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Posted: November 29, 2007
Raymor Releases Third Quarter Results of 2007
(Nanowerk News) Raymor Industries Inc. (TSX VENTURE:RAR), a leading developer and producer of single-walled carbon nanotubes, nanomaterials and advanced materials, today released its third quarter unaudited financial statements, along with the company's Management Discussion and Analysis (MD&A) for the third quarter 2007. Raymor, recognized as one of the NANOTECH 100, posted quarterly revenues of $1,130,982, a 79% increase as compared to the same period in 2006 and a 25% increase from the second quarter of 2007. Raymor generated a net loss after depreciation and amortization of $424,743 or $0.004 per share in its third quarter, compared to a net loss after depreciation and amortization of $583,868 or $0.007 per share for the corresponding period in 2006. Moreover, when compared to its second quarter of 2007, the net loss decreased by 17% and by 27% for the same period in 2006. The growth in revenue is explained in part by completed qualification by clients now leading to sales during this quarter and also by the Company's commitment to grow its existing client base by expanding its offering of products and technologies to the global markets. With more accreditations to be completed in the last quarter of 2007, additional revenues are expected.
Raymor realized a gross margin of 50% as compared to 40% for the same period in 2006. The gross margin realized in the third quarter has improved when compared to results achieved previously during the first and second quarter of 2007 with a gross margin of 40% and 41% respectively.
Selling expenses decreased by 8% compared to the same period in 2006. In particular, selling expenses amounted to $344,396 as compared to $373,375 for the same period in 2006. During this quarter, the Company launched a number of initiatives and action plans to improve not only its sales but efficiencies in sales fulfillment.
Administrative expenses amounted to $426,780 as compared to $418,367 for the same period in 2006. Items included under administrative expenses are rent, property taxes, salaries and professional expenses such as accounting fees. The Company is dedicated to reducing its administrative expense and improve its efficiency through its new found economies of scale as the slight increase represents short term absorption of transactional expenses.
Also, in the third quarter, the Company incurred legal fees related to patent applications for its existing technology and for future applications being developed in an effort to fulfill the Company's commitment to its customers and investors. In October 2006, further to advice from its legal counsel, the Company filed a patent infringement lawsuit against two organizations and three of their principal scientists in the Federal Court of Canada. In its proceedings, the Company maintains that these organizations infringed Canadian patent number 2,499,860 "Method and Apparatus for Producing Single Wall Carbon Nanotubes" for which the Company holds the exclusive worldwide rights. The Company, further to legal advice, is confident in its position. The Company is committed to protect its technology and intellectual property rights.
The Company's total assets amounted to $18,627,505 as at September 30, 2007, compared to $15,136,107 as at December 31, 2006. It has cash and cash equivalents of $3,339,052 as at September 30, 2007 as compared to $4,113,089 as at December 31, 2006. This increase in assets is due to the Company's financing activities which include institutional funding received during the second quarter. In the third quarter, investments were made in development costs toward nanotechnology initiatives and to improve the Company's efficiency in production and operations.
Fixed assets amounted to $5,039,554 as at September 30, 2007 compared to $4,633,339 as at December 31, 2006. This variation relates to the purchase of new equipment and all necessary assets for the Company production processes.
Also, deferred development costs related mainly to its nanotechnology project and amounted to $6,064,544 as at September 30, 2007, as compared to $4,185,832 at the end of December 31, 2006. In the third quarter, development costs amounted to $712,170 as compared to $727,444 for the same period in 2006 and $660,989 for its second quarter. Deferred development costs are composed of fees for the maintenance and protection of the Company's intellectual property, development of new components for its single-walled carbon nanotubes project and related salaries.
Other highlights from the third quarter of 2007 Financial Statements and MD&A includes the following:
As previously disclosed, Raymor had an obligation to pay a royalty on sales of its powders and coatings subsidiary until 2016 (representing the next 36 financial quarters). For the third quarter only, the payment under that royalty would have amounted to $50,000. Subsequent to the end of the quarter, the Company eliminated all future obligations for royalties on sales of its powders and coatings division by making a one-time lump sum payment of $375,000. The Company considered this transaction as value accretive for it. Also, further to this settlement, all relationships with the former co-venture partner and its affiliates have been terminated.
Raymor previously announced on September 19th 2007 the conclusion of a conditional purchase agreement for a company specializing in the manufacturing of metal parts and other services for the aeronautical and industrial sectors. This transaction is still pending and subject to the fulfillment of certain conditions. No revenue from this acquisition is included in the Company's financial statements.
Stephane Robert, President and CEO of Raymor Industries had the following to say:
"Raymor considers these third quarter results as promising for the future. Revenue generated reflects the Company position in offering differentiated advanced material and nanomaterial products addressing the needs of the aerospace, biomedical and defence sectors."
The complete 2007 third quarter results, along with the MD&A are available at www.sedar.com.
About Raymor Industries
RAYMOR INDUSTRIES INC. (TSX VENTURE:RAR) has as its mission to become a leading developer of high technology for the production of single-walled carbon nanotubes, nanomaterials and other advanced materials for high value-added applications. Raymor Industries operates three wholly-owned, industrial subsidiaries, Raymor Nanotech, Raymor Aerospace and AP&C Advanced Powders and Coatings, specializing in nanotechnology and advanced materials, and comprising four divisions: (1) nanotechnology products, including nano-powders, nano-coatings, and single-walled carbon nanotubes (C-SWNT) for "the applications of tomorrow"; (2) thermal spray coatings, which largely targets military, aeronautical, aerospace, specialized industrial, and mining applications; (3) spherical metallic powders, primarily used for biomedical and aerospace applications; and (4) net-shape forming, a component manufacturing technique used for ballistic protection and other aerospace and military applications. Raymor holds the exclusive rights to more than 20 patents throughout the world, with other patents pending.