TORONTO, Nov. 23, 2004 (PRIMEZONE) -- Thinkpath Inc. (OTCBB:THTHF) today announced financial results for the third quarter ended September 30, 2004.
Revenues for the three and nine months ended September 30, 2004 were $3,125,899 and $9,507,784 compared to $2,649,681 and $7,611,673 for the same periods in 2003. The significant increase in revenue is attributable to new contracts with existing defense, automotive and aerospace clients that were awarded in the later part of 2003 and early 2004.
Gross profit for the three and nine months ended September 30, 2004 was 37% and 36% compared to 33% and 32% for the same periods in 2003. The increase in gross profit is a result of the strategic focus on higher margin contracts in design, drafting and technical publishing compared to the lower margins earned on traditional on-site engineering support.
For the three and nine months ended September 30, 2004, the company recorded operating income from continuing operations of $55,967 and $237,343 compared to operating losses of $106,789 and $602,098 for the same periods in 2003. Included in the results for the three and nine months ended September 30, 2004 are commissions on the convertible debentures of $0 and $116,597 as well as non-cash items including depreciation expense of $118,683 and $399,699 and services paid for in shares and warrants of $45,233 and $82,626.
For the three and nine months ended September 30, 2004, the company recorded a net loss of $1,039,732 or (0.00) per share and $2,667,350 or (0.00) per share compared to a net loss of $1,857,832 or (0.00) per share and $7,158,690 or (0.02) per share for the same period in 2003. Included in the net loss for the three and nine months ended September 30, 2004 is interest expense of $967,440 and $2,507,880 related to the beneficial conversion feature on the 12% Senior Secured Convertible Debentures issued in the second quarter. The interest charges for the same periods last year were $1,528,700 and $6,179,406.
At September 30, 2004, the company had a cash flow deficiency from operations of $1,015,833 largely attributable to the increase in accounts receivable of $369,870 and the decrease in accounts payable of $1,014,369 reflecting the company's increased revenues and repayment of accrued liabilities. At September 30, 2003, the company had a cash flow deficiency from operations of $169,584.
At September 30, 2004, the company had a working capital deficiency of $1,088,843 and stockholder's equity of $3,689,927, which is a considerable improvement over its working capital deficiency of $2,756,405 and stockholder's equity of $2,260,892 at December 31, 2003.
After adjusting for the non-cash items and convertible debenture expenses, the Company has income of approximately $220,000 from continuing operations for the third quarter and $840,000 for the nine months ended September 30, 2004. This continues the Company's trend of positive growth as reported in the first and second quarters of 2004. The Company believes this will continue into the fourth quarter and that income from continuing operations will be augmented by the recognition of debt forgiveness of approximately $1,130,000 related to the various debt settlements announced last week.
Further information about the company may be found at www.thinkpath.com.
Forward-Looking Statement
This press release contains forward-looking statements regarding Thinkpath Inc., its business prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause Thinkpath's actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by Thinkpath in this news release and other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect Thinkpath's business.