CALGARY, ALBERTA--(CCNMatthews - Feb. 20, 2007) - zed.i solutions inc. (TSX VENTURE:ZED) (the "Company" or "Zedi") today releases results for both the fourth quarter and year-end, 2006. Matthew Heffernan, President and CEO of Zedi states: "A significant improvement in revenue and earnings growth from our operations in Q4 resulted in respectable earnings for 2006 overall. Notwithstanding that improvement, the annual results were impacted by a soft Q3 that had the additional one time stock based compensation expense. I continue to be encouraged by our year over year growth from operations." Annual audited financial statements and MD & A are filed on SEDAR and can be accessed at www.sedar.com or on the Company's website at www.zedi.ca.
Revenues for 2006 were $37,137,000, an increase of 41% over the previous year's revenue of $26,416,000. Revenues increased 15% in the fourth quarter to $10,760,000 from $9,348,000 for the comparable period in 2005. Cash flow from operations in the year was $6,234,000, compared to $4,629,000 in 2005. The year ended with cash on hand of $9,753,000 and working capital of $21,962,000.
A stock based compensation expense of $3,115,000 was recognized in 2006. Although these are non-cash expenses, with no actual impact on the Company's operations, generally accepted accounting principals require that they be recognized in the calculation of net income. The result was net income before tax for 2006 of $4,238,000 or $0.04 per common share compared to net income before tax of $2,597,000 or $0.03 per common share for 2005. Earnings before interest, taxes, depreciation, amortization and stock option expense ("EBITDAS") for 2006 was $9,617,000 compared to $5,962,000 for 2005, representing an increase of 61% (this includes a reduction of $1,656,000 in our R&D expense as a result of recognition of an SRED Investment tax credit, which if factored out would result in an increase of 34%). While EBITDAS is a non GAAP measure it is a common measure used by industry to normalize non-operating factors that are included in the net income results.
The Company tracks recurring revenue as a percentage of operating expenses. Recurring revenue for the year increased to 77% of operating expenses, up from 66% in 2005. Zedi has begun to report on recurring revenue as a percentage of the Company's total cash requirements as well and reports 57% for 2006 up from 49% in 2005. The Company believes that these two measures are significant indicators of performance.
The Company has undertaken significant re-branding in early 2007 and as a result, subject to TSXV approval, will propose a special resolution to shareholders at its AGM to change the name of the Company to "Zedi Inc."
Zedi specializes in production operations management, delivering systems and services that help oil and gas producers to better manage people, assets and information. We help our customers increase earnings from production, decrease operating costs, best utilize human, physical and fiscal assets and mitigate compliance risk. Established in 1987, Zedi has enhanced the operational performance of more than 200 upstream, midstream and oilfield service customers.
FOR FURTHER INFORMATION PLEASE CONTACT:
zed.i solutions inc.
(403) 444-1101 (FAX)