First quarter numbers down as sale looms for Silent Witness

SSN Staff  - 
Thursday, December 4, 2003

December 4, 2003

SURREY, British Columbia - Despite first quarter revenues being down 18 percent when compared with the first quarter of last year and the company reporting only $18,861 in profits, Silent Witness’ future remains bright as its pending sale to Honeywell drew one step closer to completion.

Nearly 94 percent of Silent Witness shareholders tendered their common shares of the company before Honeywell's offer for the company's outstanding shares ended at 4:30 p.m. P.S.T. Wednesday.

According to Silent Witness, two-thirds of the decrease in revenues could be attributed to the strengthening of the Canadian dollar over the U.S. dollar. The company reported revenues of $12.5 million (Canadian) for its first quarter, which ended Oct. 31, 2003, compared with $15.2 million last year for the same period.

Sales also dipped at the company in its CCTV division, reporting a 19 percent decrease. The company took in $9.9 million in its CCTV division from $12.2 million in the prior year’s first quarter.

The company’s first quarter financial results were released just days before Honeywell’s bid for the Canadian camera manufacturer was set to expire. The deal will provide Silent Witness with Honeywell’s international reach and additional financial backing.

The first-quarter results detailed expenses Silent Witness incurred as a result of take-over talks. The company reported spending $602,000 in travel, legal and accounting expenses.

In its filing, Silent Witness also said it settled a lawsuit filed by American Building Controls, formerly known as Ultrak, which claimed a patent infringement relating to a video recording system. The settlement requires Silent Witness to pay $100,000 (U.S.) over the next eight years as compensation for past sales of licensed products, with the first payment paid Aug. 1, 2003. The company will also pay a 7 percent royalty fee on future sales of licensed products.