Expanded Geographic Presence and Continued Market Penetration Account for
Year-Over-Year Revenue Growth Rate of 68 Percent
TORONTO, Jan. 11 /CNW/ -- ComnetiX(TM) Inc
(Toronto: CXI), a leading provider of biometric identification and
authentication solutions, reported that strong growth continued into its first
fiscal quarter ended November 30, 2005. The quarter's $3.7 million in revenue
was 68 percent higher than the quarterly revenue of $2.2 million reported in
the comparable quarter of the previous year, which was in turn a dramatic
increase over the $1.1 million in revenue reported during the quarter ended
November 30, 2003. The $3.7 million in revenue was also a substantial
sequential increase over the $2.5 million reported for the fourth fiscal
quarter ended August 31, 2005. (All dollar amounts in this release are in
Canadian dollars unless otherwise indicated.)
James P Scullion, ComnetiX CEO, said, "I'm happy to report that this is
the Company's first full quarter that includes revenue, of $836,000, generated
by ComnetiX(TM) SE, the Company's wholly owned subsidiary created as a result
of the acquisition of Paragon Total Solutions Inc in August 2005. However,
that number does not include $144,000 in deferred revenue, which was in place
prior to the acquisition and thus cannot be recognized per GAAP. In addition,
revenue from our applicant fingerprinting services group during the quarter
was $536,000, a growth rate of 69 percent over the same period last year.
Much of this growth may be attributed to our ongoing penetration of the US
market through our agreement with IBT and our partnership with Promissor."
Revenue for the first quarter of fiscal 2006, ended November 30, 2005, was
$3.65 million with a net loss of $1.43 million, or $0.10 loss per share,
versus revenue for the first quarter of fiscal 2005 ended November 30, 2004,
of $2.17 million with a net loss of $811,827, or $0.07 loss per share.
Excluding a non-cash stock compensation charge of $360,000, the loss for the
first quarter of fiscal 2006 would have been $1,070,000.
Scullion continued, "As you can see, ComnetiX continues to report growth
companywide. We are much larger geographically than we were just one year
ago, and our business in the US, with state and local agencies -- and with the
Federal Government, is moving up rewardingly. And with Canada's Real Time
Identification (RTID) program about to take off, we've established the first
nationwide network of electronic fingerprinting services in Canada."
Scullion also noted that the Company accomplished two significant
milestones during this quarter. First, it began the implementation of an
order, initially valued above US $1.0 million, from a large and significant
federal organization in the United States, whose scaled implementation covers
23 states and was substantially completed in the first quarter as expected.
In addition, the Company reported its first orders out of its newly
established subsidiary in the Southeast US, and continues to see strong
bookings coming out of the region.
"We believe that our strategy is proving itself, and that our opportunity
for solid growth remains strong," said Scullion.
ComnetiX CFO Tim Zahavich commented on the quarter saying, "The Company
continues to maintain a solid financial position. As of November 30, 2005,
cash and cash equivalents were $5.358 million, the current ratio was 1.52:1,
total assets were $18.8 million, and the Company reduced its debt by $420,000
in the quarter.
First Quarter Highlights and Subsequent Events
The Company partnered with a major, US federal customer to provide its
civil- and law enforcement-related biometric technology software solutions to
screen the backgrounds of new employees. The three-year contract, initially
valued above US $1 million, is for its IntelliBook(TM), IntelliServ(TM) and
IntelliScreen(TM) products, as well as various hardware components and
maintenance.
The Company was awarded a contract to install its advanced solutions in
the police unit of a large northeastern United States metropolitan public
transit system. Valued at approximately US $185,000, the contract is for its
full suite of biometric technology business automation solutions, including
the IntelliServ(TM) open image server, its IntelliBook(TM) solution with
integrated mug shot and web-based investigative capabilities, as well as
various hardware components and maintenance for its live scan systems.
The Company received its first orders out of its newly established
territory in the Southeast US. Through its wholly owned subsidiary,
ComnetiX(TM) SE, the Company received orders valued at approximately US
$206,000, for the Company's IntelliServ(TM) server solution, as well as its
jail management system (JMS) and record management system (RMS) components
from the Company's newly acquired EagleAdvantage product line. Once
complete, the installations will serve various counties in Georgia.
The Company further expanded its installed base in the Southeast US with
the receipt of another order -- its largest order to date from the territory,
worth more than US $230,000. Won as part of a competitive bid, the order is
from the Moultrie, GA Police Department and is comprised of several components
from the Company's recently acquired Eagle brand line of products, including
the EagleAdvantage record management system (RMS), EagleNet data collection
system and EagleResponse mobile reporting devices.
Earnings Conference Call and Webcast Replay Information
On Thursday, January 12, 2006, ComnetiX(TM) is holding a conference call
at 8:30 AM EST where management will discuss the results for the first quarter
of its fiscal year 2006, ended November 30, 2005. The live call may be
accessed online at www.comnetix.com or at www.vcall.com.
