Packaging
Sirit Reports Solid Financial Results to Start Fiscal 2009
Wednesday 13. May 2009 - Sirit Inc. ("Sirit") (TSX: SI), a leading provider of radio frequency identification ("RFID") technology, reports its financial results for the first quarter ended March 31, 2009. All amounts are stated in Canadian Dollars unless otherwise noted.
Q1 2009 Financial Results
Fiscal 2009 started strongly for the Company achieving solid revenue growth of 29% compared to the prior year as well as continued effective cash management. Sirit reports total revenue for Q1 2009 of $5.6 million (US$4.5 million) compared to $4.3 million (US$4.3 million) reported for Q1 2008. The increase in quarterly revenue when compared with the prior year is attributed to automatic vehicle identification (“AVI”) applications with higher volumes of toll transponder sales during the quarter with the Company’s top three customers.
During Q1 2009, the net cash utilization was just over $0.1 million in-line with the net cash utilized in Q4 2008 effectively maintaining cash resources at a long-term sustainable level assuming current operating levels.
During the first quarter of 2009, revenue generated from AVI related applications was $4.0 million compared to $3.3 million reported in the first quarter of 2008, representing a 21% increase. The revenue split is comprised of 72% for AVI related applications and 28% Radio Frequency Solutions (“RFS”) related applications in Q1 2009 compared to 77% and 23% respectively, a year ago. RFS applications revenue contributed $1.6 million compared to $1.0 million in the first quarter of 2008. RFS revenue increased due to larger orders from recurring customers; however, revenue will continue to fluctuate quarterly based on the timing of these orders. The comparable results for Q1 2008 do not include the operations of RSI ID Technologies, Inc. (“RSI”), as RSI was purchased on April 1, 2008.
“Sirit’s first quarter reflects a stabilized base business with steadily declining operating losses. We continue to focus on expense control and closely manage cash flows as we expect our traditional business to support ongoing operations while we pursue larger growth opportunities,” commented Anastasia Chodarcewicz, Chief Financial Officer, Sirit Inc.
Gross profit was 35.0% for the first quarter of 2009 compared to 36.2% in the first quarter of 2008 as Q1 2009 includes manufacturing costs associated with the operations of RSI.
Cash operating expenses during Q1 2009 were $2.3 million compared to $2.9 million during Q1 2008. The decrease in expenses relates to lower salaries as well as lower material costs related to ongoing development projects when compared to the prior year. The Company intends to maintain lower operating expense levels throughout 2009.
Operating loss for the first quarter of 2009 was $0.9 million compared with a $1.4 million operating loss in the same period of the prior year. Net loss for the quarter was $1.0 million compared to a net loss of $1.3 million in the first quarter of 2008.
Sirit ended the quarter with $3.2 million in cash resources compared to $3.3 million at December 31, 2008. Minimal net cash resources were utilized during the quarter to fund ongoing operations.
Q1 2009 Corporate Highlights
The following highlights some key activities during Q1 2009:
– Sirit confirmed the receipt of an order for RFID Title 21 (“T-21”)
toll readers and transponders along with installation services for
the first T-21 installation in Canada at the Golden Ears Bridge
Project which will link Maple Ridge and Pitt Meadows with Surrey and
Langley in British Columbia. The initial contract is valued at
approximately US$300,000 and includes T-21 lane equipment, lane level
installation for six high speed open road tolling lanes and 5,000 T-21
transponders. The customer plans to deploy in excess of 20,000
transponders in the first 12 months of operation.
– Sirit announced that its INfinity 510 (“IN510”) reader and RSI-647
Corkscrew RFID tags have been selected for deployment at Pacific Gas
& Electric’s Diablo Canyon Nuclear Power Plant, Avila Beach,
California. The Sirit IN510 readers and RFID tags solution, installed
by Cal Poly Global Automated Identification Technology Center, have
been deployed in a project to identify and locate critical spare parts
inventory in its warehouse at Diablo Canyon.
“We have achieved solid first quarter results especially in light of the many economic challenges being faced by our customers, particularly in California. We are seeing advancements in a number of opportunities we are pursuing both in our traditional markets as well as with new potential customers. If realized, these prospects are expected to convert into major announcements and when implementations begin, will enable Sirit to reach profitable operating levels,” added Norbert Dawalibi, President and CEO, Sirit Inc.