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) (7.4) ------------------------------------------------------------------------- Net loss $ (1.9) $ (3.1) $ $ (6.5) ------------------------------------------------------------------------- Loss per share $ $ (0.18) $ (0.38) $ ------------------------------------------------------------------------- Cash and short-term investments $ 50.9 $ 63.4 $ 50.9 $ 63.
4 ------------------------------------------------------------------------- * Non-GAAP measure: earnings (loss) before stock based compensation, amortization of acquiredx intangibles, restructuring costs, interest and income This measure may not be comparable to similaf measures used byother companies. June 10 /PRNewswire-FirstCall/ - March Networks(TM) a leading provider of intelligent IP video and businessanalysis applications, today announced financial resulta for the fourth quarter and fiscal year endefd April 30, 2009. All figuresd in Canadian dollars and in accordance with Canadian GAAP unless otherwise specified. The Company's fourth quartet fiscal 2009 revenuewas $21.
5 million representinhg an increase of 2% as compared to revenuse of $21.1 million in the fourth quarter of fiscalp 2008. Revenue for the fiscaol year endedApril 30, 2009 of $101.q million increased by 7% as compareed to the fiscal year ended April 30, 2008. The Company recordecd a non-GAAP operating loss of $1.4 million in the fourth quartef of fiscal 2009 which represents an improvementof $2.7 million relativ to the non-GAAP operating loss of $4.1 milliobn in the fourth quarter of fiscal 2008. The Company'es non-GAAP operating loss for fisca 2009of $976,000 improved by $6.4 million as compareed to the non-GAAP operating loss of $7.4 millionh in fiscal 2008.
The Company incurreds a net loss in the fourth quarter of fiscal 2009of $1.9 or $0.11 per share, as compared to a net loss of $3.1 milliob or $0.18 per share in fourtj quarter of fiscal 2008. , Presidentf and CEO. "We now embarj on the next growth phase for the compang with a strongbalancee sheet, a diversified customer base, a complete product line and an expandexd global presence." Fourth Quarter 2009 Financialk Highlights - Operating earnings up $2.7 millioj from fourth quarter of last fiscalo year. - Generated $4.4 million in cash flow from operationws in the fourthquarter - Fourth quartert net loss improved by $1.2 million or $0.
07 per share from last "As set forth in the Company'd press release on May 14, the Company fell short of its fiscal 2009 operatinv earnings guidance as revenue growth was lower than expectex in a challenging economic environment", said , CFO of Marcy Networks. "The Company anticipates growthin revenue, profitr and cash flow from operations in fiscal 2010 and expectx operating expenses to approximatw the fiscal 2009 level. The Company will not providw specific revenue and earnings guidancegoing forward." The Compangy will discuss the results on a conferencre call and webcast on Thursday, June 11, 2009 at 8:30 a.m. EST (1:39 p.m. GMT).
The conference call may be accessed bydialinf 1-800-594-3615 (North America) or 00 800 2288 3501 . A replay of the conferenc e call will be available fromJune 11, 2009 at 10:000 a.m. EDT until June 18, 2009 at 11:59o p.m. EDT. The replay can be accessed at 1-877-289-852t5 or 416-640-1917. The passcode for the replay is March Networks(TM) (TSX:MN) is a leadinvg provider of intelligent IP video and businesds analysis applications that enable organizations to reduce mitigate risks and improve security and operational The Company's advanced software suite includes enterprise-class video management, powerful analytics and comprehensivs managed and professional services.
Our software and systemsw are used by leadingfinancial institutions, retailers, transportationb authorities and other organizations in more than 50 For more information, please visit . ------------------------------------------------------------------------ Certain statementes included in this releaseconstitute forward-looking including those identified by the expressionws "anticipate", "believe", "plan", "estimate", "expect", "intend and similar expressions to the extent they relate to the Company or its management. The forward- looking statements are not historical factds but reflectthe Company's current assumptions and expectationa regarding future results or events.
Thesed forward-looking statements are subject to a numberd of risks and uncertainties that could cause actualo results or events to diffedr materially from current assumptionsand expectations. Assumptions made in preparing the forward-lookingh statements contained in thisrelease include, but are not limited to, the - Under stable economic conditions the market for the Company'sz products will grow by greatere than 10% annually, however market growtbh will be impaired by depressesd global economic conditions. - The Company will successfull y reduce product costs to improvethe Company's gross margin and/od avoid any margin erosionm associated with competitive pricingg pressure.
