Foccini Management Expects First Annual Profit Despite Q3 Loss
29 November 2007 - 11:44PM
Marketwired
TORONTO, ONTARIO (the "Company"), 100% owner of Austrian
merchandising and design subsidiary Foccini Trade GmbH ("FT"),
today reported fiscal 2007 third quarter results for the period
ending September 30, 2007.
The Company reported a net loss for the quarter of $55,639 or
$0.002 loss per share based on 27,321,179 weighted average shares
outstanding versus a loss of $59,171 or $0.0023 loss per share
based on the same amount of shares outstanding in the same quarter
last year.
Despite the third quarter loss, management expects a boost to
total revenue and net income in the fourth quarter as a result of
the following reasons:
i) FT completed a contract with Osterreichischen Bundesbahnen
(Austrian National Railway or "OBB") to deliver outdoor clothing
and safety accessories for its employees. A total of 25,000 pieces
were manufactured during the second and third quarters of 2007 and
revenue was realized when these goods were shipped to OBB in the
beginning of the fourth quarter.
ii) FT continues to focus on its overall efficiencies and
continues to benefit from cost sharing initiatives with related
parties.
iii) FT is starting to see the benefits of focusing on higher
margin customized sales rather than the increasingly competitive
generic merchandising sales that made up more of the sales mix in
previous years.
iv) FT has benefited from the devaluation of the US dollar
versus the Euro and Canadian dollar during 2007. Many of FT's
products are manufactured in China where billing is based in US
dollars. The revenue of FT is predominantly based in Euros. The net
effect has been an increasing gross margin percentage in recent
quarters, enhancing FT's bottom line.
As a result of these factors, FT expects net income for both the
fourth quarter and the year ending Dec 31, 2007 to be its best
result since the Company went public in November, 2003.
Reduction of Bank Debt Expected in Fourth Quarter
The Company's working capital deficiency as at September 30,
2007, was $1,258,986 as current liabilities totalled $2,056,574. FT
management expects to significantly reduce this working capital
deficiency during the fourth quarter as a result of the
following:
- In the fourth quarter of 2007, Mr. Christian Jagerhofer, CEO
of the Company, repaid 177,000EURO to eliminate a balance owing to
FT (Approx. $250,420 CAD). This amount was allocated toward
reducing FT's outstanding bank debt and is shown as a "subsequent
event" in the Q3 financial statements.
- In addition, FT management expects to pay approximately
300,000 EURO (approx. $424,440 CAD) of the outstanding bank debt as
a result of the improved revenues expected in the fourth quarter.
The exact amount will be confirmed at the end of the fourth
quarter.
Recent Strategic Developments
In addition to planned debt reduction within FT, management of
the Company continues to seek new opportunities to increase
shareholder value, whether these opportunities are within the
existing framework of the Company, or if they require a new
business entity such as the one proposed in the Change of Business
transaction disclosed to the market on October 31, 2006.
Management of the Company has filed financial statements and
Management Discussion and Analysis for the quarter ending September
30, 2007. These statements and MD&A, along with additional
information including past press releases regarding the Company,
can be accessed at www.sedar.com.
Foccini International has 27,321,179 common shares issued and
outstanding.
WARNING: The statements made in this news release contain
forward-looking statements that include risks and uncertainties,
which reflect management's current views of future events and
financial performance. Actual events or results could differ
materially from expectations and projections set out herein. The
Company undertakes no obligation to update forward-looking
statements, whether as a result of new information, future events,
or otherwise; however, these risks may be detailed from time to
time in Foccini International Inc.'s public disclosures.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the accuracy or adequacy of this release.
Contacts: Foccini International Inc. Richard Muruve Director
(647) 428-7031 (647) 428-7032 (FAX)
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