Expansion Into the Southeastern United States Drives Increase in Customer
Base, Extends Market Reach, Positions Company for Growth
TORONTO, Nov. 1 /CNW/ -- ComnetiX(TM) Inc (TSX: CXI), a
leading provider of biometric identification and authentication solutions,
reported results for its 2005 fiscal year and fourth quarter ended August 31,
2005. Year-over-year revenue for the periods increased 117 percent and 35
percent, respectively, driven by increasing demand for the Company's products
and services as exemplified by a recently announced contract valued at more
than US $1.2 million. The Company also increased its overall resources,
market reach and customer base during the fourth quarter with the completion
of the acquisition of Carrollton, GA-based Paragon Total Solutions Inc in
August.
Revenue for the fourth quarter benefited only slightly from the Paragon
acquisition, while revenue from the Company's fingerprinting services group
for fiscal 2005 grew 14 percent from the prior quarter, contributing $1.6
million to the year-over-year growth in ComnetiX revenue. (All dollar amounts
in this release are in Canadian dollars unless otherwise indicated).
Revenue for the fourth quarter of fiscal 2005 was $2.5 million with a net
loss of $1.1 million, or $0.08 loss per share, versus revenue for the fourth
quarter of fiscal 2004 ended August 31, 2004, of $1.8 million with a net loss
of $1.0 million, or $0.14 loss per share. Excluding a non-cash stock
compensation charge of $0.3 million, the loss for the fourth quarter of fiscal
2005 would have been $0.8 million.
For the fiscal year ended August 31, 2005, revenue was $10.3 million with
a net loss of $2.9 million, or $0.21 loss per share, compared to revenue of
$4.7 million and a net loss of $2.4 million, or $0.34 loss per share, for the
fiscal year ended August 31, 2004. The year to date non-cash stock
compensation charge was $0.7 million.
ComnetiX CEO Jim Scullion said, "The quarter, and indeed the year, saw a
number of very positive developments that contributed significantly to the
growth of ComnetiX, not only in terms of revenue, but in the overall scope,
resources and capability of the Company. As promised, we expanded our reach
in the United States (with the Paragon acquisition), including at least five
new states in the southeastern region, where ComnetiX had no presence. The
acquisition also expanded our customer base by more than 250 new customers.
"To keep pace with this growth, we increased the depth and experience
profile of our executive management team to take full advantage of the
respective talents of each member of the team and to focus their efforts on
their specific areas of responsibility," Scullion added.
Mike Pearson joined the Company as Executive Vice President of Marketing
and Business Development, taking over the marketing responsibilities from
Carter Marantette and the Business Development duties from Alan Brousseau.
Marantette is now Vice President of Sales, with sole responsibility of
overseeing the sales of the Company, including regional development as a
result of the acquisition of Paragon. Brousseau is now Vice President
Fingerprinting Services USA. "The shifts in the respective responsibilities
of each member of the management team will enable them to concentrate on their
respective strategic initiatives as they pertain to the continued growth of
the Company," Scullion said.
"We continue to explore opportunities that will enable us to become the
leading supplier of software-centric biometric identification and
authentication solutions in North America," Scullion added, "and we are
confident that through the continued hard work of our management, sales,
development and administrative team, we will continue to be successful in
meeting that goal."
CFO Tim Zahavich commented, "While quarter-over-quarter and year-over-year
revenue were up substantially, our net loss increased for the quarter and the
year, mainly due to the continued operational expansion into new areas.
"However, our balance sheet remains quite strong, even with the
acquisition of Paragon. As of August 31, 2005, cash and cash equivalents were
$6.4 million, the current ratio was 1.59:1, total assets were $19.0 million,
and the Company still has virtually no debt."
Fourth Quarter Highlights and Subsequent Events
The Company continued to increase its presence as a strategic supplier of
law enforcement systems in geographic areas in which it has had pronounced
successes in the last two years: New York State and Canada. In Saskatchewan,
the Company received an order to install one of its solutions customized
specifically for the police agencies across Canada. In the State of New York,
the Company received additional orders from various law enforcement agencies
across the state, as they relate to the state's plan to roll out electronic
fingerprinting systems statewide.
The Company announced that it had closed on its acquisition of Paragon
Total Solutions Inc, an established, privately-held, Carrollton, GA-based
biometrics technology company with a broad base of law enforcement and
government customers throughout the southeastern United States.
The Company entered into a collaborative relationship with Promissor Inc,
one of the nation's leading applicant-assessment firms, and a subsidiary of
Houghton Mifflin Company, to work together to provide electronic
fingerprinting services for candidates that require criminal-history
background checks for a variety of occupational and professional licenses,
such as real estate, insurance, nursing, education and others.
