Earnings report.SAMSys Technologies Reports Fiscal 2005 Annual/Q4 Financial Results and Holds Investor Conference Call
Stock Symbol: SMY
Listing: Toronto Stock Exchange (TSX)
Outstanding Shares: 51.5 Million
Web Site: www.samsys.com
TORONTO, Dec. 20 /CNW/ - SAMSys Technologies Inc., ("SAMSys"), (TSX:SMY),
www.samsys.com, of Toronto, an international provider of Radio Frequency
Identification (RFID) reader hardware solutions, today reports on the
Company's audited fiscal 2005 fourth quarter and annual financial results for
the three and twelve-month periods ended September 30, 2005.
2005 Highlights:
- SAMSys experienced revenue growth in fiscal 2005 and achieved record
sales of $4,486,986, compared with $3,353,124 in fiscal 2004, an
increase of 33.8%.
- SAMSys launched two new products: (1) the MP9311 ultra-high frequency
reader module; and (2) the MP9320 v2.8 reader. The MP9311 enables RFID
smart label printers, encoders and other devices to read and write to
the new EPC Generation Two ("Gen 2") tags in addition to the full
array of first-generation tag protocols.
- SAMSys developed a number of new support tools for its products,
including the Gen 2 RFID Pilot Express program, which shortens the
time for implementation of RFID pilot programs for systems integrators
and end user suppliers, the RFID Application Programming Interface for
Developers (RAPID), which simplifies the management of SAMSys ultra-
high frequency readers by enabling developers to use familiar Java and
Microsoft .NET programming environments, as well as the RF Command
Suite(TM) configuration application that provides a user-friendly
graphical user interface for configuring, programming, and commanding
SAMSys RFID reader products.
- Datamax selected the new SAMSys RFID reader module to provide Gen 2
encoding for their RFID printers. Datamax will use the MP9311 module
as a key component of its I-Class RFID printers, a family of combined
barcode printers and smart label encoders.
- SAMSys RFID module chosen to power Paxar printer/encoders, supporting
multiple tag protocols including EPC Gen 2. SAMSys module will come
standard in all Paxar Monarch(R) 9855(TM) RFID tabletop bar code
printers sold in the U.S. and Europe.
- SAMSys improved its working capital position in fiscal 2005 with the
completion of a private placement of $6,000,000 and a private
placement of 3,750,000 units for gross proceeds of $3,000,000, and a
private placement of $1,000,000 aggregate principal amount convertible
unsecured subordinated debentures.
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3 Month & 12 Month Financial Highlights:
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3-Months 3-Months 12-Months 12-Months
Ending Ending Ending Ending
Consolidated Financial Sept. 30, Sept. 30, Sept. 30, Sept. 30,
Statement - audited 2005 2004 2005 2004
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Revenues $1,042,879 $1,386,221 $4,486,986 $3,353,124
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Gross profit $453,965 $496,160 $1,908,114 $1,456,198
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Net income (loss) ($2,531,178) ($2,383,377)($10,815,024) ($7,515,247)
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Earnings (loss)
per share ($0.05) ($0.04) ($0.22) ($0.16)
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Weighted average of
outstanding shares 47,784,765 46,597,328 47,911,292 46,597,328
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Total revenue for the year ended September 30, 2005 was $4,486,986
compared to $3,353,124 for the previous year, representing an increase of 34%.
The majority of revenues was derived from the sale of RFID reader hardware
products into pilot/evaluation projects both through SAMSys' VAR partners, OEM
partners and direct to end-users. The Company's MP9320 multi-protocol UHF
reader was the biggest contributor to sales.
In the fourth quarter, the Company recorded $1,042,879 in revenues, a
marginal increase in quarter over quarter revenues in the fourth quarter of
fiscal 2005 as compared to the second and third quarters of fiscal 2005.
