TORONTO, Jan. 12 /PRNewswire/ -- Comnetix Inc (TSX: CXI), a leading provider of biometric identification and authentication solutions, announced results for its fiscal first quarter ended November 30, 2004. Revenue increased by 109 percent compared to the previous year’s first quarter, and by 19.6 percent compared to the fourth quarter of fiscal 2004, ended August 31, 2004. Revenue for the first quarter was $2.17 million* with a net loss of $811,826, or $0.07 loss per share, versus revenue for the first quarter ended November 30, 2003, of $1.04 million with a net loss of $229,505, or $0.07 loss per share. The loss for the quarter ended November 30, 2004, includes approximately $309,000 in non-cash and one-time expenses.
Jim Scullion, Chief Executive Officer of Comnetix, said, “Results from this quarter demonstrate our continued focus on increasing our presence in the United States, as well as in Canada. Several significant awards from within already established territories in the Northeast of the US contributed to the doubling of our revenue. In addition, as a result of our acquisition of International Fingerprinting Services Canada Ltd., this quarter saw the first revenue generated from our fingerprinting services group. The group was profitable, with revenue standing at approximately $317,000.
“In addition, Comnetix continues to explore opportunities to develop and expand strategic relationships, and we are confident that with our experienced and energized sales team, leading edge technology and software-centric business automation solutions, we will continue to be successful in our expansion efforts.”
Expenses for the quarter include a non-cash stock compensation expense of $149,000 and a one-time payment of approximately $160,000 regarding the retirement of an executive from the Company.
CFO Tim Zahavich said, “During the quarter the Company’s balance sheet remained solid, with cash and cash equivalents at $5.58 million, a current ratio at November 30, 2004, of 2.9:1, and total assets of $10.17 million. The Company remains debt free as of November 30, 2004.”
First Quarter Highlights and Subsequent Events * On September 14, 2004 Comnetix announced that it closed its acquisition of privately held, Ottawa-based International Fingerprinting Services Canada Ltd. (“IFSC”). John Conohan, the former Chief Executive Officer of IFSC, has joined Comnetix as its Vice President of Fingerprinting Services and is operating IFSC as a wholly owned subsidiary of Comnetix. * On October 18, 2004 Comnetix President, Edward Escubedo, spoke at two sessions of the NATO Symposium and Exhibition in Ottawa: “Biometrics Security: Challenges and Solutions.” * On November 3, 2004 Comnetix announced that it was awarded a contract from several New York State agencies to supply 42 units of its Civil Applicant and Criminal Screening System and to integrate these systems with the Company’s Open Image Servers. The contract is worth US $1.2 million. * On November 11, 2004 Comnetix announced that it continued to expand its share of the New York State market with the receipt of three purchase orders from three separate municipal and state agencies totaling more than US $230,000. * On December 1, 2004 Comnetix announced that it received an order from a major international investment bank, whose identity has been kept confidential at their request. The order is valued at more than $150,000, for its Civil Applicant Processing System (CAPS(TM)). The system will be used to fingerprint potential employees in order to run criminal history and periodic status checks, as required by federal regulations. * On December 23, 2004 Comnetix announced that it received an order, valued at $117,000, from the New York State Division of Criminal Justice Services (DCJS) for 11 FBI-Certified Fingerprint Printers. The phased installation of these printers and associated servers is scheduled to be complete by the end of January 2005, and will modernize the DCJS system, adding increased power and speed in processing electronic fingerprint submissions to the New York State AFIS (Automated Fingerprint Identification System).
Fiscal 2004 year-end financials have been audited and are now complete. The final results showed sales for the year at $4.73 million, with a net loss of $2.389 million for the year, or a loss of $0.34 per share. Previously announced unaudited results showed sales of $4.73 million and a net loss of $2.302 million.
* All figures are in Canadian Dollars, unless otherwise noted. About Comnetix Inc (http://www.comnetix.com/)
Comnetix provides secure criminal identification and authentication solutions to law enforcement agencies 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/utilities. Clients include American Airlines, Lehman Brothers, New York State 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 criminal background check company, facilitating tens of thousands of criminal background checks each year through its chain of ten offices across Canada.
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 please contact: Investor Relations, Jesse Deal, +1-877-691-8087 (toll-free), investor.relations@comnetix.com, for Comnetix Inc; or Tim Zahavich of Comnetix Inc, +1-905-829-9988 ext. 206, investor.relations@comnetix.com
Comnetix Inc Consolidated Statements of Operations and Deficit (in Canadian Dollars, Unaudited) Three Months Ended November 30, 2004 2003 SALES $2,172,151 $1,039,231 EXPENSES Cost of hardware sold 697,209 147,843 Wages 1,330,201 477,853 Selling, general and administrative 797,033 489,889 Interest 3,035 121,919 Amortization of capital assets and intangible assets 38,045 15,724 Amortization of deferred financing costs -- 15,508 Stock compensation 148,716 -- 3,014,239 1,268,736 NET LOSS before the undernoted (842,088) (229,505) OTHER INCOME 30,262 -- NET LOSS for the period (811,826) (229,505) DEFICIT, beginning of the period (8,434,002) (6,044,212) DEFICIT, end of period $(9,245,828) $(6,273,717) Loss per common share (basic & diluted) $(0.07) $(0.07) Weighted average common shares outstanding 11,402,428 3,219,599 Comnetix Inc Consolidated Balance Sheet (in Canadian Dollars) November 30, 2004 August 31, 2004 (unaudited) (audited) ASSETS CURRENT Cash $280,753 $907,984 Short term investments 5,300,139 6,529,480 Accounts receivable 2,376,059 1,909,873 Inventory 113,711 432,564 Employee loan 23,134 36,494 Prepaid expenses 143,966 132,392 8,237,762 9,948,787 CAPITAL ASSETS 407,918 380,452 GOODWILL 1,454,563 -- INTANGIBLE ASSET 72,150 -- 10,172,393 10,329,239 LIABILITIES CURRENT Accounts payable and accrued liabilities 1,687,979 2,109,955 Current portion of capital lease obligation 5,446 9,594 Deferred revenue 1,109,280 1,038,238 2,802,705 3,157,787 Capital lease obligation -- 500 2,802,705 3,158,287 SHAREHOLDERS’ EQUITY SHARE CAPITAL 13,068,659 12,206,814 CONVERTIBLE DEBENTURE 1,688,618 1,688,618 WARRANTS 207,538 207,538 CONTRIBUTED SURPLUS 1,650,701 1,501,984 DEFICIT (9,245,828) (8,434,002) 7,369,688 7,170,952 $10,172,393 $10,329,239
Comnetix Inc
CONTACT: Investor Relations, Jesse Deal, +1-877-691-8087 (toll-free),investor.relations@comnetix.com, for Comnetix Inc; or Tim Zahavich of ComnetixInc, +1-905-829-9988 ext. 206, investor.relations@comnetix.com
Web site: http://www.comnetix.com/
