ZTEST 1997 Annual Sales Increase 103 Percent
MISSISSAUGA, ONTARIO--Our fiscal year ending June 30,1997 has been a very encouraging year for ZTEST Electronics Inc. Your Company 's annual sales of $1,285,922 to June 30, 1997, were 103 percent higher than last year's total of $633,584. ZTEST for this 12 month period, generated a positive cash flow of $260,339. with an operating profit of $128,536 versus an operating loss of $97,300 for the previous year's results. As a result of a change in accounting policy, ZTEST has elected to take a one time write down of $665,000 on its Nexsys Commtech International Inc. investment. The result of this one time, non-cash transaction, is a net loss for ZTEST of $536,464 for the year ended June 30, 1997.
As announced in our Press Release of Oct. 29, 1997, Nexsys has successfully completed a test run of its automated fire detection system. During the test, firefighters were able to reach the scene within two and a half minutes after the smoke alarm went off, which was more than four times faster than in a simultaneously compared case without an automated fire detection system in place. This test was part of a staged pilot project (1,000 homes) for the Safe Smart Home System (TM) sponsored by the City of Waterloo. If successful, the program will be extended to 23,000 homes and businesses city wide. Nexsys also has recently finalized negotiations with CIBC Wood Gundy Securities Inc. and C.I. Covington Fund for a $3,500,000 investment of subordinated debt and equity. ZTEST, on a fully diluted basis, continues to be the largest single shareholder in Nexsys and has a long term agreement to manufacture Nexsys products. ZTEST remains very optimistic about our investment in Nexsy, and expects this manufacturing contract to contribute to ZTEST's sales growth in the coming years.
The first stage of our Strategic Partner Program with UNIQRYPT Technologies Inc., which is the design phase, was completed in the year ended June 30, 1997. After extensive field testing, the UNIQRYPT PRO series Fax Security System will now enter the manufacturing stage under ZTEST's exclusive manufacturing contract, and is also expected to contribute to ZTEST's sales growth in the coming years.
Subsequent to the June 30, 1997 year end, ZTEST, on Sept. 9, 1997, successfully completed a takeover bid to acquire 53.26 percent of Chessen U.V. Systems Inc. Chessen is involved in the field of Advanced Surface Engineering Technologies, marketing its advanced thin film and U.V. processors throughout the world. At the time of the takeover, Chessen had an order backlog of approximately $2,500,000, which will contribute significant growth to ZTEST's future sales and profits.
In addition to its proprietary line of Automatic Test Equipment, ZTEST offers Strategic Partner services in electronic design, development and manufacturing to emerging high tech companies in return for long-term manufacturing contracts, fees for services and equity positions.