Highlights
- Record revenue of $25.45 million in Q1-10, representing growth of 30% compared to Q1-09 revenue of $19.58 million
- Record consulting revenue of $13.19 million in Q1-10 compared to $12.15 million in Q1-09
- Q1-10 net income of $2.77 million or $0.09 per share compared to $2.76 million or $0.09 per share in Q1-09
- Several significant recent wins, including both high value consulting and industry applications, along with a growing pipeline, indicate strategy is bearing results and are expected to fuel growth throughout the year
- Board of directors declares quarterly dividend of $0.03 per common share
Edmonton, Alberta - January 11, 2010
Matrikon Inc. (TSX:MTK), a leading provider of solutions for industrial intelligence, today reported financial results for the first quarter of fiscal year 2010 which ended November 30, 2009.
Matrikon president and CEO Nizar J. Somji commented on the quarter: "Riding on the momentum from activity that started to pick up late in Q4-09, our first quarter places us back on track. Some of our recently announced contract wins resulted in record consulting and equipment revenue and strong software revenue in the quarter. We expect that as we continue to execute these contracts and close other opportunities in our pipeline, we will continue to grow our top line and profitability throughout this fiscal year and beyond.
"These record results demonstrate the turning point we have reached as a company; we have built a sustainable business model based on high value consulting engagements and our integrated industry solutions. As a long-term business strategy, we expected it to bear fruit in the last fiscal year. However, the global economic downturn set things back by a year. Our results are now back on track and we expect projects of the magnitude we have announced recently to become the new norm rather than one-off occurrences as we continue to execute our strategy."
Revenue for the first quarter was a record $25.45 million compared to $19.58 million in Q1-09 and $17.62 million in Q4-09. Net income in the first quarter was $2.77 million or $0.09 per share compared to $2.76 million or $0.09 per share in Q1-09 and $0.49 million or $0.01 per share in Q4-09.
Matrikon's board of directors declared a quarterly dividend of $0.03 per common share to all shareholders of record on January 20, 2010, payable on January 29, 2010. The dividend is an eligible dividend for Canadian tax purposes.
Additional Highlights:
- Consulting revenue increased by $1.04 million over Q1-09 and by $2.32 million compared to Q4-09 as a result of new project wins which led to improved utilization and a 6% increase in average daily rate compared to Q1-09 and 18% compared to Q4-09.
- Record Equipment revenue: Equipment revenue was a record $5.63 million in Q1-10 as we delivered a significant portion of the equipment (third party hardware and software) on our major industrial security project. We continue to work on the consulting components of this project. With a lower margin than other revenue lines, this significant increase in equipment revenue shifted our revenue mix and impacted both gross and net margin.
- Subsequent to the quarter, we won and announced a US$15.7 million contract to build a remote oil field monitoring program for a Middle East oil company based on Matrikon's Well Performance Monitor industry application. Also subsequent to the quarter, we announced a €4.2 million contract win with Statoil to deliver Well Performance Monitor to 35 offshore assets on the Norwegian Continental Shelf. These recent wins, along with ongoing work with other global clients, establish Matrikon as the vendor of choice for intelligent field solutions.
- During the quarter, we received additional change orders totaling US$2.13 million on the US$14.61 million contract to deliver the network foundation for cyber security for a major United States electricity producer. We also entered a corporate license agreement for our Control Performance Monitor and Alarm Manager products with a major European chemicals company. The contract is worth approximately €1.36 million in software and services.
- Products revenue (comprised of software license and support revenue) increased 4% compared to Q1-09 and 14% compared to Q4-09. Off-the-shelf product sales grew 38% and support revenue increased 4% compared to Q1-09. The new corporate license agreement with the major European chemicals company mentioned above comprised the majority of this increase. Industry application sales, which were depressed throughout the latter half of FY-09 due to economic conditions, have begun to gain traction again. While revenue from industry applications was minimal in the quarter, we expect it to pick up significantly as we begin to implement recently won projects.
- Gross margin was 54% in Q1-10, compared to 61% in Q1-09 and 54% in Q4-09. Gross margin was significantly impacted by elevated equipment revenue in Q1-10, which has a lower gross margin than other revenue lines. The impact was a 7 percent point reduction, compared to a typical gross margin impact of 1 to 2 percent. Combined overhead expenses in Q1-10 were $9.58 million compared to $9.32 million in Q1-09 and $8.92 million in Q4-09. Sales and marketing expenses were up 27% from Q1-09, as we continue to invest in sales and marketing to drive top-line growth.
MD&A and Financial Statements
The MD&A and Financial Statements for the current quarter can be found on Matrikon's website at http://www.matrikon.com/about/corporate/investors/financial/q-reports.aspx or by contacting Nicole Sayler at 1-877-628-7456 extension 4010.
Conference Call and Webcast
Matrikon President and CEO, Nizar J. Somji and CFO Jonathan Chia will hold a conference call to discuss first quarter results on Tuesday, January 12, 2010 at 8:30am EST (6:30am MST). To participate live, call 647-427-7450 in the Toronto area and 1-888-231-8191 in all other areas.
A replay will be available until midnight EST, February 7, 2010. To access the playback service, please dial 416-849-0833 in Toronto or 1-800-642-1687 in all other areas. The passcode is 44764484.
The conference call will also be webcast and podcast (live and archived) at: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2904880
About Matrikon
Matrikon (www.matrikon.com) provides industrial software solutions to process control industries, empowering their clients to achieve operational excellence. Matrikon products transform production data into knowledge and action that enable users to maximize performance while managing risk. With offices throughout North America, Australia, Europe and the Middle East and a client base that includes industry leaders in a wide range of process industries, Matrikon's reach is global. Empowering excellence since 1988, Matrikon is traded on the Toronto Stock Exchange under the symbol MTK.
For more information, contact:
Nicole Sayler
Corporate Communications Director
780-945-4010
877-628-7456 x 4010
email: nicole.sayler@matrikon.com
Matrikon is a registered trademark of Matrikon Inc.