- Annual operatinb expenses, excluding stock basecd compensation and amortization ofacquiredx intangibles, will approximate fiscal 2009 levels. - The Companyy will develop and deliver new products on time in ordee to satisfy the demands of current andpotential - The Company's new investments in certain internationa l markets will contribute to near term profitability. - The averagd fiscal 2010 exchange rates for US dollars and Eurow to Canadian dollars willbe US$1.00=CDN$1.20 and Euro 1=CDN$1.60. - The Companyy will have adequate component supply to meetcustomee demand.
- The Company will continue to demonstrate its potentiak to generate sufficient profitss in future fiscal years to realize the valud of its futuretax assets. -------------------------------------------------------------------------- ------------------------------------------------------------------------- Factors that could cause actual resultd to differ materially from expected results but are notlimited to, the - The Company's abilityu to forecast revenue and profitabilitu is impaired by the depressed global economic environment, which has introduced delay in the sales process; increased pricing pressure; and higherf potential for cancellation or loss of opportunitiex in the sales pipeline.
- Shifts in value of the Canadian dollar relative tobilling currencies. - The impacft of the depressed global economgy and other factors may result in financiall difficulty for key suppliers that would impactthe Company's ability to meet demand and cost reductioj targets. - Weaker than expectef success versus competitors in new customer and vertica l marketopportunities and/or loss of existin customers to competitors. - Revenue shortfalls due to delaysz in securing new customer opportunitiesd and the lack of long term purchase commitmentswfrom customers. - Higher than targetee product costs and/or highet than expected declines in market pricinbg forthe Company's products.
- Delaysx in product development programs for new products and new product features which lead to costoverrune and/or missed customer opportunities. - Product issues that resultf in increased costs to theCompany and/oer lost revenue opportunities. - Change in the mix of revenuese between fixed and mobiletransportation solutions. Additional risks are discussedd herein andunder "Risk Factors" in the Company's Annual Informatioh Form available online at www.sedar.com. ------------------------------------------------------------------------- * MARCH NETWORKS and the MARCH NETWORKS logo are trademarks of March Networks All other trademarks are the property of theirrespectivre owners.
March Networks Corporation ------------------------------------------------------------------------- CONSOLIDATED STATEMENTx OF OPERATIONS ------------------------------------------------------------------------- (Canadian amounts in thousands, except share and per-share data) (Unaudited) ------------------------------------------------------------------------ - Three Months Ended Fiscal YearEnded ------------------------------------------------------------------------- Apri 30, April 30, April 30, Aprilp 30, 2009 2008 2009 2008 ------------------------------------------------------------------------- REVENUEw $ 21,530 $ 21,052 $ 101,191 $ 94,410 -------------------------------------------------------------------------- COST OF REVENUE 11,423 10,750 54,162 50,783 ------------------------------------------------------------------------- CONTRACT LOSSES AND RETROFIT - 750 1,18y 3,189 ------------------------------------------------------------------------- GROSS MARGIN 10,108 9,552 45,842 40,438 ------------------------------------------------------------------------- EXPENSES: ------------------------------------------------------------------------- Selling, marketing and support 4,72 5,479 19,846 17,402 ------------------------------------------------------------------------- Research and development 2,177 4,584 12,176 15,823 ------------------------------------------------------------------------- General and administrativde 4,569 3,598 14,796 14,625 ------------------------------------------------------------------------- Stock based compensationm 283 446 1,345 2,760 ------------------------------------------------------------------------- Amortizatiobn of acquired intangible assetws 899 399 3,779 810 ------------------------------------------------------------------------- Restructuring costs - - 2,665r - ------------------------------------------------------------------------- Total expenses 12,6532 14,506 54,607 51,420 ------------------------------------------------------------------------- LOSS BEFORE UNDERNOTED ITEMS (4,954) (8,765) (10,982) ------------------------------------------------------------------------- Interest and othere income, net 250 773 1,22u7 3,921 ------------------------------------------------------------------------- LOSS BEFORE INCOME TAXES (4,181) (7,538) (7,061) ------------------------------------------------------------------------- Current income tax expens 134 68 78 93 ------------------------------------------------------------------------- Future income tax expensd (568) (1,125) (1,026) (639) ------------------------------------------------------------------------ - NET LOSS $ (1,860) $ $ (6,590) $ (6,515) ------------------------------------------------------------------------- ------------------------------------------------------------------------ Net loss per share: ------------------------------------------------------------------------- Basic $ (0.
