Edmonton, AB -October 22, 2004 - Matrikon Inc. (TSX: MTK), a leading industrial IT solutions provider, today reported consolidated financial highlights for the fourth quarter and year ended August 31, 2004. "We capitalized on the momentum generated towards the end of the third quarter and achieved an all around record fourth quarter, with the highest ever software sales, support revenue, total revenue and earnings," stated Nizar J. Somji, president and chief executive officer of Matrikon.
"This quarter reflects an increasing market acceptance and new excitement about the potential of our products for industrial plant intelligence, and the continuing realization of the value our products bring to industrial facilities."" In addition, our acquisition of PI Automation late in the third quarter has paid off with strong performance by this group. We will continue to build on this momentum into 2005."" Recent business wins, such as the $3.3 million Syncrude asset management solution and the corporate rollout of ProcessDoctor at Sasol are early indicators of our growth potential for the coming years.
With the recent changes and additions to our management team, we are positioned to take advantage of these opportunities." Fiscal year revenue grew by 11% to $54.40 million from $48.88 million in 2003.
Net income for the year grew to $2.68 million or $0.09 per share from $2.63 million or $0.11 per share in the prior year.
Revenue for the fourth quarter grew 35% to a record $16.57 million compared to revenue of $12.32 million for the fourth quarter of 2003.
Net income for the three-month period grew 84% to a record $1.55 million or $0.05 per share versus $0.85 million or $0.03 per share during the same period in fiscal 2003.
Fourth quarter net income was reduced by $0.36 million or $0.01 net of tax due to foreign currency translation.
Outlook
Matrikon is committed to sustainable long-term growth and is well-positioned to capitalize on its market potential. Matrikon's solutions represents new technology in the industrial market and thus to date have been adopted primarily by technology innovators. With wide-spread realization of the need for and benefits of Matrikon's solutions, management expects adoption rates of certain products to increase rapidly.As one of the top 50 control companies in North America, Matrikon continues to move up the ranks (currently at #42 based on 2002 revenue). Despite this historic growth, considerable potential exists to increase market share.
To achieve this growth Matrikon has made a significant investment in sales and marketing, which increased by 55% over 2003. Based on the present economic environment, current contracts underway and assuming Matrikon's ability to win new business continues at the current pace, management expects the company to achieve revenue in the range of $62-$67 million (14-23% growth) and net income of $4-$5 million (49-87% growth), or $0.14-$0.17 per share based on current shares outstanding during fiscal year 2005.
This forecast is based on the following currency exchange rate assumptions in comparison to the Canadian dollar: US dollar at $1.25, British pound at £2.25 and Australian dollar at $0.90.
Management further anticipates that a one cent appreciation of US currency would have a positive after tax impact of CDN$0.13 million on this forecast, a one pence appreciation of the British pound would have a positive after tax impact of CDN$0.02 million and a one cent appreciation of the Australian dollar would have a positive after tax impact of CDN$0.09 million. Matrikon has processes in place to handle gradual changes in currency exchange rates as well as a built in hedge due to the diversity of the currencies it operates in.
However, if a currency moves very rapidly or if all currencies move in the same direction in comparison to the Canadian dollar, there is likely to be an impact to net income. In general, it is Matrikon's policy not to convert currency unless required , thus minimizing the long term impact.Quarter Highlights: *Meridian Energy selected Matrikon for a $1.0 million plant asset management system.
*Syncrude selected Matrikon to deliver a $3.3 million Equipment Asset Management System. *Sasol's Secunda site, one of the largest stand-alone manufacturing facilities in the world with 19 plants, selected Matrikon's ProcessDoctor as the site standard for monitoring and optimizing plant control assets. *Matrikon's distributor in Germany (best solutions AG) licensed the Matrikon name and now exclusively distributes Matrikon products.
*Matrikon and OSIsoft, Inc. finalized a settlement agreement and have discontinued their respective law suits against each other. Subsequent to the quarter, Matrikon announced several changes to the executive team: -Shafin U. Kanji, currently chief financial officer of Matrikon, has been promoted to the newly created position of executive vice president of operations, effective November 1, 2004. -Nimal Rodrigo has joined Matrikon and will become chief financial officer on November 1, 2004, pending board approval.
-Floyd Bjorgan, formerly managing director of Australia, has returned to Matrikon's head office in the new role of vice president human resources and administration. -Sam Crisafulli, formerly a senior executive in Matrikon Australia, has assumed the role of managing director in Australia.
MD&A and Financial Statements
The complete Management's Discussion and Analysis and Financial Statements can be found on Matrikon's website at www.matrikon.com/investors