Q4’10 • Investor Fact Sheet Fourth Quarter ended October 31, 2010 TSX: TWT ABOUT 20-20 TECHNOLOGIES INC. 20-20 Technologies is the world's leading provider of computer-aided design, business and manufacturing software tailored for the interior design and furniture industries. Dealers and retailers use our desktop and Web-based products and solutions for the home and office markets. 20-20 offers a unique 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 and an extensive network of partners worldwide, 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. As we look back on 2010, the recovery in our main market, the U.S., proved to be much softer than anticipated as indicated by stable North American revenues when compared to 2009. This in no way reflects our competitive position, but rather a flat line U.S. economy. The situation is brighter in new markets where we are investing for the future, such as China, Brazil and Russia. As for Europe, revenues have increased reflecting strong momentum in Central Europe partially offset by Southern Europe.
FOURTH QUARTER RESULTS (In thousands of US dollars, except per share amounts)
Revenues 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
2010 (Unaudited) $
Three months ended October 31 2009 (Unaudited) $
2010 (Audited) $
Years ended October 31 2009 (Audited) $
5,353 1,328 6,865 3,122 16,668
4,390 1,266 7,694 2,831 16,181
20,237 4,947 28,916 11,133 65,233
17,341 3,920 29,380 12,466 63,107
12,073 72.4% 714 0.04
12,149 75.1% 735 0.04
48,155 73.8% 2,289 0.12
47,004 74.5% 2,581 0.14
18,921,792
18,936,904
18,921,792
Q4 2010 HIGHLIGHTS •
Fiscal 2010 revenues of $65.2 million, up 3.4% from $63.1 million last year
•
Overall license revenues increased by 18.5% year-over-year
•
EBITDA at $8.5 million ($11 million in constant dollars) compared to $9.3 million in 2009
•
Sold 27 solutions to manufacturers in China, up from 16 in 2009
•
Long-term debt reduced by $10.1 million during the year
18,931,828
Revenues (in millions of US$)
Geographic Distribution of Sales
Q1’09
Q4 2010
15
Europe
43.4%
50.0%
38.9%
Q2’09
Q3’09
Q4’09
Q1’10
Q2’10
Q3’10
Q4’10
25 20
5.4%
6.6%
North America
Q4 2009
55.7%
Rest of the World
15.6
15.1
16.1
16.2
16.6
17.2
16.7 14.8
10 5
FOURTH QUARTER REVIEW Fourth quarter revenues increased 3.0% to $16.7 million, compared with $16.2 million a year ago. The negative impact of exchange rates was $0.5 million; absent this impact, revenues would have increased by 6.4%. For the quarter, Home sector revenues reached $9.6 million, up 2.4% over the previous year. The introduction of bathroom and closet products in Europe were the primary drivers in this sector. For the quarter, Manufacturing sector revenues increased by 8.5% to $4.4 million. Sales of inSight manufacturing solutions in Central Europe remained strong. Revenues for the Office sector decreased by 2.8% and appear to have stabilized. EBITDA was $1.8 million, down from $2.4 million a year ago. In constant dollars, EBITDA for the quarter would have been $2.1 million. The Company generated net earnings of $0.7 million for the fourth quarter, or $0.04 per share, compared with net earnings of $0.7 million or $0.04 per share, a year ago. The Company benefited from approximately $600,000 in net tax benefits resulting from a series of items including adjustments to provisions, utilisation of prior years’ capital losses and tax rates applicable to taxable income outside of Canada.
A WORD FROM THE CEO We enter fiscal 2011 with confidence in what we have accomplished to position 20-20 on the right course and as we begin the implementation of our new strategic plan. Our win rates in our various market segments indicate that 20-20’s competitive position has been enhanced and our objective is clearly to further improve it with a solid product roadmap, our end-to-end solution which is gaining traction and a more collaborative approach with existing and new partners. We will continue to proactively and prudently manage our operating expenses. As we have done in the past, we will react quickly to demand volatility. Balancing short-term profitability objectives while investing in our business to create medium-term value for shareholders remains our focus. Jean-François Grou Chief Executive Officer January 18, 2011
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 Scott Penner Richard Tse
BMO Capital Markets TD Newcrest Cormark Securities
INVESTOR RELATIONS 20-20 Technologies Inc. Steve Perrone Tel.: (514) 332-4110 Email: steve.perrone@2020.net MaisonBrison Communications Pierre Boucher Tel. : (514) 731-0000 ext.237 Email: pierre@maisonbrison.com
STOCK INFORMATION (as at January 18, 2011, in Canadian dollars) Share Price (TSX: TWT) $3.14 52 Week High/Low $4.28 - $2.80 Number of Shares Outstanding (as at January 18, 2011) 18.9 million Market Capitalization $59.3 million IPO Date 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.