Adeptron Technologie : Adeptron Reports Second Quarter Results and Welcomes New Board Members

Adeptron Reports Second Quarter Results and Welcomes New Board Members

Stock Symbol: ATQ

TORONTO, Aug. 15, 2011 /CNW/ - Adeptron Technologies Corporation  (ATQ: TSX-V) ("Adeptron" or the "Company"), a specialist at delivering integrated product solutions and support to the global technology and electronics industry, today reports unaudited second quarter financial results for the three-month and six-month periods ended June 30, 2011.

Adeptron reports in U.S. dollars and all numbers below are expressed in thousands of U.S. dollars, except per share information and gross margin percentages.

On January 1, 2011, Adeptron adopted International Financial Reporting Standards ("IFRS") for financial reporting purposes, using a transition date of January 1, 2010. The financial statements for the three month and six-month periods ended June 30, 2011, including required comparative information, have been prepared in accordance with International Financial Reporting Standards 1, First-time Adoption of International Financial Reporting Standards, and with International Accounting Standard ("IAS") 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB"). Previously, the Company prepared its Interim and Annual Consolidated Financial Statements in accordance with Canadian generally accepted accounting principles ("previous GAAP"). Unless otherwise noted, 2010 comparative information has been prepared in accordance with IFRS.

The adoption of IFRS has not had an impact on the Company's operations, strategic decisions and cash flow. The most significant area of impact was the adoption of the IFRS upstream accounting principles. Further information on the IFRS impacts is provided in the Accounting Policies and Estimates Section of the MD&A, including reconciliations between previous GAAP and IFRS net earnings, operating earnings and other financial metrics and in the condensed consolidated interim financial statements for the period ended June 30, 2011 which are available on the Company's website at www.adeptron.com and the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com.

Q2 2011 Financial Highlights:

• Sales decreased by $5,155 or 38.5% over the second quarter of 2010 to $8,222,
• Gross margin decreased to 9.6% compared to 9.8% for the same period last year,
• Loss from continuing operations of $717 compared to net income of $491 for the same period last year,
• Income from discontinued operations of $9 compared to net loss of $305 for the same period last year,
• Net loss and comprehensive loss for period of $708 compared to net income of $186 for the same period last year,
• Adjusted EBITDA loss from continuing operations of $326 compared to an Adjusted EBITDA of $975 for the same period last year,
• Adjusted EBITDA from discontinued operations of $10 compared to an Adjusted EBITDA loss of $283 for the same period last year,
• Loss of $0.01 per share compared to earnings of $0.00 per share last year,
• Cash provided by operating activities of $2,191 during the quarter compared to cash used in operating activities of $1,109 for the same period last year.

Trent Carruthers, CEO of Adeptron stated, "Revenue in the second quarter of 2011 was $8.2 million; 20.2% lower than the prior quarter and 38.5% lower than the near record second quarter of 2010. Some of our larger customers experienced significant reductions in business relating to their end-markets resulting in an unforeseen drop in Adeptron's revenue during the quarter. Overall, the net loss from continuing operations was $717 compared to net income of $491 for the same period of 2010. Notwithstanding that the loss in the quarter was largely the result of lower sales; the Company also had a significant foreign exchange loss of $195 as compared to a $401 gain in 2010. Furthermore, the Company incurred some additional restructuring costs during the quarter and SG&A expenses were higher during the quarter as the result of significant increases in professional fees relating to the transition from the TSX to the TSX Venture Exchange, transition to a new senior lender, as well as, additional costs relating to the conversion to IFRS."

"Given the many changes and progress we made in the last year, this quarter's results are disappointing. The management team continues to face many challenges and has been quick to react and adjust its business plan to improve Company performance. Overall, we continue to reduce expenses necessary to maintain margins and minimize losses during these slower periods. In addition, the investment in growing our sales team earlier this year has continued to pay dividends for our current and future growth. Although the softness in the market we experienced in the second quarter is expected to extend into the third quarter, we are optimistic given the recent and potential revenue opportunities with new and existing customers spanning across many of the Company's industry sales segments" continued Carruthers.

Carruthers added, "At the annual meeting of shareholders, Messrs. Ian McKinnon, Ron Morrison and Zvi Bromberg were elected as members of the board of directors. The Board and members of management would like to thank Michael Marti and Tim Osby for their contributions as they ended their service to the Company and would also like to thank Alastair Robertson for the 14 years he has served as Chairman of the Board. We welcome the experience and knowledge of our new members of the board of directors and I am confident that they will contribute greatly as we continue to improve our business. These new members bring with them significant depth and understanding which will be helpful as we face new challenges and their extensive network will be useful in opening doors as we continue to focus on growing sales in this business."

Ian McKinnon has been appointed the Chairman of the Board of Adeptron. Mr. McKinnon currently sits on the board of a number of technology companies and provides consulting services within the sector. He specializes in leadership development, international expansion, corporate turnarounds and business planning. Most recently Mr. McKinnon was President and Chief Executive Officer of TSX-listed Certicom Corp from 2002 to 2007. Prior to 2002 he was Chief Executive Officer for a number of public and private software companies including TSX-listed Promis Systems Corporation from 1995 to 2000. Between 1981 and 1995 he was with Digital Equipment Corporation in various sales and senior management positions in Canada and as Managing Director in Singapore. Mr. McKinnon is a member of the Board of Directors of TSX-listed Constellation Software, Alt Software and Prinova and is a graduate of McMaster University and attended the INSEAD Business School Advanced Management Program.