The Company appointed Michael Pearson as Executive Vice President,
Marketing and Business Development, realigning two other executives' duties to
fit the strategic goals of the Company. Pearson fills the business
development role once held by Alan Brousseau as Brousseau has been appointed
Vice President, Fingerprinting Services USA. In addition Carter Marantette
will now be Vice-President Sales with expanded regional responsibilities as a
result of the acquisition of Paragon Total Solutions. Previously Marantette
was responsible for marketing as well. All three individuals report directly
to CEO Jim Scullion.
The Company continued to make significant headway into the US market,
breaching the federal level, as well as local area where it has little
presence within a larger region that has a large installed base. The
three-year federal contract, initially valued above US $1 million, is for the
Company's proprietary software-centric biometric technology solutions to
screen the backgrounds of new employees. The other award, for the police unit
of a large northeastern United States metropolitan public transit system, is
valued at approximately US $185,000, and is for a full suite of unique,
biometric technology business automation solutions, including the ComnetiX
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.
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.
Statements made in this news release that relate to future plans, events
or performances are forward-looking statements. Any statement in this release
containing words such as "believes," "plans," "expects" or "intends" and other
statements that are not historical facts are forward-looking, and these
statements involve risks and uncertainties and are based on current
expectations. Consequently, actual results could differ materially from the
expectations expressed in these forward-looking statements.
For further information
Investor Relations: Company:
Jesse Deal Tim Zahavich
ComnetiX Inc ComnetiX Inc
1-877-691-8087 (toll-free) 905-829-9988 ext 206
[email protected] [email protected]
ComnetiX Inc
Consolidated Balance Sheet
(in 000s)
August 31, August 31,
2005 2004
ASSETS
CURRENT
Cash 828,170 907,984
Short term investments 5,554,466 6,529,480
Accounts receivable 3,067,393 1,909,873
Inventory 545,459 432,564
Employee loan -- 36,494
Prepaid expenses 156,819 132,392
10,152,307 9,948,787
CAPITAL ASSETS 609,168 380,452
INTANGIBLE ASSET 3,422,420 --
GOODWILL 4,896,706 --
19,080,601 10,329,239
LIABILITIES
CURRENT
Bank Indebtness 548,331 --
Accounts payable and accrued liabilities 3,470,261 2,109,955
Deferred revenue 1,774,150 1,038,238
Current portion of notes payable 560,175 --
Current portion of capital lease obligation 4,115 9,594
6,357,032 3,157,787
LONG TERM
Capital lease Obligation 1,697 500
Future Income Tax Liability 929,274 --
Notes Payable 134,796 --
1,065,767 500
7,422,799 3,158,287
SHAREHOLDERS' EQUITY
SHARE CAPITAL 18,299,896 12,206,814
CONVERTIBLE DEBENTURE 1,688,618 1,688,618
WARRANTS 961,313 207,538
CONTRIBUTED SURPLUS 2,020,238 1,501,984
DEFICIT (11,312,263) (8,434,002)
11,657,802 7,170,952
19,080,601 10,329,239
ComnetiX Inc
Consolidated Statements of Operations and Deficit
(in 000s)
Three Three Fiscal Fiscal
Months Months Year Year
Ended Ended Ended Ended
August 31, August 31, August 31, August 31,
2005 2004 2005 2004
SALES $2,450,971 $1,816,349 $10,260,086 $4,729,779
EXPENSES
Cost of hardware
sold 607,277 951,651 2,860358 1,339,203
Wages 1,308,218 965,467 5,237,043 2,859,365
Sales, general and
administrative 1,436,741 781,492 4.345,881 2,410,577
Interest 9,820 5,471 14,343 134,184
Amortization of
capital assets 41,340 31,042 146,434 83,665
Amortization of
intangible assets 62,558 -- 81,408 --
Amortization of
deferred
financing costs -- -- -- 77,539
Stock compensation
expense 261,662 160,577 735,436 246,920
3,727,616 2,896,700 13,420,903 7,151,453
LOSS FROM OPERATIONS (1,276,645) (1,080,351) (3,160,817) (2,421,674)
OTHER INCOME 157,058 31,884 226,498 31,884
FUTURE TAX RECOVERY 56,058 56,058
LOSS FOR THE PERIOD (1,063,529) (1,048,467) (2,878,261) (2,389,790)
DEFICIT, BEGINNING OF
THE PERIOD (10,248,734) (7,385,535) (8,434,002) (6,044,212)
DEFICIT, END OF YEAR
TO DATE (11,312,263) (8,434,002) (11,312,263) (8,434,002)
NET LOSS PER COMMON
SHARE, BASIC $(0.08) $(0.14) $(0.21) $(0.34)
NET LOSS PER COMMON
SHARE, DILUTED $(0.08) $(0.14) $(0.21) $(0.34)
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING (000S) 13,611 7,485 13,617 7,004
Currency Exchange International, Corp. news
Investor announcements, newest first.