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OMT Cites Radio Industry’s ‘Focus on Capital Expenditure Reduction’

Company posts quarterly loss; also is working on debt refinancing.

OMT Inc. posted a net loss of $159,000 in the third quarter, continuing a series of recent quarterly losses. The Canadian company said it continues to work on debt refinancing. It has a $4 million obligation that matures next summer and it said it is reviewing its cash management options. The net loss in the quarter was smaller than those posted a year ago and in the previous quarter.

Sales in Q3 were about $671,000 (Canadian) compared to $637,000 in the same period a year ago, which is $34,000 higher, thanks to an increase in its retail segment, though the quarter’s sales were down $206,000 from the second quarter of this year.

“The weakening U.S. economy continues to negatively impact the financial performance of the radio industry, causing an increased focus on capital expenditure reduction,” OMT reported.

“Some clients have decided to postpone annual technical maintenance contract renewals. As a consequence, recurring revenue in the commercial segment has been negatively affected and is $48,000 (11%) lower than last year ($12,000 this quarter).”

For the year to date, sales are just under $2.4 million, slightly less than at this time last year.

OMT Inc.’s business units are Intertain Media, which sells commercial music, messaging and digital signage services to retailers, and OMT Technologies, which makes automation systems for radio stations including the iMediaTouch line. The company notes in its accounting report that it has experienced “significant losses” in the last six years and that its long-term debt is now due in less than a year, but that management believes its deficiency in working capital is temporary.