Cenosis Announces 2Q Results, Restructuring Plan to Be Completed Soon
Press release from the issuing company
February 11, 2002 - Cenosis Inc. has announced its financial results for the second quarter ended November 30, 2001.
Over the course of its second quarter of the 2001-2002 fiscal year, Cenosis began a major restructuring aimed at improving its financial picture as well as ensuring the continuity of its commercial activities related to the marketing and selling of its technology platform and know-how. The Company divested itself of its main premedia production assets to better focus on development of its core integration services and software solutions, as well as the digital content transport and management services of its KangaCom subsidiary. The Company is currently finalizing an offer to its creditors while pursuing discussions to renew its credit and financing facilities. The Company is confident of successfully completing its restructuring plan in the near term and, in conjunction with its partners, of adopting the appropriate solutions to ensure its financial health going forward.
For the second quarter ended November 30, 2001, Cenosis posted revenues of $2,128,206, compared to $3,266,267 for the same period in 2000, a decrease of 35%. Gross margin for the quarter was $35,107, compared to $1,150,010 for the corresponding period in 2000.
This decrease in revenues and gross margin is due to revenue reductions at the StanMont and Leading Group subsidiaries of approximately $900,000 and $400,000 respectively. These subsidiaries continued to suffer from a significant economic slowdown in their markets. Conversely, revenues at the KangaCom subsidiary increased by about $200,000, mainly due to a contract from Bell ActiMedia.
Selling and administrative expenses decreased to $1,247,380 compared to $1,708,286 for the first quarter. This decrease of $460,906 is due primarily to cost cuts in reaction to the subsidiaries' declining revenues.
During the course of the quarter, the Company sold its interest in the Leading Group. The Company had a gain on disposal of $70,413 taking into account a write down of the book value of these assets which had already been made in the first quarter.
The net loss for the second quarter of the current fiscal year was $1,421,779, or $0.10 per share, versus a loss of $956,592, or $0.07 per share in the same quarter of the preceding year.
As at November 30, 2001, Cenosis had a cash shortage of $267,588, compared to a balance of $187,548 one year earlier. Furthermore, on November 30, 2001, the Company was in default with respect to certain covenants required by its bank, which issued a written notice to this effect on November 8, 2001. The Company is currently negotiating with the said bank for a new arrangement within its restructuring plan.
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