LONDON, Ontario, Jan. 29, 2001 (BUSINESS WIRE)—Trojan Technologies Inc. (TSE:TUV.) today announced its financial and operating results for the first quarter of fiscal year 2001, ended November 30, 2000.
Revenue for the quarter was $18.4 million, an increase of 12% compared to $16.5 million in the same quarter last year. Earnings before interest, taxes, amortization and income from equity investment were $271,500 compared to a loss of $3.3 million in the first quarter of fiscal 2000.
In the first quarter of fiscal 2001, Trojan reported a net loss after tax of $0.6 million or $0.03 per share compared to a loss of $4.1 million or $0.24 per share in the first quarter of the prior year. Last year's results included a restructuring charge of $2.5 million before tax.
Consolidated gross margin was 36.4% or $6.7 million in the quarter compared to 24.7% or $4.1 million in the same quarter last year. These results demonstrate the positive effect of changes introduced over the last year. Gross margins in North American markets were particularly strong at over 40% reflecting the benefits of cost reductions and improved operations. In addition, improvements to the Company's financial and information systems have provided better information to ensure improvement in the bidding process.
However, the gross margin in Europe was just over 10%. One large contract, manufactured this quarter, was committed to in fiscal 1999 at a low margin. That, together with the impact of the weakened Euro since 1999, has negatively impacted the Company's performance overall reducing gross margin gains made in the prior quarter.
Mr. Hank Vander Laan, President and Chief Executive Officer said, "I am pleased with the progress we are making in our North American markets. We have demonstrated that we can achieve attractive margins in our largest market. To ensure Trojan's success in Europe, we are implementing the changes required to reduce costs and focus and co-ordinate our efforts."
Administrative, selling and research and development costs were reduced to $6.4 million or 34.9% of sales compared to $7.3 million and 44.5% in the first quarter of last year. In addition to these expenses, last year's first quarter results reflected a restructuring charge of $2.5 million
At November 30, 2000, the Company's net bank indebtedness was $16.1 million, compared to $20.6 million at August 31, 2000 as a result of the production realignment program and reductions in inventory. Accrued revenue at November 30, 2000 was $11.6 million, compared to $16.3 million at August 31, 2000 and $23.1 million at the same time last year, reflecting Trojan's success in aligning production with customer delivery requirements. Outlook
For the last two years, the wastewater treatment industry has experienced project delays that in turn have reduced sales volumes. Given the slowing in the U.S. economy, it is not clear how soon this market will rebound. In the meantime, Trojan has identified additional applications for UV technology, including municipal drinking water and has launched new products for these markets. The Company is receiving requests for proposals for its Trojan UVSwift™ drinking water systems, but the long decision cycle makes it likely that significant new revenues from these market will not emerge until fiscal 2002 and beyond.
During the last year, the Company has placed considerable emphasis on improving its gross margins and believes it can achieve margins. Because of the cyclical nature of the business, it is anticipated that the second quarter revenues will not be at a sufficient level to generate profits during the period. Given the expected revenue growth in the balance of the year, management believes profitability can be achieved for the year overall.
Later today, the Company's Annual Meeting of Shareholders will be held in London, Ontario. Copies of the presentations made by Mr. Vander Laan and Mr. Alexander will be available on the Company's website at www.trojanuv.com.
Trojan Technologies is a Canadian based, high technology environmental company operating internationally. With more than 20 years of experience, Trojan has the largest installed base of UV disinfection systems operating around the world. Trojan designs, manufactures and sells ultraviolet disinfection systems for municipal wastewater, drinking water systems for residential, municipal and commercial use, and industrial systems for food and beverage, pharmaceutical, and semiconductor applications.
