Sona Resources Corporation SREZF

RE: Financials are out.

[turr]

I ain't no financial genius but after reading through this it looks like this company is after making some Giant steps on the road to recovery. personally , I love it. May take a little bit of time to build the revenue back up but this is going to be a real winner I won't be selling anytime soon I guess these guys knew what there doing increasing their hold on this company "as a sign of its renewed commitment to the remaining business, the company's two largest shareholders, Integrated Partners L.P. Limited Partnership One and Park Avenue Equity Partners, L.P., have reinvested approximately $1.7-million in equity into the business to provide additional working capital to the company" Systech Retail narrows loss to $5.6-million in 2004 2004-06-18 18:09 ET - News Release Mr. David Shonerd reports SYSTECH RETAIL SYSTEMS CORP. DBA OPENFIELD SOLUTIONS -- REPORTS RESULTS FOR FISCAL YEAR ENDED JANUARY 31, 2004 Systech Retail Systems Corp. -- doing business as Openfield Solutions, has released its financial results for the 12-month fiscal period ended Jan. 31, 2004. This news release should be read in conjunction with the company's audited consolidated financial statements, and management's discussion and analysis for the year ended Jan. 3, 2004, which can be found in Stockwatch Sedar files dated June 18, 2004. For fiscal 2004, the company recorded revenues of $21.2-million, a decrease of $15.3-million, or 42.0 per cent over the prior year. Loss before income taxes and discontinued operations was $3.2-million for the year (including a foreign exchange gain of $5.6-million), compared with a loss of $31.2-million in the prior year (including a foreign exchange gain of $1.3-million). Deducting discontinued operations and income taxes brought the loss for the year to $5.6-million, compared with a loss of $40.0-million for the prior year, which represents a decrease of 86 per cent. For the period from Feb. 1, 2003, to Sept. 9, 2003, which represents the company's performance prior to exiting bankruptcy protection, the basic and fully diluted loss per share was four cents per share. For the period from Sept. 10, 2003, to Jan. 31, 2004, which represents the company's performance after emergence from bankruptcy protection, the basic and fully diluted loss per share was nil. This compares with a basic and fully diluted loss per share for the entire fiscal 2003 period of $1.15. While revenues declined compared with last year, the full effect of the cost-cutting program and restructuring of the balance sheet resulted in a significant reduction in operating losses. As a result, operating results for the year ended Jan. 31, 2004, reflect a significant improvement over those of the prior year. "Over the past year, the company went through a period of tremendous change which included successfully emerging from bankruptcy protection and divesting of its hardware services division. Management believes that this difficult process has left the company stronger financially and free to pursue its goal of become a leader in retail point-of-sale software solutions," said Richard Adair, Systech's chief financial officer. Formal reorganization under bankruptcy protection The company's consolidated amended plan of reorganization, as modified, was confirmed on Aug. 28, 2003, by the United States Bankruptcy Court for the Eastern District of North Carolina -- Raleigh division. The Ontario Superior Court of Justice sanctioned and approved the amended plan on Sept. 9, 2003. The amended plan became effective on Sept. 10, 2003, and the company and its subsidiaries have emerged successfully from Chapter 11 and Companies' Creditors Arrangement Act (CCAA) protection. All conditions precedent to the implementation of the amended plan were satisfied as of Sept. 30, 2003. In total, the amended plan resulted in a reduction in liabilities of $75.3-million with a corresponding reduction in shareholders' deficiency. The amended plan also reorganized a series of other secured claims, unsecured liabilities and share classes and simplified the corporate structure of the Systech Companies. Business divestiture and discontinued operations On Feb. 27, 2004, Optimal Robotics Inc. acquired the assets and assumed the liabilities related to the Systech hardware services division. The sale price after working capital adjustments was $3,510,653 (U.S.) in cash subject to postclosing adjustments, if any, and Optimal has assumed substantially all the liabilities of the division. The proceeds of the transaction were used to repay debt and finance working capital requirements going forward. With the divestiture of this division, management is now able to focus on the software solutions business, which holds the key intellectual property of the company and provides what management believes to be the largest strategic growth opportunity for the business. Highlights during the year Proprietary software product sales continued to perform well with the rollout of 150 licences of Systech's flagship Openfield point-of-sale product to the Northwest company. Other new development applications, including Systech's Clean Receipt software and new software regression test tool, were introduced to a Tier 1 retailer and Academy Sports, respectively. The software programming services group reduced its reliance on two key third party original equipment manufacturers (OEM) and generated revenues with 26 different customers including Holiday Quality Foods, Grand Union and Copient Technologies. Systems solution sales continued to experience lower sales volumes compared with fiscal 2003, as a result of delays in confirmed customer programs and hesitance by new potential customers to commit to new orders while the company was under bankruptcy protection. Despite these constraints, major customer installations with Gabriel Brothers, Academy Sports and Ahold/Giant were successfully completed. During fiscal 2004, the cost-cutting program which began in fiscal 2001 was completed. The company's work force was reduced from 425 at Jan. 31, 2003, to 274 at the end of the fiscal 2004. After the divestiture of the hardware services division, further staffing reductions brought the remaining work force to 82. During the same period, the number of business offices was reduced from 10 to five and the supporting infrastructure was significantly downsized. Management believes that this has left the remaining business