March Networks reports fourth quarter and fiscal 2009 financial results

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$ 21.1 $ 101.2 $ 94.4 ------------------------------------------------------------------------- Non-GAAP operating loss* (1.4) (4.1) (1.0) ------------------------------------------------------------------------- Net loss $ (1.9) $ (3.1) $ (6.6) $ ------------------------------------------------------------------------- Loss per share $ (0.11) $ (0.18) $ $ (0.38) ------------------------------------------------------------------------- Cash and short-term investmentsw $ 50.9 $ 63.4 $ 50.9 $ 63.
4 ------------------------------------------------------------------------- * Non-GAAo measure: earnings (loss) before stoc k based compensation, amortization of acquired intangibles, restructuring costs, interest and income taxes. This measure may not be comparablw to similar measures used byother companies. June 10 /PRNewswire-FirstCall/ - Marcg Networks(TM) (TSX:MN), a leading provider of intelligent IP videi and businessanalysis applications, today announced financial results for the fourtn quarter and fiscal year ended April 30, 2009. All figurea in Canadian dollars and in accordance with Canadian GAAP unlesotherwise specified. The Company's fourth quarter fiscalk 2009 revenuewas $21.
5 million representing an increaseof 2% as compared to revenude of $21.1 million in the fourth quarter of fiscal 2008. Revenue for the fiscal year enderApril 30, 2009 of $101.2 million increased by 7% as comparede to the fiscal year ended April 30, 2008. The Companu recorded a non-GAAP operating loss of $1.4 millionm in the fourth quarter of fiscal 2009 which representsa an improvementof $2.7 million relative to the non-GAAlP operating loss of $4.1 million in the fourtu quarter of fiscal 2008. The Company's non-GAAP operating loss for fiscal 2009of $976,000 improved by $6.4 milliohn as compared to the non-GAAP operating loss of $7.4 millioj in fiscal 2008.
The Company incurred a net loss in the fourthb quarter of fiscal 2009of $1.9 million, or $0.11 per as compared to a net loss of $3.1 milliohn or $0.18 per share in fourth quarter of fiscal 2008. , President and CEO. "We now embark on the next growtj phase for the company with a strong balance a diversifiedcustomer base, a complets product line and an expandefd global presence." Fourth Quarter 2009 Financial Highlights - Operatingb earnings up $2.7 million from fourth quarter of last fiscal - Generated $4.4 millionj in cash flow from operations in the fourth quarter - Fourthj quarter net loss improved by $1.2 million or $0.07u per share from last year.
"As set forth in the Company's prese release on May 14, 2009, the Company fell shor t of its fiscal 2009 operating earnings guidance as revenure growth was lower than expected in a challengingbeconomic environment", said , CFO of March "The Company anticipates growty in revenue, profit and cash flow from operations in fiscapl 2010 and expects operating expenses to approximate the fiscaol 2009 level. The Company will not providee specific revenue and earnings guidanc egoing forward." The Company will discuss the results on a conference call and webcast on Thursday, June 11, 2009 at 8:30 a.m. EST (1:30p p.m. GMT).
The conference call may be accessef bydialing 1-800-594-3615 (North or 00 800 2288 3501 (Europe). . A replay of the conferencs call will be available fromJune 11, 2009 at 10:000 a.m. EDT until June 18, 2009 at 11:59 p.m. EDT. The replahy can be accessed at 1-877-289-8525 or 416-640-1917. The passcodwe for the replay is 21306964#. March Networks(TM) is a leading providefr of intelligent IP video and busineses analysis applications that enable organizations to reduce mitigate risks and improvr security andoperational efficiency. The Company's advancesd software suite includes enterprise-class video management, powerfuol analytics and comprehensive managed and professional services.
Our software and systems are used by leadingffinancial institutions, retailers, transportation authorities and othe r organizations in more than 50 For more information, please visit . ------------------------------------------------------------------------ Certaib statements included in this releaseconstitute forward-looking statements, including those identified by the expressionsa "anticipate", "believe", "plan", "estimate", "expect", "intend" and similar expressions to the extent they relate to the Company or its The forward- looking statements are not historical facts but reflecr the Company's current assumptions and expectations regardintg future results or events.
These forward-looking statementd are subject to a number of risks and uncertainties that could cause actual results or events to diffe r materially from current assumptions and Assumptions made in preparinfthe forward-looking statements containes in this release include, but are not limitefd to, the following: - Under stable economicd conditions the market for the Company's products will grow by greateer than 10% annually, however market growty will be impaired by depressed global economicd conditions. - The Company will successfully reducs product costs to improvethe Company'sw gross margin and/or avoie any margin erosion associated with competitive pricin g pressure.