Gross margin for fiscal 2005 was 42.5% which was 1% lower than the gross
margin of 43.5% reported in fiscal 2004. This disparity was partly due to
development modifications early in the year on the Company's MP9320 UHF reader
which resulted in improved functionality, but also in a 19.9% increase in the
cost per unit. This cost of sale increase was subsequently offset with the
completion of negotiations by the Company with its contract manufacturers in
connection with builds of all of its reader products during the third and
fourth quarters of fiscal 2005.
Gross margin decreased marginally to 43.5% in the fourth quarter of
fiscal 2005 from 44.5% in the third quarter of fiscal 2005 but was
significantly higher than the low of 35.8% in the fourth quarter of fiscal
2004.
The Company incurred general and administrative expenses for the year
ended September 30, 2005 totaling $3,667,325 compared to $3,025,758 for the
year ended September 30, 2004. The increase in costs is mainly attributable to
the following items:
- Implementation of the CICA Handbook Section 3870 "Stock based
compensation and other stock based payments" resulted in an increase
in compensation expense of $731,216 for the period.
- Overall staffing levels increased to 43 employees as of September 30,
2005 compared to 37 as of September 30, 2004, an increase of 16%. The
addition of staff also resulted in an increase in recruitment and
relocation costs along with general operating expenses associated with
an increase in personnel.
Management expects that staffing will not increase until the company
witnesses improved revenue visibility and traction within the RFID supply
change market industry.
General and administrative expenses decreased in the fourth quarter of
fiscal 2005 as compared to the third quarter of 2005, primarily as a result of
one time relocation and recruitment costs of approximately $237,000 which were
recorded in the third quarter ended June 30, 2005.
The Company incurred sales and marketing expenses for the year ended
September 30, 2005 totaling $3,514,306 compared to $1,956,157 for the year
ended September 30, 2004. The increase in sales and marketing expense is
directly attributable to the increase in salaries and related costs resulting
from the addition of eight direct sales and sales support staff covering North
America, Europe and Asia throughout the year.
Sales and marketing expenses was $810,337 for the three months ended
September 30, 2005. The Company has recently scaled expenditures in this area
to reflect the current revenue levels and has reduced staffing levels from a
high of twelve employees to the current level of nine.
Research and development costs in fiscal 2005 were $4,967,134 as compared
to $3,959,055 in fiscal 2004. The increase in research and development costs
is primarily attributable to the increase in salaries and related expenses
caused by the 50% addition of staff working on product development activities.
The Company continues to invest in research and development activities for its
passive RFID reader products, including UHF reader products designed
specifically for logistics and supply chain applications.
Research and development expenses decreased in the fourth quarter as a
result of a deferral of certain development costs which met the criteria under
Canadian generally accepted accounting principles for deferral and
amortization. Total development costs identified and deferred were $383,951.
The Company recorded net loss of $10,815,024 ($0.22 per share loss) for
the 12 months ended September 30, 2005 and net loss of $2,531,178 ($0.05 per
share loss) for the 3 months ended September 30, 2005.
SAMSys held cash and short-term investments of $11,250,580 at
September 30, 2005 and long-term debt of $6,957,103.
The Company's audited fiscal 2005 financial statements for the three and
twelve-month periods ended September 30, 2005 will be posted on SAMSys' web
site (www.samsys.com) by 11am EST today.
Outlook:
Cliff Horwitz, CEO of SAMSys commented, "The RFID industry made great
strides over the last year in an effort to resolve regulatory, standards and
intellectual property issues which were expected to facilitate and accelerate
the deployment of RFID technology. In December 2004, EPC Global ratified the
Generation 2 Electronic Product Code ("EPC") specification as an EPC standard.
This ratification allows industry vendors to begin making products based on
the specification, which has been designed for global use. In addition, in
January 2005 the Generation 2 specification was submitted to the International
Organization for Standardization (ISO) for review. In June 2005, the Company
joined the Intermec Rapid Start licensing program providing the Company with
full access to Intermec's full fixed RFID reader and fixed RFID printer
intellectual property portfolios. This proactive step continued to demonstrate
the Company's leadership in eliminating barriers to adoption by reducing a
significant risk for the Company and its customers."
