TORONTO, May 23, 2005 (PRIMEZONE) -- Thinkpath Inc. (OTCBB:THTHF) today announced financial results for the first quarter ended March 31, 2005.
Revenues for the quarter ended March 31, 2005 increased by $540,000 or 18% to $3,600,000 compared to $3,060,000 for the same period in 2004. The significant increase in revenue is attributable to new contracts with existing defense, automotive and aerospace clients that were awarded in 2004 and early 2005.
Gross profit for the quarter ended March 31, 2005 increased to 35% from 33% for the same period in 2004. The increase in gross profit is a result of the continued focus on higher margin contracts in design, drafting and technical publishing compared to the lower margins earned on traditional on-site engineering support.
For the quarter ended March 31, 2005, the company recorded operating income from continuing operations of $230,000 compared to an operating loss of $30,000 for the same period in 2004.
For the quarter ended March 31, 2005, the company recorded a net loss of $145,000 or (0.00) per share compared to a net loss of $790,000 or (0.00) per share for the same period in 2004. Included in the net loss for the quarter ended March 31, 2005 is interest expense of $294,000 related to the beneficial conversion feature on the outstanding 12% Senior Secured Convertible Debentures. The beneficial conversion expense for the same period last year was $635,000.
After adjusting for non-cash items and convertible debenture expenses, the Company has income of approximately $315,000 from continuing operations for the quarter ended March 31, 2005.
At March 31, 2005 the Company had reduced its working capital deficiency to $6,000 from $120,000 at December 31, 2004 and increased its stockholder's equity to $4,520,000 from $4,000,000 at December 31, 2004.
"Our first quarter results clearly demonstrate that we are committed to our strategy of increasing our revenues and gross profit while remaining profitable and strengthening our balance sheet," stated Declan French, Thinkpath's CEO, President and Chairman. "Our revenue increase of 18% over last year is consistent with last year's growth and should bring us up to revenues of approximately $15 million from existing operations for 2005. Our earnings before interest, taxes, depreciation and amortization of $315,000 or 9% of revenue is consistent with our budget. This positive growth will be augmented by the strategic acquisition of complimentary and profitable companies later this year and early 2006."
"We are also continuing our efforts to retire the balance of the convertible debentures, after which we will complete a 5,000 to 1 reverse stock split of the outstanding shares of our common stock. We anticipate these transactions will be completed within the next 30 days."
Further information about the company may be found at www.thinkpath.com.
Forward-Looking Statement
This press release contains forward-looking statements regarding Thinkpath Inc., its business prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause Thinkpath's actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by Thinkpath in this news release and other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect Thinkpath's business.