Edmonton, Alberta, April 28, 2016 – Titan Logix Corp., (TSX Venture: TLA) (“Titan” or the “Company”), a high technology company specializing in advanced technology fluid management announces its unaudited financial results for the second quarter of its fiscal 2016, ended February 29, 2016.
“These are tough times for all people and companies caught in the crude oil market collapse, especially so our staff here in Edmonton,” said CEO, Douglas Carruthers. “Titan’s team of dedicated and experienced professionals coupled with its excellent product quality and service reputation is a solid foundation from which to build. I have initiated a complete review of Titan’s strengths and weaknesses, its products and its business opportunities with the objective of creating a mid to long-term strategy for expansion and shareholder value creation” continued Mr. Carruthers. “We are also fully engaged in an expanding third party product assessment alongside new product and market releases.”
Summary of Sales Revenue and Net Earnings (Loss)
Titan Logix Corp.’s revenue for the second quarter of fiscal 2016 ended February 29, 2016 totaled $945,112, a decrease of $3,004,779 or 76% from revenue of $3,949,891 in the previous year’s second quarter. Titan’s revenue outside of Canada, primarily to the U.S., was $539,934 in the second quarter of fiscal 2016, a decrease of 77% from revenue of $2,361,455 in the second quarter of fiscal 2015. Revenue in Canada for the second quarter of fiscal 2016 was $405,178, a decrease of 74% from revenue of $1,588,436 in fiscal 2015’s second quarter.
This overall decrease was marginally offset 2% by the benefit of the strengthened U.S. dollar compared to fiscal 2015’s second quarter. For the first six months of fiscal 2016 ended February 29, 2016, sales were $2,522,899, down by $6,472,237 or 72% from sales of $8,995,136 in the first six months of fiscal 2015. The substantial decline in revenues, for both the quarter and first six month of fiscal 2016 are attributable to the significant slowdown in crude oil trailer manufacturing due to the decline in the price of oil.
The net loss in the second quarter of fiscal 2016 was $658,805 ($0.03 loss per diluted share) compared to net earnings of $1,004,334 ($0.04 per diluted share) for fiscal 2015. Net loss and comprehensive loss in fiscal 2016’s first six months was $1,009,660 ($0.04 loss per diluted share) after tax compared to earnings of $2,118,262 ($0.08 per diluted share) after tax reported for the first six months of fiscal 2015.This decrease is tied to the decrease in revenue and related gross profit as well as lower gains on foreign exchange.
Total expenses excluding the gain on foreign exchange were $2,406,949 for the first six months ended February 29, 2016 compared to $2,438,965 in the previous year. Engineering costs reflect an increase due to lower capitalized product development costs primarily as a result of the engineering team’s increased involvement in preparing for the introduction of new third party products into Titan’s solution suite. Therefore reduced time was spent on new capitalizable product development.
At February 29, 2016 working capital was $16,167,517 compared to the August 31, 2015 year-end balance of $17,218,937. At February 29, 2016 cash and cash equivalents were $13,945,256 compared to $14,773,897 at the end of fiscal 2015. Titan does not have any debt except for trade payables, accrued liabilities and finance lease obligations.
Titan continues to maintain its market share but within a significantly downsized new tanker market in the face of the dramatic downturn in the upstream crude oil market. Until crude oil prices recover to a level that stimulates increased oil rig activity in North America the demand for Titan primary products is expected to remain depressed. However, Titan’s proprietary TD80/Finch II/RCM technologies continue to be widely accepted which facilitates existing trailer retrofit sales, which are an ongoing opportunity.
In an effort to improve the sales margins for Titan’s products in territories served by its Saskatchewan branch Titan has entered into agreements with selected value added resellers (“VAR”) in southeast Saskatchewan to distribute and support many of Titan’s “In the Field” products. In conjunction with this expanded sales footprint Titan is downsizing its Saskatchewan branch while establishing dedicated customer sales and service support for the new VAR program.
