Inverpower Controls Reports Q3 Operating Results

June 24, 2001 by Jeff Shepard

Inverpower Controls Ltd. (Canada) reported the company’s operating results for the third quarter of fiscal 2001 ending April 29, 2001. Revenues were $1.1 million, compared to revenues of $2.7 in the prior year. Corresponding with the revenue volume, the company’s orders backlog at the end of the third quarter was approximately $2.2 million, an increase over the second-quarter’s results.

Inverpower reports that frugal operations, cost-efficiency measures and a favorable product mix resulted in a 17-point contribution margin improvement over the same period last year. The cost efficiencies resulted in a nominal third-quarter gross margin of 1.2 percent, a 101-percent improvement from the prior year's 27.3-percent gross margin, despite the quarter's lower contract-based revenue.

In line with the company's alternative energy focus, research and development activities in the third quarter grew 120 percent from the prior year, with a third-quarter investment in research and development of $0.67 million.

With the substantial financing assistance received from its secured creditors, Inverpower recorded $0.45 of financing-related charges during the quarter. These charges consisted of financing fee amortization, interest expense accrual and accretion of the company's convertible debenture option. Despite impacting the company's financial results, these charges did not have a cash impact during the quarter. Overall, Inverpower's third quarter yielded a loss of $1.9 million, or $0.23 per share, compared with prior year's loss of $1.6 million, or $0.19 per share.