Second Quarter Results Improved profit margins. Good News.
GDI GLOBAL DATA INC ("GI-T;GDIGF-L") - Second Quarter Results
GDI Global Data Inc. ("Global Data") reports its second quarter results for the period ended December 31, 1999.
Net sales for the second quarter ended December 31, 1999 were $1,517,200 versus $1,753,967 reported for the corresponding period in the prior year. The resulting net loss for the second quarter ended December 31, 1999, was $286,908 ($0.02 per share) representing a significant improvement over the net loss of $1,278,709 ($0.09 per share) reported in the second quarter ended December 31, 1998.
While Global Data's bookings were in accordance with its business plan, a shortage of working capital prior to its recent financings, coupled with a worldwide shortage of one of its key wireless components, resulted in lower than anticipated sales in the quarter. As at December 31, 1999, Global Data had working capital of $691,767 and sales backlog in excess of $1.5 million.
"Global Data continued to make significant corporate progress over the past several months including the completion of financing initiatives, increased sales activities in our Global Data Wireless business unit and the announcement of a planned strategic acquisition," said Lawrence E. Davis, President and CEO. "We believe the steps recently taken set the stage for rapid growth in 2000 and beyond."
Gross profit for the three months ended December 31, 1999, was $696,950 (45.9% of net sales) compared to $464,806 (26.5% of net sales) for the second quarter ended December 31, 1998. Gross profit, as a percentage of net sales, increased by 19.4% as a result of new product releases and continued cost reduction initiatives.
During the quarter, Global Data Wireless further validated its business plan with the initial recognition of revenue from its AMRnet service and increased sales of its CS-832 automatic meter reading products. Global Data Wireless continues to grow its customer base and increase its brand recognition within the commercial and industrial segment of the electric power industry.
In December, Global Data successfully completed a rights offering with Octagon Capital Corporation, generating gross proceeds of $636,000. The proceeds of this rights offering were used for working capital purposes and enhanced product development. Additionally, Global Data announced on January 28, 2000, it engaged Octagon Capital Corporation to raise an additional $5 million in capital to fund the planned acquisition of StarComm Products, Inc., accelerate product development and expand sales initiatives.
Finally, subsequent to the end of the quarter, Global Data executed a Letter of Intent to acquire StarComm Products, Inc. of Huntington Beach, California. StarComm Products, Inc. is a leading developer of industrial rated modems, Digital Subscriber Line (DSL) devices and custom communications modules for utility, transportation and security markets. This acquisition is consistent with Global Data's commitment of developing products for an ever-expanding range of solutions based on advanced wireless and wire line technology.
Global Data, based in Toronto, Ontario and Amherst, New Hampshire offers wireless data collection and communications products and services through its two business units: Global Data Wireless and Granite Communications. Global Data Wireless designs, develops, markets and supports products and services for automated meter reading and remote telemetry applications for the electric power and gas industries. Granite Communications designs, develops, markets and supports application-specific hand-held data collection computing products that integrate wireless local area networking and bar code data capture technologies. Global Data's common shares trade on the Toronto Stock Exchange (TSE:GI). GDI Global Data Inc. can be reached through the Internet at https://www.globaldata.com.
GDI Global Data Inc.
Consolidated Statements of Operations