Ron Morrision has been appointed to Adeptron's Audit Committee. Mr. Morrison is a University of Toronto Chemical Engineering graduate and began his career at Kodak Canada in 1958 and retired in 2001. He held progressive responsibilities in manufacturing and general management. He was named President and General Manager of Kodak Canada Inc. in 1984 and Chairman of the Board in 1994. In September 1994 he was appointed General Manager of Kodak Park and Vice President, Eastman Kodak Company. Mr. Morrison is Treasurer, member of the Executive Committee and on the Board of Directors of the Canadian Manufacturers and Exporters and on the Board of Zink Imaging, Inc. He is currently President of RC Management, an organization providing strategy and operational management consulting to a number of North American manufacturing and service organizations.

Mr. Zvi Bromberg has been Chief Executive Officer of Obellisk Mergers & Acquisitions Limited and prior to his current position was involved in real estate development. Mr. Bromberg was also the Chief Financial Officer of Sapako Limited, Infrastructures Providers and was a former manager at Ernst & Young for over 10 years. Mr. Bromberg has significant experience in mergers & acquisitions in Israel.

Q2-2011 - Financial Summary

Selected comparative financial information for the three-month and six-month periods ended June 30, 2011 and 2010 is shown below. (All numbers below expressed in thousands of U.S. dollars, except per share information and gross margin percentages):

Income Statement Continuing Operations	3-Month Period June 30, 2011	3-Month Period June 30, 2010	6-Month Period June 30, 2011	6-Month Period June 30, 2010
Sales	$8,222	$13,666	$18,529	$23,269
Gross Profit	789	1,086	2,117	1,913
Gross Profit %	9.6%	7.9%	11.4%	8.2%
Net Income (loss)	(717)	(525)	(662)	(133)
Adjusted EBITDA2	(255)	363	296	761
Basic & diluted income (loss) per share	$(0.01)	$0.00	($0.01)	$0.00
Number of common shares outstanding	96,708	96,708	96,708	96,708

EBITDA¹ and Adjusted EBITDA2 reconciliations to IFRS Net Income/(Loss) for the three-month and six-month periods ended June 30, 2011 and 2010 are shown below.  (All numbers below expressed in thousands of U.S. dollars):

	3-Month Period June 30, 2011	3-Month Period June 30, 2010	6-Month Period June 30, 2011	6-Month Period June 30, 2010
Net income (loss) per IFRS	($717)	$186	($788)	($588)
Add (deduct):
Interest expense	212	196	425	402
Income tax expense (recovery)	-	-	-	-
Depreciation and amortization	202	279	406	563
EBITDA1	($303)	$661	$43	($377)
Loss (income) from discontinued operations	(9)	305	254	455
Severance and termination benefits	45	-	45	-
Embedded foreign currency derivatives	-	9	-	(83)
Stock-based compensation	12	-	21	12
Adjusted EBITDA2	($255)	$975	$363	$761

1EBITDA means earnings before interest, taxes, depreciation and amortization.

2Adjusted EBITDA means earnings before interest, taxes, depreciation, amortization, loss on settlement of subordinated debenture, stock-based compensation, embedded foreign currency derivatives, goodwill impairment, severance and termination benefits and discontinued operations.

3EBITDA and Adjusted EBITDA are not recognized measures under IFRS. However, management believes that EBITDA and Adjusted EBITDA as herein defined are useful supplemental measures to net income (loss), as it provides investors with an indication of cash earnings prior to debt service, capital expenditures, income taxes and other non-recurring and non-cash items. Readers should be cautioned, however, that EBITDA and Adjusted EBITDA should not be construed as an alternative to net income (loss) determined in accordance IFRS as an indicator of the Company's performance or to cash flows from operating, investing and financing activities as a measure of liquidity and cash flows. The Company's method of calculating EBITDA and Adjusted EBITDA may differ from the methods by which other companies calculate EBITDA and Adjusted EBITDA and, accordingly, the EBITDA and Adjusted EBITDA used herein may not be comparable to measures used by other companies.

Adeptron's unaudited 2011 second quarter financial statements and MD&A will be available on Adeptron's web site on August 16, 2011 at www.adeptron.com and the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com.

About Adeptron:

Adeptron is a specialist at delivering integrated product solutions and support to the global technology and electronics industry. As a leading global provider of complete Electronics Manufacturing Services (EMS), Adeptron offers world class manufacturing facilities and global partners throughout Canada, the United States, Israel, China an Mexico, allowing the Company to provide its customers the flexibility and scalability to competitively achieve total solutions to their present and future electronics outsourcing needs. Adeptron is a public company whose common shares are listed for trading on the TSX Venture Exchange under the symbol: "ATQ". Visit Adeptron at: www.adeptron.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

THIS NEWS RELEASE MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO SUCH MATTERS AS EXPECTED FINANCIAL PERFORMANCE, BUSINESS PROSPECTS, TECHNOLOGICAL DEVELOPMENTS, DEVELOPMENT ACTIVITIES AND LIKE MATTERS.  THESE STATEMENTS INVOLVE RISK AND UNCERTAINTIES, INCLUDING BUT NOT LIMITED TO RISK FACTORS DESCRIBED IN DOCUMENTS FILED WITH REGULATORY AUTHORITIES, SUCH AS THE COMPANY'S MOST RECENTLY FILED ANNUAL AND QUARTERLY REPORTS AND ANNUAL INFORMATION FORM.  ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED AS A RESULT OF THESE RISKS AND SHOULD NOT BE RELIED UPON AS A PREDICTION OF FUTURE EVENTS.  ADEPTRON TECHNOLOGIES CORPORATION UNDERTAKES NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE ON WHICH SUCH STATEMENT IS MADE, OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

For further information:

Adeptron Company Contact:		Adeptron Company Contact:
Trent Carruthers Chief Executive Officer Tel: [phone] [e-mail]		Jon Szczur Chief Financial Officer Tel: [phone] [e-mail]