Revenues stabilise but exchange rates bite

Edited by the Electronicstalk editorial team Mar 1, 2004

Inventronics has published its 2003 year-end year end financial results.

Inventronics has published its 2003 year-end year end financial results.

For the year ended 31st December, Inventronics recorded a net loss of $1,505,000 or $0.22 cents per share in 2003 compared with a net loss of $7,376,000 or $1.07 per share in 2002.

For the three months ended 31st December, Inventronics reported a net loss of $273,000 or $0.04 per share in 2003 compared with a net loss of $646,000 or $0.10 per share in 2002.

The majority of the 2003 loss was due to the decreasing value of the US dollar against the Canadian dollar, which reduced earnings by approximately $1 million, and one-time restructuring charges of $234,000 to further reduce staff.

Inventronics improved its EBITDA to $449,000 in 2003 from $113,000 in 2002.

Selling and administrative expenses were reduced by 28%, lowering fixed costs to $1.5 million from $2.1 million in 2002.

Sales were $13,951,000 in 2003 compared with $25,567,000 in 2002.

The $11.6-million decrease was due to three factors.

The corporation's principal customer began directly purchasing certain components that Inventronics installed in this customer's enclosures, rather than the previous practise of Inventronics purchasing these components and then selling them to the customer.

This change reduced both sales and cost of sales by $5.6 million with no effect on net income.

A prolonged downturn in infrastructure spending in the communications industry and other markets served by Inventronics continued in 2003, reducing Inventronics' sales by $5 million.

The fall in value of the US dollar compared with the Canadian dollar resulted in a sales and net income reduction of about $1 million.

More than 75% of Inventronics' sales are denominated in US currency.

Inventronics' revenues stabilised in 2003, and began to strengthen in the fourth quarter as the communications and electronics industries initiated long-awaited increases in infrastructure spending.

"This strengthening in sales, which has continued in 2004, is a positive indication that demand for Inventronics' products and services is improving", said Dan Stearne, Inventronics' President and CEO.

"We are also achieving sales outside the telecom sector through relationships developed with a number of new customers, which will reduce our dependency on any particular industry".