BRAMPTON, Ontario, Canada, Aug. 23, 2004 (PRIMEZONE) -- Thinkpath Inc. (OTCBB:THTHF) today announced financial results for the second quarter ended June 30, 2004.
Revenues for the three and six months ended June 30, 2004 were $3,325,184 and $6,381,885 compared to $2,471,706 and $4,961,993 for the same periods in 2003. The significant increase in revenue is attributable to new contracts with existing defense, automotive and aerospace clients that were awarded in the fourth quarter of 2003 and the first quarter of 2004.
Gross profit for the three and six months ended June 30, 2004 was 38% and 36% compared to 35% and 32% for the same periods in 2003. The increase in gross profit is a result of the strategic focus on higher margin contracts in design, drafting and technical publishing compared to the lower margins earned on traditional on-site engineering support.
For the three and six months ended June 30, 2004, the company recorded operating income from continuing operations of $210,690 and $181,376 compared to operating losses of $120,903 and $495,308 for the same periods in 2003. Included in the results for the three and six months ended June 30, 2004 are commissions on the convertible debentures of $54,652 and $116,597 as well as non-cash items including depreciation expense of $138,750 and $281,016 and services paid for in shares and warrants of $37,393.
For the three and six months ended June 30, 2004, the company recorded a net loss of $835,388 or (0.00) per share and $1,627,618 or (0.00) per share compared to a net loss of $645,275 or (0.00) per share and $5,300,858 or (0.04) per share for the same period in 2003. Included in the net loss for the three and six months ended June 30, 2004 is interest expense of $872,845 and $1,488,421 related to the beneficial conversion feature on the 12% Senior Secured Convertible Debentures issued in the second quarter. The interest charges for the same periods last year were $539,142 and $4,474,826.
At June 30, 2004, the company had a cash flow deficiency from operations of $840,898 largely attributable to the increase in accounts receivable of $470,466 and the decrease in accounts payable of $599,646 reflecting the company's increased revenues and repayment of accrued liabilities. At June 30, 2004, the company had cash flow from operations of $124,699.
At June 30, 2004, the company had a working capital deficiency of $959,647 and stockholder's equity of $3,685,963, which is a considerable improvement over its working capital deficiency of $2,756,405 and stockholder's equity of $2,260,892 at December 31, 2003.
"I'm extremely pleased with these results," stated Declan French, CEO and Chairman of Thinkpath Inc. "Once you adjust for the non-cash items and convertible debenture expenses, we have income of nearly $350,000 from continuing operations for the second quarter. It has been a long struggle to get back to a positive position but with the significant contracts awarded to us late last year and earlier this year as well as our continued restructuring efforts, we are finally starting to see the fruits of our labor. Our plan is to continue to grow our top line, maintain our gross profit level and manage our expenses. In addition, we will continue our efforts to restructure our debt and settle outstanding claims which should have a remarkable impact on our balance sheet."
Further information about the company may be found at www.thinkpath.com.
Forward-Looking Statement -- This press release contains forward-looking statements regarding Thinkpath Inc., its business prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause Thinkpath's actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by Thinkpath in this news release and other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect Thinkpath's business.