Extreme CCTV Reports Strong Earnings in Q1Wednesday, February 15, 2006
Posted by Brawlin Melgar
|FEBRUARY 14, 2006 - 08:00 ET||
|Extreme CCTV Reports Strong Earnings in Q1|
|VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Feb. 14, 2006) - Extreme CCTV Inc. ("Extreme" or "the Company") (TSX:EXC), the global leader in active-infrared night vision surveillance equipment, today reported its financial results for the quarter ended December 31, 2005. Strong gross margin, increased revenue and reduced expenses, drove net income for the quarter to $562,000 from $4000 for the quarter ended December 31, 2004.|
For Extreme's quarter ended December 31, 2005, the Company reported revenues of $6.0 million, a 9% increase over revenues of $5.6 million for the quarter ended December 31, 2004. Gross margin increased to 50.8% of revenue from 50.1% in the comparable quarter to December 31, 2004, and consecutively from 49.2% in the fiscal fourth quarter of 2005. Pricing initiatives, continual manufacturing process improvements and new product design have enabled gross margins to improve.
Net income for the quarter ended December 31, 2005 increased to $562,000, or $0.04 per share basic, $0.03 per share diluted, as compared to $0.00 per share basic and diluted for the quarter ended December 31, 2004.
"During the quarter we have concentrated on our corporate goals of profitable growth and technology leadership," stated Jack Gin, president & CEO of Extreme.
Revenue would have been higher by approximately $400,000 for the three months ended December 31, 2005, had the exchange rates held steady compared to the same period last year. In 2005, Extreme implemented a corporate strategy to address foreign exchange pressure. This corporate strategy, which includes improvements to manufacturing, product offerings, and product costs, has helped offset the impact of the stronger Canadian dollar. A hedging strategy using foreign exchange contracts to manage the exposure to currency fluctuations related to cash flows in US dollars and the Euro has also decreased the impact of foreign exchange fluctuations.
Expenses for the three months ended December 31, 2005 and 2004 were $2.4 million and $2.6 million, respectively. The decrease in expenses was the result of cost reduction strategies implemented during 2005. Sales and marketing expenses for the three months ended December 31, 2005 were 17.2% of revenue, down from 20.6% of revenue for the three months ended December 31, 2004.
Extreme continues to grow a stronger balance sheet. As of December 31, 2005, cash increased to $7.7 million from $7.3 million at September 30, 2005. Inventories remained stable and accounts re