March Networks Announces Record Revenue in Second Quarter and First Half of Fiscal 2008

OTTAWA , Nov. 28 /PRNewswire-FirstCall/ - March Networks(TM) (TSX:MN; AIM:MNW), a leading provider of innovative video and data applications used for security surveillance, monitoring, analysis and business optimization, today announced financial...


OTTAWA , Nov. 28 /PRNewswire-FirstCall/ - March Networks(TM) (TSX:MN; AIM:MNW), a leading provider of innovative video and data applications used for security surveillance, monitoring, analysis and business optimization, today announced financial results for the second quarter and first six months of fiscal 2008 ended October 31, 2007 . All figures in Canadian dollars and in accordance with Canadian GAAP unless otherwise specified.

Record revenue of $27.7 million in the second quarter of fiscal 2008 represented an increase of 5% as compared with revenue of $26.3 million in the second quarter of fiscal 2007 and represented an increase of 13% as compared to the first quarter of fiscal 2008. Revenue of $52.3 million in the first six months of fiscal 2008 ended October 31, 2007 was also a record for the Company and represented an increase of 6% as compared to the first six months of fiscal 2007.

The Company incurred a net loss from continuing operations before income taxes in the second quarter of fiscal 2008 of $872,000 as compared to earnings from continuing operations before income taxes of $2.4 million in the second quarter of fiscal 2007 and earnings of $0.9 million in the first quarter of fiscal 2008. Earnings from continuing operations before income taxes in the first six months of fiscal 2008 were $58,000 as compared to earnings of $7.5 million in the first six months of fiscal 2007. Earnings from continuing operations before income taxes in the second quarter and first six months of fiscal 2008 reflected a one time $2.4 million charge related to a retrofit program which the Company initiated to proactively address design issues related to the Company's installed base of transit products. Earnings from continuing operations before income taxes in the second quarter and first six months of fiscal 2007 were negatively impacted by a $2.3 million lawsuit settlement.

The Company incurred a loss from continuing operations in the second quarter of fiscal 2008 of $666,000 or $0.04 per diluted share as compared to net earnings of $1.4 million or $0.08 per diluted share in the second quarter of fiscal 2007 and net earnings of $374,000 or $0.02 per share in the first quarter of fiscal 2008. The Company's net loss from continuing operations of $292,000 or $0.02 per diluted share in the first six months of fiscal 2008 compares to earnings of $4.2 million or $0.24 per share in the first six months of fiscal 2007.

"Our second quarter results represent another quarter of achievement for the Company as we recorded new revenue highs in several segments of our business. Our commitment to customer service continues to be a key differentiator for the Company as is demonstrated by proactively addressing design issues within the Company's installed base of transit products" said Peter Strom , President and CEO of March Networks.

"The Company has demonstrated its ability to maintain strong revenue levels with its largest customer and to generate strong revenue growth outside of this customer which are the key drivers to successfully achieving the Company's financial objectives for fiscal 2008." said Ken Taylor , CFO of March Networks.

Business Outlook

March Networks maintains its focus on long-term growth objectives and will continue to provide only full year guidance. The Company is maintaining the annual revenue and profitability guidance ranges that were last published in the Company's first quarter results release on August 29, 2007 . The Company's ability to achieve its revenue and profitability expectations is subject to a significantly increased level of risk associated with the value of the US dollar, which is currently trading at approximately $US1.00=$Cdn0.99 or 6% below the Company's guidance rate of $US1.00=$CDN1.05. In addition, the $2.4 million retrofit charge that was taken in the second quarter of fiscal 2008 will affect the Company's ability to achieve the profitability range provided.

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