Q1’10 • Investor Fact Sheet First Quarter ended January 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 residential and commercial 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 and world-leading enterprise resource planning (ERP) systems, including computer-aided engineering and plant floor automation software. Operating in twelve 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 We regard the rising trend in license sales on a sequential or year-over-year basis during the first quarter as an indication of building momentum in the recovery. Specifically our increased sales of Virtual Planner and manufacturing solutions represent a clear departure from our experience of the last few quarters. Such sales demonstrate that our larger customers on both the retail and manufacturing sides have begun to re-invest. While challenges certainly remain, and as we persist in strict operational efficiencies to protect our margins, we will also be implementing our long-term strategic plan to maximize the ongoing growth of our industry-leading end-to-end solution.
FIRST QUARTER RESULTS (In thousands of US dollars, except per share amounts) Three months ended January 31, (unaudited)
Revenues Perpetual licenses Recurring licenses Maintenance and other recurring services Professional services
Gross margin Gross margin (%) Net earnings Per share - diluted Diluted weighted average number of common shares outstanding
$4,775 1,139 7,700 2,990
$4,144 997 6,949 3,530
12,336 74.3% 462 0.02
11,543 73.9% 179 0.01
Q1 2010 HIGHLIGHTS •
Revenues stood at $16.6 million, up 6.3%
Overall license sales increased by 15.0% largely fuelled by residential sector
EBITDA of $2.5 million, or 15.3%
Net earnings of $0.5 million or $0.02 per share, compared with $0.2 million, or $0.01 per share, in 2009
Cash position increased to $22.2 million from $10.6 million last year
Revenues (in millions of US$)
Geographic Distribution of Sales
Q1’2010 North America
Rest of the World
FIRST QUARTER REVIEW First quarter revenues increased by 6.3% to $16.6 million compared with $15.6 million a year ago. The improvement was due to favorable currency exchange rates (4.6%) and organic growth (1.7%) in the context of relatively stable market conditions. North America accounted for 51.1% of revenues or $8.5 million for 2010, representing a 1.4% increase year-over-year, largely attributable to improving market conditions in the residential sector offset by depressed activities in the commercial sector. Europe accounted for 45.6% of revenues or $7.6 million for 2010, an increase of $0.6 million or 7.9% over last year, essentially from favorable exchange rates. International revenues accounted for $0.6 million or 3.3% compared $0.2 million or 1.5% in 2009. Maintenance and other recurring services continued to perform relatively well supported by last year’s license revenues with an increase of 6.9% to $7.4 million and 10.8% to $7.7 million taking into account the impact of foreign exchanges. First quarter revenues from perpetual license sales increased by 9.9% to $4.6 million and by 15.2% to $4.8 million, including currency fluctuations. Recurring licenses increased by 10.7% to $1.1 million and by 14.3% with exchange rates. Professional services revenues declined by 20.6% to $2.8 million and by 15.3% to $3.0 million with the impact of foreign exchanges in all sectors due to fewer projects underway, including less catalog updates. Operating income was $1.5 million compared with $1.6 million last year. In the first quarter of 2009, the Company recorded a $0.4 million recovery of restructuring costs. In addition, unrealized exchange losses related to translation had a negative impact of $0.4 million on the first quarter of 2010. EBITDA of $2.5 million for the quarter was flat when compared to 2009 and matched the highest level attained in the past nine quarters. The Company generated net earnings of $0.5 million for the quarter, or $0.02 per share, compared with $0.2 million, or $0.01 per share, a year ago.
A WORD FROM THE CEO Throughout 2010 we expect the market to continue a gradual recovery. We see among our clients a general readying for a progressive return to normal levels of business activity and growth. Many of them have signalled that they are poised to make targeted investments in add-on products or to enter new niches of the business. Jean-François Grou CEO March 16, 2010.
400 Armand Frappier Blvd, Suite 2020, Laval, Quebec H7V 4B4, Tel: (514) 332-4110 MANAGEMENT Executive Chairman and Chief of Strategic Direction Jean Mignault Chief Executive Officer Jean-François Grou Chief Financial Officer Steve Perrone ANALYST COVERAGE Thanos Moschopoulos BMO Capital Markets Richard Tse National Bank Financial Scott Penner TD Newcrest
INVESTOR RELATIONS 20-20 Technologies Inc. Steve Perrone Tel.: (514) 332-4110 Email: email@example.com MaisonBrison Communications Pierre Boucher Tel. : (514) 731-0000 ext.237 Email: firstname.lastname@example.org
STOCK INFORMATION (as at March 11, 2010 in Canadian dollars) Share Price (TSX:TWT) $3.02 52 Week High/Low $3.75 - $1.00 Number of Shares Outstanding (as at Jan.27, 2010) 18.9 million Market Capitalization $57.1 million IPO Date Dec. 2004
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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.