Titan Logix Corp. Reports Fiscal 2016 Q4 and Year End Financial Results
Titan Logix Corp. Reports Fiscal 2016 Q4 and Year End Financial Results
Edmonton, Alberta, December 2, 2016 – Titan Logix Corp., (TSX Venture: TLA), a high technology company specializing in advanced technology fluid management solutions, announces its results for the three months and year ended August 31, 2016.
“Titan continues to face challenges because of ongoing lower levels of oilfield activity and consequently lower demand for our products in crude oil applications” said CEO, Douglas Carruthers. “The Company has right-sized the organization, prioritized our product development and energized our sales effort to realize the strength of our market leading Titan Brand.”
For the year ended August 31, 2016 total revenue decreased by $9,329,983 to $3,972,800, compared to $13,302,783 in fiscal 2015. The revenue decline reflects the decrease in the demand for the Company’s signature product (TD80) that abruptly declined concurrent with demand for new crude oil tankers as a result of the crude oil price collapse that began mid 2014. The decline in revenue resulted in gross margin as a percentage of revenue dropping to 22% from 49% in the prior year as fixed support and production overhead costs are spread over lower production volume and revenue. Gross profit was reduced by $5,616,698 to $888,565, compared to $6,505,263 in the prior year. This gross profit reduction is the primary cause of the net loss in fiscal 2016.
The net loss before income taxes, excluding impairments, for fiscal 2016 was $3,359,943 compared to net earnings before tax, excluding impairments, of $2,257,123 in the prior year. The non-cash impairments for fiscal 2016 include a $940,924 impairment recorded in the fourth quarter as a result of a reduction in the anticipated recoverable amount of the capitalized carrying value of historical product development costs, as compared to an impairment of $431,551 in the prior year as a result of the discontinuation of certain product line development. In addition, an impairment of $174,558 was recorded for decommissioned property, plant and equipment in fiscal 2016.
The net loss in fiscal 2016 was $3,697,254 ($0.14 loss per diluted share) compared to net earnings of $1,140,268 ($0.04 per diluted share) for fiscal 2015. In addition to the gross profit reduction and impairments noted above, the results in fiscal 2016 were unfavourably impacted by a $557,239 decrease in the foreign exchange gain recognized on US sales, compared to the prior year, and favourably impacted by a $569,202 decrease in expenses in fiscal 2016, compared to the prior year, due to cost reduction initiatives undertaken in the third and fourth quarter which
included staff rationalizations. Rationalizations resulted in non-recurring expenditures of $158,215 in severance costs in fiscal 2016.
Titan continues to maintain its market share for level measurement and control devices in a significantly smaller crude oil tanker construction market in the face of continuing low crude oil prices. When crude oil prices recover to a level that stimulates increased oil tanker activity in North America the demand for Titan’s primary products is expected to respond positively.
Titan’s proprietary TD80/Finch II/RCM technologies continue to be widely accepted. Leveraging Titan’s large install base and market share, the Company is focused on generating new revenue stream opportunities via existing tanker retrofit sales and by exploring new market alternatives for product sales in other than crude oil applications. The Company is also prospecting new opportunities in both the complimentary upstream and downstream storage tank markets.
Titan has taken the necessary progressive steps to position itself within this new market reality:
• It has undertaken cost reduction measures that include a significant reduction in its work force while retaining core engineering, sales and support teams. These cost reduction initiatives will begin to be realized in 2017 and compensation savings of approximately $1.3 million, as compared to fiscal 2016, are expected.
• It closed its Saskatchewan warehouse and service facility and divested of its TPZ and 3500 Controller product lines allowing for resources to be more focused on current and upcoming market opportunities and products.
• It has completed an intensive review of its R&D program and is now focused on high potential product development.
• It continues to explore and develop strategic partnerships that will allow it to expand into new markets.
• It continues to explore new business opportunities to leverage Titan’s expertise and capital.
Titan maintains a strong balance sheet that will support strategic initiatives going forward.
Titan Logix Corp.’s audited financial statements and management’s discussion and analysis for the fiscal year ended August 31, 2016 are available on SEDAR at www.sedar.com and on the Company’s website, www.titanlogix.com.
About Titan Logix Corp.:
Founded in 1979, Titan Logix Corp. (“Titan” or “the Company”) is a developer, manufacturer and marketer of innovative fluid measurement and 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. Titan’s 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 remotely 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, 2016 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