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Eurocontrol Reports Year End 2015 Results
TORONTO, ONTARIO--(Marketwired - May 2, 2016) - Eurocontrol Technics Group Inc. (TSX VENTURE:EUO) ("Eurocontrol" or the "Company"), a Canadian public company specializing in the acquisition, development and commercialization of innovative security, authentication, verification and certification technologies, announces that it has filed its audited financial statements and Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2015.
Readers are encouraged to refer to the MD&A filed on May 2, 2016 which replaces the MD&A that was filed on April 29, 2016. The May 2, 2016 MD&A amends and restates and supersedes, the Company's MD&A filed on April 29, 2016, which contained numerous typographical errors throughout the document and excluded several other disclosure changes. For this reason, the April 29th MD&A should not be relied upon and readers should refer only to the May 2nd document.
The year end results reflect a 33% increase in fiscal year revenue, including discontinued operations, to $7,909,442 compared to $5,956,733 for the year ended December 31, 2014. The Company recognized EBITDA of $161,791 ($415,983 in 2014) and a deferred tax gain of $2,109,000 ($nil in 2014) resulting in net income of $1,627,042 for the year (net loss of $246,365 in 2014). Included below is a summary table outlining earnings for the fiscal year and for the three month period compared to the corresponding 2014 period which is followed by a description of recent developments in relation to discontinued operations.
On January 4, 2016, the Company closed the sale of its wholly owned subsidiary, Global Fluids International (GFI) S.A. ("GFI") to SICPA Finance SA ("SICPA"), a subsidiary of SICPA SA, each a privately owned company based in Switzerland, in exchange for cash and post-closing earn-out payments and certain additional payments. In accordance with International Financial Reporting Standards ("IFRS"), the 2015 financial statements and MD&A are presented on an adjusted basis to include discontinued operations. For a reconciliation of discontinued operations, readers should refer to MD&A sections "Adjusted Revenue and Profit from Continuing Operations" and "Reconciliation of IFRS to Adjusted Results".
Bruce Rowlands, Chairman and Chief Executive Officer stated: "With record revenues in 2015 and Eurocontrol's sale of GFI, 2016 is a transformational year for Eurocontrol. We're looking forward to revenue growth in the future through our ongoing relationship with SICPA / GFI both in earn-out revenue and through Xenemetrix's exclusive supply agreement, organically through our increased R&D investment in Xenemetrix's and XwinSys's leading edge technologies as well as growing revenues through acquisition."
Three Months Ended Year Ended December 31, December 31, 2015 2014 2015 2014 $ $ $ $ Revenue: - from continuing operations 402,312 316,256 1,271,111 1,508,391 - from discontinued operations 1,848,245 1,137,969 6,638,331 4,448,342 Total revenue 2,250,557 1,454,225 7,909,442 5,956,733 Cost of sales: - from continuing operations Cost of sales - direct production costs (273,456 ) (192,526 ) (657,012 ) (749,398 ) Cost of sales - amortization and other non cash items (44,348 ) (44,348 ) (177,393 ) (177,393 ) (317,804 ) (236,874 ) (834,405 ) (926,791 ) - from discontinued operations Cost of sales - direct production costs (727,813 ) (549,292 ) (2,272,288 ) (1,878,147 ) Cost of sales - amortization and other non cash items (68,951 ) (68,952 ) (275,809 ) (275,810 ) (796,764 ) (618,244 ) (2,548,097 ) (2,153,957 ) Gross profit - continuing operations 84,508 79,382 436,706 581,600 Gross profit - discontinued operations 1,051,481 519,725 4,090,234 2,294,385 Expenses - continuing operations (1,568,736 ) (607,167 ) (4,267,901 ) (2,460,270 ) Expenses - discontinued operations (182,458 ) (171,746 ) (869,820 ) (667,375 ) Other (expense) income - continuing operations (90,631 ) (319 ) 98,172 (37,405 ) Other (expense) income - discontinued operations 9,341 30,239 58,554 71,440 Income tax expense - discontinued operations (9,212 ) (12,460 ) (27,903 ) (28,740 ) Deferred income tax gain - continuing operations 2,109,000 - 2,109,000 - Net income (loss) - continuing operations 534,141 (528,104 ) (1,624,023 ) (1,916,075 ) Net income (loss) - discontinued operations 869,152 365,758 3,251,065 1,669,710 Net income (loss) 1,403,293 (162,346 ) 1,627,042 (246,365 ) EBITDA (540,772 ) 13,055 161,790 415,983 EBIT (679,372 ) (125,787 ) (386,756 ) (118,774 )
