All results are reported in Canadian dollars.
Revenue for the fourth quarter was $18.9 million, which was higher than our previous guidance of $18.0 million to $18.5 million. This compares to $19.9 million in the fourth quarter of the prior year, a decrease of 5.3%.
Cost of revenue and operating expenses for the fourth quarter decreased 9.3% to $16.5 million from $18.2 million in the fourth quarter of the prior year. As previously announced, FMC reduced its workforce by approximately 35 people, or 8%, to approximately 385 people in the fourth quarter. As a result FMC incurred a realignment charge in the amount of $0.7 million included in operating expenses. Additionally, in the fourth quarter, FMC early adopted, on a prospective basis, the provisions of the amended CICA Handbook Section 3870, Stock-based Compensation and Other Stockbased Payments with respect to the expensing of the cost of stock options and accordingly recorded a charge of $0.1 million relating to options issued in 2004.
Fourth quarter EBITDA(1) increased to $2.3 million from $1.7 million in the fourth quarter of the prior year. Fourth quarter net earnings increased to $1.4 million, or $0.13 earnings per share, from a net loss of less than $0.1 million, or $0.00 per share.
"We are pleased with the quarter over quarter improvements in earnings throughout fiscal 2004," said Stamos D. Katotakis, President and Chief Executive Officer of FMC.
"Our revenue levels over the last six months confirm our view that our markets appear to have bottomed out. FMC enters fiscal 2005 with prospects of further improvements in profitability, supported by efficiencies gained over the past two years."
Revenue for the year decreased 5.1% to $72.4 million from $76.3 million in the prior year. Approximately $3.0 million of this $3.9 million decline was due to the Canadian currency strengthening as compared to United States and British currencies through fiscal 2004, which negatively impacted the conversion of our foreign revenue to Canadian dollars.
Cost of revenue and operating expenses for the year decreased 9.0% to $64.8 million from $71.2 million in the prior year. While approximately $1.5 million of this $6.4 decrease was attributed to the lower foreign exchange rates, approximately $4.9 million was primarily the result of efficiency improvements.
EBITDA for the year increased to $7.6 million from $5.2 million in the prior year. Net earnings increased to $2.5 million, or $0.22 per share, from net loss of $0.5 million, or $0.04 per share.
"We have continued to improve our cash balance and have generated positive cash
flow from operations," continued Katotakis. "In the fourth quarter, cash flow from operations was $2.4 million before changes in non-cash operating working capital and $4.5 million subsequent to such changes. Cash increased to $28.7 million, or $2.55 per share outstanding at the end of the year, as compared to $25.3 million at the end of the third quarter end and $23.2 million at the prior year end."
Fiscal 2005 Outlook
Notwithstanding the recent improvements in our markets, we remain guarded in our
outlook. We expect a modest increase in fiscal 2005 revenue and we expect cost of sale and operating expenses to remain relatively constant. As a result, we expect further improvements in fiscal 2005 EBITDA and net earnings over fiscal 2004 levels. Total revenue for the first quarter of fiscal 2005 is expected in the range of $17.5 million to $18.5 million. Cost of revenue and operating expenses for the first quarter of fiscal 2005 is expected in the range of $15.5 million to $16.0 million.
Information for Shareholders
You are invited to listen to our conference call live on the Internet on Tuesday, April 13 at 9:00 a.m. ET. A replay will be available on the Internet or by telephone at 416-626-4100 (pass code 21192029) until April 27 at 11:59 p.m.