F.V.Ramsoondar stated: "The results for the quarter do not reflect the results of the restructuring and cost management that the Company's new management has initiated. There were several significant changes made during the second quarter of 2011, which will impact the results of Q2 and the balance of 2011 in a significant way. I am confident that our shareholders will see positive changes in the results of the Company going forward."
(1) EBIITDA = Earnings before interest, impairment, taxes, depreciation and amortization (2) EBIITDAS = Earnings before interest, impairment, taxes, depreciation and amortization and share-based payments.
Revenues
Revenue for the first quarter was $7,977,759, compared to $8,813,176 for last year, a decrease of $(835,417) or (9.48)%. The overall decrease in revenues is largely attributable to the additional one time revenue the Company recognized in 2010 from the 2010 Winter Games.
Gross margin
Gross profit for the first quarter 2011 was $1,280,231 (16.05%), compared with $2,060,893 (23.38%) last year. The decrease in gross profit is directly related to the reduction in revenues relating to the 2010 Winter Games.
Operating costs
Operating costs were $6,697,528 compared with $6,752,283 last year, a decrease of $54,755 or 1%.
Selling and administrative expenses ("SGA")
SGA totalled $1,286,070 for the first quarter compared with $1,574,665 for last year, a decrease of $(288,595) or (18.33)%.
Operating activities
Cash provided by operating activities decreased mainly due to the increased net loss and decreased non-cash operating working capital. Decreases in non-cash operating working capital were primarily the result of increased receivables in Q1 2011.
Financing activities
Cash from financing activities amounted to $141,924 compared with cash of $267,431 last year. The revolving facility generated $231,140 during the quarter compared to $326,635 in the comparative quarter.
Property and equipment
Property and equipment amounted to $838,603 as at March 31, 2011, a decrease of $42,776 compared to December 31, 2010 mainly due to the Q1 2011 depreciation of $84,361 and additions of $41,585.
Intangible assets
Intangible assets primarily include customer relationships, which are amortized on a straight-line basis over periods varying between 5 and 8 years. Intangible assets amounted to $674,874 as at March 31, 2011, a reduction of $19,330 over intangible assets as at December 31, 2010, mainly due to customer lists purchased of $39,793 and Q1 2011 amortization of $59,123.
Stock Awareness Activities
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Statements in this press release other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, are forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks related to business development and retention, and risks related to the current economic and credit conditions. As a result, actual results may vary materially from those described in the forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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