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Press Release Source: Manaris Corporation
Manaris Corporation Announces Year-End Results: Progress Made in
Refining Strategic Objectives, Cleaning Up Balance Sheet and
Assisting Subsidiaries in Achieving Respective Goals
Tuesday October 3, 8:00 am ET
MONTREAL, QUEBEC--(MARKET WIRE)--Oct 3, 2006 -- Manaris Corporation
(OTC BB:MANS.OB - News) (FRANKFURT WKN: 255471), today reported
financial results for its fiscal year ended June 30, 2006.
ADVERTISEMENT
"2006 was without a doubt a year of transformation for Manaris. We
emerged from fiscal 2006 with a clear strategy and enhanced focus
on our core subsidiaries," said John G. Fraser, President and Chief
Executive Officer. "During the year, we exited the professional
services business by ceasing operations of Canadian Security Agency
(CSA) in September 2005 and selling Chartrand Laframboise Inc.
(CLI) in February 2006. These transactions also strengthened our
balance sheet."
Mr. Fraser continued: "We acquired the manufacturing assets and
business of ITF Optical Technologies Inc. (ITF) which provided
Avensys, one of Manaris' subsidiaries, with access to ITF's 10,000
square foot clean room. We have already realized economies of scale
from this acquisition and expect that the resulting new customer
base and additional specialized knowledge will lead to future
significant growth for Avensys."
During the same fiscal period, C-Chip Technologies (North America),
the Company's other subsidiary, invested in reengineering its risk
management device and launched two new generations: C-Chip 100 in
September 2005, the improved version utilizing AMPS (the analogue
network) and C-Chip 200G in March 2006, the GSM-based device. The
latter was developed in response to the U.S.'s imminent shift from
AMPS to the GSM standard. Market demand has been strong for the
C-Chip 200G and monthly sales have increased from 1,000 units in
May 2006 to 2,000 in the month of August alone. Although
distribution has been constrained by supply chain issues, they have
subsequently been resolved and we expect sales to increase
significantly over the coming months.
Fourth Quarter and Year-End Results
Revenues for the year ended June 30, 2006 increased to $10.50M
compared to revenues of $3.58M for the same period a year ago. Net
loss for the year ended June 30, 2006 increased to $14.10M, or
$0.20 per diluted share, compared to $6.21M, or $0.14 per diluted
share, for the year ended June 30, 2005.
Revenues for the three months ended June 30, 2005 increased to
$3.44M compared to revenues of $1.97M for the same period a year
ago. Net income for the three month period ended June 30, 2006 was
$0.07M, or $0.00 per diluted share, attributable to a $2.75M
partial reversal of an estimated goodwill impairment charge taken
during the quarter ended March 31, 2006, compared to $3.22M net
loss, or $0.07 loss per share, for the three months ended June 30,
2005.
Net loss for the year was primarily due to an impairment of
goodwill, debenture accretion, interest expenses as well as
increases in marketing and sales expenses arising out the inclusion
of Avensys' operations for a full fiscal year; and professional
fees related to increased use of accounting, audit and legal
services. Following an annual goodwill impairment test, we
determined that the carrying value of goodwill exceeded its
estimated fair value. As a result, the Company recorded Losses on
Impairment of Goodwill totaling $1.53M for the year ended June 30,
2006. This amount is believed to be related to an extension of the
timeline for achieving forecasted growth objectives and anticipated
cash flows from Avensys and does not reflect the Company's
confidence in this subsidiary.
Appointments
During fiscal 2006, the Company announced the appointment of John
G. Fraser as CEO in September 2005 following the resignation of
Stephane Solis.
In support of Manaris' focus on meeting set objectives established
in fiscal 2005, new Board members were appointed including Jos
Wintermans in November 2005, Bernard Bougie in December 2005, and
Marc Bouchard in January 2006, and with the ITF transaction, John
H. Simons in May 2006. In August 2006, Mr. Simons was appointed
Chairman of the Board replacing Robert Clarke who resigned from the
Board after three years of service.
In January 2006, Manaris appointed PricewaterhouseCoopers LLP
(Montreal) as its auditors.
Following the resignation of Andre Monette as Chief Financial
Officer on September 13, 2006, the Board appointed John Fraser as
interim CFO.
Fiscal 2007 Priorities
With a refocus on core activities essentially complete, our primary
objective for our subsidiaries is revenue growth. We expect to
realize our goals with Avensys as it integrates the business of ITF
Optical and with C-Chip as it meets market demand for its C-Chip
200G device. We remain committed to improved profitability
resulting from cost containment measures while evaluating
strategies for converting revenue growth into increased shareholder
value.
CONFERENCE CALL
Manaris Corporation will hold a conference call to discuss these
results on Wednesday, October 4th at 10:00 A.M. Eastern Time.
Interested parties can join the call by dialing 514-807-8791 or
1-866-250-4665. If you are unable to call in at this time, you may
access a copy of the call by visiting the Company's website
www.manariscorp.com.
Financial Highlights
Fiscal Year Ended June 30,
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2006 2005 Change
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$ $ $
Revenue 10,498,505 3,580,619 6,917,886
Cost of Revenue 7,464,710 2,306,458 5,158,252
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Gross margin 3,033,795 1,274,161 1,759,634
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Gross Margin as % of Revenue 29% 36%
Operating expenses
Depreciation and amortization 979,635 373,905 605,730
Selling, general and
administration 6,447,065 3,243,653 3,203,412
Acquired in-process research
and development - 386,749 (386,749)
Loss on disposal of long-lived
assets - 15,487 (15,487)
Loss on impairment of Goodwill 1,529,767 - 1,529,767
Loss on impairment of
Intangible Assets 107,715 117,199 (9,484)
Research and development 1,106,259 731,865 374,394
Stock based compensation 490,795 1,216,542 (725,747)
Contingency for litigation
losses - 192,549 (192,549)
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Total Operating expenses 10,661,236 6,277,949 4,383,287
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Operating gain (loss) (7,627,441)(5,003,788) (2,623,653)
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Other income (expenses) (4,771,904) (808,734) (3,963,170)
Income tax benefits
- refundable tax credits 351,242 65,228 286,014
Non-Controlling interest (3,977) (1,257) (2,720)
Results of discontinued
operations 149,637 (459,251) 608,888
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Net loss for the year (11,902,443)(6,207,802) (5,694,641)
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Effect of reduction in
exercise price of outstanding
warrants (2,197,296) - (2,197,296)
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Net loss applicable to
common shareholders (14,099,739)(6,207,802) (7,891,937)
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Notes:
1- The results of the operations include the accounts of the
Company and its wholly-owned subsidiaries.
2- Operating results for Avensys were included from the date of
acquisition of February 28, 2005, in fiscal year 2005, and for
twelve months in fiscal year 2006.
3- The operating results of the ITF acquisition are included in the
operating results from April 18, 2006."
About Manaris Corporation
Manaris Corporation, through its two wholly-owned subsidiaries,
offers risk mitigation solutions. C-Chip Technologies (North
America) specializes in the high-tech sector of the security
industry, offering technology that allows business users to
efficiently access, control, manage and monitor remote assets at
low cost. Avensys enables businesses to monitor different types of
environments, including air, soil and water, as well as buildings
and materials. Avensys also produces fiber optic components and
sensors. For more information please visit www.manariscorp.com.
Contact:
Contacts:
Manaris Corporation
John Fraser
President and CEO
514-337-2447
jgfraser@manariscorp.com
Zenergy Communications
Linda Farha
514-273-4034
linda@zenergycom.com
.