2015 Financial and Operating Highlights *
Achieved record annual gross profit of $4,526,939 (includes discontinued operations), an increase of 57% from 2014 Recognized EBITDA of $161,791 compared to $415,983 in 2014 Recognized income of $1,627,042 compared to a loss of $246,365 for the 2014 fiscal year Investment in R&D increased by 150% to $1,636,245 towards developing the integration of our ED-XRF technology with automated 2D and 3D image processing technologies for the Semiconductor and related microelectronics industries
Fourth Quarter Financial and Operating Highlights *
Achieved quarterly revenue of $2,250,557 (includes discontinued operations), an increase of 55% compared to the 2014 fourth quarter Recognized EBITDA of ($540,771) compared to $13,055 for the 2014 fourth quarter
* Certain comparative figures have been reclassified to conform to the current year's presentation. These reclassifications did not affect prior years' net losses.
On January 4, 2016, the Company closed the sale of its wholly owned subsidiary, GFI, to SICPA in exchange for cash and post closing earn-out and additional payments. As a key part of the transaction, the Company, through its wholly owned subsidiary, Xenemetrix, entered into a strategic exclusive long term supply, maintenance and support agreement, pursuant to which Xenemetrix will continue to supply to GFI, Xenemetrix's products and services currently used by GFI in its business, in each case, on an exclusive basis within the oil and gas marking and monitoring field of GFI's current operations. The consideration paid to the Company for the sale of GFI is as follows:
Cash of $16 million less the $250,000 deposit received by the Company and $395,595 in transaction payments. Post closing earn-out payments equal to 5% of the net revenues earned by GFI from contracts entered into by it following the execution of the Purchase Agreement and during the period ending January 4, 2022, with a minimum guaranteed of $1.5 million per year for the six year earn-out period (total payment of at least $9,000,000). Additional post closing payments equal to 5% of the net revenues earned by GFI from contracts signed during the fourth through sixth years following closing paid until the third anniversary of such contracts. The settlement of intercompany loan amounts owing by Eurocontrol to GFI.
About Eurocontrol Technics Group Inc.
Eurocontrol is a TSX Venture listed company that specializes in the acquisition, development and commercialization of innovative authentication, verification and certification technologies. Eurocontrol has two wholly owned subsidiaries, Xenemetrix Ltd. and XwinSys Technology Development Ltd. Xenemetrix is a leading designer, manufacturer and marketer of ED-XRF systems, a technology that is the most accurate and economic method for determining the chemical composition of many types of materials, including the analysis of petroleum oils and fuel. Xenemetrix has an exclusive long-term supply, maintenance and support agreement with SICPA/GFI to supply SICPA/GFI with Xenemetrix products and services related to the oil and gas marking and monitoring field. XwinSys is in the final stage of developing a fully automated metrology system for the semiconductor industry that combines 2D and 3D image processing technology with Xenemetrix's ED-XRF technology.
For further information on Eurocontrol, please visit the Company's website at www.eurocontrol.ca.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
This press release contains forward-looking statements. More particularly, this press release contains statements. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", anticipate", "estimate", "may", "will", "would", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. The forward-looking statements are based on certain key expectations and assumptions made by Eurocontrol. Although Eurocontrol believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Eurocontrol can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. In addition to other risks that may affect the forward-looking statements in this press release are those set out in Eurocontrol's management discussion and analysis of the financial condition and results of operations for the year ended December 31, 2015 which are available on the Corporation's profile at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and Eurocontrol undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.