Early adopters of the technology, including retail and consumer packaged
goods companies, continue to move toward meeting the various mandates defined
by numerous North American and European retailers and the U.S. Department of
Defense. As a result of these trends and the introduction of new products,
SAMSys expects to see growth and expansion in the adoption and deployment of
RFID technology in fiscal 2006 and beyond which should result in growth in the
Company's revenues.
"I am delighted with the appointment of Tom Dziersk as the Company's new
President and Chief Executive Officer. He will assume those duties in January
2006; but our dealings to this point indicate a very promising collaboration.
For SAMSys to succeed in the long run it is imperative that we be able to
compete in the market on an equal footing and with the enthusiasm and
creativity which will allow us to continue to gain market share and
leadership. Historical perspective and industry standing is important - and it
is our belief that we will continue to play an active role in helping shape
the industry going forward; and to perpetuating our history of innovation and
technological excellence. However, we also need to address the role of the
technology within the total solution and its value proposition. I look forward
to working closely with Tom and the entire team in continuing to build our
role and our business," said Horwitz.
Investor Conference Call:
A conference call and web cast of this event to review the fiscal 2005
annual and Q4 results will take place today December 20th, 2005 beginning at
11:00am EST.
Mr. Cliff Horwitz, President & CEO of SAMSys and Mr. George Kypreos, CFO
of SAMSys will speak on behalf of the Company. A question-and-answer forum
will follow the review of the 2005 annual/Q4 financial results and update on
the Company's operations and growth strategies.
To listen and/or participate in this conference call, please dial
1-800-814-4890 (from Toronto: 416-644-3424) approximately 10 minutes prior to
the beginning of the conference call.
The investor conference call can also be heard over the Internet through
a web cast by visiting www.samsys.com or through a direct URL link:
https://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1327260
For those unable to participate in the conference call, a recording of
the conference call will be available from 1:00 p.m. EST, Tuesday
December 20th, 2005, until 11:59 p.m. EST, Tuesday December 27th, 2005. Please
dial 1-877-289-8525 (from Toronto: 416-640-1917) and enter the reservation
number 21167588 followed by the number sign # to listen to the
rebroadcast.
The web cast will be archived for 90 days following the day of investor
conference call. Visit the "Investor Relations" section of SAMSys website at
https://www.samsys.com for a replay link.
About SAMSys Technologies Inc.
SAMSys Technologies Inc. (SAMSys), founded in 1995, is a world-leading
provider of radio frequency identification (RFID) reader solutions. SAMSys
offers a family of products to simplify the installation and ensure the
ongoing performance of the overall RFID hardware infrastructure. SAMSys is a
public company whose shares are listed for trading on the TSX Exchange under
the symbol: "SMY". The Company has a total of 51.5 million shares outstanding.
Visit SAMSys at www.samsys.com and www.investorfile.com.
THIS NEWS RELEASE MAY CONTAIN FORWARD-LOOKING INFORMATION. ACTUAL FUTURE
RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED. THE RISKS,
UNCERTAINTIES AND OTHER FACTORS, BOTH KNOWN AND UNKNOWN, THAT COULD INFLUENCE
ACTUAL RESULTS MAY BE SUBSTANTIAL AND INCLUDE THOSE DESCRIBED IN DOCUMENTS
FILED WITH REGULATORY AUTHORITIES, SUCH AS THE COMPANY'S MOST RECENTLY FILED
ANNUAL REPORT AND ANNUAL INFORMATION FORM. ACCORDINGLY, NO ASSURANCES CAN BE
GIVEN THAT ANY OF THE EVENTS ANTICIPATED BY THE FORWARD-LOOKING STATEMENTS
WILL TRANSPIRE OR OCCUR, OR IF ANY OF THEM DO SO, WHAT BENEFITS THE COMPANY
WILL DERIVE THEREFROM.