Municipal Solutions Announces Annual Results For 2004
Victoria, British Columbia, April 11, 2005 - Municipal Solutions Group, Inc. ("Municipal Solutions") (TSX Venture: MSZ), a provider of a provider of business process automation solutions for government, today announced the financial results for the year ending December 31, 2004. Revenue decreased in 2004 to $3.58m from $5.01m in 2003, a 29% decrease. The year ended with a net loss of $824,152 compared with a loss of $585,786 in 2003.
Iain McLean, the new Chief Executive Officer of Municipal Solutions, commented, "2004 was difficult year for the company. There were delays in closing major sales and a number of key implementations took longer than anticipated. In response to a shift in market requirements towards more prepackaged products the company undertook a transition to create a set of PreBuilt solutions for launch in early 2005."
In December 2004 an agreement was reached with Pender Growth Fund of Vancouver, B.C. for a $1,000,000 investment. The terms of the agreement saw the appointment of Iain McLean as CEO, and a restructuring of the Board. The initial payment of $100,000 was received in late December with the balance to be delivered upon approval of the terms of the agreement by the shareholders at a meeting to be held on April 1, 2005. Subsequent to December 31, 2004, bridge financing terms were agreed to for Q1 2005, the proceeds being used for the Company's working capital needs and to take the initial steps in its 2005 Business Plan until the balance of funds are received.
"Municipal Software laid the foundation in 2004", added Iain McLean, "as we further demonstrated the versatility of the CityView product platform and worked with our diverse range of clients to help them deliver improved services in local government".
A summary of the 2004 consolidated Municipal Solutions income statement follows, along with a comparison to the 2003, 2002 and 2001 income statements (2001 representing Municipal Software Corporation prior to acquisition):
|
2004 |
2003 |
2002 |
2001 |
|
| Revenue |
$3,576,029 |
$5,011,970 |
$4,422,519 |
$3,064,461 |
| Direct Expenses |
2,676,121 |
3,970,959 |
2,928,534 |
2,172,619 |
| Gross Margin |
899,908 |
1,041,011 |
1,493,985 |
891,842 |
| Overhead Expenses |
1,706,579 |
1,410,185 |
1,500,384 |
818,792 |
| Foreign Exchange Gain/(Loss)** |
(17,481) |
(216,612) |
18,905 |
75,016 |
| Taxes/Other Adjustments |
8,068 |
1,558 |
2,416 |
(213,535) |
| Net Income (Loss) |
$ (832,220) |
$ (587,344) |
$ 10,090 |
$ 361,601 |
* All amounts expressed are in Canadian dollars.
** Effect of monetary balance sheet translation to Canadian dollars only. US based revenues and other expenditures reflect lower exchange rates in 2004. Average rates continued to decrease from 1.5542 in 2002 to 1.4025 in 2003 and 1.2892 in 2004, resulting in approx. $210,000 less revenue in 2004 than 2003, and approx. $510,000 less revenue in 2004 than 2002.
