2012 MANAGEMENT REPORT

Published October 26 2012 in What's New

For Immediate Release

Results for the fourth quarter and the 2012 fiscal year ended June 30 2012

ACCELERATED GROWTH IN TERMS OF SALES AND PROFITABILITY AT ERGORESEARCH LTD

Salient points:

  • For the term ended, sales increased by 14.1%, reaching $8,231,134 compared to $7,215,993 in 2011;
  • The firm’s net profit this year was $621,093, a 63.7% increase compared to $379,441 for the term ended June 30 2011;
  • Cash flows generated from operating activities have known a 33.7% increase to $1,208,840, compared to $904,118 in 2011;
  • EBITDA is $1,341,775 this year, a 28.4% increase compared to $1,045,293 for the term ended June 30 2011.

Laval, October 26 2012 – Ergoresearch Ltd (″Ergoresearch″ or ″the Company″ or ″the Firm″) is pursuing a growth strategy plan based on innovation and acquisitions. With this strategy, the Company is poised for accelerated growth in terms of sales and profitability. The year ending in 2012 will therefore have been the best in its history.

“The present financial results reflect the efficacy of its business plan and the strong abilities of its executive team” says Ergoresearch President and CEO Sylvain Boucher. “Fourth quarter sales in 2012 increased by 22%, triggering an annual increase in sales of 14.1% compared to 2011, record profits of 63.7% and a 28.4% increase of its EBITDA. Ergoresearch’s revenues reached an historic peak in 2012, surpassing the $8M mark and soaring to $8.2M,” he specifies.

Company administrators are pleased with these results but their goals are set higher still, with Ergoresearch now positioned at its growth inflection point. In fact, with the fine-tuning of its Expert-Fit™proprietary technologies and the September 2012 launch of OdrA – a revolutionary world-patented product that relieves pain linked to knee osteoarthritis – the Company now possesses an economic engine that will allow it to reach the highest summits. “The current healthcare boom and joint problems associated with aging populations will serve to accelerate countless business opportunities. Ergoresearch is perfectly positioned to exploit such opportunities” adds Mr Boucher.

A retrospective of years past
In terms of past management mandates, Ergoresearch sales have enjoyed an important increase. Between 2005 and 2011, the Company saw a 722% sales growth, confirming its status as the Quebec leader in the manufacturing of custom-fit “intelligent” foot orthotics and specialty orthotics.

In June 2012, Ergoresearch appeared for a second consecutive year on the prestigious roster of PROFIT 200 Canada’s Fastest-Growing Companies, as one of the country’s most successful 5-year performers. Three months later, its president and CEO was selected as a finalist for the Ernst & Young Entrepreneur Of The Year Awards, with winners to be announced in November 2012. This worldwide initiative rewards entrepreneurs who are innovative and ensure sustainable growth and job creation. The selection of finalists is based on their vision, their leadership, their corporate spirit and the prosperity of their firm.

Projects completed in 2012:

  • Complete website overhaul at www.ergoresearch.com;
  • Corporate financing of $750,000 through a bank loan to back the Company’s new growth plan;
  • Opening of a new Clinique du pied Équilibre and three satellite offices in the Mauricie region;
  • Development and pursuit of eight research projects aiming to optimize current technologies and further advance knowledge and solutions, both in the field of foot orthotics as well as for patients suffering from knee osteoarthritis;
  • $55,250 grant awarded by the National Research Council of Canada (NRCC) as part of an Industrial Research Assistance Program (IRAP) towards the creation of a new generation of podo-barometric sensor pad;
    • The project was completed in October 2012 and allowed to quadruple the resolution of sensor pads and significantly increase signal acquisition speed;
    • The Expert-Fit™ system, now the first bi-modal imprint system, integrates scanner images with foot pressure points.
  • Participation in the creation of Ergorecherche France, the first tier in Ergoresearch’s international development plan. A firm order for 15 Expert-Fit™ systems has already been secured and delivered;
  • Patients welcomed to the Living Lab, the first centre of its kind in Canada for excellence in assessing and dispensing the very latest knee OA treatments.

Subsequent events:

  • Signing of a Canadian distribution agreement with Proteor, France’s leading orthopedics provider, for the purchase and exclusive distribution of world-patented components;
  • Launch of OdrA, a new generation of orthotic device that revolutionizes the treatment of knee OA;
  • Deployment of the www.odra.ca website, backed by an advertising campaign and press relations actions in support of the launch;
  • Development of a certification program for orthotists working with knee osteoarthritis.

The firm is pursuing a number of projects in 2013:

  • Organic growth of its distribution network under the Clinique du pied Équilibre banner;
  • Execution of its business acquisition plan across Canada;
  • Continuation of the development, adaptation and implementation of Enterprise Resource Planning software (ERP) specially adapted to the medical field that will allow a migration of current management systems towards a new platform equipped with new functions and capacities.

Ergoresearch administrators are looking ahead with enthusiasm at the years to come. “The engineering of the economic engine that we have devised and set up, the firm’s financial wealth, the vitality of our business model and the firm’s assorted projects are a testimonial to the dynamism of Ergoresearch and its subsidiaries. Accomplishing the business plan and creating value for our shareholders are more than ever at the core of our actions, and will allow us to reach new heights in years to come,” says Sylvain Boucher, President and CEO.

About Ergoresearch
Ergoresearch has developed Quebec’s leading network of orthotics clinics, with over 60 corporate and satellite centres under the Clinique du pied Équilibreand Orthoconcept banners. The leading manufacturer of “intelligent” foot orthotics and specialty orthotics, it is a trend-setter in creating durable medical equipment and software for the orthopedics market. Ergoresearch has developed and commercialized Expert-Fit™, the first robotized custom-fit orthotics manufacturing software program, launched the first Living Lab in Canada and more recently, a new generation of world-patented orthotic device called the OdrA, that revolutionizes the treatment of pain associated with knee osteoarthritis. Ergoresearch Ltd is listed on the Toronto Stock Exchange (TSX-V) under the TSX-V Symbol: ERG.

Forward-looking statements
Certain statements in this Press Release contain forward-looking statements and information that may entail certain risks related to uncertainties. Such statements are based on management’s expectations and no assurance can be given that potential future results or circumstances described in the forward looking statements will be achieved or will occur. Such risks factors include, but are not limited to, those related to the Corporation’s ability to finance its activities, competition, ability to negotiate and maintain partnerships, the market acceptance of the said product, fluctuations in operating results, the impact of general economics, industry and market conditions, the ability to recruit and retain qualified employees, the success of research and development programs, fluctuations in cash flow, expectations regarding market demand for particular products, the strength of intellectual property, market dependence on new product development, the trust invested in sub-contractors or their core personnel, as well as other documents containing risks and uncertainties which are put forth every now and then by the firm to various Canadian securities and exchange commissions and made available at www.sedar.com.

The reader should not give great importance to forward-looking statements as (i) the results may differ from conclusions, predictions or projections contained in such forward-looking statements; and (ii) certain important factors or hypothesis taken into account in reaching conclusions or the preparation of a projection or prediction may prove to be incorrect in fact.

Management disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

All amounts in Canadian dollars unless otherwise stated.

– 30 –

Sources – Information:
Sylvain Boucher, President and CEO – Ergoresearch Ltd
Tel.: 450-973-6700, ext. 213 / sboucher@ergoresearch.com

Isabelle Vallée, Director of Communications and Public Relations – Ergoresearch Ltd
Tel.: 450-973-6700, ext. 233 / 514-377-0485 / ivallee@ergoresearch.com

Réalisation Web Sept24