Scott Farr,
OMT'S CEO, said the conversion will
eventually take about $400,000 in
dividends off the books, which would help
the company's bottom line. The changes to
the conversion formula are seen as
necessary as part of the company's
attempts to raise about $2.5 million in a
private placement. That effort was
originally announced in March.
Farr said
despite recent financial results that show
declining sales, OMT Inc. is operating
more profitably.
"In
2003 our gross profit margin was 42 per
cent, but in the first quarter of 2004 it
was 62 per cent," he said in an
interview.
In June
2003, OMT sold its Oakwood Broadcast
equipment distribution business that had
generated 40 per cent of gross revenue,
but only 13 per cent of profit. Farr said
the decision was made to concentrate on
its software business, and in November the
Winnipeg-based company purchased the
assets of a
Toronto
company, which
now gives it one of the largest libraries
of digital music files in the world.
OMT has
created a new division called Intertain,
and recently signed a contract with Best
Buy to provide music and movie trailer
preview stations in Best Buy's new store
in Calgary and possibly in other Best Buy
stores.
"We
have gone from operating with a total
market capacity of $250 million to one
with an entire capacity of close to $4
billion," the CEO of the media and
broadcast-focused technology company said.
"Although
the top line is most directly affected,
the bottom line will get better," he
said, adding expectations are for the
company to post a net profit by early in
2005.
He said
gross profit margins of the Intertain
division have already replaced those
generated by the Oakwood division, and
revenues from the Intertain division will
completely pay for the acquisition by the
second quarter of this year.
For the
first quarter ending March 31, the company
reported sales declined to $916,000 this
year from $2.36 million the previous year.
The
Renaissance Fund, controlled by Wellington
West Capital, and the ENSIS Growth Fund
and its associated fund, ENSIS Investment
Limited Partnership, each control about
2.5 million preferred shares. The ENSIS
and the Renaissance investments originally
totalled $1 million each. ENSIS is also
owed about $500,000 in the form of a
separate debt instrument.
OMT's
shares, which gained one cent in trading
Monday on the TSX Venture Exchange, closed
unchanged at 15 cents yesterday.
martin.cash@freepress.mb.ca
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