EDMONTON, ALBERTA -- (Marketwire) -- 01/23/13 -- Titan Logix Corp., (TSX VENTURE: TLA) ("Titan" or the "Company"), an advanced technology industrial instrumentation and controls company today reported its unaudited financial results for the first quarter of its fiscal 2013, ended November 30, 2012.
Summary of Sales Revenue, Gross Profit and Net Earnings:
Sales for the first quarter ended November 30, 2012 were $4,009,955, an increase of 18% from sales of $3,389,692 in the first quarter of fiscal 2012. Gross profit in the three month period was $2,036,577 (51%) compared to $1,579,893 (47%) in the comparable period of the previous fiscal year. Net earnings and comprehensive income was $1,058,560 before tax and $781,257 after tax ($0.03 per diluted share) compared to $630,086 before tax and $622,237 after tax ($0.02 per diluted share) in the same quarter of the previous fiscal year. The increase is tied to the increase in sales for the period. Income tax expense for the previous year's first quarter was minimal compared to fiscal 2013 as the Company had unrecognized deferred tax assets available to reduce income tax expense.
Financial results for the first three months of fiscal 2013 reflect Titan Logix Corp's successful execution of its strategic plan, its continued operational strength and the continued customer demand for its oilfield fluid transport products.
Summary of Operating Expenses:
Total expenses for the first three months of fiscal 2013 were $989,218 compared to $951,945 in the same period a year ago. General and administration expenses were $471,564, compared to $450,698 recorded in the same period of the previous fiscal year. Engineering and development expense was $124,023 compared to $194,107. During the three months ended November 30, 2012, Titan recorded an increase to capitalized product development costs of $143,471 compared to $67,565 in the three months of the previous fiscal year. This increase is a result of additional resources being allocated to new product development rather than sustaining engineering in comparison to the previous year's first quarter. Marketing and sales expense increased from $353,553 in the previous fiscal year's first three months to $404,892 for the first three months of fiscal 2013. As a percentage of sales, operating expenses are 25% for the three month period ended November 30, 2012 compared to 28% for the same period of fiscal 2012. The reduction of operating expenses as a percentage of sales is primarily due to the increase in revenues and also the continued focus on controlling of operating costs.
At November 30, 2012, working capital was $9,514,113 compared to the August 31, 2012 year-end balance of $8,557,406. Cash and cash equivalents and short term investments were $6,899,143 compared to $5,760,318 at the end of fiscal 2012. Titan does not have any debt except for trade and accrued payables.
The customer activity in our primary market has decreased from the peak levels of the previous fiscal year. Sales for this most recent quarter ending November 30, 2012, are lower than the previous three quarters (second, third and fourth quarter of fiscal 2012). This market correction is expected to continue to have an impact on our sales into the next quarter. We plan to address this correction by continuing to focus on increasing our market share.
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