Q3’10 • Investor Fact Sheet Third Quarter ended July 31, 2010 TSX: TWT ABOUT 20-20 TECHNOLOGIES INC. 20-20 Technologies is the world's leading provider of computer-aided design, business and software solutions tailored for the interior design and furniture industries. Dealers and retailers use its desktop and Web-based products and solutions for the home and office markets. 20-20 offers a unique proprietary end-to-end solution, integrating the entire breadth of functions in interior design. It provides a bridge for data communication from the point-of-sale to manufacturing, including computer-aided engineering and plant floor automation software. Operating in eleven countries with more than 500 employees, 20-20 is a publicly traded company (TWT) on the Toronto Stock Exchange (TSX). For more information, visit www.2020technologies.com.
UNIQUELY POSITIONED TO BENEFIT FROM A RESUMPTION OF GROWTH IN OUR INDUSTRY During the quarter market conditions continued to be challenging, particularly in the U.S. Home sector, combined with some business seasonality. Excluding the impact of Southern Europe and exchange rates, operations in Europe, fuelled by market share gains in the Manufacturing Sector and building momentum in the Bathroom domain, have performed in line with our expectations. Market conditions in the Office sector remained sluggish. For the quarter, EBITDA of $2.0 million in constant dollars was achieved in spite of a lower sales volume, while margins remained stable and operating expenses decreased.
THIRD QUARTER RESULTS (In thousands of US dollars, except per share amounts) Three months ended July 31, (unaudited) 2010
Revenues Licenses Recurring licenses
Maintenance and other recurring services
Gross margin Gross margin (%) Net earnings Per share - diluted
Diluted weighted average number of common shares outstanding
Q3 2010 HIGHLIGHTS •
Revenues of $14.8 million, down 8.3% from $16.1 million last year
EBITDA stood at $1.4 million or 9.5% of revenues from $2.0 million or 12.7% of revenues in 2009
Net earnings of $0.8 million or $0.04 per share compared to $1.0 million or $0.06 per share in 2009
Healthy Balance Sheet with working capital at $11.6 million
Revenues (in millions of US$)
Geographic Distribution of Sales Q3’2010 North America Europe
Rest of the World
THIRD QUARTER REVIEW Third quarter revenues decreased 8.3% to $14.8 million, compared with $16.1 million a year ago. In constant dollars, revenues declined modestly in the Home sector and more significantly in the Office sector while the Manufacturing sector was up. For the quarter, unfavourable currency exchange rates negatively impacted revenues by 3.8%. Revenues for the nine-month period increased to $48.6 million or 2.6%. For the quarter, Home sector revenues reached $8.4 million accounting for 56.7% of total revenues, down 6.7% taking into account currency exchange rates and 3.6% in constant dollars over the previous year. After being the engine of growth in recent quarters, the Home sector slowed down in the U.S. and southern Europe partially offset by growth in the rest of Europe and International markets. For the quarter, Manufacturing sector revenues which account for 27.4% of total revenue, declined by 5.3% to $4.0 million. In constant dollars, revenues were up 2.5% reflecting relatively stable market conditions in North America and Europe since the beginning of the current fiscal year. For the quarter, as expected, the Office sector remained weak reflecting an oversupply of office space with revenues reaching $2.4 million, down 17.9% over the previous year with most of the impact on licenses and services. EBITDA declined to $1.4 million (9.5% of revenues) from $2.0 million (12.7% of revenues) a year ago. In constant dollars, EBITDA for the quarter would have reached $2.0 million (13.5% of revenues). The remainder of the decline in EBITDA is largely attributable to lower revenues. The Company generated net earnings of $840,000 for the third quarter, or $0.04 per share, compared with net earnings of $1.0 million or $0.06 per share, a year ago. Earnings were positively impacted by exchange gains of $838,000 ($376,000 in 2009).
A WORD FROM THE CEO In recent months, the economic recovery in the U.S. proved to be much more fragile than many expected and market conditions in the Home Sector during the third quarter haven’t improved and remained challenging in the Office sector. The Manufacturing sector was one of the bright spots during the quarter, particularly in Europe, and we currently have a healthy pipeline of business opportunities but customer purchasing decisions are often pushed back mostly in North America. In the context of very prudent and selective investments, many customers are deploying efforts to diversify and reorganize their sales and manufacturing operations, and are evaluating various solutions to further computerize their operations. Jean-François Grou Chief Executive Officer September 14, 2010
400 Armand Frappier Blvd, Suite 2020, Laval, Quebec H7V 4B4, Tel: (514) 332-4110
MANAGEMENT Executive Chairman and Chief of Strategic Direction Chief Executive Officer Chief Financial Officer ANALYST COVERAGE Thanos Moschopoulos Scott Penner
Jean Mignault Jean-François Grou Steve Perrone
BMO Capital Markets TD Newcrest
STOCK INFORMATION (as at September 14, 2010 in Canadian dollars)
INVESTOR RELATIONS 20-20 Technologies Inc. Steve Perrone Tel.: (514) 332-4110 Email: email@example.com
Share Price (TSX:TWT) 52 Week High/Low
MaisonBrison Communications Pierre Boucher Tel. : (514) 731-0000 ext.237 Email: firstname.lastname@example.org
Number of Shares Outstanding (as at Sept.14, 2010) Market Capitalization IPO Date
$3.22 $3.90 - $2.50
18.9 million $60.9 million Dec. 2004
For more information, please visit www.2020technologies.com Certain statements contained in this fact sheet constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of future operating results and economic performance of the Company are assumptions regarding projected revenue and expenses. These assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual future operating results and economic performance of the Company are subject to a number of risks and uncertainties, including general economic, market and business conditions and could differ materially from what is currently expected. For more exhaustive information on these risks and uncertainties you should refer to our most recently filed annual information form which is available at www.sedar.com. Forward-looking information contained in this document is based on management's current estimates, expectations and projections, which management believes are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time, unless required by securities law.