NPT.C (Plaintree Systems Inc) Due Diligence Report Most Recent Financials + Management Discussion Highlights. Found On www.Sedar.com Year End Results Will Be Released August 2018 Symbols: Canada – NPT / USA - PTEEF Price: $0.165 CAD / $0.14 US Common Shares: 12,925,253 Options/Warrants: 0 Insider/Institutional Holdings: 6,024,676 or 46.6%
Important Announcements From MD&A and Most Recent News Release:
Last News Release: David Watson, the company's president and chief executive officer, commented by stating: "Plaintree's biggest product line, our mining domes, posted strong revenues this fiscal year and leave us with a substantial backlog for next year due to buoyancy in several mining sectors. In addition to this, the product lines for all of Plaintree's aerospace divisions have increased in profitability over the course of this year. I would be remiss if I didn't comment on the strong growth of our foundations for unstable soils and flood zones. After three years of investment in marketing and sales for this product line, it is expected that we may almost triple our previous year's sales." Q3 MD&A (Page 10): These consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As at December 31, 2017, the Company had an accumulated deficit of $3,458,891 and, for the period then ended, the Company had comprehensive earnings of $1,746,353. As at December 31, 2017, the Company had working capital of $10,290 and $NIL cash on hand. These material uncertainties may cast doubt upon the Company’s ability to continue as a going concern. However, due to the recent improvement in the financial performance of the Company, management is reviewing whether the going concern note remains appropriate and whether it should be removed from future statements. In assessing whether the going concern assumption was appropriate, management took into account all relevant information available about the future, which was at least, but not limited to, the next twelve month period following December 31, 2017
LIABILITIES Cash Deficit - $1,119,642 Trade Payables: $1,647,113 Deferred Revenue: $2,215,186 Current Bank Note Payment: $1,148,831 Portion Of Long Term Debt: $45,000 Due To Related Parties: $554,447 Deferred Government Assistance: $146,000 Obligation Under Lease Capital: $455,519 Long Term Debt: $92,925 Due To Related Parties: $5,565,044 Total Liabilities: December 2017 - $13,564,220 (March 2017 - $13,456,597)
Nine Month Sales Performance
Revenue: $12,488,416 (2016 - $10,033,364) Cost Of Sales: $8,672,752 (2016 - $8,352,694) Gross Margin: $3,815,664 (2016 - $1,680,670) Net Income: $1,746,354 (2016 - -$1,039,871) Earnings Per Share - $1,746,354 / 12,925,253 = $0.135 Trading at less than two times earnings
Management Discussion From Q3 2017 Overview Plaintree Systems Inc. (“Plaintree” or the “Company”) was incorporated in Canada under the Canada Business Corporation Act and is publicly traded on the Canadian Securities Exchange (“CSE”) under “NPT”. The Company operates an Electronics division [the Hypernetics business, Summit Aerospace USA Inc. (“Summit Aerospace”)] and a Specialty Structures division (the Triodetic business), Spotton Corp. and 9366920 Canada Inc. (operating as Madawaska Doors). Plaintree is a diversified company with proprietary technologies and manufacturing capabilities in structural design, aerospace and telecommunications. The Hypernetics business manufactures avionic components for various applications including aircraft antiskid braking, aircraft instrument indicators, solenoids, and permanent magnet alternators. The Triodetic business is a design/build manufacturer of steel, aluminum, and stainless steel specialty structures such as commercial domes, free form structures, barrel vaults, space frames, and industrial dome coverings. Summit Aerospace specializes in the high-end machining of super-alloys for the aircraft and helicopter markets. Spotton’s business involves the design and manufacture of high-end custom hydraulic and pneumatic valves and cylinders for the industrial, oil and gas markets. Madawaska Doors Inc., through its wholly-owned subsidiary, 9366920 Canada Inc. involves the manufacturing and selling of high quality, 100% natural solid wood custom doors and related parts and materials. Until June 2017 the Speciality Structures division included Arnprior Fire Trucks Corp. (“AFTC”). On June 6, 2017, the Company announced that it had completed the sale of assets and business of AFTC. The address of the Company’s registered office and principal place of business is 10 Didak Drive, Arnprior, Ontario.
Total product revenue for three and nine months ended December 31, 2017 was $4,461,762 and $12,488,416 compared to $3,057,288 and $10,033,364 (discontinued Arnprior Fire Truck Corp business removed) for the respective periods ending December 31, 2016. Plaintree has two diversified business divisions: Specialty Structures and Electronics.
Plaintree’s Electronics Division revenues of $1,343,421 and $4,499,671 in the three and nine months ended December 31, 2017 down from revenues of $1,606,831 and $4,628,647 for the three and nine months ended December 31, 2016.
Plaintree’s Specialty Structures Division revenue increased to $3,118,341 and $7,988,745 in the three and nine months ended December 31, 2017 from $1,450,457 and $5,404,717 in the three and nine months ended December 31, 2017 and December 31, 2016 respectively.
Total gross margin increased in the first three and nine months of fiscal 2018 to 32% and 31% from 16% and 17% for the same period in fiscal 2017.
Research and development expenses were $331,420 and $947,357 for the three and nine months ending December 31, 2017 compared to $276,160 and $904,509 for the three and nine months ending December 31, 2016. Research and development expenditures consist primarily of development engineering and personnel expenses. Research and development expenses are expected to remain at comparable levels throughout fiscal 2018.