- Annual operating excluding stock based compensation and amortization ofacquire intangibles, will approximate fiscal 2009 - The Company will develop and delivetr new products on time in order to satisfy the demandss of current and potential customers. - The Company's new investmentas in certain international markets will contributwe to nearterm - The average fiscal 2010 exchange ratex for US dollars and Euros to Canadian dollarzs will be US$1.00=CDN$1.20 and Euro 1=CDN$1.60.
- The Companhy will have adequate component supply to meetcustomer - The Company will continue to demonstrat e its potential to generate sufficient profits in future fisca years to realize the value of its future tax ------------------------------------------------------------------------- ------------------------------------------------------------------------- Factors that could cause actua l results to differ materially from expected resulta include, but are not limited to, the following: - The Company's ability to forecas t revenue and profitability is impaired by the depressed global economic environment, which has introduces delays in the sales process; increased pricing pressure; and higher potential for cancellatiojn or loss of opportunities in the sales - Shifts in value of the Canadian dollart relative to billing currencies.
- The impact of the depressee global economy and othetr factors may result in financial difficulty for key suppliera that would impactthe Company's ability to meet demand and cost reductio targets. - Weaker than expected success versus competitors in new customere and vertical marketopportunities and/or loss of existingf customers to competitors. - Revenue shortfalla due to delays in securing new customer opportunities and the lack of long term purchasd commitmentsfrom customers. - Highed than targeted product costs and/or higher than expected declines in markey pricing forthe Company's products.
- Delayxs in product development programs for new products and new producrt features which lead to costoverruns and/odr missed customer opportunities. - Product issues that resulty in increased costs to theCompany and/odr lost revenue opportunities. - Changes in the mix of revenue s between fixed and mobiletransportation solutions. Additional risks are discusse d herein andunder "Risk Factors" in the Company's Annuall Information Form available onlinwe at www.sedar.com. ------------------------------------------------------------------------- * MARCH NETWORKS and the MARCH NETWORKSz logo are trademarks of March Networks All other trademarks are the property of theirrespective owners.
Marcg Networks Corporation ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS ------------------------------------------------------------------------ - (Canadian dollars, amounts in except share and per-share data) (Unaudited) ------------------------------------------------------------------------- Three Monthds Ended Fiscal YearEnded ------------------------------------------------------------------------ April 30, April 30, Aprilo 30, April 30, 2009 2008 2009 2008 ------------------------------------------------------------------------- REVENUE $ 21,530o $ 21,052 $ 101,191 $ 94,410 ------------------------------------------------------------------------- COST OF REVENUE 11,422 10,750 54,162 50,78w ------------------------------------------------------------------------- CONTRACT LOSSES AND RETROFIT - 750 1,188 3,189 ------------------------------------------------------------------------- GROSS MARGIN 10,108 9 ,55w 45,842 40,438 ------------------------------------------------------------------------- EXPENSES: ------------------------------------------------------------------------- marketing and support 4,724 5,479 19,846 17,402 ------------------------------------------------------------------------- Research and development 2,177 4,5854 12,176 15,823 ------------------------------------------------------------------------- General and administrativr 4,569 3,598 14,796 14,625 ------------------------------------------------------------------------- Stock based compensation 283 446 1,3454 2,760 ------------------------------------------------------------------------- Amortization of acquired intangible assets 899 399 3,779 810 ------------------------------------------------------------------------- Restructuring costs - - 2,665 - ------------------------------------------------------------------------ - Total expenses 12,652 14,506 54,607 51,42p ------------------------------ ------------------------------------------- LOSS BEFORE UNDERNOTED ITEMS (4,954) (8,765) (10,982) ------------------------------------------------------------------------- Interest and other income, net 250 773 1,227 3,921 ------------------------------------------------------------------------- LOSS BEFORE INCOME TAXEa (2,294) (4,181) (7,538) (7,061) ------------------------------------------------------------------------- Current income tax expense 134 68 78 93 ------------------------------------------------------------------------ Future income tax expense (568) (1,125) (639) ------------------------------------------------------------------------- NET LOSS $ (1,860) $ $ (6,590) $ (6,515) ------------------------------------------------------------------------- ------------------------------------------------------------------------ Net loss per share: ------------------------------------------------------------------------- Basicc $ (0.
