coreco considers that the repurchase of common shares at certain market prices will be beneficial to Coreco and represents an appropriate use of its corporate funds. Webcast The Company's year-end results will be webcast on Q1234.com at 10 a.m. on Tuesday Tuesday: see week. , March 6, 2001. Coreco Inc. is a leader in the design, development, manufacturing and marketing of hardware and software for high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" computer vision applications, primarily in the medical imaging, machine vision and industrial inspection markets. The Company employs approximately 160 people and has operations in Montreal Montreal (mŏn'trēôl`), Fr. Montréal (môNrāäl`), city (1991 pop. 1,017,666), S Que., Canada, on Montreal island, surrounded by St. Lawrence River and Rivière des Prairies. (QC), Ottawa Ottawa, city, Canada Ottawa (ŏt`əwə), city (1991 pop. 313,987), capital of Canada, SE Ont., at the confluence of the Ottawa and Rideau rivers. Hull, Que. (ON), Vancouver Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. (BC) and Bedford Bedford, town, England Bedford, town (1991 pop. 75,632), county seat of Bedfordshire, central England, on the Ouse River. It is an important industrial center; diesel engines, pumps, turbines, agricultural machinery, electrical equipment, and transistors (MA), with additional sales offices in Cleveland Cleveland, former county, England Cleveland, former county, NE England, created under the Local Government Act of 1972 (effective 1974). It was composed of the county boroughs of Hartlepool and Teeside and parts of the former counties of Durham and (OH) and San Juan Capistrano San Juan Capistrano (săn wän kăpĭsträ`nō), city (1990 pop. 26,183), Orange co., S Calif.; inc. 1961. San Juan Capistrano has some manufactures, including aircraft parts, medical apparatus, and boats, but the economy is (CA). Founded in 1979, Coreco's success is driven by sound financial management combined with its commitment to the research and development of value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: products to serve the evolving needs of the computer vision market. This press release contains statements that are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. All figures reported in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents unless otherwise indicated.
CORECO INC.
CONSOLIDATED STATEMENTS OF EARNINGS
Three months ended Twelve months ended
December 31 December 31
2000 1999 2000 1999
---------------------------------------------------------------------
(audited)
Sales $10,832,155 $4,229,619 $31,519,288 $17,308,973
Cost of goods
sold 4,392,992 1,449,654 12,463,494 6,056,441
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Gross profit 6,439,163 2,779,965 19,055,794 11,252,532
Expenses:
Research and
development
expenditures 1,666,057 1,020,020 5,699,374 3,798,071
Less research tax
credits (369,918) (400,228) (1,670,942) (1,583,079)
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1,296,139 619,792 4,028,432 2,214,992
Selling and
marketing 1,718,381 589,752 5,205,041 2,540,163
General and
administrative 1,172,581 405,299 2,821,749 1,459,518
Depreciation and
amortization of
equipment and
leasehold
improvements 257,722 121,587 802,063 489,291
Financial, net 327,384 (154,170) (38,298) (595,764)
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4,772,207 1,582,260 12,818,987 6,108,200
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Earnings before
income taxes and
undernoted items: 1,666,956 1,197,705 6,236,807 5,144,332
Acquisition-related
charges * 2,118,570 3,272,484 4,330,701 3,907,096
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Earnings before
income taxes (451,614) (2,074,779) 1,906,106 1,237,236
Income taxes 484,279 (707,000) 2,207,277 458,000
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Net (loss) earnings $(935,893) $(1,367,779) $(301,171) $779,236
---------------------------------------------------------------------
---------------------------------------------------------------------
Earnings per share $(0.13) $(0.18) $(0.04) $0.11
Net earnings from
operations (**) $1,156,268 $755,641 $3,989,306 $3,224,518
---------------------------------------------------------------------
---------------------------------------------------------------------
Net earnings from
operations per
share, basic (**) $0.16 $0.10 $0.55 $0.44
Net earnings from
operations per
share, fully
diluted (**) $0.14 $0.10 $0.53 $0.44
Weighted average
number of shares
outstanding, basic 7,267,997 7,333,322 7,286,121 7,345,452
Weighted average
number of shares
outstanding, fully
diluted 7,825,747 7,641,963 7,757,836 7,549,243
(*) Includes the amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. related to acquisitions (**) Excludes the after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. amortization of intangibles related to acquisitions.
