FOR: TITAN LOGIX CORP.
TSX VENTURE SYMBOL: TLA
Date issue: April 13, 2017
Time in: 5:55 PM e
Attention:
EDMONTON, ALBERTA–(Marketwired – April 13, 2017) – Titan Logix Corp., (TSX
VENTURE:TLA) (“Titan” or the “Company”), a high technology company specializing
in advanced technology fluid management solutions, announces its results for
the second quarter ended February 28, 2017 and a change to the Company’s board
of directors.
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Financial Highlights Summary
(in Canadian dollars)
—————————————————————————-
Three months ended Six months ended
—————————————————————————-
February February 29, February February 29,
28, 2017 2016 28, 2017 2016
—————————————————————————-
Revenue $ 872,145 $ 945,112 $ 1,695,804 $ 2,522,899
—————————————————————————-
Gross profit (GP) $ 348,702 $ 169,422 $ 621,774 $ 779,172
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GM % 40% 18% 37% 31%
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Operating loss before
other items and income $ (344,026) $ (1,000,345) $ (705,045) $ (1,503,515)
tax
—————————————————————————-
Net loss before income
tax $ (326,923) $ (966,702) $ (308,129) $ (1,434,213)
—————————————————————————-
Net loss $ (326,923) $ (658,805) $ (308,129) $ (1,009,660)
—————————————————————————-
EPS (diluted) $ (0.01) $ (0.03) $ (0.01) $ (0.04)
—————————————————————————-
—————————————————————————-
Financial Position As at February 28 2017 As at August 31, 2016
—————————————————————————-
Working capital $ 15,551,883 $ 15,860,627
—————————————————————————-
Total assets $ 17,315,306 $ 17,701,465
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Long-term liabilities $ 30,288 $ 91,058
—————————————————————————-
Total equity $ 16,846,926 $ 17,042,206
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“Our product development initiatives to enhance the market leading Titan Brand
are progressing as planned,” said CEO, Douglas Carruthers. “Our engineering and
sales teams are targeting new product releases in the final quarter of this
fiscal year. I am pleased Titan’s existing product sales are meeting our
expectations in this slower market.”
QUARTERLY HIGHLIGHTS
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— Revenues were $872,145 for the second quarter of fiscal 2017 ended
February 28, 2017, an increase over the revenues of each of the last
three quarters, which were $823,659, $706,279 and $743,622 respectively.
— Gross profit as a percentage of sales is recovering and trending towards
previously experienced levels. The gross margin for the second quarter
of fiscal 2017 was 40%, an increase from the last three quarters which
were 33%, 2% and 13% respectively.
— Operating expenses for the second quarter of fiscal 2017 decreased to
$692,728 compared to the fiscal 2016 comparable second quarter’s
expenses of $1,169,767, reflecting management’s cost reduction
initiatives.
— Net loss for the second quarter of fiscal 2017 decreased to $326,923
compared to the fiscal 2016 comparable second quarter’s net loss of
$658,805.
— Product development continued with positive results on the development
of Titan’s next generation of products and other high potential
products.
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Titan Logix Corp.’s revenue is largely derived from sales of its Guided Wave
Radar product line of technologies employed to automate essential measurement
and control processes safely and efficiently. These technologies are sold
primarily into the mobile tanker truck market, servicing upstream/midstream
customers and designated as Titan’s “On the Road” solution offering. Product
revenue is derived from sales throughout Canada and the U.S. The Company’s
revenue for the second quarter of fiscal 2017 ended February 28, 2017 decreased
by $72,967 or 8% to $872,145, as compared to $945,112 for the comparable three-
month period in fiscal 2016. Revenues for the first six months of fiscal 2017
decreased by 33% to $1,695,804 from sales of $2,522,899 in the comparative
period. This decrease in revenue in the quarter and year-over-year reflects
continued weaker demand for the Company’s products in Canada and the U.S.
resulting from lower oil and gas prices.
Cost of sales decreased by $252,247 or 33% to $523,443 in the second quarter of
fiscal 2017, and decreased by $669.697 or 38% to $1,074,030 for the six-month
period ended February 28, 2017. The lower cost of sales was due to reduced
product shipments, a decrease in technical service and support engineering
related costs, and labour savings achieved due to a reduction in the workforce.
These savings partially offset production overhead costs related to spare
capacity of the production facility.
The operating loss before other items and income taxes was $344,026 for the
current quarter and $705,045 for the first six months of fiscal 2017. This
compares to an operating loss before other items and income taxes of $1,000,345
and $1,503,515 respectively in the comparative prior periods of fiscal 2016.
The improvement in the current fiscal quarter and year-to-date is primarily
attributable to the reduction in total expenses, including general and
administration, marketing and sales and engineering, and to a lesser degree the
reduction in production costs included in cost of sales and the resulting
improvement in gross profit. Due to cost reduction initiatives in the prior
fiscal year total expenses decreased by $477,039 in the current fiscal quarter
and $955,868 year-over-year. The operating loss reduction was partially offset
by a decrease in the gain on foreign exchange in the second quarter and first
six months of fiscal 2017 as compared to the previous year’s comparable
periods. Despite significant improvements in its cost structure in the current
fiscal quarter and year-over-year the Company incurred an operating loss,
largely due to continued weaker demand for the Company’s products and the
resulting decrease in revenues.