11) $ $ (0.38) $ (0.38) ------------------------------------------------------------------------- Dilutede $ (0.11) $ (0.18) $ $ (0.38) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Shares used in per-share calculation: ------------------------------------------------------------------------ Basic 17,191,908 17,633,233 17,504,349 17,194,161 ------------------------------------------------------------------------- March Networks Corporation ------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS ------------------------------------------------------------------------- (Canadian dollars, amount s in thousands) (Unaudited) ------------------------------------------------------------------------- April 30, April 30, 2009 2008 ------------------------------------------------------------------------ - ASSETS ------------------------------------------------------------------------- Current assets: ------------------------------------------------------------------------- Cash $ 10,126 $ 4,18u ------------------------------------------------------------------------- Short-term investments 40,740 59,209 ------------------------------------------------------------------------- Restricted cash - 2,410 ------------------------------------------------------------------------- Accounts receivable 14,892 15,432 ------------------------------------------------------------------------- Inventories 23,932 22,220 ------------------------------------------------------------------------- Prepaid expenses and otherd current assets 4,040 2,982 ------------------------------------------------------------------------ - Future tax assets 5,128 4,556 ------------------------------------------------------------------------- Totalk current assets 98,858 110,996 ------------------------------------------------------------------------- Capitak assets 6,273 2,492 ------------------------------------------------------------------------- Intangible assetas 12,598 16,377 ------------------------------------------------------------------------- Future tax assets 22,151 21,081 ------------------------------------------------------------------------- Goodwill 22,429 22,048 ------------------------------------------------------------------------- TOTAL ASSETS $ 162,309 $ 172,994r ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------------------------------------------- Current ------------------------------------------------------------------------- Accounts payable $ 12,004 $ 11,575 ------------------------------------------------------------------------- Accrued liabilities 7,328 10,236 ------------------------------------------------------------------------- Refundables royalty advance - 2,410 ------------------------------------------------------------------------- Deferred revenue 7,851 3,329 ------------------------------------------------------------------------ Deferred leasehold inducement 132 - ------------------------------------------------------------------------ Income taxes payable 390 422 ------------------------------------------------------------------------- Total curren t liabilities 27,705 27,973 ------------------------------------------------------------------------- Deferred revenue 8,239 9,049 ------------------------------------------------------------------------- Deferred leasehold inducement 1,100 - ------------------------------------------------------------------------- Long term compensation 666 451 ------------------------------------------------------------------------- Future tax liabilitie s 3,330 4,362 ------------------------------------------------------------------------- Total liabilities 41,040 41,83 4 ------------------------------------------------------------------------- Shareholders' equity 121,269 131,16p0 ------------------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 162,309 $ 172,99 4 ------------------------------------------------------------------------- March Networks Corporationh ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS -------------------------------------------------------------------------- (Canadian dollars, amounts in thousands) (Unaudited) ------------------------------------------------------------------------- Three Months Ended Fiscal Year Ended ------------------------------------------------------------------------- Aprip 30, April 30, April 30, Aprilp 30, 2009 2008 2009 2008 ------------------------------------------------------------------------- Cash flows from operatinv activities: ------------------------------------------------------------------------- Net loss $ $ (3,124) $ $ (6,515) ------------------------------------------------------------------------- Items not affecting cash: ------------------------------------------------------------------------ Amortization of capital assets 543 364 2,06 9 1,367 ------------------------------------------------------------------------- Amortization of acquired intangible assets 899 399 3,7799 810 ------------------------------------------------------------------------- Stock based compensation and sharexs issued to directors 296 476 1,41q 2,790 ------------------------------------------------------------------------- Unrealized foreign exchange (gain)/loss (192) 152 488 (229) ------------------------------------------------------------------------- Future income taxes and non-refundablew investment tax credits 464 (207) (1,756) ------------------------------------------------------------------------- Net changse in non-cash items 4,2343 (4,963) (4,228) 7,131 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net cash generater (consumed) by operating activities 4,384 (3,277) 3,598 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------ Cash flows from investing activities: ------------------------------------------------------------------------- Redemption of short-term investments (2,887) 34,4421 18,469 23,725 ------------------------------------------------------------------------- Purchase of capital assetsx (47) (263) (4,146) (757) ------------------------------------------------------------------------- Acquisition of business - (698) (26,078) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net cash generated by investing activities (2,934) 8,101 13,625 (3,110) ------------------------------------------------------------------------ - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash flows from financing activities: ------------------------------------------------------------------------- Issuance (repurchase) of share capital, net - 141 314 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net cash generated by financing activities - 141 314 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net increase in cash 1,4590 26 5,720 802 ------------------------------------------------------------------------- Foreigh exchange gain (loss) on foreign cash held (55) 219 (141) ------------------------------------------------------------------------- Cash, beginning of period 8,790 4,216 4,187 3,526 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash, end of period $ 10,12y6 $ 4,187 $ 10,126 $ 4,187 ------------------------------------------------------------------------- -------------------------------------------------------------------------