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Epic Data International Inc.: Epic Data Announces Results for the Third Quarter

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 27, 2009) - Epic Data International Inc. (TSX VENTURE:EKD), a provider of manufacturing operations management and real-time data collection solutions, today announced the results of operations for the three and nine months ended June 30, 2009.

Epic Data president & CEO, Robert Nygren, commented on the quarter: "We continue to see our customers in North America and Europe delay capital expenditure programs in light of the current economic conditions, and as a result, we experienced lower revenue for the quarter ended June 30, 2009. We continue to focus on sales and marketing initiatives and our product development both of which we believe will deliver long term success for our company once the economy improves."

During the quarter, Epic Data's IntegraTrak^TM 2.0 solution, which includes IntegraNet 5.0 interface software, was certified by SAP AG as powered by the SAP NetWeaver^® technology platform.

Selected Financial Information

All amounts in 000's of Canadian dollars, except per share figures

 Three months Nine months
 ended June 30, ended June 30,
 2009 2008 2009 2008
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Revenue $ 1,390 $ 3,402 $ 4,819 $ 7,328

Cost of sales 690 1,695 2,298 3,691
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 50% 50% 52% 50%

Gross margin 700 1,707 2,521 3,637

Selling, general and administration 970 1,167 2,717 3,573
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Income (loss) before undernoted items
 - EBITDA (270) 540 (196) 64

Other (income) expenses (383) 88 (288) 241
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Net income (loss) for the period $ 113 $ 452 $ 92 $ (177)
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Net income (loss) per share $ 0.01 $ 0.04 $ 0.01 $ (0.01)
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Results of Operations for the Three and Nine months ended June 30, 2009

Revenue

Total revenue for the three months ended June 30, 2009 was $1.4 million compared with $3.4 million in the three months ended June 30, 2008, a decrease of $2.0 million. Each of hardware, software and professional services revenue was down significantly compared to the same period in 2008 in part as customers curtailed spending in light of the global economic downturn. In addition, in the prior year the Company was working on a single large project with a major US defense contractor, which accounted for revenue of $1.9 million in the third quarter of 2008.

Total revenue for the nine months ended June 30, 2009 was $4.8 million compared with $7.3 million in the nine months ended June 30, 2008, a decrease of $2.5 million compared with 2008. As discussed above the Company had a single project which accounted for revenue of $2.4 million for the nine months ended June 30, 2008.

Gross margin

While total gross margins for the three and nine months ended June 30, 2009 were down compared with the three and nine months ended June 30, 2008, due to the decrease in revenue, both periods in fiscal 2009 show an improved margin percentage compared to the same periods in 2008, which is due to cost controls, improved staff efficiency and a higher percentage of maintenance revenue.

Selling, general and administration

Selling, general and administration expenses for the three months ended June 30, 2009 were $970 thousand compared to $1.2 million in the three months ended June 30, 2008. The decrease of $197 thousand is due to cost reductions, including staff.

Selling, general and administration expenses for the nine months ended June 30, 2009 were $2.7 million compared to $3.6 million in the nine months ended June 30, 2008. The decrease of $856 thousand is due to cost reductions, including staff, the recovery of a receivable previously written off and certain other non-recurring recoveries totaling approximately $400 thousand.

EBITDA

EBITDA for the three months ended June 30, 2009 was a loss of $270 thousand compared with a profit of $540 thousand in the three months ended June 30, 2008. For the nine months ended June 30, 2009 it was a loss of $196 thousand compared with a profit of $64 thousand in the nine months ended June 30, 2008. The decrease in EBITDA in the third quarter and year to date was due to the decrease in revenue from the large single contract in 2008, partially offset by cost reductions under taken by management and the non-recurring recoveries discussed above.

Other income (expenses)

During the quarter ended June 30, 2009, the Company received written notice from Canada Revenue Agency that it had completed its review of the Company's Notice of Objection and will be issuing the Company a tax refund of $231,918 in respect of scientific research tax credits relating to the Company's 1994 fiscal year. The tax recovery of $505,000 is comprised of the tax refund plus interest estimated at $363,082, for a total refund of $595,000, less estimated costs of $90,000.

Net income (loss)

Net income for the three months ended June 30, 2009 was $113 thousand as compared with $452 thousand in the three months ended June 30, 2008. Net income for the nine months ended June 30, 2009 was $92 thousand compared with a net loss of $177 thousand in the nine months ended June 30, 2008. The decrease in the third quarter of fiscal 2009 compared with the same period in fiscal 2008 was due to the lower level of revenue, partially offset by cost reductions and non-recurring recoveries of approximately $500 thousand. The increase year to date in fiscal 2009 compared with the same period in fiscal 2008 was due to cost reductions and non-recurring recoveries of approximately $900 thousand.

About Epic Data

For over 30 years Epic Data has delivered real-time shop floor information to the world's most progressive discrete manufacturers through turnkey data collection, warehouse management and lean manufacturing operations management solutions. Defense contractors, aerospace, automotive, high technology and industrial equipment & machinery manufacturers, employ Epic Data solutions to optimize the ROI of their manufacturing IT infrastructure investments and operations by increasing plant productivity, materials visibility and production velocity. Customers include Lockheed Martin, Bell Helicopter, Komatsu, Learjet, CAE Inc., Kingfisher plc, Joy Mining Machinery, Cobham Defence Communications Ltd., GE Aircraft Engine, Contour Premium Aircraft Seating, McBride plc, Phoenix Contact, Rolls-Royce and Volvo.

More information about Epic Data is available at [ www.epicdata.com ].

Caution Regarding Forward-looking Statements

In this document and in other documents filed with Canadian regulatory authorities or in other communications, the Company may from time to time make written or oral forward-looking statements within the meaning of applicable securities legislation, including statements regarding the Company's business plans and financial objectives. These statements typically use words such as prospects, believe, estimate, forecast, project, expect, anticipate, plan, may, should, could and would, or the negative of these terms, variations thereof or similar terminology. By their very nature, forward-looking statements are based on assumptions and involve inherent risks and uncertainties, both general and specific in nature. It is therefore possible that the forecasts, projections and other forward-looking statements will not be achieved or will prove inaccurate. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it provides no assurance that these expectations will prove to have been correct. The Company cautions readers against placing undue reliance on forward-looking statements when making decisions, as the actual results could differ considerably from the opinions, plans, objectives, expectations, forecasts, estimates and intentions expressed in such forward-looking statements due to various material factors. Among other things, these factors include fiscal and economic policies, changes in interest and foreign exchange rates, and general economic conditions, legislative and regulatory developments, competition and access to capital. The Company further cautions that the foregoing list of factors is not exhaustive. For more information on the risks, uncertainties and assumptions that would cause the Company's actual results to differ from current expectations, please also refer to the Company's public filings available at [ www.sedar.com ]. The Company does not undertake to update any forward-looking statements, whether oral or written, made by itself or on its behalf, except to the extent required by securities regulations.

The contents of this news release have neither been approved nor disapproved by any regulatory authority.