CORECO INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2000 and 1999
(audited)
2000 1999
---------------------------------------------------------------------
Assets
Current assets:
Cash $2,457,264 $76,883
Short-term investments - 14,845,591
Accounts receivable 8,145,390 3,078,162
Research tax credits recoverable 3,285,844 2,180,415
Inventories 5,576,996 3,283,718
Prepaid expenses 489,490 147,665
Future income taxes 751,700 -
---------------------------------------------------------------------
20,706,684 23,612,434
Capital assets 2,776,199 1,896,754
Investment, at cost 1,482,030 1,482,030
Goodwill 13,253,710 590,068
Future income taxes 170,925 96,000
Deferred financing charges 121,488 -
---------------------------------------------------------------------
$38,511,036 $27,677,286
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---------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities * $6,094,066 $1,702,283
Income taxes payable 2,622,241 565,703
Dividends payable - 183,333
Future income taxes 417,000 346,000
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9,133,307 2,797,319
Long-term debt 5,250,700 -
Future income taxes 190,000 187,000
Shareholders' equity:
Share capital 16,315,843 16,393,221
Cumulative translation adjustment 173,518 -
Retained earnings 7,447,668 8,299,746
---------------------------------------------------------------------
23,937,029 24,692,967
---------------------------------------------------------------------
$38,511,036 $27,677,286
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---------------------------------------------------------------------
* Including acquisition-related reserves
CORECO INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended Twelve months ended
December 31 December 31
2000 1999 2000 1999
---------------------------------------------------------------------
(audited)
Cash flows from
operating activities:
Net (loss) earnings $(935,893) $(1,367,779) $(301,171) $779,236
Adjustments for:
Depreciation and
amortization of
capital assets 257,722 121,587 802,063 489,291
Amortization of
goodwill 2,257,856 (12,753) 4,362,844 98,344
Amortization of
acquired software 35,714 174,819 142,857 698,334
Amortization of
deferred financing
fees 2,074 - 15,224 -
Write-off acquired
software - 2,689,333 - 2,689,333
Future income
taxes (158,628) (938,000) (68,628) (913,000)
Changes in operating
assets and
liabilities (304,168) (24,219) 996,933 (552,194)
---------------------------------------------------------------------
1,154,677 642,988 5,950,122 3,289,344
Cash flows from
financing activities:
Dividends paid - (183,333) (548,672) (551,175)
Repurchase of shares - - (348,097) (201,683)
Proceeds from
issuance of
common shares 85,150 - 85,150 -
Proceeds from
issue of long-term
debt - - 8,149,900 -
Repayment of
long-term debt (3,039,800) - (3,039,800) -
Financing fees - - (135,000) -
---------------------------------------------------------------------
(2,954,650) (183,333) 4,163,481 (752,858)
Cash flows from
investing activities:
Cash used for
business
acquisitions,
net of cash
required (504,583) (877,378) (21,967,539) (4,548,746)
Purchase of capital
assets (188,622) (87,457) (648,257) (592,096)
Net proceeds from
(purchases of)
disposal of short
-term investments - (673,192) 14,845,591 (2,393,145)
---------------------------------------------------------------------
(693,205) (1,638,027) (7,770,205) (7,533,987)
Effect of foreign
exchange rate changes 9,458 - 36,983 -
---------------------------------------------------------------------
Increase (decrease)
in cash during
the period (2,483,720) (1,178,372) 2,380,381 (4,997,501)
Cash, beginning
of period 4,940,984 1,255,255 76,883 5,074,384
---------------------------------------------------------------------
Cash, end of
period $2,457,264 $76,883 $2,457,264 $76,883
---------------------------------------------------------------------
---------------------------------------------------------------------
Cash position at
the end of the
period is:
Cash 2,457,264 76,883 2,457,264 76,883
Short-term
investments - 14,845,591 - 14,845,591
---------------------------------------------------------------------
$2,457,264 $14,922,474 $2,457,264 $14,922,474
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