right-sized to its current revenue levels. With the completion of the cost-cutting program, management began to focus on the strategy for the business after emergence from bankruptcy protection. This included capital investments into the company to improve the efficiency of the operations, reorganizing the software organization into separate programming services, and research and development divisions, and hiring three new sales professionals to focus on growing the installations of proprietary software products and hardware solutions installations. Outlook The Chapter 11 CCAA reorganization and the hardware services division proved to be a tremendous drain on the company's financial resources and consumed a significant amount of management's time. Management is now refocused strategically on growing the core software business: On Feb. 6, 2004, Systech Retail Systems announced in Stockwatch that it would commence carrying on business as Openfield Solutions. The decision to rebrand the company operations with a new name reflected the increased focus on delivery open architecture point-of-sale software solutions to the North American retail industry. On March 1, 2004, the company promoted David Shonerd to the president and chief executive officer role. Mr. Shonerd has over 25 years of experience in the retail point-of-sale software business. The majority of this tenure was with IBM and the past 12 years he served as president of MGV and then led sales for the MGV software division, which was acquired by Systech in 1998. The company believes that Mr. Shonerd will bring increased focus and expertise in growing the core software business. On Feb. 29, 2004, the company unveiled the latest version of its Openfield point-of-sale offering. The next-generation product is called ISIS (in-store information system) and is a Microsoft.net-based point-of-sale, back office and multistore management solution. Using open architectures allows ISIS to provide clients faster time to market for their marketing and consumer programs. This translates into differentiation and competitive edge, which are critical needs for retailers. As a result of these initiatives, management is already starting to see some positive momentum in the business in fiscal 2005: * management is beginning to see customers reinforce their commitment to Systech now that the company is no longer under the cloud of bankruptcy protection. The company has been asked to participate in several request for quotations (RFQs) for new software opportunities that it would not have been considered for during bankruptcy protection; * new contracts for ISIS have been signed with Sedanos for its 26 grocery stores and 12 pharmaceutical outlets in South Florida and with Magruders, a supermarket chain in the Washington area; * the company has continued to deepen its business relationship with partners such as Hewlett Packard and has successfully sold its new HP RP 5000 retail technology with the ISIS point-of-sale software as part of a total solution into several customers; and * as a sign of its renewed commitment to the remaining business, the company's two largest shareholders, Integrated Partners L.P. Limited Partnership One and Park Avenue Equity Partners, L.P., have reinvested approximately $1.7-million in equity into the business to provide additional working capital to the company. The sales cycle for point-of-sale software solutions will require time for the orders backlog to rebuild. However, management is confident that after shedding the cloud of bankruptcy protection, and refocusing on its core business and intellectual property, the remaining company is stronger and much more capable of becoming a leader in retail point of sale software solutions. WARNING: The company relies upon litigation protection for "forward-looking" statements. CONSOLIDATED STATEMENT OF LOSS AND DEFICIT Sept. 10, 2003, to Jan. 31, 2004 Revenue $ 7,153,920 ------------ Costs and expenses 8,150,392 Research and development 740,395 Foreign exchange gain (1,111,801) Depreciation 124,849 Interest on short-term obligations 302,041 Interest on long-term obligations 624,967 Non-interest financing costs 124,746 Restructuring costs 539,357 Writedown of capital assets - ------------ 9,494,946 (Loss) before income taxes and discontinued operations (2,341,026) Income tax recovery 113,541 ------------ (Loss) before discontinued operations $ (2,227,485) (Loss) from discontinued operations (including (loss) on disposal of $900,630) (1,898,969) ------------ Net (loss) $ (4,126,454) ------------ Basic and fully diluted (loss) per share (Loss) before discontinued operations $ (0.00) (Loss) from discontinued operations $ (0.00) ------------ Net (loss) $ (0.00) ============ (Deficit), beginning of period $ - Net (loss) (4,126,454) Stock dividends on Series A convertible preferred shares - Fresh-start adjustment - (Deficit), end of period $ (4,126,454) ============ CONSOLIDATED STATEMENT OF LOSS AND DEFICIT Prereorganization Feb. 1, Year 2003, to ended Sept. 9, Jan. 31, 2003 2003 Revenue $ 14,021,581 $ 36,502,648 ------------- ------------- Costs and expenses 15,479,432 54,981,924 Research and development 1,096,605 2,640,000 Foreign exchange gain (4,507,079) (1,305,983) Depreciation 334,599 371,362 Interest on short-term obligations 19,034 3,416,554 Interest on long-term obligations 152,912 3,126,177 Non-interest financing costs 25,443 1,612,072 Restructuring costs 2,276,103 2,096,163 Writedown of capital assets - 772,518 ------------- ------------- 14,877,049 67,710,787 (Loss) before income taxes and discontinued operations (855,468) (31,208,139) Income tax recovery - 445,453 ------------- ------------- (Loss) before discontinued operations $ (855,468)$ (30,762,686) (Loss) from discontinued operations (including (loss) on disposal of $900,630) (612,886) (9,229,118) ------------- ------------- Net (loss) $ (1,468,354)$ (39,991,804) ------------- ------------- Basic and fully diluted (loss) per share (Loss) before discontinued operations $ (0.02)$ (0.90) (Loss) from discontinued operations $ (0.02)$ (0.25) ------------- ------------- Net (loss) $ (0.04)$ (1.15) (Deficit), beginning of period $(144,513,449)$(103,784,948) ------------- ------------- Net (loss) $ (1,468,354)$ (39,991,804) ============= ============= Stock dividends on Series A convertible preferred shares - (736,697) Fresh-start adjustment (145,981,803) - (Deficit), end of period $ - $(144,513,449) ============= ============= Top