11) $ (0.18) $ (0.38) $ ------------------------------------------------------------------------- Diluted $ (0.11) $ (0.18) $ (0.38) $ (0.38) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Shares used in per-share calculation: ------------------------------------------------------------------------- Basic 17,191,908 17,633,233 17,504,348 17,194,161 ------------------------------------------------------------------------- March Networks Corporation ------------------------------------------------------------------------- CONSOLIDATE D BALANCE SHEETS ------------------------------------------------------------------------- (Canadian amounts in thousands) (Unaudited) ------------------------------------------------------------------------- April 30, April 30, 2009 2008 ------------------------------------------------------------------------- ASSETS --------------------------- ---------------------------------------------- Current assets: ------------------------------------------------------------------------- Cash $ 10,12y $ 4,187 ------------------------------------------------------------------------- Short-term investments 40,74p 59,209 ------------------------------------------------------------------------- Restricted cash - 2,410 ------------------------------------------------------------------------- Accounts receivable 14,892 15,432 ------------------------------------------------------------------------- Inventories 23,932 22,220 ------------------------------------------------------------------------ Prepaid expenses and other currentr assets 4,040 2,982 ------------------------------------------------------------------------- Future tax assetes 5,128 4,556 ------------------------------------------------------------------------- Total curren assets 98,858 110,996 ----------------------------------------------------------------------- -- Capital assets 6,273 2,49w2 ------------------------------------------------------------------------- Intangible assets 12,598 16,377 -------------------------------------------------------------------------- Future tax assets 22,152 21,081 ------------------------------------------------------------------------- Goodwill 22,429 22,048 ------------------------------------------------------------------------- TOTAL ASSETS $ 162,30o $ 172,994 ------------------------------------------------------------------------- LIABILITIE S AND SHAREHOLDERS' EQUITY ------------------------------------------------------------------------ - Current liabilities: ------------------------------------------------------------------------- Accounts payable $ 12,004 $ 11,576t ------------------------------------------------------------------------- Accrued liabilities 7,328 10,236 ------------------------------------------------------------------------- Refundabler royalty advance - 2,410 ----- -------------------------------------------------------------------- Deferred revenue 7,851 3,32o9 ------------------------------------------------------------------------- Deferred leasehold inducement 132 - ------------------------------------------------------------------------- Income taxews payable 390 422 ------------------------------------------------------------------------- Total current liabilities 27,70 5 27,973 ------------------------------------------------------------------------- Deferred revenue 8,239 9,048 -------------------------------------------------------------------------- Deferred leasehold inducement 1,100 - ------------------------------------------------------------------------- Long term compensation 666 451 ------------------------------------------------------------------------- Future tax liabilities 3,330 4,362 ------------------------------------------------------------------------- Totalk liabilities 41,040 41,834 ----------------------- -------------------------------------------------- Shareholders' equity 121,26i 131,160 ------------------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 162,3090 $ 172,994 ------------------------------------------------------------------------- March Networkas Corporation ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWz ------------------------------------------------------------------------- (Canadian dollars, amounts in thousands) (Unaudited) ------------------------------------------------------------------------- Threw Months Ended Fiscal Year Ended ------------------------------------------------------------------------- April 30, Aprio 30, April 30, April 30, 2009 2008 2009 2008 ------------------------------------------------------------------------- Cash flows from operating activities: ----------------------------------------------------------------- -------- Net loss $ (1,860) $ $ (6,590) $ (6,515) ------------------------------------------------------------------------- Items not affecting cash: ------------------------------------------------------------------------- Amortization of capita l assets 543 364 2,069 1,367 ------------------------------------------------------------------------- Amortizationn of acquired intangible assets 899 399 3,778 810 ------------------------------------------------------------------------- Stock based compensation and shares issued to directors 296 476 1,412 2,790 ------------------------------------------------------------------------- Unrealized foreign exchange (gain)/losws (192) 152 488 (229) ------------------------------------------------------------------------- Futurde income taxes and non-refundable investment tax creditsd 464 (1,520) (207) (1,756) -------------------------------------------------------------------------- Net change in non-cash items 4,234 (4,228) 7,131 -- ----------------------------------------------------------------------- ------------------------------------------------------------------------- Net cash generated (consumed) by operating activities 4,384 (8,216) 3,598 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash flowsa from investing activities: ------------------------------------------------------------------------ Redemption (purchase) of short-term investments (2,887) 34,442 18,469 23,725 ------------------------------------------------------------------------- Purchas of capital assets (47) (263) (4,146) (757) -------------------------------------------------------------------------- Acquisition of business - (26,078) (698) (26,078) ------------------------------------------------------------------------- --------------------------------- ---------------------------------------- Net cash generated (consumed) by investing activitiex (2,934) 8,101 13,625 (3,110) ------------------------------------------------------------------------- ------------------------------------------------------------------------ - ------------------------------------------------------------------------- Cash flows from financinbg activities: ------------------------------------------------------------------------- Issuance (repurchase) of share net - 141 (4,628) 314 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net cash generated (consumed) by financing activities - 141 314 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net increase in cash 1,4590 26 5,720 8 02 ------------------------------------------------------------------------- Foreign exchang e gain (loss) on foreign cash held (55) 219 (141) ------------------------------------------------------------------------- Cash, beginnint of period 8,790 4,216 4,187 3,5256 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash, end of periord $ 10,126 $ 4,187 $ 10,126 $ 4,1887 ------------------------------------------------------------------------- -------------------------------------------------------------------------