MARKHAM – As the company warned last week, contractor and equipment supplier Cygnal Technologies endured a tough 2005.
Revenues were $125.8 million in fiscal year 2005, down from $140.1 million in 2004. Network Operations revenues increased $1.9 million to $75.9 million, while Communications Services revenues (which includes supplier White Radio) decreased $16.2 million to $49.9 million.
Gross margin was 21.4% in 2005, up from 20.8% the prior year.
Selling, general and administrative expenses, prior to severance costs, were $36.8 million, compared to $34.3 million the previous year. EBITDA was a loss of $10.8 million, compared to an EBITDA loss of $7 million in 2004.
Cash used for operating activities was $1.8 million in 2005 versus $7.7 million in 2004, an improvement of $5.9 million. Net loss was $27.6 million, or $1.02 per share, compared to a loss of $7.2 million or $0.29 per share the prior year.
That loss for the year was impacted by a number of non-cash charges, including an $8 million goodwill impairment charge, a $5.2 million provision related to the write-down of the future income tax asset, and increases in allowances of $500,000. Cash charges impacting net loss included $1 million of severance costs.
"Our 2005 results are obviously disappointing, but I believe the difficulties are largely behind us," said Jos Wintermans, president and CEO, in a release. "In spite of these difficulties our Network Operations revenue actually grew, and the revenue drop in our Communications Services division was the result of a decrease in a non-strategic, low margin part of its business. The core business in each segment was flat or growing on the year.
"I have been encouraged by the results of our Productivity Improvement Program ("PIP") since the fourth quarter of 2005. We have reduced overhead in our Network Operations business. With a renewed focus on execution and Cygnal’s existing core strengths and capabilities, I believe we are very well positioned to capitalize on market opportunities in 2006."
Cygnal shares remained basically the same, in the $1 range.
