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TORONTO, ONTARIO – Coretec Inc. has reported its financial results for the first quarter ending March 31.
Coretec reported revenues of $18.5 million in the quarter ended March 31, 2008, an 18.9% decrease over the prior year period revenue of $22.8 million and a decrease sequentially of 2.2% from Q4 2007.
Gross profit in the quarter was 15.4% of sales compared to 20.3% in the prior year period and 16.1% in the fourth quarter of 2007. Net loss for the quarter was $1 million compared to a net loss of $0.6 million for the same period in 2007.
Sequentially, the company showed a net increase of $0.4 million as compared to a net loss of $1.4 million in the fourth quarter of 2007.
"Softness in order activity levels from Q4 carried into January and February at all sites as well as in the company's offshore business. The major contributor to the… compression of our revenues was the change in the US dollar [to] Canadian dollar exchange rate. In Q1 we estimate that the impact to revenues of the change in the value of the US dollar relative to the Canadian dollar was in excess of $3 million when compared to the first quarter of 2007. As a result we have undertaken measures on both the revenue generation and cost effectiveness fronts to enable us to overcome this challenge", said Paul Langston, CEO.
"From a cost perspective, we implemented a staff reduction in our Toronto operations in February 2008 that will realize savings of $0.3 to $0.4 million per quarter. Also noteworthy is the manufacturing and planning yield improvements, which we have made at each of our sites. This combined with utility conservation initiatives as well as tight controls with respect to other labor costs we believe will result in improved financial metrics in subsequent quarters," added Langston.
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