The net loss in the second quarter of fiscal 2017 was $326,923 ($0.01 loss per
diluted share) compared to a net loss of $658,805 ($0.03 loss per diluted
share) for the comparable period of fiscal 2016. The net loss for the second
quarter of the previous year was reduced by an income tax recovery of $307,897.
There was no income tax recovery recorded in fiscal 2017 due to uncertainties
of the realization of tax loss carry forwards. Net loss and comprehensive loss
in fiscal 2017’s first six months was $308,129 ($0.01 per diluted share) after
tax, compared to a loss of $1,009,660 ($0.04 per diluted share) after tax
reported for the first six months of fiscal 2016. This reduced net loss is tied
to the decrease in operating expenses. In addition, the Company recorded a gain
on sale of assets of $310,963 in the first six months of fiscal 2017 related to
the sale of the TPZ 3310 and 3500 controller product lines sold in conjunction
with the closing of Titan’s under performing Saskatchewan warehouse and service
facility. The net loss for the first six months of the previous year was
reduced by an income tax recovery of $424,553.
Business Outlook
Titan’s revenue from its current primary market – mobile tank gauging for the
crude oil industry – is linked to the economic conditions of the energy
industry and the level of drilling activity. The oilfield fluid transport
market focuses on the transportation of various liquids involved in oilfield
operations such as well fracturing chemicals, produced water, waste liquids,
and crude oil. New drilling activity employs mobile tankers to deliver
necessary process fluids to well sites. The initial well head activity requires
offsite transfer of process water for treatment or disposal. The production
well heads not directly connected to pipeline networks require mobile transfer
of crude oil to pipeline terminals and processing. Each stage stimulates mobile
tanker activity. These liquids are transported in various mobile tankers. Each
of these tankers requires a level measurement and overfill prevention system to
enable rolling-stock inventory management, ensure against overfills (which
would result in high-impact environmental incidents), protect equipment against
damage, improve the efficiency of the operation and help ensure driver safety.
Titan’s TD80(TM) provides this functionality.
The 2016-17 recovery of the market price of WTI Crude Oil from the 2014 extreme
lows is resulting in some uptick in U.S. and Canadian drilling activity as
operators increase their drilling programs. However, the oil price collapse in
2014, stranded a significant backlog on dealer lots of tanker trucks and
trailers suitably equipped with level gauges. This backlog must be absorbed
before the new tanker construction market will begin to recover. Titan is
seeing a slight pickup in its customer’s activity in reaction to the higher and
more stable commodity prices; however, there are no short-term expectations of
significant improvements to revenues. 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. The Company follows oil rig drilling activity and crude oil prices as a
long-range market indicator for its forecasting.
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:
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— It has undertaken cost reduction measures that include a significant
reduction in its work force while retaining core engineering, sales and
support teams. The impacts of these cost reduction initiatives are
beginning to be realized in fiscal 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.
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Titan maintains a strong balance sheet that will support strategic initiatives
going forward.
Change of Directors
Titan Logix Corp. announces the appointment of Mr. Alvin Pyke as a director of
the company effective April 12, 2017. Mr. Pyke is President, CEO and founder of
Helical Pier Systems Ltd. Helical Pier Systems Ltd provides design,
manufacturing and installation services across the North American landscape to
the oil and gas industry, electrical power transmission and distribution
companies, and commercial projects. Mr. Pyke is a professional engineer and
entrepreneur with over 30 years of corporate experience.
“I welcome Alvin and the expertise he brings to our Board,” said Grant Reeves,
Chairman. “His experience with technology along with his extensive leadership
experience is an excellent complement to our existing Board.”
In addition, the Company announces the resignation of Charles Buehler from the
board of directors effective April 12, 2017. Mr. Buehler served as a Director
since June 2015, was Chairman of the Board from December 2015 until January
2017, and played an invaluable role on the Board providing guidance through his
experience with public boards and corporate governance along with his extensive
business acumen.
Grant Reeves, Chairman stated, “On behalf of our Company and Directors, I would
like to sincerely thank Charles for his many contributions to Titan. All of us
at Titan Logix wish Mr. Buehler all the best in the future.”
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” (TM).
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— 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.
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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.
– END RELEASE – 13/04/2017
For further information:
Titan Logix Corp.
Douglas Carruthers
Chief Executive Officer
(780) 462-4085
invest@titanlogix.com
www.titanlogix.com
COMPANY:
FOR: TITAN LOGIX CORP.
TSX VENTURE SYMBOL: TLA
INDUSTRY: Computers and Software – Software, Energy and Utilities –
Equipment, Manufacturing and Production – Machinery and Tools
RELEASE ID: 20170413CC0075
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