Eurotech: first nine months 2007 - revenues up 43.8% to €50.22 million

  • Consolidated revenue +43.8% from €34.93 million to €50.22 million
  • Consolidated EBITDA: from €615 thousand to - €370 thousand
  • Consolidated EBIT: from - €1.083 million to - €3.601 million
  • Consolidated result before income taxes: from €36 thousand to - €2.708 million
  • Consolidated net financial position: €5 7.02 million
Amaro (UD), 14 November 2007.Today, the Board of Directors of Eurotech S.p.A. examined and approved the results related to the first nine months and third quarter of FY 2007.

Sales improved for the Eurotech Group, active in the research, development, production and marketing of miniaturised computers (NanoPCs) and of computers featuring high-performance computing capability (HPCs).

Revenues increased from €34.93 million in the first nine months of 2006 to €50.22 million in the same period of 2007, reporting healthy growth of 44% or €15.3 million.

The first nine months of the year reported growth in gross profit, in absolute terms, of €7.7 million, increasing from €17.08 million at September 2006 to €24.78 million at September 2007, representing an improvement from 48.9% of revenues in the first nine months of 2006 to 49.3% in the same months of 2007. Profits as a percentage of revenues were essentially in line with the objectives set by management for 2007 and demonstrated the absence of pressure on sale prices. The negative effects on gross profit arising from price allocation relating to the ADS acquisition came to €602 thousand in the first nine months of 2006 and €220 thousand for the same period in 2007.

EBITDA in the period reported a result of a negative €370 thousand. In the first nine months, operating costs accounted for 54.6%. This percentage increase is due to the fact that these operating costs are mainly fixed and were not absorbed proportionately with the revenue earned. Group revenues forecast next quarter should make it possible to absorb part of these overheads.

EBIT reported a decrease in the first nine months of 2007 vs. the same period in 2006, falling from - €1.083 million in 2006 to -€3.601 million in 2007. This performance is closely correlated with the performance of EBITDA as well as the higher amortisation and depreciation charged in 2007. These higher values of amortisation and depreciation are due to new product development costs and the effects arising from “price allocation” relating to the Applied Data Systems Inc and Arcom Group acquisitions entering amortisation. Amortisation and depreciation of the higher values calculated during "price allocation" in the first three quarters of 2007 was €1.473 million, against €486 thousand in the same period in 2006. The overall negative effects on EBIT due to price allocation caused by amortisation of the ADS and Arcom acquisitions came to €1.088 million for the first nine months of 2006 and €1.693 million for the same period in 2007.

Without considering the extraordinary positive effect last year arising from the PTO on Radstone, which accounted for €1.223 million, financial management reported a positive change in absolute values of €1.036 million between January to September 2006 and the same months in 2007 due to income deriving from liquidities available pursuant to the increase in capital in July 2006 and in spite of the negative impact of the Euro / USD exchange rates.

Pre-tax income decreased from €36 thousand in the first three quarters in 2006 to - €2.708 million in the same period in 2007. The negative effects due to price allocation caused by amortisation of the costs of the Arcom and ADS acquisitions came to €1.088 million for the first nine months of 2006 and €1.693 million for the same period in 2007.

Net Group income worsened from a loss of €807 thousand in 2006 to a larger loss of €2.685 million in 2007. The negative effects due to price allocation caused by amortisation of the costs of the Arcom and ADS acquisitions amounted to €696 thousand for the first nine months of 2006 and €1.043 million in the same period in 2007. Besides reflecting the trend in pre-tax performance, this result was mainly due to the tax burden of the Group’s various companies and to a lesser extent minority interest.

At 30 September 2007, the Group reported a positive financial position of €57 million.


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