Coretec Announces Third Quarter 2005 Results.TORONTO Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing -- Coretec Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :CYY) today reported its financial results for the third quarter ended September September: see month. 30, 2005. The Company recorded sales from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $19.9 million in the quarter, an 8% decrease versus sales of $21.7 million in the third quarter of 2004, although a 1% increase sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen from the second quarter of 2005. Gross profit for the quarter was $4.0 million or 20% of sales compared to $5.4 million or 25% of sales in the third quarter of 2004. Sequentially, gross profit decreased $0.3 million from gross profit of $4.3 million or 22% of sales in the second quarter of 2005. The Company recorded a loss per share in the quarter of $0.08 compared to earnings per share of $0.03 in the third quarter of 2004 and sequentially, compared to a loss of $0.07 per share in the second quarter of 2005. In the third quarter of 2005 the Company recorded a charge of $0.5 million or $0.02 per share representing the costs associated with staff reductions. Included in the Q3 2005 loss was a gain from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $0.16 million or $0.01 per share. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
adj. 1. Almost exact or correct: the approximate time of the accident. 2. negative $0.4 million in the quarter, compared to positive free cash flow of $1.7 million in the third quarter of 2004 and free cash flow of $0.0 million in the second quarter of 2005. "Market conditions at the beginning of Q3 2005 were very challenging, affecting all of our plants. We reacted to the market softness by reducing staff in Toronto, instituting a shortened short·en v. short·ened, short·en·ing, short·ens v.tr. 1. To make short or shorter. 2. work week at our Denver Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. site and by implementing a 10 day plant shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down at our 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 plant. As well, we are pleased to report that activity levels have increased since mid August and have continued to be strong, particularly at our Toronto site," said Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. Langston Langston is the name of two places in the United States:
"Price compression Price compression The limitation of the price appreciation potential for a callable bond in a declining interest rate environment, based on the expectation that the bond will be redeemed at the call price. in the quarter was a factor in the results at both our Toronto and Denver plants, particularly in the Defense and Aerospace end markets. Additionally, the weak US Dollar vis-a-vis the Canadian Dollar 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 has negatively impacted our Toronto shipments whereas the US Dollar - British Pound exchange rate has hurt our Denver operation. Offsetting this was a meaningful improvement in both operational and financial metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. at our Cleveland facility, which achieved positive cash flow during the quarter," continued Mr. Langston. Coretec is one of the leading designers and fabricators of Restriction restriction - A bug or design error that limits a program's capabilities, and which is sufficiently egregious that nobody can quite work up enough nerve to describe it as a feature. of Hazardous Substances (RoHS) compliant
A first or original model of hardware or software. Prototyping involves the production of functionally useful and trustworthy systems through experimentation with evolving systems. and quick turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. production segments of the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. and European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. markets. Coretec distinguishes itself from its competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. by providing complete printed circuit board solutions, including design, advanced prototyping (1) Creating a demo of a new system. Prototyping is essential for clarifying information requirements. The design of a system (functional specs) must be finalized before the system can be built. and quick turnaround production across an outstanding range of product technologies. This news release may include statements about future expectations, plans and prospects that may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Please be cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties. Actual results or developments may vary materially from those projected or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in the forward-looking statements as a result of any number of factors, including currency exchange rate fluctuations; variability of operating results; dependence on certain industries; management of growth and expansion; integration of operations; ability to attract and retain key personnel; nature of sales; product complexity and product defects; international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. ; material cost fluctuations and limited availability When customers of the PSTN make telephone calls, they commonly make use of a telecommunications network called a switched-circuit network. In a switched-circuit network, devices known as switches are used to connect the caller to the callee. of raw materials; potential loss of customers; competition; industry contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction and slow economic growth; technological change and process development; environmental liability; need for additional financing; product liability; pricing pressure; ability to reduce costs; and other risks listed in Coretec's public disclosure documents and other filings with securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities found at www.sedar.com.