Titan has expanded its ‘In the Field” product offerings to include the TankScan line of products. TankScan is a leader in wireless tank monitoring for more than ten years and monitors tens of thousands of tanks across the U.S. As a U.S. distributor and the sole Canadian distributor Titan offers TankScan’s tank level monitoring solution for fuel distributors, waste oil collectors and others managing liquid assets, primarily intended for use in downstream, refined petroleum tanks. The TankScan product provides remote access to liquid tank data anywhere an internet connection is available, facilitating efficient delivery and collection of liquid products.
Titan has also expanded its “On the Road” product offerings to include the Air-Weigh LoadMaxx line of products through a special integration with the existing Titan TD80/Finch II. Air-Weigh is a leader in electronic onboard scales with tens of thousands installations across the world. As the sole North American distributor of this unique integration Titan offers a combined overweight and overfill prevention solution.
Titan continues to closely monitor discretionary spending. Company-wide compensation roll backs of 5% to 10% for all employees and 20% for executive and directors including suspension of certain employee benefits remain in force.
The recent addition of a new CEO to Titan’s executive team has strengthened the company’s capability to verify and justify its R&D program while simultaneously integrating carefully selected third party technologies into the product offerings. In addition, this expanded management bandwidth has allowed Titan to intensify its review of strategic initiatives and opportunities, including acquiring and developing new products and partnerships while expanding into new markets. Titan continues a strategic planning exercise targeting a business plan that is responsive to the new market factors. The expanded management bandwidth has also facilitated an increased focus on sales by other members of the management team, particularly considering the addition of the new
As a result its April 7, 2016 Share Purchase and Settlement Agreement with The Article 6 Marital Trust created under the First Amended and Restated Jerry Zucker Revocable Trust, Titan will incur added unplanned one-time legal and regulatory expenses in the last half of fiscal 2016 in relation to the special meeting, provisions of the settlement and the related negotiations. In addition, certain corporate development initiatives were interrupted during the post notice period and negotiations on the settlement agreement.
About Titan Logix Corp.
Founded in 1979, Titan Logix Corp. (“Titan” or “the Company”) is a high technology company specializing in Research and Development (R&D), manufacturing and marketing of advanced technology fluid management solutions. The Company’s products include Guided Wave Radar (GWR) gauges for level measurement and overfill prevention (particularly for use in mobile tanker applications), level gauges for storage tanks, and communication systems for remote alarming and control. Our products are currently used in the oil and gas, waste fluid collection, chemical and aviation industries.
Titan’s products are part of a complete asset management solution. The full solution consists of Titan’s products integrated with best-in-class third party solutions to enable our complete fluid management throughout each stage of their fluid handling processes. This is captured by our slogan “Advanced Technology Fluid Management Solutions, In the Field, On the Road, In the Office”™.
- ● In the Field: “In the Field” refers to Titan’s solution offerings for storage tanks and process vessels.
- On the Road: “On the Road” refers to Titan’s solution offerings for mobile tanker trucks and trailers.
- In the Office: “In the Office” refers to Titan’s solution offerings that enable customers to monitor their fluid assets from the convenience of their dispatch center or other back office environment through a wired or wireless connection.
Titan Logix Corp. is a public company listed on the TSX Venture Exchange and its shares trade under the symbol TLA.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Information in this press release that is not current or historical factual information may constitute forward looking information within the meaning of securities laws. Implicit in this information are assumptions regarding our future operational results. These assumptions, although considered reasonable by the company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual performance of the company is subject to a number of risks and uncertainties and could differ materially from what is currently expected as set out above.
For more exhaustive information on these risks and uncertainties you should refer to our Management Discussion and Analysis in respect of the year ended August 31, 2015 which is available at www.sedar.com. Forward-looking information contained in this press release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date.
You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time, whether as a result of new information, future events or otherwise, except as required by applicable securities law.
Chief Executive Officer
Ph: (780) 462-4085
TSX Venture, TLA