Finance expenses were $388,007 and $996,731 for the three and nine months ending December 31, 2017 compared to $247,497 and $718,413 for the three and nine months ending December 31, 2016. Finance and administration expenses consist primarily of costs associated with managing the Company’s finances, which included financial staff, legal and audit activities. Amortization of intangibles related to the business of Summit Aerospace is the primary reason for the increase in finance and administration expenses. Finance and administration expenses were higher in fiscal 2018 due to legal fees associated with the new financing and sale of the discontinued operations.
Sales and marketing expenses were $119,145 and $424,213 for the three and nine months ending December 31, 2017 compared to $130,307 and $480,864 for the three and nine months ending December 31, 2016. These expenses consisted primarily of personnel and related costs associated
Outlook – Going Concern These consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As at December 31, 2017, the Company had an accumulated deficit of $3,458,891 and, for the period then ended, the Company had comprehensive earnings of $1,746,353. As at December 31, 2017, the Company had working capital of $10,290 and $NIL cash on hand. These material uncertainties may cast doubt upon the Company’s ability to continue as a going concern. However, due to the recent improvement in the financial performance of the Company, management is reviewing whether the going concern note remains appropriate and whether it should be removed from future statements. In assessing whether the going concern assumption was appropriate, management took into account all relevant information available about the future, which was at least, but not limited to, the next twelve month period following December 31, 2017. The Company has in place a credit facility of up to $2,100,000 through its bank based on acceptable trade receivables and inventory. The availability of the credit facility to the Company as at December 31, 2017 was $2,100,000 of which $360,292 was in use and a letter of credit in the amount of US$287,200 (CAD$360,292) leaving $1,739,708 available. The Company’s analysis of forecasted sales and expenses indicate improvement in both sales and cash flow as a result of contracts bid and/or signed, and their expected margins on these projects. As a result, the Company believes that it has sufficient cash resources to meet its obligations, beyond the next 12 months. However, should (i) the Company’s bank credit facility fail to be available or fail to have sufficient availability to meet the Company’s cash requirements; (ii) forecasts fall short of expectations in one or more of the Company’s divisions; and/or (iii) any unanticipated unprofitable event occurs, this will impact the Company’s ability to generate sufficient cash to meet its requirements and this will impact its ability to continue as a going concern. The Company would then implement a strategic review of its portfolio of companies to maximize shareholders value.
The Company leases a 135,500 sq. /ft. building at 10 Didak Drive in Arnprior, Ontario. The Company along with its wholly-owned US subsidiary owns a 16,300 sq. ft. manufacturing facility in Pocono Summit, PA. The Company, through a wholly-owned subsidiary owns a 33,000 sq. ft. manufacturing facility in Barry’s Bay, ON for the manufacturing of its Madawaska Door business.
Plaintree earns $2.54-million in fiscal 2018
2018-07-30 14:11 MT - News Release
Mr. David Watson reports
PLAINTREE SYSTEMS INC. RELEASES FISCAL 2018 AUDITED RESULTS
Plaintree Systems Inc. has just completed a profitable year.
The Company filed today its audited consolidated financial statements and management discussion and analysis for the year ended March 31, 2018.
For the year ended March 31, 2018, the Company posted after-tax profit of $2,547,514 as compared to a loss of $(2,639,634) and revenue of $19,005,680 as compared to revenue of $12,844,110 for the 2017 fiscal.
"2018 was an excellent year for Plaintree with sales increasing by 48%. We are excited to announce that this dramatic sales growth combined with the divestiture of the Firetrucks division, had earnings increase by over $5 million.
It's important to explain that, starting in fiscal 2014 through fiscal 2016, the market for all of Plaintree's product lines were either stagnant or declining, said David Watson, Plaintree CEO. The Mining industry went into almost complete hibernation, the Aerospace industry began its cyclical move to offshore as much as possible and funding for firetrucks by municipalities continued to languish at lower than expected levels. This all began to change in fiscal 2017. Commodity prices finally began to recover and the Aerospace industry began its phase of reshoring its manufacturing.
This has not only provided us with the excellent 2018 results but also given us a favourable backlog to begin fiscal 2019."
About Plaintree Systems Inc.
Plaintree has two diversified product lines consisting of Specialty Structures and Electronics.
The Specialty Structures Division includes the former Triodetic Group with over 40 years of experience, is a design/build manufacturer of steel, aluminum and stainless steel specialty structures such as commercial domes, free form structures, barrel vaults, space frames and industrial dome coverings, Spotton Corporation, a design and manufacturer of high end custom hydraulic and pneumatic valves and cylinders and Madawaska Doors, a design and manufacturer of premium solid wood doors.
The Electronics Division includes the legacy Hypernetics and Summit Aerospace USA Inc. businesses. Hypernetics was established in 1972 and is a manufacturer of avionic components for various applications including aircraft antiskid braking, aircraft instrument indicators, solenoids, high purity valves and permanent magnet alternators. Summit Aerospace USA Inc. provides high precision machining to the aerospace and defense markets. Our facility includes 5 axis CNC precision machining of complex castings and large ring parts such as turbine and assembly shrouds as well as assembly & pressure seals. Summit will support requirements from concept, prototype and throughout production.