CONSOLIDATED BALANCE SHEETS
(in thousands - unaudited)
September 30, December 31,
2005 2004
$ $
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ASSETS
Current
Cash 314 354
Accounts receivable 12,819 13,903
Inventories 4,513 5,002
Income taxes recoverable - 631
Prepaid expenses 1,611 1,752
Note receivable from discontinued
operations - 1,524
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Total current assets 19,257 23,166
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Long-lived assets held for sale 2,129 -
Property, plant and equipment, net 26,005 30,193
Other assets 769 386
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48,160 53,745
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness 1,986 1,608
Accounts payable and accrued liabilities 8,329 9,969
Current portion of long-term debt 4,233 5,044
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Total current liabilities 14,548 16,621
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Long-term debt 2,981 3,406
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Total liabilities 17,529 20,027
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Shareholders' equity
Share capital 61,029 60,992
Contributed surplus 655 340
Deficit (31,053) (27,614)
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Total shareholders' equity 30,631 33,718
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48,160 53,745
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CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands - unaudited)
Three months ended Nine months ended
September 30, September 30,
2005 2004 2005 2004
$ $ $ $
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Sales 19,926 21,693 58,993 61,095
Cost of sales 15,902 16,300 46,599 44,186
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Gross profit 4,024 5,393 12,394 16,909
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Expenses
Selling, general and
administrative 3,705 3,123 10,173 9,305
Depreciation and amortization 1,419 1,624 4,444 4,958
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5,124 4,747 14,617 14,263
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Income (loss) from continuing
operations (1,100) 646 (2,223) 2,646
Terminated merger costs 42 - 576 -
Interest and other expenses 255 261 762 639
Foreign exchange loss (gain) 17 (210) 159 (228)
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Income (loss) before income taxes (1,414) 595 (3,720) 2,235
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Provision for income taxes - 13 - 33
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Income (loss) from continuing
operations (1,414) 582 (3,720) 2,202
Income (loss) from discontinued
operations 160 (4,710) 281 (5,127)
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Net loss for the year (1,254) (4,128) (3,439) (2,925)
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Earnings (loss) per share:
From continuing operations,
basic and diluted $(0.08) $0.03 $(0.20) $0.12
Net loss per share, basic and
diluted $(0.07) $(0.22) $(0.18) $(0.16)
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CONSOLIDATED STATEMENTS OF DEFICIT
(in thousands - unaudited)
Quarters ended September 30
2005 2004
$ $
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Deficit, beginning of year (27,614) (25,832)
Net loss, further period (3,439) (2,925)
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Deficit, end of period (31,053) (28,757)
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands - unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2005 2004 2005 2004
$ $ $ $
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OPERATING ACTIVITIES
Income (loss) for
the year from
continuing operations (1,414) 582 (3,720) 2,202
Non-cash items
Depreciation 1,419 1,624 4,444 4,958
Stock-based compensation 106 86 315 208
Unrealized foreign
exchange loss 108 11 635 139
Amortization of deferred
finance charges 54 38 161 95
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273 2,341 1,835 7,602
Net change in non-cash
working capital balances
related to operations 211 (1,550) 123 (4,464)
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Cash provided by
operating activities 484 791 1,958 3,138
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FINANCING ACTIVITIES
Increase of long-term debt - - - 4,454
Repayment of long-term debt (632) (718) (1,301) (2,248)
Increase
in bank indebtedness 1,177 546 378 72
Increase in share capital 21 - 37 14
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Cash (used in) provided
by financing activities 567 (172) (886) 2,292
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INVESTING ACTIVITIES
Purchase of capital assets (524) (508) (2,385) (1,458)
Increase
in other assets (606) (40) (544) (324)
Advance to Proto Circuit - - - (3,798)
Acquisition of Proto Circuit - - - (236)
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Cash used in investing
activities (1,130) (548) (2,929) (5,816)
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Effect of exchange rate
changes on cash 5 5 12 (13)
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Net increase (decrease)
in cash during the period (74) 76 (1,845) (399)
Change in cash from
discontinued operations 306 (477) 1,805 (432)
Cash, beginning of period 82 912 354 1,342
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Cash, end of period 314 511 314 511
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Supplemental cash
flow information
Interest paid 183 140 659 476
Income taxes paid - - 63 144
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Coretec Inc.
Selected Financial Information (000's)
%
% Change YTD YTD %
Q3/05 Q3/04 Change Q2/05 Q2/Q1 05 04 Change
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Continuing
operations:
Revenue 19,926 21,693 -8% 19,718 1% 58,993 61,095 -3%
Gross
Profit 4,024 5,393 -25% 4,275 -6% 12,394 16,909 -27%
Income
(loss) -1,414 582 -343% -1,365 4% -3,720 2,235 -266%
Reconciliation of EBITDA from continuing operations
%
% Change YTD YTD %
Q3/05 Q3/04 Change Q2/05 Q2/Q1 05 04 Change
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-
Income
(loss) for
the period
from
continu-
ing
opera-
tions (1,414) 582 (1,365) -3,720 2,235
Add/
(Deduct):
Interest 255 261 259 762 639
Deprecia-
tion and
amortiza-
tion 1,419 1,624 1,498 4,444 4,958
Provision
for
income tax - 13 - - 33
Abandoned
merger
costs 42 - 534 576 -
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EBITDA from
continuing
operations 302 2,480 -88% 926 -67% 2,062 7,865 -74%
Reconciliation of Free Cash Flow from continuing operations
%
% Change YTD YTD %
Q3/05 Q3/04 Change Q2/05 Q2/Q1 05 04 Change
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-
Income
(loss) for
the period
from
continu-
ing
opera-
tions (1,414) 582 (1,365) -3,720 2,235
Add:
Depreci-
ation and
amorti-
zation 1,419 1,624 1,498 4,444 4,958
Amorti-
zation of
deferred
finance
charges 54 38 54 161 95
Abandoned
merger
costs 42 - 534 576 -
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101 2,244 721 1,461 7,288
Deduct:
Capital
expendi-
tures (524) (508) (703) -2,385 -1,458
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Free Cash
Flow from
continuing
operations -423 1,736 -124% 18 2450% -924 5,830 -116%
-EBITDA and free cash flow are not measures recognized under Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). EBITDA is calculated as earnings before interest and certain other expenses, provision for income taxes, depreciation and amortization and impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) . Free cash flow is calculated as net income plus depreciation and amortization and impairment of capital assets less capital expenditures. Management believe that many of the Company's shareholders, creditors, other stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. and analysts prefer to assess the Company's performance using EBITDA and free cash flow in addition to the GAAP measures. The Company's method of calculating EBITDA and free cash flow may differ from other companies and accordingly may not be comparable to measures used by other companies. Coretec Inc. (TSX:CYY) |
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