Audio and online archives of this call will be available through
January 19, 2006; to listen to the audio replay, dial 877 660 6853 (or
201 612 7415 for international callers) using account # 286 along with
conference ID # 184415. The online archive will be available at
www.comnetix.com or www.vcall.com.
About ComnetiX(TM) Inc (www.ComnetiX.com)
ComnetiX(TM) Inc provides secure identification and authentication
solutions to both the public and private sectors throughout North America.
ComnetiX offers multimode biometric identification solutions for use in areas
such as applicant screening, financial services, health care, transportation,
airlines and airports, casinos and gaming, and energy and utilities. Clients
include American Airlines, Lehman Brothers, New York City Health and Hospital
Corporation, New York State Division of Criminal Justice Services, Toronto
Police Services Board, Boston Police Department and the Royal Canadian Mounted
Police. ComnetiX is also Canada's premier applicant fingerprinting services
company, facilitating tens of thousands of criminal background checks each
year through its chain of ten offices across Canada. In addition, ComnetiX
has recently launched its first applicant fingerprinting services office in
the US, located in Sacramento, California.
This press release contains forward-looking statements that involve risks
and uncertainties, which may cause actual results to differ materially from
the statements made. When used in this document, the words "may", "would",
"could", "will", "intend", "plan", "anticipate", "believe", "estimate",
"expect" and similar expressions are intended to identify forward-looking
statements. Such statements reflect our current views with respect to future
events and are subject to such risks and uncertainties. Many factors could
cause our actual results to differ materially from the statements made,
including those factors discussed in filings made by us with the Canadian
securities regulatory authorities. Should one or more of these risks and
uncertainties, such as the timing of large government contracts, reduced
funding, long sales cycles, currency fluctuations, increased competition and
the timing of acquisitions materialize, or should assumptions underlying the
forward looking financial statements prove incorrect, actual results may vary
materially from those described herein as intended, planned, anticipated, or
expected. We do not intend and do not assume any obligation to update these
forward-looking statements.
SELECTED FINANCIAL INFORMATION FOLLOWS
ComnetiX(TM) Inc
Interim Consolidated Balance Sheets
November 30, 2005 August 31, 2005
(unaudited) (audited)
ASSETS
CURRENT
Cash $992,907 $828,170
Short term investments 4,380,435 5,554,466
Accounts receivable 3,821,143 3,067,393
Inventory 620,677 545,459
Prepaid expenses 100,017 156,819
9,915,178 10,152,307
CAPITAL ASSETS 692,634 609,168
INTANGIBLE ASSETS 3,278,492 3,422,421
GOODWILL 4,896,706 4,896,706
$18,783,011 $19,080,602
LIABILITIES
CURRENT
Bank indebtedness $525,105 $548,331
Accounts payable and
accrued liabilities 3,938,896 3,470,263
Current portion of
capital lease obligation -- 4,115
Current portion of notes payable 157,515 560,175
Deferred revenue 1,960,948 1,774,150
6,582,465 6,357,034
LONG TERM
Capital lease obligation -- 1,697
Future income tax liability 878,115 929,275
Notes payable 116,690 134,796
994,805 1,065,768
7,577,270 7,422,802
SHAREHOLDERS' EQUITY
SHARE CAPITAL 19,437,536 18,655,443
CONVERTIBLE DEBENTURE 1,688,618 1,688,618
CUMULATIVE TRANSLATION ADJUSTMENT 123,804 --
WARRANTS 620,206 620,206
CONTRIBUTED SURPLUS 2,080,980 2,005,796
DEFICIT (12,745,402) (11,312,263)
11,205,741 11,657,800
$18,783,011 $19,080,602
ComnetiX(TM) Inc
Interim Consolidated Statements of Operations and Deficit
(Unaudited)
Three Months Ended
November 30,
2005 2004
SALES $3,648,709 $2,172,151
EXPENSES
Cost of hardware sold 1,598,215 697,209
Wages 1,555,347 1,330,201
Sales, general and administrative 1,465,896 797,033
Interest 17,854 3,034
Amortization of capital assets 39,527 32,195
Amortization of intangible assets 143,929 5,850
Stock compensation expense 357,536 148,717
5,178,305 3,014,240
LOSS FROM OPERATIONS (1,529,596) (842,089)
OTHER INCOME 45,296 30,262
LOSS BEFORE TAXES FOR THE PERIOD (1,484,300) (811,827)
FUTURE TAX RECOVERY 51,161 --
NET LOSS FOR THE PERIOD (1,433,139) (811,827)
DEFICIT, BEGINNING OF PERIOD (11,312,263) (8,434,002)
DEFICIT, END OF PERIOD $(12,745,402) $(9,245,829)
LOSS PER COMMON SHARE -
basic and diluted $(0.10) $(0.07)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING (000s) 14,304 11,402
For further information
Investor Relations:
Jesse Deal
1-877-691-8087 (toll-free)
[email protected]
Tim Zahavich
ComnetiX Inc
905-829-9988 ext 206
[email protected]
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