Acceleware Reports Fourth Quarter and YearEnd Results for Fiscal 2008 For Immediate Release
CALGARY, Alberta – April 30, 2009 – Acceleware® Corp. (“Acceleware” or the “Company”) (TSX- V: AXE), a leading developer of high performance computing applications, today announced results for the three months and fiscal year ended December 31, 2008 (all figures are in Canadian dollars unless otherwise noted).
During the fourth quarter of fiscal 2008, Acceleware reported revenues of $897,006 a significant increase (90%) compared to the $472,620 recorded for the three months ended September 30, 2008. The increase is due to partners and other customers increasing purchases following Acceleware’s restructuring program. Revenue for the fourth quarter of fiscal 2008 decreased 12% compared to $1,024,954 for the fourth quarter of fiscal 2007. The decrease is attributable to an overall decline in global economic activity which negatively impacted the sales of the Company’s acceleration products, and a decrease in interest revenue compared to the same quarter a year ago.
"2008 was a transitional year for Acceleware. The first half of the year we faced significant anticipated growth along with opportunities to finance such growth. As the global economic and capital market environments deteriorated during the year we faced slower growth prospects and a lack of financing alternatives. The second half of 2008 was marked by restructuring and cost reduction initiatives,” said Michal Okoniewski, Interim CEO of Acceleware. "Ultimately, based on the significant improvement in operating cash flow during Q4, we believe we have been successful in our restructuring, and believe that we have “right-sized” the Company to live within its means in the short term, and realize the many exciting growth opportunities that lay ahead."
Net loss for the fourth quarter was $2,315,605, or $0.06 per share (diluted), compared with net loss of $2,121,423, or $0.06 per share (diluted), in fourth quarter of last year, and net loss of $3,108,208 or $0.07 per share (diluted), in the third quarter of 2008. The increase in net loss was due to inventory write-down ($608,758 recorded in the fourth quarter), the further write-down of the Company’s investment in Asset-Backed Commercial Paper (“ABCP”) (2008 - $315,047 compared to 2007 - $216,710), and restructuring expenses related to loss on disposal of property and equipment ($197,630) and impairment of leaseholds and furniture and fixtures ($271,445).
Acceleware showed significant improvement in cash flow during the fourth quarter of 2008. Cash used in operating activities fell to $353,705 during the three months ended December 31, 2008, compared to $1,430,588 used for the same period a year earlier. Cash used in operating activities during the fourth quarter was also significantly lower than the $1,816,308 used in the three months ended September 30, 2008.
During the year ended December 31, 2008, Acceleware recognized revenue of $3,797,916 representing a 44% increase over the $2,631,878 recognized during the year ended December 31, 2007. In anticipation of growth, Acceleware made a significant investment in computer hardware inventory during the first half of 2008. This investment was subsequently written down as revenue did not grow as quickly as expected, and much of the inventory has become obsolete as suppliers have introduced new models. The total inventory write-down was $737,466 for the year ended December 31, 2008. The risks associated with investing in hardware inventory (sales forecasting risk and hardware obsolescence risk, among others) has led management to implement a software- only business model.
Acceleware had a net loss for the year ended December 31, 2008 of $10,496,871 a 56% increase compared to a net loss of $6,737,746 for the year ended December 31, 2007. In addition to the inventory write-down noted above, Acceleware incurred significant expenses in restructuring. To date, restructuring charges of approximately $1,234,313 have been incurred, primarily related to severance of $330,681, vacation liabilities of $84,409, net loss on property and equipment of $299,778, impairment of leasehold and furniture and fixtures resulting from the sublease of excess office space of $271,445 and prospectus offering costs of $248,000. As of today, Acceleware has substantially completed the restructuring. Prior to the decision to implement the restructuring plan, the Company incurred additional costs to ramp-up for future growth including additional staff in the first half of 2008. Excluding the inventory write-down and the restructuring charges, net loss would have been $8,525,092 for 2008.
Acceleware recognized an additional impairment of $315,047 (2007 - $433,420) in the carrying value of its investment in ABCP during 2008. The non-liquidity of the ABCP has reduced the cash available to fund the Company’s operations.
During the summer of 2007, Acceleware moved into a new 10,000 square foot office facility in Calgary. The facility has enough space to accommodate up to 100 employees, test laboratories, server facilities and inventory storage. After the restructuring, Acceleware sub-leased approximately 42% of the facility, and expects to continue to sublease approximately the same amount of space for the entire remaining term of the lease.
At December 31, 2008 Acceleware had $334,670 in working capital, including $1,052,724 in cash and cash equivalents, and $355,587 in short term debt, compared to a year earlier when the Company had $8,698,740 in working capital including $6,196,894 in cash and cash equivalents, and no debt.
Management’s objective is to manage cash flow and investment in new products to ensure that cash requirements do not exceed cash generated from operations. Plans include programs to improve profitability through the introduction of a software-only business model, to focus on core vertical markets, reduce operating expenses, and limit capital expenditures.
Additional information, the annual audited financial statements and management discussion and analysis are available on SEDAR at www.sedar.com.
Acceleware develops and markets a platform to enable software vendors to leverage heterogeneous, multi-core processing hardware without rewriting their applications for parallel computing. This software acceleration platform benefits users performing computationally intensive tasks such as data processing and computer simulations, by harnessing the capabilities of high performance computing technologies such as multiple-core CPUs, GPUs or other acceleration hardware.
Acceleware solutions are deployed by companies worldwide such as Philips, Boston Scientific, Samsung, Kodak, General Mills, LG, Medtronic, Hitachi, Fujifilm, FDA, Mitsubishi, Sony Ericsson, AGC, NTT DOCOMO, P-Wave Seismic and Renault to speed up product design, analyze data and make better business decisions in areas such as consumer electronics, industrial design, seismic data processing, imaging for the medical, industrial testing and security, defense, financial, and academic research.
Acceleware is a public company on Canada's TSX Venture Exchange under the trading symbol AXE.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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For further information:
Marketing Manager at Acceleware Corp.
+1 (403) 249-9099 ext. 287,
Acceleware Corp 1600 - 37th St SW
Calgary, AB T3C 3P1 Ph: 1.403.249.9099